# Petition for Writ of Certiorari — Local 1814, International Longshoremen's Ass'n v. National Labor Relations Board

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385017_2200%3A1

## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1984
- **Citation:** 469 U.S. 1072

## Text

——

| iy Otic. Sprem Court, U.S,
a Ss
84-358 ‘a
SEP 5 1984
No. |
—rr STEVAS, |
IN THE 4

Supreme Court of the United States

OcrToBER TERM, 1984

LOCAL 1814, INTERNATIONAL
LONGSHOREMEN’S ASSOCIATION,

Petitioner,

Vv.

NATIONAL LABOR RELATIONS BOARD

JACKSON ENGINEERING COMPANY, INC.,
Petitioner,
Vv.

NATIONAL LABOR RELATIONS BOARD

PETITION FOR A WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

*Rosert H. Bocucki
ANTHONY T. ScoTTo

TinA PELuso

Bocucki, DiCHIARA & SCOTTO
26 Court Street

Brooklyn, New York 11242
(212) 875-7762

Counsel for Petitioner,
Local 1814, International
Longshoremen’s Association

*Counsel of Record

QUESTIONS PRESENTED

1. Whether under Section 8 of the National Labor Relations
Act, 29 U.S.C. 158, common law principles of agency may be
applied to impute to a labor organization the concealed criminal
acts of an officer in accepting illegal employer payments under
29 U.S.C. 186 (b) when there is no substantial evidence that
the officer intended to benefit the labor organization.

2. Whether a labor organization may be found to have
violated Section 8(b)(1)(A) of the Act, 29 U.S.C. 158(b)(1)(A)
solely on the basis of the concealed criminal acts of an officer,
despite a finding by the Board that at all times the labor
organization vigorously represe1ited an uncoerced majority of
the employer’s employees.

3. Whether a labor organization must, when a union officer
is accused of accepting employer payments in violation of 29
U.S.C. 186(b), act contrary to the national labor policy and
discipline that officer or risk a judgment that it ratified and con-
doned the officer’s criminal acts.

4. Whether the Board exceeded its jurisdiction by applying
typical unfair labor practice remedies in an atypical fashion in
order to redress the criminal conduct of an officer of a labor
organization.

PARTIES

The petitioner, Local 1814, International Longshoremen’s
Association, AFL-CIO, is an unincorporated labor organiza-
tion representing longshoremen and allied craft workers in the
Port of New York. It is a subordinate unit of the International
Longshoremen’s Association, AFL-CIO.

In accordance with Rule 21(b), it should be noted that all
of the parties in the court below are listed in the caption. Jackson
Engineering Company, Inc. has not petitioned for a writ of
certiorari.

TABLE OF CONTENTS

es oak dd Ga bbs 40S eA 0 OKA
Ea a ee
ee) 8 8 A): 6
EE er ee ee ee
REASONS FOR GRANTING THE PETITION...
te een 64 ohes Kk wR AS Odo 08
ES err ie re ee ere
ee ies VN A-5' A F0O-6 AWD ORS BOO
IRIE rae ea a ae
ess SAREE Se RT SE
RS Tae

TABLE OF AUTHORITIES
CASES:
Allen v. NLRB, 561 F.2d 976 (D.C. Cir. 1977) ..

Conair Corporation v. NLRB, 721 F.2d 1355
ee a EDS vs Sic ach a bk Case Cees

Consolidated Edison Co. v. NLRB, 305 U.S. 197
Sara ct aia cy 4 Ae Re

ILGWU v. NLRB, 366 U.S. 731 (1961) .........

Intalco Aluminum Corp. v. NLRB, 417 F.2d 36
rrr rr ee rr rere rer

International Distribution Corp. v. American
District Telephone Co., 569 F.2d 136 (D.C.
STE 0a GN Eb Rae ws

International Longshoremen and Warehousemen’s
Union, 79 N.L.R.B. 1487 (1948) .............

Local 60, Carpenters v. NLRB, 365 U.S. 651
SEE: 6idvnkevndas cons Cee ee eae

Melton v. United States, 488 F. Supp. 1066
ate SE 66-4446 BWA e Sa nee ae dees

Morrison-Knudsen Co. v. NLRB, 276 F.2d 63
ks re ey ee

NLRB V. Burke Oldsmobile Inc., 285 F.2d 14
(Qnd Cir. 1961) ............cecceceeeeeeeees

NLBB v. District 50, UMW, 355 U.S. 453 (1958) .
NLRB v. Gissel Packing Co., 395 U.S. 575 (1969)

NLBB v. Hollywood-Maxwell Co., 126 F.2d 815
Ss ns PE LAS Ak cae Gaara bee eae es

NLBB v. Mark J. Gerry, Inc., 355 F.2d 727 (9th
Cir. 1966), cert. denied, 385 U.S. 820 (1966) ..

NLBB v. Pennsylvania Greyhound Lines, 303
2% frre ere re

PAGE

iv
NLBB vw. U.S. Steel Corp., 278 F.2d 896 (3rd

Cir. 1960), cert. denied, 366 U.S. 908 (1961) ..

NLRB v. Vernitron Electrical Components, Inc.,
FA § Fi oe A epererrerrere cere

Park Transfer Co. v. Lumberman’s Mutual
Casualty Co., 142 F.2d 100 (D.C. Cir. 1944) ..

Phelps Dodge Corp. v. NLRB, 313 U.S. 177
COORD oa ices tx én sa c0onvcvdusebvinsactacana

Republic Steel Corp. v. NLRB, 311 U.S. 7 (1940)

Scotto v. Waterfront Commission, No. 5580 81
(Sup. Ct. Sept. 19, 1980), aff'd, 78 A.D. 2d
686 (2d Dept. 1980), leave to appeal denied, 51
N.Y. Ge TOD COORD ww ccc scr enensaescnsen

United States v. Jalas, 409 F.2d 358 (7th Cir.
rer ere errr rere re

United States v. Ricciardi, 357 F.2d 91 (2d Cir.),
cert denied, 384 U.S. 942 (1966) .............

United States v. Ryan, 350 U.S. 299 (1956) ......

United States v. Scotto, 641 F.2d 47 (2d Cir.
1980), cert. denied, 452 U.S. 961 (1981) ......

Universal Camera Corp. v. NLRB, 340 U.S. 474
GRUNBED 5 54 uous caas cease seb eseesavaenseewews

Virginia Electric & Power Co. v. NLRB, 319 U.S.
ee Cn 6g koh 6g seks cn 04540 cuesnss

Wirtz v. Local 153, Glass Bottle Blowers, 389
U.S. 463 (1968) .. 2.2 eee

13

13

16

10

1]

10

16

1]

Sm CN eX Detect anon AA Nts cbt tate ill

STATUTES AND RULES:

PAGE
Se ts BF MIND oa bw acc sccndcccecces 3, 10, 1l
ae U.5.C. § RBBAT) (ROTE) . . ccc cens 2
. 29 U.S.C. § 141, et seg. (1976) ................ 2
29 U.S.C. § 151, et seg. (1976) ................ 2
Se ED con ccacocncucsdcnsasccs 8
eS ee i
29 U.S.C. § 158(a)(1) (1976)................... passim
29 U.S.C. § 158(a)(2) (1976) ................... passim
29 U.S.C. § 158(b)(1)(A) (1976) ..... 2.2.0.0... passim
BD Uae BBB) CIBTED ww wc ccc cece 5
Ee ererererrer 12
BP Weds MED COUT on cc ce cess ccc ccnces 12
Be Ws © UD MOOD nn cc ccc cies ccceccs 8
Sree ee 15
Se Weas G BD CUO ons cscs scccccccnccce i, 3, 5,
9, 10,
11, 15
RA ome OE rr ree 2, 10
29 U.S.C. § 504(a)(1) (1976)............0.00... ll
29 U.S.C. § SO04(c) (1976) ... 0... en 10, ll
BO Wes UO Sas nc csi cccn cae ccisens 1]
N.Y. Unconsol. Laws § 9933 (McKinney 1974) ... 10
RESTATEMENT (SECOND) OF AGENCY (1958)
yA Ce wa Cae hg asad eh re 5
Saat. 4k o8 od ead GkGa She Kkd La ee 5
Ea SRLS Le aN OL Aad ae KKK ORR GAGS Mee 5
8 ere 2
outs CU Gs WE OID vc osc ca ssa caccnecacs i

No.

em met os

IN THE

Supreme Court of the United States

Octroser TERM, 1984

LOCAL 1814, INTERNATIONAL
LONGSHOREMEN'’S ASSOCIATION,

Petitioner,

Vv.

NATIONAL LABOR RELATIONS BOARD

JACKSON ENGINEERING COMPANY, INC.,
Petitioner,

Vv.

NATIONAL LABOR RELATIONS BOARD

PETITION FOR A WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Petitioner, Local 1814, International Longshoremen’s Associa-
tion, AFL-CIO, prays that a writ of certiorari issue to review
the judgment of the United States Court of Appeals for the
District of Columbia Circuit enforcing an order of the National
Labor Relations Board (“Board”) which, upon a finding that

the petitioner violated Section 8(b)(1)(A) of the National Labor
Relations Act (“Act”), 29 U.S.C. 158 (b)(i)(A), directed
withdrawal of employer recognition, abrogation of the collec-
tive bargaining agreement between the petitioner and the
employer and petitioner’s reimbursement of dues and initiation
fees to employees of the employer.

OPINION BELOW

The opinion of the Court of Appeals (App. A, infra, la-47a)
is not yet officially reported.

JURISDICTION

The Court of Appeals filed its opinion and entered judgment
against petitioner on May 15, 1984. A timely petition for rehear-
ing and suggestion for rehearing en banc was denied, without
opinion on July 23, 1984. A copy of the orders of denial are
printed at App. B, infra, 48a-49a. By its order of August 17,
1984, the Court of Appeals stayed issuance of its mandate, under
Fed. R. App. P. 41, pending application to this Court for a writ
of certiorari. The jurisdiction of this Court is invoked under 28
U.S.C. 1254 (1).

STATUTES INVOLVED

The relevant provisions of the National Labor Relations Act,
29 U.S.C. 151 et. seq., the Labor Management Relations Act,
29 U.S.C. 141 et. seq. and the Labor Management Reporting
and Disclosure Act of 1959, 29 U.S.C. 504 are set forth in App.
E, infra, 125a-128a.

STATEMENT

This case has its origins in a jurisdictional dispute between
the petitioner and Local 17, IUMSWA over the representation
of employees of the Jackson Engineering Company, Inc.
(“Jackson” or the “employer”) with which the petitioner had

BF Seber AMT a eS OH

a previous and ongoing collective bargaining relationship. ' After
unsuccessfully pleading its case under the AFL-CIO’s jurisdic-
tional dispute resolution procedures, Local 17 filed unfair labor
practice charges against the petitioner and Jackson alleging
violations of Sections 8(b)(1)(A) and 8(a)(1)(2), respectively, of
the National Labcs Relations Act, as amended, (“Act”), 29
U.S.C. 158 (b)(1)(A), (a)(1)-(2).

A complaint issued and, subsequently, the Board’s General
Counsel issued an amended complaint focusing on concealed
payments made by the president of Jackson (Seregos) to the peti-
tioner’s vice-president (Anastasio) as a commission for referr-
ing ship repair work to Jackson. Those concealed payments
violated Section 302(b) of the Labor Management Relations Act,
1947, as amended, 29 U.S.C. 186(b).?

After full hearings, the Board’s Administrative Law Judge
(“ALJ”) found that Seregos was acting as Jackson’s agent when
he made the concealed payments and that Anastasio was ac-
ting as the petitioner’s agent when he accepted them. The ALJ
concluded that Seregos’ payments violated Section 8(a)(2) of the
Act, which prohibits interference with the administration of any

' Prior to 1975, Jackson’s employees were not represented by any labor
organization. In September 1975, the petitioner’s predecessor, Local 1277-1,
ILA, obtained signed authorization cards from a majority of Jackson's
employees and Jackson, thereupon, recognized the union as the exclusive
bargairng representative for its employees. Effective November 3, 1975
througt November 3, 1978, Jackson was party to an industry-wide collective
bargaining agreement between the petitioner's predecessor and other ship
repair companies. In March 1978, Local 1277-1, ILA merged into the peti-
tioner labor organization. Jackson was also party to the succeeding industry
agreement which became effective in November, 1978. App. C, infra, 53a-57a.

* Anthony Scotto and Anthony Anastasio, the president and vice-president,
respectively, of the petitioner labor organization, were prosecuted and con-
victed under 18 U.S.C. 1962(c)(d), for conducting and conspiring to conduct
the affairs of an enterprise (union) through a pattern of racketeering activity
predicated upon multiple misdemeanors under 29 U.S.C. 186(b), each of
which consisted of the receipt of money from an employer paid without in-
tent to influence the officers in respect to any of their actions,decisions or
duties. See United States v. Scotto, 641 F.2d 47 (2d Cir. 1980), cert. denied,
452 U.S. 961 (1981). The predicate Section 186(b) offenses are non-mens rea
misdemeanors. United States v. Ryan, 350 U.S. 299, 305 (1956); United States
v. Ricciardi, 357 F.2d 91 (2d Cir.), cert. denied, 384 U.S. 942 (1966).

labor organization or the contribution of financial or other sup-
port to it, and that Anastasio’s acceptance of the concealed
payments violated Section 8(b)(1)(A), which makes it an un-
fair labor practice for a labor organization to restrain or coerce
employees in the exercise of their statutory rights. The relief
recommended by the ALJ was limited, however, to a cease and
desist order that Jackson would not thereafter make concealed
payments to the petitioner and that the petitioner would not
thereafter receive such payments, and to the posting of notices
to that effect. App. C, infra, 109a-110a.

Subsequently, the Board issued its Decision and Order affir-
ming, inter alia, the ALJ’s findings of fact and conclusion that
the concealed payments violated Sections 8(a)(2)-(1) and
8(b)(1)(A) of the Act. The Board further found that the par-
ties’ modification of an existing collective bargaining agreement
to accommodate the establishment of a new shipyard opera-
tion was “tainted” by the illegal concealed payments. Based on
that finding, the Board drastically expanded the scope of the
remedy to include: (1) withdrawal of employer recognition of
the petitioner; (2) abrogation of the collective bargaining agree-
ment, as modified; and (3) the refund of all dues and initiation
fees to employees of the employer who joined the Union after
the effective date of the modification agreement. App. D, in-
fra, 115a-119a.

Both the petitioner and Jackson petitioned the United States
Court of Appeals for the District of Columbia Circuit for review
of the Board’s Decision and Order. The Board moved for con-
solidation of the two cases and for enforcement of its order.

The Court of Appeals, with one judge dissenting, held that the
Board’s order should be enforced. A petition for rehearing and sug-
gestion for rehearing en banc was denied. App. B, infra, 48a-49a.

REASONS FOR GRANTING THE PETITION

1. The court below characterized the issues raised in this case
as “legal questions of considerable importance and some novel-
ty.” App. A, infra, 2a. Its decision, with Wald, J. dissenting,
is of equai significance by virtue of its inevitable impact upon
the continued viability of the fundamental premises of the Na-
tional Labor Relations Act.

APD, ARB DARD DURES 2 a eR a

5

The indisputable core of the Act is the right of workers to
bargain collectively through representatives chosen by a ma-
jority. 29 U.S.C. 157, 159(a), Conair Corp. v. NLRB, 721 F.2d
1355, 1381-82 (D.C. Cir. 1983), App. A, infra, 4a. The deci-
sion below affirms a decision and order of the Board (App. D,
infra) which effectively eviscerates that policy by an ad hoc and
tortuous application of the principles of ordinary agency law
to achieve a desired result, i.e. the remediation of what the
Court of Appeals described as a “... truly stark case of corrup-
tion in labor-management relations.” App. A, infra, 2a. It falls
to this Court to reaffirm the national labor policy and reject
the substitution of the Board’s “big brother” judgment for a ma-
jority of employees’ express choice of collective bargaining
representative. See Conair, supra 721 F.2d at 1379.

The court below held that the acceptance of employer
payments by two of the petitioner’s highest officers in violation
of 29 U.S.C. 186(b) could properly be attributed to the Union
and, thereby, serve as predicates for the unfair labor practice
charged. App. A, infra, 3a. It based its imputation of liability
to the Union for the criminal acts of its officers upon the ap-
plication of the “scope of employment” doctrine and a finding
that the Union “benefitted” by Anastasio’s acceptance of
payments from Seregos. App. A, infra, 19a, 2la-23a.

In determining whether the acts of an individual may be im-
puted to a labor organization, the Board is bound by the “or-
dinary law of agency.” Int7 Longshoremen and Warehousemen’s
Union, 79 N.L.R.B., 1487 at 1507, quoting 93 Cong. Rec. 7001
(June 12, 1947) (remarks of Sen. Taft). Ordinary agency law
recognizes that an act may be within the scope of employment
even though it is criminal. See RESTATEMENT (Second) OF
AGENCY Section 231 (1958). However, a criminal act by an
employee is not within the scope of employment if it is not done
to benefit the employer. See id. Section 235. The act of any in-
stitution’s employees or officers may be imputed to the institu-
tion only when “it is actuated, at least in part, by a purpose
to serve the [institution].” See id. Section 228 (1)(c). See also
International Distribution Corp. v. American District Telephone
Co., 569 F.2d 136 (D.C. Cir. 1977); Park Transfer Co. v.

Lumberman’s Mutual Casualty Co., 142 F.2d 100 (D.C. Cir.
1944); Melton v. United States, 488 F.Supp. 1066 (D.D.C. 1980).

In this case, the sine qua non to a determination that Jackson
violated Section 8(a)(1)-(2) and the petitioner, Section 8(b)(1)(A),
is a finding, supported by substantial evidence, that Anastasio was
acting as the petitioner’s agent when he accepted illegal payments
from Seregos. The court below characterized the agreement bet-
ween Seregos and Anastasio as having four interlocking facets,
to wit: (1) The Company would voluntarily recognize the Union;
(2) the Company would check-off union dues and initiation fees
and fund a variety of fringe benefits; (3) the Union would steer
business to the Company; and (4) Anastasio would be paid a com-
mission for the business referred to Jackson. App. A, infra,
29a-23a. Yet, no substantial evidence was adduced that Anastasio
intended to serve the interests of the petitioner. *

The ALJ found that: (1) the record was devoid of any evidence
that Anastasio was authorized by the petitioner to obtain addi-
tional business for employers and to enter into arrangements for
payment from the employer for such referrals; (2) there is no
evidence that the petitioner received any of the monies paid by
Jackson through Seregos to Anastasio; and (3) there was no
evidence that the petitioner received any other tangible benefits
from such payments. App. C, infra, 85a. The Board disregard-
ed, but did not dispute those findings. As the dissent below ac-
curately observed:

“The solicitation and acceptance of kickback payments
here appear in no way to have been motivated by the
officials’ desire to serve their union. Instead it appears
from the evidence that Scotto and Anastasio simply ex-
ploited their powerful positions as ILA officials.” App.
A, infra, 45a.

> Conceptually, the kickback arrangement consisted of two parts: (1) Scotto
and Anastasio referred business to Jackson and (2) Seregos made cash payments
to Anastasio, which Anastasio accepted for himself. Under Section 8(a)(1)-
(2) and Section 8(b)(1)(A) of the Act, there is nothing unlawful about union
leaders referring work to a signatory employer. The court below found that

A ay Nate my Cf. Park Transfer Co. v. Lumbermen’s Mutual Casualty
Co., 142 F.2d 100, 100 (D.C. Cir. 1944) (employer not respon-
sible for murder of employee by co-worker in racial incident

26a

In those cases, like that at bar, the employees’ job re-
sponsibilities give rise to the opportunity for the mis-
deed. The critical distinction, however, lies in the fact
that the employees’ acts in the cited cases cannot possibly
be understood to further the interests of the employer.
Outright thefts by employees ¢ nfer no benefit whatso-
ever on the employer, and it would be absurd to main-
tain that employees were even partially motivated by
the employer’s interest when they commit such crimes.

Further illustration is provided by another case upon
which petitioners rely, Melton v. United States, 488 F.
Supp. 1066 (D.D.C. 1980), in which a government re-
habilitation specialist had been bribed by a developer to
falsify reports. The government was held not to be re-
sponsible under agency principles for the acts of its spe-
cialist, because his unlawful acts could not be regarded
as furthering the government’s interests. Jd. at 1073-74.
Significantly, the simple question of who ended up with
the bribe money was not considered determinative: the
totality of the parties’ interests were taken into consid-
eration. Jd. When the sort of all-embracing approach
evident in petitioners’ authority is applied to this case, it
becomes evident that the Board was correct to conclude
that the conduct of Anastasio and Scotto was within the
“scope of employment.”*! Their kickback arrangement

on the job site) ; Grimes v. Saul, 47 F.2d 409 (D.C. Cir. 1931)
(rape committed by employee not attributed to building
owner).

21 Because we hold that the Union officials’ acts were within
the “scope of employment” under agency law, we need not
address the NLRB’s alternative theory for the agency rela-
tionship, the “apparent authority” doctrine. See Brief for
Respondent at 18-19, 21-25. We note, however, that the “ap-
parent authority” strain of agency law has been applied under
the NLRA as an independent theory for the attribution of
responsibility to a union. See NLRB v. Local 3, IBEW, 467
F.2d 1158, 1160 (2d Cir. 1972); NLRB v. Local 815, Int’l
Bhd. of Teamsters, 290 F.2d 99, 103-04 (2d Cir. 1961)
(Friendly, J.). By analogy, the Supreme Court has given

27a

foreseeably and effectively benefitted the Union and fur-
thered the Union’s interests. We conclude that the ac-
ceptance of the money—a prohibited form of employer
payment and assistance—by the Union’s principal officers
is properly attributable to Local 1814, and gave rise to a
finding that both the Employer and the Union engaged in
unfair labor practices.

IV. THE BoARD’s REMEDIAL ACTIONS

Both the Union and Employer challenge the Board’s statu-
tory authority to order the remedial measures that it did.
The essence of their complaints is that the “remedies punish
Local 1814 for conduct beyond its control and conflict
with the purposes of the Act.” Brief for Petitioner Local
1814 at 31. Recognizing the NLRA’s remedial nature,
and the Board’s considerable remedial discretion, this
Court cannot agree that the Board exceeded its authority
or abused its discretion in ordering affirmative relief as it
did. Viewed pragmatically, the Board, when faced with
the egregious pattern of concealed unlawful assistance

approval to the liberal development of “apparent authority”
doctrine to hold organizations responsible for the acts of their
high officials in the context of other federal statutes. See
American Soc’y of Mechanical Eng’rs, Inc. v. Hydrolevel Corp.,
456 U.S. 556 (1982) (Sherman Act) ; United States v. Acme
Process Equip. Co., 385 U.S. 1388 (1966) (Anti-Kickback Act
provides basis for United States’ cancellation of contract).

Apparent authority doctrine, however, may not be well-
suited to a case such as this. When working within that doc-
trine, one must remain attentive to the question of to whom
authority might be said to be “apparent.” In the typical
unfair labor practice, the critical audience is the workforce:
the Act priiiiarily protects their interests. Apparent authority
doctrine under the NLRA has so recognized. In this case, how-
ever, the record nowhere indicates that Jackson’s employees
were aware of the kickback arrangement, at least until the
supervening indictment in the criminal case was issued. Thus
as an audience, the employees were shielded from most of
this performance.

28a

before it, was justified in ordering a completely fresh
start to relations between Jackson and its employees.

A. Background: The Board’s Remedial Discretion

The NLRA vests in the Board broad discretion to rem-
edy unfair labor practices:

If . . . the Board shall be of the opinion that any
person ‘named in the complaint has engaged in. .
any such unfair labor practice, then the Board shall
state its findings of fact and shall issue and cause to
be served on such person an order requiring such
person to cease and desist from such unfair labor
practice, and to take such affirmative action ... as
will effectuate the policies of this chapter... .

Section 10(c), 29 U.S.C. §160(c) (1976) (emphasis
added); see also Section 10(a), 29 U.S.C. § 160(a)
(1976) (“The Board is empowered .. . to prevent any
person from engaging in any unfair labor practice... .’’).
The Supreme Court has consistently recognized the great
breadth of discretion given the Board in remedial mat-
ters, thus implementing Congress’ intention to entrust
labor-management relations to a policy-making adminis-
trative body:

Because the relation of remedy to policy is peculiarly
a matter for administrative competence, courts must
not enter the allowable area of the Board’s discretion
and must guard against the danger of sliding un-
consciously from the narrow confines of law into the
more spacious domain of policy.

Phelps Dodge Corp. v. NLRB, 318 U.S. 177, 194 (1941) ;
see International Association of Machinists, Lodge 35 v.
NLRB, 311 U.S. 72, 82 (1940). The Court has also iden-
tified the need for judicial deferrence to the specialized
expertise of the NLRB, frankly acknowledging that the
Board’s remedial “conclusions may ‘express an intuition
of experience which outruns analysis and sums up many
unnamed and tangled impressions... .2” NLRB v.

29a

Seven-Up Bottling Co., 344 U.S. 344, 348 (1953) (cita-
tion omitted).

Accordingly, judicial review of Board-ordered remedies
has a narrow scope. The reviewing court must satisfy it-
self that the Board has employed its expertise, and has
fulfilled its duty to explain how the proposed remedy
furthers the policies of the Act. See Phelps Dodge, supra,
313 U.S. at 196-97. In addition, the court must ulti-
mately ensure that the selected remedy is rationally re-
lated to the purposes asserted by the Board, and does not
conflict with any statutory purpose. See Seven-Up Bot-
tling Co., supra, 344 U.S. at 346-48; Consolidated Edison
Co. v. NLRB, 305 U.S. 197, 235-36 (1938); NZRB v.
MacKay Radio & Telepraph Co., 304 U.S. 333, 348
(1988). Some decisions have spoken of the Act as
barring “punitive” rather than remedial measures, but
the Supreme Court has made it clear that the punitive
remedial distinction is merely a way of restating the un-
derlying question of whether a given remedy furthers,
and is in no manner inconsistent with, the purposes of
the Act. Seven-Up, supra, 344 U.S. at 348; Consolidated
Edison, supra, 305 U.S. at 235-36. In the remedial con-
text as in others, the central purposes of the Act are the
encouragement of collective bargaining and the protection
of employees’ rights to freedom of association and free
choice of bargaining representatives. See 29 U.S.C.
§§ 151, 157 (1976 & Supp. V 1981).

This Court’s duty is to ascertain whether the remedies
ordered by the Board are proximately tailored to the
facts of this case. The remedies selected by the Board
are virtually routine in large classes of cases, so it is not
the novelty of the remedies that should be our concern.
Rather, the question is whether these routine remedial
measures are appropriate to the violations here presented.
Several facts underlying the unfair labor practices in
question are of particular significance. First, the corrupt
arrangement went back to the very origins of the parties’

30a

relations, and actually predated the Employer’s recogni-
tion of the Union. Second is the extreme degree of col-
laboration between Jackson and Local 1814: although
Local 1814 was not a “company union” in the traditional
sense, its ties under the kickback arrangement were very
strong. The involved officers of the Union, without being
employees, in effect were paid for the services they were
able through the strength of the Union in the shipping
industry to render to Jackson.

Finally, we have the concealment of the unlawful as-
sistance payments in this case. Such payments usually
furnish the basis for the criminal prosecution of the re-
cipients, but here they furnish the basis for the unfair
labor practices. The more usual unfair labor practice
case based on company assistance to the union involves
more open management contributions of money or services
to the union——assistance of which the employees would pre-
sumably be aware. In this case, there is no evidence that
Jackson’s employees could have known of the kickback
arrangement until the issuance of the superseding indict-
ment.

Recognizing the broad contours of the NLRA’s reme-
dial scheme, and attentive to the peculiar facts of this
case, this Court has considered each of the contested rem-
edies ordered by the Board. We find that the Board’s
decision represents nothing more than a sensible applica-
tion of routine remedial practices to a slightly unusual
case, and that its orders were entirely consistent with the
purposes of the Act. The Board’s approach is based on
holding the Union responsible for its officers’ acts and on
restoring the employees to the position they would have
enjoyed but for the illegal arrangement.

B. The Cease-and-Desist Order Directed to the Union

Local 1814 contests the Board’s order directing the
Union to cease and desist from entering an arrangement
“where it receives payments from Jackson,” and to post

3ha

a notice declaring that the Union will never again enter
into such a scheme. Board Decision at 10, 11 (JA 405,
406). This objection is easily disposed of, for it is little
more than a renewal of the argument that Local 1814
cannot be held responsible for the actions of its officers.

The Board has specific authority to order cease-and-
desist orders to employers and unions, 29 U.S.C. § 160(c),
supra, and such orders are the staple of the NLRB’s
remedial practice. In particular, for instance, the Board
has ordered an employer to cease and desist from bribing
a union official. See Hollywood-Maxwell, supra, 126 F.2d
at 818-19. The proper scope of a cease-and-desist order
is determined only by inquiry into whether the Board
could reasonably conclude from the evidence that the or-
der was necessary to prevent further violations. See May
Department Stores Co. v. NLRB, 326 U.S. 376, 390
(1945). Notwithstanding the Board’s plenary authority
to issue such orders, the Union maintains that in this
case cease-and-desist orders are inappropriate, because
they “will not prevent a recurrence of the unfair labor
practices the Board found here, since in this case Local
1814 never received any of the money Seregos paid
Anastasio.” Brief for Petitioner Local 1814 at 51 (em-
' phasis in the original). As the entirety of section III of
this opinion demonstrates, supra, the absence of any evi-
dence that the Union received illegal payments is not
dispositive of whether the Union was unlawfully assisted.
The actions of Anastasio and Scotto are properly attrib-
utable to the Union. Local 1814 has the authority and
responsibility to control the conduct of its highest officers
and is responsible for their acts to the extent herein-
before set forth. Thus the cease-and-desist orders di-
rected to the Union were the natural concomitant of the
Board’s substantive findings in the case. The remedy fits
the facts. The orders issued to Local 1814 were neither
unfair nor misleading. In sum, we find no infirmity in
this portion of the Board’s order.

32a

C. The Board’s Order that the Employer Withdraw
Recognition of Local 1814 as Exclusive Bargaining
Representative of the Employees

In addition to the straightforward cease-and-desist or-
ders approved by the ALJ, the Board ordered several af-
firmative remedies on the part of the two petitioners. The
first such remedy consists of the portions of the Board’s
order compelling the Employer to cease recognizing Local
1814 as the exclusive bargaining representative of its
employees until the Union has been certified by the
NLRB, and requiring the Union to cease acting as the
representative of Jackson’s employees. Board Decision
at 7, 8, 11 (JA 402, 403, 406). Petitioner Local 1814
attacks this remedy as “punitive,” arguing that it “con-
flicts with [Jackson’s] employees’ rights under §7 of
the Act, because Local 1814 was the chosen representative
of an uncoerced majority of Jackson’s employees at all
relevant times.” Brief for Petitioner Local 1814 at 32;
see id. at 34, 38-39.

The Board’s standard practice in cases involving ex-
tensive unlawful assistance of a union is to issue the type
of decertification order here presented. See, e.g., NLRB
v. American Beef Packers, Inc., 488 F.2d 331 (10th
Cir.), cert. denied, 403 U.S. 919 (1971); American Bak-
ery & Confectionary Workers International Union v.
NLRB, 379 F.2d 160, 163 (D.C. Cir. 1967); Bowman
Transportation, Inc., 120 N.L.R.B. 1147, 1151 (1958). The
principal remedial issue in this area has revolved around
the distinction drawn between “employer domination”
and the lesser offense of “employer assistance;” the for-
mer has been remedied by complete disestablishment of
the union, while the latter has been corrected by the less
absolute means of decertification.2 Under the Board’s
established remedial practice, the purposes behind a de-

22 For evidence of this distinction at work, see NLRB v.
District 50, UMW, 355 U.S. 453, 458-59 (1958), and the
numerous cases cited therein.

33a

certification order are clear: to allow the effects of an
unfair labor practice to be dissipated, pending the estab-
lishment of the majority status of the union in an election
free of restraint and coercion. See NLRB v. District 50,
UMW, 355 U.S. 458, 459-60 (1958). Under such circum-
stances, the central policy of the NLRA is served—em-
ployees are given a true opportunity, after a breathing
spell, to choose freely their bargaining representative.
See id.

In this case, the Board ordered the decertification rem-
edy on the basis of its established practice and of the
statutory purposes fulfilled by that practice. See Board
Decision at 5 (JA 400). The Board had found unfair
labor practices on the part of both the Employer and the
Union, the core substances of which were respectively the
Employer’s concealed assistance of the Union, and the
Union’s capitulation, through its two principal officers, of
its independence and undivided loyalty to those whom it
represented. Noting the contract concessions made by the
Union during the 1979 renegotiation of the collective bar-
gaining agreement, the Board emphasized that the unfair
labor practices had “operated to taint and undermine the
bargaining relationship between” the Employer and Un-
ion. Jd. (emphasis added). That finding was central to
the Board’s imposition of the decertification remedy as a
means of allowing for a fresh start to the labor-
management relations of Jackson’s employees. As such,
it appears to be the real target of petitioners’ objections
to the affirmative remedies in question. However, we find
that the Board’s finding of a “taint” was supported by
substantial evidence on the record as a whole: * the long-
standing illicit kickback arrangement went to the very
core of the parties’ working relationship. The corrupt
agreement to provide the unlawful assistance pre-dated
the Employer’s recognition of Local 1814 by several

23 See 29 U.S.C. § 160(f) (1976) ; Universal Camera Corp.
v. NLRB, 340 U.S. 474 (1951).

34a

months, and was a condition imposed by the Union’s offi-
cials prior to entering into the collective bargaining
agreement. The final payments were made even after the
indictments, and even as the 1979 negotiations were get-
ting underway. See ALJ Decision at 4-9 (JA 295-300).
By necessity, a union represents its membership through
its officers, and in this case Local 1814’s officers had been
thoroughly corrupted. The Union’s representation of
Jackson’s workforce was thereby tainted.

In contesting the Board’s decertification remedy, peti-
tioners rely heavily on the ALJ’s findings that Local 1814
had enjoyed majority status among Jackson’s employees.
See ALJ Decision at 22, n.36, 40, 42 (JA 313, 331, 333).
Petitioner Jackson observes that the typical employer as-
sistance case in which the NLRB orders decertification
involves conduct which assists the union in obtaining ma-
jority status. Brief of Petitioner Jackson at 11. The
main thrust of this argument is that where majority
status has been demonstrated, a decertification order can-
not be reasonably imposed because the initial recognition
of the union was not flawed in any way. See id. at 12-13.
There are two potent responses. First, the Board has the
remedial authority and responsibility to apply its discre-
tion to all factual configurations that come before it; is-
suance of certain remedies is not limited to standard
factual situations. Second, the unlawful agreement to
provide the assistance in this case was entered into in
July, 1975 (JA 295), and predated the September date
when a majority of the employees expressed a preference
for the Union (JA 296). The evidence thus strongly
demonstrates that the kickback arrangement was an in-
tegral part of the mutual understanding that initially led
Jackson to consent to recognition. The Supreme Court
has recognized that the existence of majority status is not
necessarily determinative of whether employer assistance
has overriden the employees’ free choice. See NLRB v.
Newport News Co., 308 U.S. 241, 248-51 (1939). We
conclude that imposition of the decertification remedy

35a

here “properly reconcile[s] the objectives of eliminating
improper employer interference and preserving the em-
ployees’ full choice of a bargaining representative.”
District 50, UMW, supra, 355 U.S. at 461.

Finally, Local 1814 argues that the absence of demon-
strable coercion of the Jackson workforce precludes the
decertification remedy. Brief for Petitioner Local 1814
at 37-40. This demand for a showing of “coercion” is
highly disingenuous, to say the least. In this case, the
Board was inherently prevented from introducing out-
ward evidence of coercion because from the very outset
the unlawful assistance payments were effectively con-
cealed from Jackson’s employees, as from the world at
large. Thus petitioner’s argument amounts to little more
than an assertion that because the Employer and Union
succeeded so long and so well in concealing their trans-
gressions, the unfair labor practices found here cannot be
remedied. The Board’s decertification order saw through
this argument. This Court finds a sufficient factual nexus
between the underlying facts, the violations found, and
the remedy of decertification. The Union has not been

*% Both in its brief, Reply Brief for Petitioner Jackson at
15, and at oral argument, Jackson adopted the position that
approval of decertification here must necessarily be equated
with the proposition that once the Employer became aware
of the violations, it was legally obligated to cease recognizing
the Union, even in the absence of any Board action in the
matter. We emphasize that the latter situation, in which
there has been no administrative or legal determination that
an unfair labor practice has occurred, is clearly distinguishable
from that at bar, and is most certainly not before this Court.
We do not imply that an employer placed in the situation
hypothesized would be obligated in the manner that Jackson
suggests. We note, however, the decision of the Ninth Circuit
that where the employees had designated a union as their
bargaining agent, and had later discovered that a union official
had accepted bribes from the employer, the employees were
empowered to revoke the prior designation, and the employer
was then justified in refusing to bargain with the union. See
Hollywood-Mazwell, supra, 126 F.2d at 819-20, 823.

36a

irrevocably disestablished: if Local 1814 truly enjoys
majority status among Jackson’s employees, then the
Union will be able to demonstrate its majority status in
an election conducted free from the tainted atmosphere
that so long pervaded relations between this Employer
and Union.

D. Abrogation of the 1979 Collective Bargaining Agree-
ment

Petitioners next contest the Board orders requiring
Local 1814 and Jackson to cease giving effect to the 1979
collective bargaining agreement between the parties—in-
cluding all dues checkoff cards executed pursuant thereto
—until the Union has been certified by the NLRB. Board
Decision at 6, 8, 10-11 (JA 401, 403, 405-06). Because
the Board provided the employees substantive protection
from the Employer disregarding the terms of the con-
tract,* the abrogation remedy is essentially only a cor-
ollary to the decertification remedy. Like that remedy,
abrogation was based on the central finding of the Board,
which we endorsed above—that the illegal concealed pay-
ments, particularly when viewed together with the con-
tract concessions, had served to “taint and undermine”
the parties’ bargaining relationship. Concerning the ab-
rogation of the collective bargaining agreement, we af-
firm the Board’s conclusion that in light of the fact that
Anastasio and Scotto had remained as officers of the Un-

23In order to protect the employees’ substantive interests,
the Board provided the following:

Nothing in our Order . . . shall be deemed to require
[Jackson] to vary or abandon those wage, hour, seniority,
or other substantive features of its relations with em-
ployees established in the performance of the aforemen-
tioned collective-bargaining agreement, or to prejudice
the assertion by the employees of any rights they may
have thereunder.

Board Decision at 6-7 (JA 401-02) (citing Sweater Bee by
Banff, Ltd., 197 N.L.R.B. 805 (1972) ).

372

ion, “their divorce from the actual negotiations” was not
determinative of whether those negotiations had been
tainted. Board Decision at 5 (JA 400).

Like the decertification remedy, the abrogation remedy
is designed to dissipate the effects of unfair labor prac-
tices and to protect employees’ statutory rights. In un-
lawful assistance cases where the violation has had some
impact on the contract in question, the abrogation remedy
is virtually routine. See, e.g., International Association of
Machinists, supra, 311 U.S. at 75; American Bakery &
Confectionary Workers International Union, supra, 379
F.2d at 163; Ditzler Mechanical Contractors, Inc., 259
N.L.R.B. 610, 612-13 (1981) ; Jeffrey Manufacturing Co.,
208 N.L.R.B. 75 (1974) ; Bisso Towboat Co., 192 N.L.R.B.
885 (1971).

In attacking the abrogation remedy, petitioner Jackson
argues that “there is simply no connection between the
unlawful payments and what has been nullified by the
Board.” Reply Brief for Petitioner Jackson at 14; see
Brief for Petitioner Local 1814 at 44-45. Petitioners rely
on the findings of the ALJ that the modified collective
bargaining agreement had been the product of hard bar-
gaining. See ALJ Decision at 42 (JA 333). In addition,
petitioners assert that the unlawful payments and the
contract concessions were not truly contemporaneous, in
that the payments ceased shortly before the 1979 contract
was executed. See Brief for Petitioner Local 1814 at 42;
Reply Brief for Petitioner Jackson at 14. Therefore, they
conclude, the 1979 modified contract was not the “fruit”
of the illegal assistance, within the sense of Consolidated
Edison, supra, 305 U.S. at 236, 238.

We cannot so easily dismiss the Board’s conclusion that
the illegal assistance was sufficiently proximate to the
1979 negotiations, in both time and practical impact, to
support the abrogation remedy. The last illegal payment
was made even as the negotiations were getting under
way. As we have indicated, the kickback arrangement

38a

went to the very heart of the Jackson-Local 1814 rela-
tionship through the summer of 1979. Like its highest
officers themselves, the Union’s representation of the Jack-
son employees had been thoroughly corrupted. In this
context, the fact that Scotto and Anastasio, still the Un-
ion’s highest officers with no diminution of their internal
authority, did not actually take part in the negotiations
amounts to a mere formality. The Board has fulfilled its
responsibility to tailor the remedy to the violation: it
demonstrated with reasonable specificity the impact of the
illegal assistance on the parties’ bargaining relationship
and on the modification negotiations in 1979. Petitioners
would simply have the Board ignore the forest for ex-
amining the trees. Given the magnitude of the violations
presented, the Board’s “taint and undermine” finding, as
applied to the 1979 modifications, was no great leap.
That taint on the agreement warrants abrogation there-
of. The Board’s order, however, does leave open the pos-
sibility that the contract may be reinstated when and if
the NLRB certifies the Union.

E. The Reimbursement of Dues

The final contested remedy is the Board’s order that the
Employer and Union, jointly and severally, reimburse all
employees who joined the Union after the 1979 contract
for all dues and fees extracted from those employees un-
der the collective bargaining agreement. See Board De-
cision at 6, 8-9, 11 (JA 401, 403-04, 406). Petitioners
contend that reimbursement is unwarranted because there
was no showing that employees had been coerced into
joining the Union and paying dues, and because the union
security clause in the 1979 collective bargaining agree-
ment was entirely legal.”

26 As a threshold matter, the Court holds that the Board
was not precluded from ordering reinstatement by either the
ALJ’s decision not to recommend that remedy, or the absence
of an exception on that point by the General Counsel—or by

39a

The reimbursement remedy is another way of dissipat-
ing the effects of unlawful labor practices, and also re-
stores to employees that which was unlawfully taken from
them. On these bases, the Board has long ordered repay-
ment of dues where employees, as a requirement of em-
ployment, were unlawfully required to support a union.
See Virginia Electric and Power Co. v. NLRB, 319 US.
533, 539-45 (1943). Reimbursement may be ordered
when the union is assisted, as well as when it is “domi-
nated.” See, e.g., NLRB v. Vernitron Electrical Compo-
nents, Inc., 548 F.2d 24, 27 (1st Cir. 1977); NLRB v.
Revere Metal Art Co., 280 F.2d 96, 100-101 (2d Cir.),
cert. denied, 364 U.S. 894 (1960). In either case, the con-
tinued existence of a union security clause may compel
union members to financially support a union that has
compromised its undivided loyalty to the employees.”

There is no dispute that the 1979 collective bargaining
agreement contained, as had the predecessor agreement,
both a union security clause and a dues checkoff provi-
sion. Nonetheless, petitioners argue that reimbursement

those two factors taken together. NLRB v. WTVJ, Inc., 268
F.2d 346, 348 (5th Cir. 1959) (“Even absent an exception, the
Board is not compelled to act as a mere rubber stamp for its
[ALJ].”) ; see Hedstrom Co. v. NLRB, 629 F.2d 305, 315-16
(3d Cir. 1980) (en banc), cert. denied, 450 U.S. 996 (1981) ;
NLRB v. Duncan Foundry & Machine Works, Inc., 485 F.2d
612, 620 (7th Cir. 1970) ; Kohler Co., 128 N.L.R.B. 1062, 1096
(1960), remanded on other grounds sub. nom. Local 8338,
UAW v. NLRB, 300 F.2d 699 (D.C. Cir.), cert. denied, 370
U.S. 911 (1962). The conclusion that the Board was not pre-
cluded from ordering this remedy is particularly strong be-
cause the reimbursement remedy was before the ALJ and was
briefed at that stage of this case: the petitioners cannot claim
unfair surprise at this later stage.

27 Under Supreme Court decisions, the question whether
union members allegedly receive benefits from union bar-
gaining that they might otherwise not have enjoyed is im-
material to the propriety of a reimbursement order. See Vir-
ginia Electric Power Co., supra, 319 U.S. at 543-44; Vernitron,
supra, 548 F.2d at 27.

40a

is inappropriate. First, Local 1814 maintains that the
ease is controlled by the Supreme Court’s decision in Lo-
cal 60, Carpenters v. NLRB, 365 U.S. 651 (1961). That
case held that reimbursement was punitive when applied
to long-time union members, at least in the absence of
evidence that those employees had somehow been coerced
into joining the union as a condition of employment. /d.
at 654-66. The Board’s reimbursement order here, how-
ever, benefits only employees who joined the union after
the 1979 collective bargaining agreement became effective.
Thus the incongruency perceived by the Court in Local
60, Carpenters—the reimbursement of longstanding union
members, whose membership had not demonstrably been
coerced—is absent in this case. Numerous decisions have
recognized that reimbursement is entirely proper when
applied to employees joining the union after the unlawful
assistance, and where a union security clause, that is un-
lawfully acquired, compels payment of dues. See, ¢.g.,
Vernitron, supra, 548 F.2d at 27; NLRB v. Raymond
Buick, Inc., 445 F.2d 644, 645 (2d Cir. 1971). The Local
60, Carpenters requirement of demonstrable coercion is
simply inapplicable.

Petitioners next produce a series of related arguments,
the common core of which is the objection that the 1979
agreement was not unlawful in any way. Both Local
1814 and Jackson reason that because the union security
clause in the 1979 agreement was merely carried over
from the preceding agreement, that the 1979 clause was
not the result of any unfair labor practice. Brief for Pe-
titioner Local 1814 at 49-50; Brief for Petitioner Jackson
at 41. In addition, pewtioners appear to treat the Board’s
application of the reimbursement remedy only to employ-
ees joining the Union under the 1979 collective bargain-
ing agreement as some sort of concession that the checkoff
of dues was unrelated to the unlawful payments. If the
two had truly been related, the argument goes, the Board
would have extended reimbursement further back in time.
Both arguments miss the mark. Regardless of the pre-

4la

existence of the union security clause, the Board found
that the unlawful assistance, particularly in light of the
Union’s bargaining concessions, had been severe enough to
“taint and undermine” the parties’ bargaining relation-
ship that led to the 1979 agreement. In that way, the en-
tirety of the modified collective bargaining agreement, in-
cluding the union security and dues checkoff clauses, were
infected. That being so, reimbursement was appropriately
ordered. The Board’s decision not to extend reimburse-
ment further back in time 7* was an exercise of remedial
discretion, and in no way detracts from the Board’s au-
thority to go as far as it did. The Board is not obliged to
adopt an all-or-nothing remedial stance. That the Board
might have been justified in going back further than it
did is not a sound reason to set aside its order limiting
reimbursemerit to more recent payments.

¥.

For the foregoing reasons, this Court upholds the
Board’s decision that both the Employer and Union com-
mitted unfair labor practices. The acts of the Union’s
Officials being properly attributable to the Union itself,
the illicit kickback arrangement gave rise to violations on
the part of both petitioners. The Board’s remedies were
reasonably designed to dissipate the effects of those vio-
lations, and to prevent their recurrence. We deny the
petitions and order that the Board’s order be enforced in
its entirety.”

Judgment Accordingly.

28In so limiting the scope of the reimbursement remedy,
the Board cited, without comment, its decision in Unit Train
Coal Sales, Inc., 284 N.L.R.B. 1265 (1978), enforcement de-
nied on other grounds, 636 F.2d 1121 (6th Cir. 1980). In
that case, the Board limited the imposition of its reimburse-
ment remedy to that time frame in which the union security
clause could be deemed unlawful. See id. at 1273.

29 The dissent suggests that the foregoing decision would
permit the Board to “abrogate... any bargaining relationship
and any labor contract involving corrupt dealings between the

42a

employer and union officials.” Dissent at 2. That assertion
is overbroad and misconstrues this opinion. Our approval of
the Board’s findings and remedial actions in this case is predi-
cated upon the specific factual situation that was presented
to the Board—a situation in which the entire relationship be-
tween the Union and Company was predicated from the
beginning on the unlawful assistance to the Union and subse-
quent kickbacks to the Union’s principal officers. From the
very beginning of negotiations it was agreed between the
officers of the Union and the Company that the Union would
benefit materially from the corrupt arrangement and that the
corrupt payments would not begin until the Company’s em-
ployees joined the Union, and both of these requirements
which materially benefitted the Union were complied with
before any sums were paid. We intimate no views on other
cases, differing in kind or in degree, that might come before
the Board.

43a

WALD, Circuit Judge, dissenting: Although I, like the
majority, abhor the corrupt conduct of the union officials
in this case, I have considerable difficulty in enforcing
the Board’s remedial order against the union on the basis
of the record before us. As the majority points out, Maj.
Op. at 12, this is apparently the first time in the fifty-
year history of the NLRA that the Board has applied the
section 8(a) (2) proscription of financial and other sup-
port of unions by employers to a scheme of individual
corruption involving kickback payments that in no way
benefitted the union as an entity. I am not willing to
say at this juncture that the Board is not authorized un-
der any circumstances to apply section 8(a) (2) and its
decertification remedies to a union so infected by its
leaders’ corruption that it cannot properly represent its
members. But neither am I willing to read the statute as
permitting the Board to make this major innovation in
the interpretation of the law without any findings or al-
lusions to evidence on the record demonstrating a rela-
tionship between the individual officers’ corruption and
the union’s representation of its members. To do so would
impermissibly expand the Board’s power to intervene in
and dissolve collective bargaining relationships vitally af-
fecting the welfare of union members in situations not
within the legitimate ambit of section 8(a) (2).

The uniqueness of this case of course does not lie in the
corrupt scheme recounted in detail by the majority. Kick-
backs of precisely this kind motivated Congress to enact
as part of the Taft-Hartley Act a special statute, 29
U.S.C. § 186, proscribing the acceptance of payments by
union officials from employers and providing for both
criminal penalties and various civil remedies for its vio-
lation. Indeed the very existence of 29 U.S.C. § 186
strongly suggests to me that Congress never intended

1 Although the Board also found violations of § 8(a) (1)
and § 8(b) (1) (A), making it unlawful for an employer and
? labor organization respectively to restrain or coerce em-
ployees in the exercise of their rights under the labor laws,
hae violations are entirely derivative of the § 8(a) (2) vio-

on.

44a

section 8(a) (2), a provision designed to deal with the
altogether different problem of “company unions,” to be
applied to kickback schemes like this one.

By its terms, section 8(a) (2) proscribes financial or
other support to a labor organization. There is absolutely
no evidence that any of the kickback money here went
into the union coffers or in any other way benefitted the
union. ALJ Opinion at 27, J.A. 318. I cannot agree with
the majority’s attempts to finesse this point by character-
izing the payments as simply part of a “package deal”
that benefitted the union. The sole basis for the Board’s
finding of an unfair labor practice was the kickback pay-
ments themselves and those payments did not in any way
(as far as the record shows) benefit the union. Under
the “package deal” theory, the Board could abrogate un-
der section 8(a) (2) virtually any bargaining relationship
and any labor contract involving corrupt dealings between
the employer and union officials. This would radically ex-
pand the Board’s power to determine for employees which
unions are or are not worthy of their support. The ALJ
specifically found that the union here maintained the sup-
port of an uncoerced majority, ALJ Op. at 40, J.A. 331.
I need not remind this court of the fundamental premise
of the National Labor Relations Act that employees should
be free to choose their own representatives; we recently
rejected a Board decision to issue a bargaining order
where the union had not attained majority status because
such an order was deemed inconsistent with that premise.
Conair Corp. v. NLRB, 721 F.2d 13855 (D.C. Cir. 1983) ;
see infra note 2.

The use of common law agency principles to substitute
for a total lack of evidence that the kickbacks benefitted
the union does not work. Obviously, as the ALJ noted, we
could not expect the union to ratify the illegal actions of
its officers. But that truism does not mean that we should
presume that every illegal action taken by a union officer
to line hix own pockets is done by and for the benefit of
the union. Indeed, the common law of agency incorpo-
rates the opposite presumption, that an illegal act ordi-

45a

narily will not be found within. the agent’s scope of em-
ployment. Although there are situations in which the
principal is held liable for such conduct, generally where
innocent third parties are the direct victims of the
agent’s illegal conduct, it remains the general rule that
“if the employee committing the crime is acting solely
for his own benefit, his employer is not liable.” Melton v.
United States, 488 F. Supp. 1066, 1074 (D.D.C. 1980).
See also Hoston v. Silbert, 681 F.2d 876, 880 (D.C. Cir.
1982) (under D.C. law, “foreseeability must be com-
bined with a purpose to further the employer’s interest’) ;
Restatement (Second) of Agency § 235. The solicitation
and acceptance of kickback payments here appear in no
way to have been motivated by the officials’ desire to
serve their union. Instead it appears from the evidence
that Scotto and Anastasio simply exploited their powerful
positions as ILA officials. Indeed, it is odd, in light of
the Board’s attempt to portray this as a routine applica-
tion of agency principles to what is unfortunately a fam-
iliar set of facts, that we have been cited to no prior
Board decision that held a union responsible under prin-
ciples of agency for its officers’ acceptance of illegal kick-
backs.

The majority, the ALJ and the Board all presume that
no direct evidence could be shown—and therefore that
none need be shown—to link the kickback payments to
the union. But that link is precisely what the statute re-
quires—some proof that the employer provided unlawful
support to the union by virtue of the payments—or at
least what agency law ordinarily requires—that Scotto
and Anastasio, in soliciting and accepting kickbacks, were
acting pursuant to a plan entered into for the benefit of
or with the approval of the union as an entity. This
would for instance be a different case if there were evi-
dence of widespread knowledge and acceptance of the
kickback scheme by other union officers or members. In-
“jead we have only the bare fact of an indictment that
came down at the very end of the kickback scheme. What-
ever our personal views of what action a “truly upright

46a

union” would take under the circumstances, Maj. Op. at
20, there is no evidence at all in this record of knowledge
or ratification by other officers or members so as to fill
the gaping holes in the Board’s application of agency
law.

This would also be a different case if the Board had
found on the basis of substantial evidence that the em-
ployer or the union had, by virtue of the kickback pay-
ments or otherwise, coerced or restrained employees in
their choice of bargaining representative, or that the un-
ion had failed to represent the employees adequately. In-
stead, the ALJ specifically found on the evidence before
him that Local 1814 had maintained the support of an
uncoerced majority, ALJ Op. at 40, J.A. 331, and had
provided the employees with “vigorous and effective rep-
resentation” in spite of the ongoing kickback scheme.
ALJ Op. at 42, J.A. 333. Without pointing to a single
piece of evidence undermining these carefully supported
findings, the Board concluded that the entire bargaining
relationship was “tainted.” It proceeded to order a set of
section 8(a) (2) remedies, including decertification of the
union and abrogation of the collective bargaining agree-
ment, that make sense only in the usual 8(a) (2) case, in
which the employer’s out front assistance to the union
carries with it a threat of coercion to the rank and file
and therefore undermines the union’s claim of majority
status. I point out at the risk of tedium the absence of
any precedent for the application of these remedies to a
case of direct and secret employer payments to officials,
apparently inuring solely to the personal benefit of those
individual union officials.

If the Board’s decision in this case is based on its con-
clusion that concealed kickback payments of this kind to
high union officers are inherently coerceive and neces-
sarily taint the bargaining relationship, then the Board
has introduced a major innovation in the law of labor
relations permitting massive government intervention
into collective bargaining relationships in the absence of

47a

any evidence of coercion or lack of majority status. At
the very least the Board is obligated to acknowledge the
significance of this innovative use of the NLRA and to
justify it.2 Here, however, we are presented with no link,
logical or factual, between the corrupt kickbacks and the
need for a complete abrogation of the entire collective
bargaining relationship that the Board, reversing the
ALJ, ordered as a remedy.

The government has a wide range of remedies and
penalties under 29 U.S.C. § 186 that are tailor-made to
penalize and rectify the evil of such kickback schemes.
Section 8(a) (2) and the traditional remedies for its vio-
lation simply do not fit the situation depicted here of
corrupt union officers extorting money from the employer
solely for their own use. Without proof of any motive to
benefit the union or any relationship between their in-
dividual greed and the union’s activities, I am not con-
vinced that there is a legitimate invocation of section
8(a) (2). However distasteful the misdeeds of these in-
dividuals, they do not justify novel remedies that bend
the statute out of shape and, in so doing, penalize not the
culprits but the union and its members who are, as far
as we can tell from this record, only innocent bystanders
to the wrongdoing. I respectfully dissent.

2In Conair Corp. v. NLRB, 721 F.2d 1355 (D.C. Cir. 1983),
this court held that the principle of majority support is so
central to the statutory scheme that the NLRB may never
issue a bargaining order in the absence of evidence that the
union had a majority before the employer’s coercive conduct
took its toll. 721 F.2d at 1377-84. I dissented. In my view,
the Board had adequately supported its conclusion that the em-
ployer’s massive and unprecedented campaign of coercion had
eliminated any possibility of a fair election and that a tempo-
rary bargaining order was the only possible means of restoring
employee freedom of choice. See id. at 1387-1401. The ma-
jority decides here, ironically, that the principle of majority
rule and freedom of choice is so unimportant that a collective
bargaining representative whose majority status is not in
doubt may be ousted on the basis of individual officers’ cor-
ruption bearing no demonstrated relationship to the quality
of the representation in collective bargaining.

APPENDIX B

48a

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT
No. 83-1113 September Term, 1983

Local 1814, International Longshoreman’s Association,
AFL-CIO

Petitioner

v.
National Labor Relations Board,

Respondent

And Consolidated Case No. 83-1117

BEFORE: Wilkey and Wald, Circuit Judges, and MacKinnon,
Senior Circuit Judge

ORDER

On consideration of the Petition for Rehearing of Petitioner-
Cross Respondent, Local 1814, it is

ORDERED by the Court that the aforesaid Petition for
Rehearing is denied.

Per Curiam

For the Court:
Georce A. FisHer, Clerk

By:
Robert A. Bonner
Chief Deputy Clerk

Circuit Judge Wald would grant the Petition for Rehearing.

49a

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 83-1113 September Term, 1983
Local 1814, International Longshoreman’s Association,
AFL-CIO

Petitioner
v.

National Labor Relations Board,

Respondent

And Consolidated Case No. 83-1117

BEFORE: Robinson, Chief Judge; Wright, Tamm, Wilkey,
Wald, Mikva, Edwards, Ginsburg, Bork, Scalia and
Starr, Circuit Judges

ORDER

The Suggestion for Rehearing en banc of Petitioner-Cross
Respondent, Local 1814, has been circulated to the
full Court and a majority of the Judges in regular
active service have not voted in favor thereof. On
consideration of the foregoing, it is

ORDERED by the Court en banc that the aforesaid Sugges-
tion is denied.

Per Curiam

For the Court:
GeorceE A. FisHEer, Clerk

By:
Robert A. Bonner
Chief Deputy Clerk

Circuit Judge Wald, Edwards and Ginsburg would grant the
Suggestion for Rehearing en banc.

APPENDIX C

UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
BRANCH OFFICE
NEW YORK, NEW YORK

JACKSON ENGINEERING CO.

and
INDUSTRIAL UNION OF MARINE
AND SHIPBUILDING WORKERS
OF AMERICA, AFL-CIO and
LOCAL 17, INDUSTRIAL UNION
OF MARINE AND
SHIPBUILDING WORKERS OF
AMERICA, AFL-CIO

and

LOCAL 1814, INTERNATIONAL
LONGSHOREMEN’S
ASSOCIATION, AFL-CIO

Party to the Contract
LOCAL 1814, INTERNATIONAL
LONGSHOREMEN’S
ASSOCIATION, AFL-CIO
(JACKSON ENGINEERING CO.)

and
INDUSTRIAL UNION OF MARINE
AND SHIPBUILDING WORKERS
OF AMERICA, AFL-CIO and
LOCAL 17, INDUSTRIAL UNION
OF MARINE AND
SHIPBUILDING WORKERS OF
AMERICA, AFL-CIO

and
JACKSON ENGINEERING CO.
Party to the Contract

Case No. 29-CA-7498

Case No. 29-CB-3966

5la

Stanley, L. Goodman, Esq. and
Steven M. Swirsky, Esq.,
Brooklyn, NY for General Counsel.

Andrew E. Zelman, Esq. and Jeffrey
H. Lapidus, Esq. (Seham, Klein &
Zelman, Esqs.) New York, NY for
Respondent Employer.

Howard Schulman, Esq. and Donald
L. Sapir, Esq. (Schulman &
Abarbanel, Esqs.) New York, NY
for Respondent Union.

Michael Brodie, Esq. (Freedman &
Lorry, Esqs.) Philadelphia, Penn.
for Charging Parties.

DECISION
Statement of the Case

STEVEN B. FISH, Administrative Law Judge: Pursuant to
charges and amended charges filed by Industrial Union of Ma-
rine and Shipbuilding Workers of America, AFL-CIO and Local
17, Industrial Union of Marine and Shipbuilding Workers of
America, herein called Charging Parties or IUMSWA, the Gen-
- eral Counsel of the National Labor Relations Board by the
Regional Director for Region 29 issued an Order Consolidating
Cases, Consolidated Complaint and Notice of Hearing on May
30, 1980 and a Consolidated Amended Complaint on October
7, 1980. The Complaint as amended alleges that Jackson Engi-
neering Co., herein called Respondent Employer or Jackson,
violated Section 8(a)(1), (2) and (3) of the Act and that Local
1814, International Longshoremen’s Association, AFL-CIO,
herein referred to as Respondent Union or ILA, violated Section
8(b)(1)(A) and (2) of the Act, by inter alia, on September 13,
1979,' executing and thereafter maintaining and enforcing a
collective bargaining agreement with respect to Jackson’s em-

‘ Unless otherwise obtained all dates hereinafter referred to are in 1979.

$2a

ployees, containing a Union Security Clause, notwithstanding
the fact that a real question concerning the representation of
said employees had been raised and was pending by virtue of
requests for recognition made by IUMSWA. The Complaint
also alleges that Jackson violated Section 8(a)(1) and (2) and ILA
violated Section 8(b)(1)(A)of the Act, by virtue of an arrangement
in existence from 1975 to 1979 whereby Jackson made concealed
payments to Anthony Scotto and Anthony Anastasio, president
and executive vice-president of the ILA, respectively, in amounts
equal to ten percent of the additional volume of business result-
ing from referrals to Jackson by the ILA.

A hearing on the issues encompassed by said complaint was
heard before me in Brooklyn and New York, New York on
October 27, 28 and 29, 1980 and on June 3 and 4, 1981.”

Briefs which have been received from General Counsel, Re-
spondent Company and Respondent Union, have been carefully
considered, and I might add were all excellently prepared and
most helpful in assisting my deliberations herein.

Upon the entire record, including my observation of the
demeanor of the witnesses, I make the following:

Findings of Fact
I. Jurisdiction

Respondent Employer, a New Jersey corporation, is engaged
in the business of performing maritime ship maintenance, build-
ing and repair services and related services, with places of

* Although not appearing at the hearing, Counsel for the Charging Parties
submitted a motion to the Chief Administrative Law Judge, which was re-
ferred to me for disposition, requesting withdrawal of the charges herein. Said
request had previously been denied by the Regional Director for Region 29,
by letter dated October 1, 1980, except for the portion of the charge in Case
No. 29-CB-3966 insofar as it relates to the International Longshoremen’s
Association, AFL-CIO, which had been named a Respondent in the original
Complaint issued on May 30, 1980. The Amended Complaint issued on
October 7, 1980, pursuant to the Director's approval of the partial withdrawal,
removed the international as a Respondent herein. I deferred ruling on the
motion of Charging Parties to withdraw the remaining portions of the charge
pending my hearing the record testimony and consideration of the parties
briefs on this issue.

$3a

business at 1418 Willow Avenue in Hoboken, New Jersey,
herein called the Hoboken facility, at 2945 Richmond Terrace
in Staten Island, New York, herein called the Staten Island
facility, and various other places of business in New York and
New Jersey. Annually, Respondent Employer in the course of
its business operations, performed services in excess of $50,000
for various steamship companies, including United States Lines
and Prudential Lines, each of which companies annually derives
gross revenues in excess of $50,000 from the transportation of
goods and passengers among the several states of the United
States and to foreign countries. Respondents admit and I find
that Jackson *s an employer engaged in commerce within the
meaning of Section 2(2), (6) and (7) of the Act.

It is also admitted and I so find that Charging Parties and the
ILA are, and have been at all times material herein labor organ-
izations within the meaning of Section 2(5) of the Act.

Il. Facts

A. Recognition of ILA By Jackson and Arrangement
For Payments to ILA Officers By Jackson

Respondent Employer began its operations in 1948. Prior to
1975 its employees were not represented by any labor organi-
zation. Nicholas Seregos, herein called Seregos, became presi-
dent of Jackson on or about August 1971, when it had sales of
less than $500,000 per year.

In the middle of 1975, Seregos noticed that when he would
go around soliciting for business, particularly on U.S. flag ships,
he would be told that unless he was a Union shop his firm could
not obtain the work on the piers. Sonny Montella, an acquaint-
ance of Seregos, suggested to him that he ccntact Anthony

Sta

Anastasio, an officer of the ILA.* Seregos then telephoned An-
astasio at the ILA’s office and informed Anastasio of his being
referred by Montella to Anastasio. Seregos added that he was
looking for some business and was interested in unionizing the
shop. A meeting was arranged for and held either at the Re-
spondent Employer's Hoboken shop or Respondent Union's
Brooklyn office. Seregos repeated that he was looking for work
and wanted to unionize his shop. Anastasio responded that he
wished to meet the employees at the shop and see if they would
be williag to sign up. Anastasio then met with Jackson’s employ-
ees. The record does not disclose what if anything Anastasio said
to the employees at that time.

Seregos next met with Anastasio sometime prior to July 11,
1975. At this meeting Anastasio offered to obtain some business
for Jackson, for a consideration of 10% of the proceeds of any
business obtained through his efforts. Anastasio made it clear to
Seregos that he would not help Seregos get any business unless
Jackson became a Union shop. Seregos agreed to the arrange-
ment and agreed that his firm would become a Union shop.

On or about July 11, 1975, Seregos met again with Anastasio,
this time in the ILA’s office. At this meeting Anastasio in-
structed Seregos to write a letter to Prudential Lines, a U.S.
flag ship, attention John Marano. Anastasio told Seregos that he
could help him obtain business from this firm. Pursuant to
Anastasio’s instructions Seregos wrote a letter dated July 11,
1975 to Marano of Prudential, stating that Jackson is a complete
union plant affiliated with ILA, and that its employees are ILA
members.

* At that time Anastasio was Secretary Treasurer of Local 1277, ILA. In
March 1978, Local 1277 as well as other locals of the International merged
into Local 1814, ILA, the Respondent Union herein. All parties concede that
Respondent Union is the successor to Local 1277. As Secretary Treasurer,
Anastasio was responsible for the administration of contracts for the ILA in the
ship repair industry. He continued exercising that responsibility after the
merger when he became Executive Vice President, the number two position
in the merged organization.

55a

On September 15, 1975 the ILA obtained authorization cards
from Jackson’s employees and in late September, Jackson by
Seregos signed a memorandum of understanding with the ILA,
apparently agreeing to recognition. Thereafter pursuant to
checkoff authorizations executed by Jackson’s employees, it be-
gan to checkoff dues and forward them to the ILA.‘

Sometime in the fall of 1975, Seregos met with Anastasio and
Anthony Scotto, president of the ILA, at the ILA’s office. Sere-
gos indicated that he was looking for more work. Scotto replied
that he could help Seregos obtain the United States Shipping
Lines account. The conversation then drifted to how Seregos
was going to come up with the 10% commission arrangement on
this business. Scotto indicated that he was concerned about how
Seregos was going to get the money and suggested that he would
assist Seregos in setting up a foreign corporation to help him in
this regard. Seregos replied that this will not be necessary.

The parties then signed a collective agreement effective No-
vember 3, 1975 to November 3, 1978. This contract was the
industry contract, known as the “blue book,” and was signed by
Seregos, Anastasio and Scotto.

At some point in the early fall of 1975, Seregos received a
phone call from a Mr. Bauer, assistant to the director at U.S.
Lines, notifying Jackson to start work on one of their ships.
Jackson began receiving business from Prudential Lines in or
about September of 1975.

At some time late 1975, after Jackson began receiving busi-
ness from Prudential and U.S. Lines, Seregos discussed with
Anastasio the method of payment of the 10% commission. An-
astasio informed Seregos that payments were to be made in
cash, and Seregos agreed.

* The memorandum of understanding signed by Jackson was not introduced
into the record, nor does the record reveal its terms. However, the record
tends to suggest and I so find that the memorandum of understanding in
addition to providing for recognition of ILA, also called for Jackson to be
bound by the terms of the [LA's industry contract, including checkoff provi-
sions, which was about to expire.

$6a

In early 1976 Seregos began his payments to Anastasio, which
were made in cash at the ILA’s office with no else present.
Pursuant to the arrangement made, Seregos paid Anastasio
$15,000 during the course of 1976 covering 10% of the business
obtained by Jackson from Prudential and U.S. Lines. During
the year 1977, Seregos paid to Anastasio, $5,000 on June 2,
$1,000 on October 6, $5,000 on November 17, and $5,000 on
December 19. All of these payments, representing 10% of busi-
ness Jackson obtained from U.S. and Prudential, were also made
to Anastasio by Seregos at the ILA office.

In 1978, Jackson lost the Prudential account. Seregos com-
plained to Anastasio about it and asked if there was anything he
could do to reinstate the business. The record does not reflect
Anastasio’s response, but the business was not thereafter re-

stored.

During the year 1978, payments were made in the same
fashion, but only covering Jackson's business from U.S. Lines.
Seregos gave Anastasio pursuant to their arrangement, $5,000
on February 28, $5,000 on March 23, $5,000 on April 10, $5,000
on May 15, $3,700 on July 3, and $5,000 on November 15.

During this period of time Seregos met with Anastasio on
various union matters, as Anastasio was directly responsible for

the administration of the collective bargaining agreement with
Jackson.

In early May 1979, at Anasiasio’s office, Anastasio asked Ser-
egos if there was any money due “against the work.” Seregos
responded why now in view of the investigation. Anastasio

replied that it was all right.°
On May 8, 1979 Seregos paid Anastasio $4,000, again at the
ILA’s office.

Shortly thereafter, by telephone Anastasio asked Seregos if
he could make a contribution for the purpose of helping Scotto

* The “investigation” referred to by Seregos was apparently the criminal
investigation which culminated in eventual indictments and convictions of
Anastasio and Scotto discussed more fully infra.

57a

pay his attorney's fees. Seregos replied that it was rather diffi-
cult at that time to come up with any money. Anastasio asked
him to try, and informed Seregos that they are having an affair
at a hotel and were asking others in the industry to contribute
to pay Scotto’s attorney fees. Subsequently, Seregos obtained
$4,000 in cash and gave it to Anastasio at ILA office on July 5,
1979.

During the period between 1975 and 1979 Jackson’s business
as well as its number of employees and ILA members grew
substantially.

On November 3, 1978 Jackson and the ILA entered into a
renewal of the prior contract, with a number of changes in-
cluded therein, running from November 3, 1978 to November
2, 1981. This contract was executed by Anastasio and Joseph
Collazzo for the ILA and by Seregos on behalf of Jackson. *®

In January 1979, an indictment was handed down in the
Southern District of New York by the Grand Jury pertaining to
the receipt of certain payments by Anastasio and Scotto from
certain employers under contract to ILA, not including Jackson.

On July 31, 1979 a superseding indictment was filed adding
additional counts of such conduct by Anastasio and Scotto, in-
cluding payments made by Seregos to Anastasio from 1977-

1979. Scotto was not indicted for any dealings with Seregos or
Jackson.

Shortly after the filing of the superseding indictment, the ILA
upon recommendation of its attorney immediately removed An-
astasio from participation in any dealings or negotiations with
Jackson. The ILA also insisted upon and Jackson agreed that
Seregos be removed from any dealings or negotiations with the
ILA.

Anastasio was permitted by the ILA to remain as its Executive
Vice President and Scotto was allowed to remain as president.

* This contract as well as the prior contract was negotiated and signed by
eleven employers in the industry, including Jackson.

58a

Scotto and Anastasio were tried in Federal Court in New
York, on multiple counts of receiving unlawful labor payments
in violation of Section 302 of the Taft Hartley Act, 29 USC
Section 186(b), as well as conspiring to participate in the affairs
of the ILA through a pattern of racketeering activity, and for
failure to report and pay federal income taxes on the unlawful
amounts obtained from such activities.

After an eight week trial, both Scotto and Anastasio were
convicted in January 1980, of forty three counts under the
indictment and the jury was unable to reach a verdict on sev-
enteen other counts included therein.” Anastasio was convicted
of receiving unlawful payments from Seregos and Jackson for a
period of February 28, 1978 to July 5, 1979. Scotto as noted was
not indicted nor convicted of the receipt of any payments from
Seregos or Jackson. Anastasio was sentenced to two years in
prison, five years probation and a $5,000 fine. Scotto was sen-
tenced to five years in prision, with five years probation and
$75,000 in fines.

The sentencing occurred in February 1980, and it also in-
cluded any order by the trial court judge that Anastasio and
Scotto forfeit their Union offices. The convictions were appealed
to the 2nd Circuit Court of Appeals. On September 2, 1980, a
three judge panel unanimously affirmed the convictions of An-
astasio and Scotto. The Court in its decision found as follows.
“Nicholas Seregos of Jackson Engineering Co., Inc. an ILA-
affiliated marine engineering company doing general ship re-
pair, paid Anastasio a 10% “commission” on business obtained
for his company with Scotto’s and Anastasio’s assistance from
Prudential Lines, Inc. and United States Lines.”

Anastasio and Scotto subsequently petitioned the Circuit en
banc for a re-hearing. At some point undisclosed by this record,
such request was denied.

egos testified for the prosecution under a grant of immunity. Anastasio
did r,t take the witness stand. Scotto did testify and denied knowledge of any

10% commission arrangement with Seregos.

59a

Meanwhile, shortly after the conviction, an action was brought
by Scotto and Anastasio in the New York State Supreme Court
for a declaratory judgment that the term “conviction” under the
New York and New Jersey Waterfront Compact, means after all
appeals are exhausted.* The Waterfront Commission moved for
judgment in its favor claiming that “conviction” under the statue
applies to the date of sentencing. The Supreme Court rules in
favor of the Commission in September 1980, and directed that
Anastasio and Scotto be removed from office. Upon application,
the Appellate Division stayed the order of the Court, pending
an expedited appeal from the Court’s judgment. Said appeal was
filed and in late October 1980, the Appellate Division unani-
mously affirmed the decision of the Supreme Court. The record
does nut disclose whether or not any appeal was filed from this
decision to the New York State Court of Appeals.

The record does disclose however that the ILA permitted
Anastasio and Scotto to remain as officers of the ILA until the
exhaustion of their appeals from these various proceedings. New
elections were conducted by the ILA in May 1981, and new
individuals were elected to fill the positions previously held by
Scotto and Anastasio.

Portions of the testimony given by Seregos in the Federal
Court trial were stipulated into evidence by the parties and
forms the basis for my findings set forth above with respect to
Seregos’ dealings with Anastasio and Scotto. The portions of his
testimony included in this record are sketchy and somewhat
unclear in certain areas, and my findings set forth herein are
based on what I perceive to be a fair reading of such testimony.

The parties are in substantial agreement as to the above facts
with the exception of one area. Respondents assert that the
record establishes that the unlawful arrangement between Ser-
egos and Anastasio was entered into after the ILA organized

* Under the Waterfront Compact Act, a Waterfront Commission was estab-
lished to regulate and control the affairs of longshoremen and labor organiza-
tions representing such workers in New York and New Jersey. The Act
provides that upon conviction of a crime, any officer of such a labor organiza-
tion must be removed.

a ee eee

60a

Jackson’s employees and after the memorandum of understand-
ing and/or contract was executed by the parties in September
and November 1975. Although Seregos’ testimony is particu-
larly uncertain on this subject, I am persuaded that my findings
set forth above, accurately reflect his testimony and a reasonable
conclusion as to the true facts.

Respondent Union points to Seregos’ testimony that Anastasio
after having been approached by Seregos about his becoming a
Union shop, insisted upon speaking to Jackson's employees to
see if they wished to sign up. Such a meeting did occur accoré-
ing to Seregos, and Respondent Union argues that this meeting
must have been in September when the authorization and
checkoff cards were executed by Jackson employees. Thus, it is
argued since Seregos testified that the arrangement for pay-
ments was made after Anastasio met with his employees, that
perforce the arrangement was not made until the contract or at
least the memorandum of understanding was signed.

I do not agree with this analysis of Seregos’ testimony how-
ever, and believe that General Counsel's position that the ar-
rangement was agreed to prior to the execution of the
memorandum and contract, more accurately reflects Seregos’
testimony as weil as the record evidence. I note that with
respect to the meeting held by Anastasio with Jackson employ-
ees after his initial conversation with Seregos, there is no record
testimony as to what was said therein, and in fact Seregos
indicated that no materials were distributed by Anastasio to his
employees at that time. More significantly, Seregos sent a letter
to Prudential dated July 11, 1975, which was received by Pru-
dential on July 15,° asserting that Jackson was an ILA shop and
requesting business. This letter was sent pursuant to the in-
structions of Anastasio, and was sent two months prior to the
execution of any contract or memorandum. Since Anastasio

* Although Seregos in direct testimony was unsure of when he mailed the
letter to Prudential and suggested the possibility that the letter may have been
backdated, when confronted on cross examination by the original letter with a
Prudential date stamp reading July 15, he recalled that it was sent in July and
that he had orally agreed to recognize the Union prior to sending such letter.

6la

made it clear to Seregos that he would not refer Jackson any
business unless it became an ILA shop, I find that he would not
have suggested a letter to Prudential unless he had a committ-
ment from Seregos to become a Union shop.

Therefore, I am convinced that Seregos and Anastasio entered
into their agreement for the 10% commission payment for busi-
ness referred in July, at least two months before any memoran-
dum contract was executed or any authorization cards obtained.
At the same time as noted, I find that Seregos orally agreed with
Anastasio that he would become an JLA shop.

B. Jackson’s Acquisition of the Staten Island Facility

Jackson has been made and is engaged in the business of
major shop repairs, overhauls and renovations, both at its own
and leased locations, as well as at sites where vessels are docked
and berthed. Jackson owned and operated a machine shop in
Hoboken, New Jersey, and leased facilities at Columbia Street
and Pier 12 on the Brooklyn, New York waterfront, alongside of
which were berthed vessels worked upon by its employees.
Jackson’s employees also would travel to make ship repairs upon
vessels tied up at other parts along the coast.

This type of operation that Jackson was engaged in was known
in the industry as a pierside operation, as contrasted with dry-
dock work’ operations, which rwpair ships at their own facilities
or shipyards.

In both types of ship repair operations, the fluctuation in
employee complements is quite substantial with employment
frequently sporadic depending upon what jobs are obtained by
the Employers at any particular time. Respondent in early spring
of 1979 ermnloyed some 140 employees in the bargaining unit.
During the months of June through September 1979, Respond-
ent employed between 40 and 76 employees at various times.

© A drydock is like an elevator which lifts a ship out of the water so that
work can be performed on portions of the ship which would normally be below
the waterline.

a a a ee a

Sometime in the winter of 1978, Jackson began negotiating
wi'h Brewer Drydock Co., herein called Brewer, for the pur-
chase of a drydock facility operated by Brewer at Richmond
Terrace in Staten Island, New York, right across the bay from
Jackson’s Brooklyn facilities. Jackson was interested in purchas-
ing this facility, primarily because it would then be able to
perform what is known as “bottomside” work, which can only be
done with a drydock. Since many jobs in the industry require a
Company to bid on both “bottomside” and “topside” jobs (called
“combination” jobs), Jackson hoped to expand its business by
purchasing a facility which included a drydock. In addition,
Jackson’s facilities at the Brooklyn pier were rented on a month-
to-month basis and were subject to cancellation at any time. The
negotiations with Brewer continued on and off throughout the
first 4-5 months of 1979. Sometime in April or May, Jackson
reached tentative agreement with Brewer for the purchase of
the yard, with a few details and fine points to be narrowed
down. Sometime in May, Seregos and Milton Horowitz, Vice
President of Jackson spoke to Anastasio and Joseph Callazzo of
the ILA. They informed the Union officials that they were going
to buy a shipyard and wanted to negotiate a modification of the
parties existing agreement. One of the ILA officials replied that
there was nothing to talk about until Jackson actually purchased
the new facility.

In early June the agreement was consumated and the closing
held, with a purchase price of $2,400,000.00 for the State Island
facility of Brewer, with Jackson to take over the premises on
June 5.

C. Jackson Rehabilitates The Staten Island Facility
and IUMSWA Asserts Its Claims

Brewer's employees at the Staten Island shipyard, had been
represented for collective bargaining by [IU MSWA since a Board
certification on July 25, 1975. The last collective bargaining
agreement between Brewer and IUMSWA ran from September
27, 1978 to August 31, 1981. The contract contains a clause
which reads that the agreement shall be binding upon Brewer
and its successors and assigns.

63a

Throughout the spring months, Brewer wound down its op-
erations and gradually laid off its work force. By June 5, all of
Brewer s employees had been laid off.

On May 29, IUMSWA wrote a letter to Brewer indicating its
knowledge of a pending sale, requests the name of the potential
buyer, and that Brewer notify the purchaser that IUMSWA
intends to enforce its successor clause in the contract and assert
its right as exclusive bargaining agent for the work location as
certified by the National Labor Relations Board in accordance
with the recognition clause of the contract. The record does not
disclose whether this letter was ever forwarded to Jackson, nor
whether Brewer ever notified Jackson officials of IUMSWA’s
claims.

However, during the next several months (between June and
September), various officials of ['UMSWA met and/or spoke on
the phone with various officials of Jackson, and asserted IUM-
SWA’s “jurisdictional” bargaining rights at the Staten Island
facility, and/or rights under the successor and assigns clause of
its contract with Brewer. Additionally, the IUMSWA officials
requested that Jackson hire the former employees who were
now out of work.

At no time did any [UMSWA ever make any claim that it
represented any of Jackson’s employees.

Indeed during this period of time between June and early
September, Jackson was not engaged in any ship repair activities
at the Staten Island yard. During these months, Jackson was
engaged in rehabilitating the facility to make it ready to accom-
modate Jackson’s ship repair operations. This consisted of re-
pairing, changing and renovating the facility, plus constructing
housing and meal facilities for Naval personnel, to be used while
Naval vessels were being refitted.

Vincent Klusmyer, Jackson’s General Manager at the Staten
Island facility was in charge of the rehabilitation, and to that end
he employed a number of outside subcontractors to perform this
work. In addition, Waterfront Marine, an affiliate of Jackson,
controlled by Seregos, employed 10-12 individuals to maintain

64a

and guard the shipyard. These individuals were all formerly
employed by Brewer. All but one of these individuals had been
previously employed by Brewer in supervisory or non-unit po-
sitions, such as dock master, assistant dock master, maintenance
foreman and estimator. One employee, J. Boschi who had been
an electrician at Brewer, was performing electrical maintenance
tasks during the summer months while the yard was being
rehabilitated.

During this period of time there was no ship repair work
being performed at the Staten Island facility. Jackson continued
its business at the Brooklyn piers as well as its Hoboken machine
shop with as noted, an employee complement fluctuating be-
tween 40 and 76, during these months.

D. Modification of The Existing Jackson ILA
Contract

In late June or early July, and through the summer months,
ILA and Jackson representatives met to discuss modification of
the existing contract."

Jackson requested that its existing contract be modified in
view of its purchase of the Staten Island facility. Jackson argued
that the ability to bid on “combination” jobs would result in
more regularity of employment of work for its employees,
thereby making up for any loss in contractual benefits. In addi-
tion, rates for shipyard firms are traditionally lower in the indus-
try than for pierside operations, and Jackson to be competitive
with its competition, needed lower labor costs. Moreover, the
costs of maintaining a shipyard are considerably higher than of a
pierside operation. The ILA agreed to discuss such a modifica-
tion but only if they were convinced that more regularity of
employment would ensue.

'' Present for Jackson were Klusmyer, Horowitz and its attorney, Martin
Seham. For the ILA its attornies Howard Schulman and Robert Bogucki,
business agent Collazzo, and various employee committee members attended
these bargaining sessions.

654

To this end the parties reviewed and compared the contracts
of various shipyards, including the contract between IUMSWA
and Brewer. The contracts of the shipyard firms were lower
with respect to wages and benefits than the existing contract
between ILA and Jackson.

After a number of bargaining sessions, with numerous propos-
als being presented by both sides, an agreement was reached,
on or about September 5. The agreement was then prepared by
.LA representatives and executed by the parties on September
13, retroactive to September 5.

The agreement modified the recognition clause to include the
Staten Island facility.'* Recognizing the fact that some employ-
ees of Jackson would still be performing some work outside the
Staten Island facility at various piers, even with the acquisition
of the new yard, the parties agreed that the 25 most senior
employees who would be most likely to perform such work,
would receive no reduction in their wages or be .efits.

With respect to the remaining employees, the parties agreed
that in view of the expected increase in regularity of employ-
ment for them, that they would receive slight reductions in
wages, pension and hospitalization contributions. Other benefits
such as holidays, sick days and jury duty were not modified for
any employees.

During the course of these sessions, Jackson informed the
ILA that it intended to give preference in employment at the
Staten Island facility to employees currently employed at Ho-

'° The prior agreement makes no specific mention of any facilities of the
Employers involved. It merely provides for recognition of various classifica-
tions of en.ployees “employed by the employer.”

'° These more experienced employees were capable of working without
supervision, so were therefore more apt to be assigned to outside piers where
there were no Jackson supervisors present.

‘* The modification also changed the duration of the prior agreement, as tthe
agreement as modified runs from September 5, 1979 to September 4, 1982,
with reopening provided for, 30-60 days prior to September 5, 1980 and
September 5, 1981. The modified contract also contained a union security
clause as did the prior agreement.

— am

66a

boken and at the Brooklyn piers as well as to employees on
layoff status from these facilities.

There was no discussion of the jurisdictional and successor-
ship clause asserted by IUMSWA during any of these sessions.
As noted the IUMSWA contract with Brewer was referred to
constantly during these meetings. There is no question that
Jackson never had any doubt that it would recognize the ILA as
the representative of its employees at the Staten Island facility,
as it believed that it was obligated to do.

E. Jackson Begins Ship Repair Operations at the
Staten Island Facility

On September 5, 1979, Jackson began ship repair operations
at the Staten Island yard. In its first week of such operations,
Jackson employed 51 bargaining unit employees. Of these em-
ployees, 48 were transferred over from its Brooklyn or Hoboken
facilities.”

Jackson also employed two individuals who were formerly
employed by Brewer,'* and one individual who was neither a
former Brewer employee nor a Jackson transferee.

'SIn this connection, Jackson maintained a file of 300-400 W-4 forms,
consisting of names and addresses of its employees who have worked for
Jackson in past years, which it uses whenever it needs to hire additional
employees.

‘© When asked if he informed the ILA that IUMSWA had asserted any
claims with respect to the facility, Horowitz responded, “No sir. I felt we had
a union already. We had a union.”

'7 As noted, Jackson closed down its operations at the Brooklyn piers, where
it had previously rented facilities from the Port Authority. It continued to
operate its Hoboken machine shop while continuing to operate the Staten
Island yard. The record is not clear as to how many of the Hoboken employees
were transferred over to Staten Island, although it does appear that the bulk
of the employees who were sent to Staten Island were formerly employed at
the Brooklyn piers.

'® One of these individuals was J. Boschi, an electrician, who had been
employed by Waterfront Marine during the rehabilitation period from June
through September. He performed essentially the same work (electrical main-
tenance functions), during the rehabilitation period as he did after ship repair
operations began on September 5. The other former Brewer employee, E.
Gamboa, was employed as a Crane Operator.

67a

Jackson also employed 10-11 former Brewer supervisors and
non-unit personnel, into various supervisory positions at the
Staten Island yard.

During its next week of operation, the payroll period ending
September 16, 1979, Jackson employed 55 employees, 46 pre-
existing Jackson employees, two former Brewer employees,'®
and seven employees from neither group.

On or about September 20, Jackson acquired a new contract
to repair a vessel called the Waterford. This job required a
deadline to be met, and necessitated the hiring of a substantial
number of additional employees. In this connection, Jackson
after exhausting its list of laid off Jackson employees, hired most
of these additional employees from a group of some 500 employ-
ment applications and resumes that it had on file. These appli-
cations and resumes resulted from newspaper advertisements
Jackson had placed in various newspapers, as well as from word
of mouth sources. Included in these applications and resumes
in Jackson’s files at that time, were 100 applications from former
Brewer bargaining unit employees.

By October 25, 1979, by which time Jackson was utilizing
drydocks at the Staten Island facility, it employed 151 bargain-
ing unit employees. Included among these employees were 49
employees who had been in the Jackson ILA bargaining unit, 23
former Brewer employees, who had been included in the I[UM-
SWA unit, and 79 employees from neither category of employ-
ees.

Prior to its acquisition of the shipyard, the number of “regu-
lar” or “steady”’” employees in the Jackson bargaining unit fluc-
tuated between 50 and 70 employees. As of June 1981, the

'® Again Boschi and Gamboa.

» A “regular” or “steady” employee is defined as an employee who works 4-
5 days a week for 2/3 of the year.

68a

number of such regular employees of Jackson fluctuated from
100 to 135.74

Of the four contractual job classifications included in the
parties modified contract, employees were hired by Jackson in
each classification when the yard opened on September 5.

Prior to its acquisition of the Staten Island yard, Jackson
employed employees who performed work requiring 14 of the
16 trade skills that were eventually to be required when it
became fully operational. The two new skills were dockhand
and crane operator.”

On the payroll week ending September 9 and 16, Jackson
employed one crane operator and no dockhands. On the week

ending October 25, Jackson employed 3 crane operators and 3
dockhands.*

With the exception of the dockhand and crane operator func-
tions, the work performance by Jackson's employees before and
after the acquisition of the shipyard was essentially identical.
The only meaningful difference between the two operations is
the use of the drydock, which as noted requires use of dock-
hands to lift the vessel out of the water, and enables Jackson to
now perform bottomside work. However, the actual ship repair
work performed by Jackson employees on bottomside work is
no different than that performed on topside work. The skills
required are the same, and no additional training is required to
enable an employee who is able to perform topside work to
perform bottomside work. Jackson’s employees work inter-

21 The above findings are derived from the credited testimony of Michael
Porta, Jr., a Local 1814 delegate, who testified as to these figures based upon
his observations in servicing the shop, consisting of visits on the average of
twice a week from the time the shipyard opened until the date of his testi-
mony, herein on June 4, 1981.

2 Dockhands were not needed at Jackson’s prior operations, since it did not
operate a drydock. Crane operators had been utilized previously by Jackson,
but were supplied by the leasor of the crane that Jackson had rented.

® Two of the three dockhands hired by Jackson were former Brewer em-
ployees from the I[UMSWA bargaining unit.

69a

changeably on “top” and “bottom” work there being no such
thing as a topside or bottomside crew. Shipyards (Brewer prior
to September and Jackson after September) and pierside opera-
tions (Jackson prior to September) perform the same work and
hire from the same source of workers, and shipyard or pierside
experience are equally significant in terms of hiring qualifica-
tions for hire in either type of operation.

As noted above, the primary reason motivating Jackson to
purchase the Staten Island yard from Brewer was the fact that
the yard included a drydock which enabled Jackson to bid on
combination (top and bottom) jobs. Since its commencement of
operations at the shipyard, about 30% of Jackson’s business
includes such combination bids. Of such jobs, acquired as a
result of combination bids, 30% of such work includes bottom-
side repairs. Thus, bottomside work comprises approximately
9% of the work being performed by Jackson employees, since
their acquisition of the shipyard and their use of the drydock.

F. T[UMSWA Files ULP and Article XX Charges

On September 28, 1979, IUMSWA filed unfair labor practice
charges against Jackson and the ILA alleging in addition to the
8(a)(2) and 8(b)(1)(A) and (2) Midwest Piping allegations con-
tained in the instant complaint, that Jackson violated Section
8(a)(5) of the Act by refusing to recognize IUMSWA as the
successor to Brewer's bargaining obligation, and Section 8(a)(3)
of the Act by discriminatorily refusing to hire former Brewer
employees because of their IUMSWA membership, and that
ILA violated Section 8(b)(1)(A) and (2) by causing Jackson to
refuse to hire such employees.

On December 14, the Regional Director dismissed the 8(a)(5)
portions of the charges in a letter reading as follows:

Gentlemen:

The above-captioned case charging a violation under
Section 8 of the National Labor Relations Act, as

amended, has been carefully investigated and consid-
ered.

70a

The investigation did not establish that Jackson Engi-
neering Co., hereinafter referred to as Jackson, vio-
lated Section 8(a)(5) of the Act by refusing to recognize
and bargain with Industrial Union of Marine and
Shipbuilding Workers of America, Local 17, herein-
after referred to as Local 17, as the collective bargain-
ing agent of its employees employed at the former
Brewer Dry Dock Company, hereinafter referred to
as Brewer, facility at 2945 Richmond Terrace, Staten
Island. Rather the evidence disclosed that in June
1979, Jackson purchased that facility from Brewer to
replace and supplant Jackson's former ship repair fa-
cility located in Brooklyn, New York, and that in
September 1979, after performing certain mainten-
ance and make-ready work on the facility, Jackson
closed its Brooklyn facility, relocating to the former
Brewer yard in Staten Island, and taking with it its
work force from the Brooklyn facility.

Prior to transferring title to the Staten Island facility
to Jackson, Brewer laid off or terminated all of its
production and maintenance employees, such em-
ployees having been represented for collective bar-
gaining purposes by Local 17.

While the investigation disclosed that Jackson contin-
ues to use the facility for the same purpose which
Brewer operated it; the repair and maintenance of
ships and other vessels; that Jackson (as did Brewer)
classifies all of its production and maintenance em-
ployees in a single unit; that there was not a significant
hiatus in the operation of the Richmond Terrace Ship-
yard; and that Jackson has hired some of the employ-
ees formerly employed by Brewer since it commenced
operations at the shipyard, nevertheless, it does not
appear that Jackson has purchased any of the goodwill
of Brewer or assumed any of its liabilities or other
assets, or that a majority of Jackson’s present comple-
ment of employees at the Richmond Terrace facility
are former Brewer employees.

7la

In these circumstances, the evidence is insufficient to
establish that Jackson is a successor to Brewer and
was therefore under an obligation to continue to rec-
ognize and bargain with you as the collective bargain-
ing representative of the employees employed at the
Richmond Terrace shipyard. I am therefore refusing
to issue a complaint on the allegation of your charge
which alleges that Jackson violated Section 8(a)(5) of
the Act. Other allegations of your charge are being
processed further. 3

The Regional Director also refused to issue complaint with
respect to tl 8(a)(3) and 8(b)(1)(A) and (2) allegations pertaining
to Jackson's refusal to hire employees because of their [UMSWA
membership.™

IUMSWA appealed the Director's partial refusal tu issue com-
plaint with respect to the 8(a)(5) successorship allegations. On
February 11, 1980, the Acting Director of Appeals upheld the
Director's refusal to issue complaint on these allegations, agree-
ing with the Director that Jackson was not a successor to Brew-
er's collective bargaining obligation to IUMSWA.

On October 5, 1979 IUMSWA filed charges under Article XX
of the AFL-CIO constitution complaining that ILA has violated
Sections 2 and 3 of such article by allegedly failing to respect an
established collective bargaining relationship and work relation-
ship maintained by IUMSWA at the Richmond Terrace ship-
yard.

On October 12, 1979 ILA filed similar charges against IUM-
SWA, alleging additionally that I|UMSWA violated Section 20 of
Article 20 by resorting to the NLRB to determine the dispute.
A hearing was subsequently held on February 6, 1980 on the
matter before Impartial Umpire D. Q. Mills.”

* The record does not reflect whether these portions of the charges were
withdrawn or dismissed.

= A hearing had been held on November 8, 1979 before Umpire Kleeb.
However, Kleeb passed away prior to rendering his decision and a new hearing
was conducted.

72a

At this hearing representatives of [UMSWA and ILA as well
as their respective attorneys participated, called witnesses and
were given the opportunity to and did present arguments and
positions. On February 20, 1980 Impartial Umpire Mills issued
his decision, referred to as “Determination.” He found that ILA
has not violated either Section 2 or 3 of Article XX, since the
standards under Article XX for the survival of IUMSWA’'s col-
lective bargaining agreement relationship have not been met,
and that ILA has not by exercise of collusion or economic
pressure—sought to obtain work for its members as to which

another affiliate has an established work relationship.

The Umpire also found that [UMSWA has violated Section 2
and 20 of Article XX, by interfering with ILA’s established
collective bargaining relationship as to the employees in dis-
pute, in its efforts to represent these employees and resort to
the NLRB to determine the dispute.

IUMSWA subsequently filed an appeal from Umpire Mills’
determination, which was heard before a subcommittee of the
AFL-CIO Executive Council. By letter dated May 21, 1980
from Lane Kirkland, President of the AFL-CIO, the appeal was
disallowed and the determination of the Impartial Umpire was
ordered to go into full force and effect.

On June 3, 1980, Michael Brodie, Esq., attorney for Charging
Party wrote a letter to the Director for 29, referring to the above
described Determination and disallowance of IUMSWA’s ap-
peal. The letter then stated, “pursuant to the enclosed docu-
ments and as a result of their issuance, my client hereby requests
that the charges and amended charges in the above proceedings
be withdrawn.”™™

On October 1, 1980, Regional Director Kaynard sent a letter
to Brodie, denying his request to withdraw, except as noted
with respect to the charges against the International of the ILA.
Director Kaynard’s letter is set forth below:

* The above proceedings refer to the instant charge and complaint.

73a

Dear Mr. Brodie:

Your letter requesting withdrawal of the unfair labor
practice charges in the above-captioned cases has been
carefully considered. For the reasons stated below,
you are hereby advised that your request to withdraw
the charge in Case No. 29-CA-7498 is denied, and
that your request to withdraw the charge in Case No.
29-CB-3966 is approved only insofar as it relates to
the International Longshoremen’s Association, AFL-
CIO, but is denied insofar as it relates to Local 1814,
International Longshoremen’s Association, AFL-CIO.

As you know, the investigation of these charges dis-
closed evidence of serious violations of the National
Labor Relations Act by Jackson Engineering Co. and
by Local 1814, AFL-CIO, including concealed pay-
ments made by Jackson to Anthony Scotto and An-
thony Anastasio, the president and executive vice
president of Local 1814, ILA, AFL-CIO, respec-
tively, commencing in 1975 pursuant to an unlawful
arrangement between Jackson and Local 1814, all of
which are alleged in the Consolidated Complaint
which I issued in these cases on May 30, 1980. Al-
though you advise that an Impartial Umpire has de-
termined that your clients, the charging parties in
these cases, Industrial Union of Marine and Ship-
building Workers of America, AF L-CIO, and Local
17, Industrial Union of Marine and Shipbuilding
Workers of America, AFL-CIO violated Article XX of
the AFL-CIO Constitution by resorting to the Board’s
processes to resolve your dispute with Jackson and
Local 1814, ILA, and that the Executive Council of
the AFL-CIO has upheld this ruling by the Impartial
Umpire and has directed you to request withdrawal
of these charges, I have nevertheless concluded that
there exists an overriding public interest to be served
by the continued processing of these cases insofar as
they relate to the unfair labor practices which were
engaged in by Jackson Engineering Co. and Local

ee a ey oe ee

74a

1814, ILA, AFL-CIO, as alleged in the Consolidated
Complaint issued on May 30, 1980. I do not believe,
therefore, that it would effectuate the policies of the
National Labor Relations Act to approve your request
to withdraw the charges against these Respondents in
these cases. Accordingly, that request is hereby de-
nied.

On the other hand, upon reconsideration of the alle-
gations of the Consolidated Complaint insofar as they
relate to International Longshoremen’s Association,
AFL-CIO, I have concluded that the investigation has
disclosed no evidence that this Respondent has en-
gaged in any of the unlawful conduct alleged in the
Consolidated Complaint issued on May 30, 1980. Your
request to withdraw the charge in Case No. 29-CB-
3966 insofar as it related to the International Long-
shoremen’s Association, AFL-CIO is therefore hereby
approved.

As noted above, IUMSWA’s attorney renewed its request to
withdraw to the Chief Administrative Law Judge, which was in
turn referred to me for disposition.

As a result of the Article XX proceedings set forth above,
Local 17 of IUMSWA was dissolved and became defunct.”

II. Analysis

A. The Article XX Proceedings and IUMSWA’s Re-
quest to Withdraw

Respondents contend that the instant complaint should be
dismissed based on the fact that the Article XX proceeding,
wherein IUMSWA fully participated, resolved any possible
question concerning representation of Jackson’s employees at
the Staten Island yard. Moreover, they urge that IUMSWA’'s

2 Brewer was the only employer with whom Local 17 of IUMSWA had a
collective bargaining agreement or relationship.

75a

withdrawal request, based upon said Article XX proceeding
should be approved, thereby also mandating the dismissal of the
instant complaint.

General Counsel argues that the Board enforces public and
not private rights, and that particularly questions concerning
representation rights should not be deferred to other tribunals.
Thus, it is contended that no affect should be given to the Article
XX proceeding insofar as it attempts to resolve the alleged
question concerning representation herein, or as a predicate for
the approval of [IUMSW4A’s request to withdraw the charges and
consequent dismissal of the complaint herein.

The instant complaint contains essentially two separate and
distinct allegations, which in my judgment require separate
consideration for the purposes of assessing these contentions.

Dealing first with the allegations of concealed payments, the
complaint alleges that on various dates between 1975 and 1979,
Jackson by Seregos, made such payments to Anastasio and Scotto
as agents of ILA, in violation of Sections 8(a)(1) and (2) and
8(b)(1)(A) of the Act. It is clear that these allegations were not
brought up, considered nor dealt with during the Article XX
proceeding. Thus no basis exists for deferring or dismissing this
aspect of the complaint based on the Article XX decision.

However, IUMSWA has as a result of such proceeding re-
quested withdrawal of the charges it has filed, said charges of
course forming the predicate for the instant complaint. Although
the Regional Director has denied the Charging Parties request
to withdraw, an Administrative Law Judge has the discretionary
authority to approve such requests made before him, even
where General Counsel objects.% Thus, it becomes necessary
for me to determine whether the public interest and the pur-
poses and policies of the Act would be served or vindicated by
approval of the withdrawal request herein.

*® Alberici Fruin-Colnon, 226 NLRB 1315, 1316 (1976); Local 638, United
Association of Journeymen and Apprentices of the Plumbing and Pipefitting
Industry of the United States and Canada, AFL-CIO (Roland Tompkins Inc. ),
158 NLRB 1747, 1750 (1966).

76a

Respondents argue that since Anastasio and Scotto have both
been convicted criminally, sentenced and removed from Union
office, no useful purpose would be served by continuing this
phase of the litigation, and that a cease and desist order would
be duplicative, superfluous and wasteful of agency resources.
They also point out that Anastasio, Scotto and Seregos were
immediately removed from any dealings and negotiations be-
tween Jackson and the ILA immediately upon the superseding
indictments being issued.

The Regional Director in his letter denying the request to
withdraw the charges, characterized the concealed payments
herein as “serious” violations of the Act and concluded that there
“exists an overriding public interest to be served” by the contin-
ued processing of these charges. I agree. I do not subscribe to
Respondents’ contentions that the criminal convictions of Anas-
tasio and Scotto and their subsequent removal from Union of-
fice,”® obviates the need for any further proceedings herein.

The criminal proceedings did not resolve nor did it purport
to decide the issue under consideration herein, i.e., whether
the ILA and/or Jackson are responsible for the conduct of its
efficers of making and receiving concealed payments pursuant
to an unlawful arrangement over a four to five year period. It
seems to me that the employees of Jackson, and the member-
ship of the ILA are entitled to a clear and unequivocal statement
by the posting of a Notice, signed by its representatives, that
Jackson and the ILA do not, and will not countenance such
behavior on the part of its officers and agents.*

® TI note in this connection that the record does not establish whether
Seregos has been removed as an officer of Jackson.

*® In this connection, the action of the ILA and Jackson of removing Seregos,
Anastasio and Scotto from any dealings with each other with respect to matters
involving collective bargaining, falls far short of giving such assurances to its
employees and/or its members. I note that the ILA continued to permit
Anastasio and Scotto to remain as officers of the Union, even after they were
convicted of accepting such payments, as well as other criminal conduct,
notwithstanding orders of two lower Courts to remove them, until finally all
appeals were exhausted.

77a

Therefore, I conclude that the public interest and the pur-
poses of the Act will not be served by approval of the withdrawal
request with respect to the concealed payments allegations in
the complaint herein, and I shall deny IUMSWA’s request to
do so.

The other portion of the complaint herein, the Midwest
Piping™ allegations, dealing with Jackson’s signing a modifica-
tion of its contract with the ILA extending coverage to its
employees at the Staten Island yard, presents a more trouble-
some issue insofar as it relates to the withdrawal request.”

The Midwest Piping allegations herein are based upon the
alleged existence of a real question concerning representation,
by virtue of certain claims made by IUMSWA prior to the
execution of the September 1979 modification contract by ILA
and Jackson covering the latter's employees at the Staten Island
yard. As pointed out, quite persuasively by Respondents, IUM-
SWA has now sought to withdraw its charges herein, thereby
eliminating any current question concerning representation, real
‘or otherwise, for these employees. Even more significantly,
Local 17 or IUMSWA has been dissolved and is now defunct.
Thus, any election that might be ordered as a result of an 8(a)(2)
finding herein, would not include IUMSWA, and employees
would not be able to choose between IUMSWA or ILA as their
representative. Therefore it is questionable whether this phase
of the litigation should be pursued further, particularly in an
area such as Midwest Piping, where the Board had been re-

* Midwest Piping & Supply Co., 63 NLRB 1060 (1945).

* The contention that the Article XX decision itself must be deferred to,
since IUMSWA fully participated therein, is clearly without merit. Although
the issue of the representation of Jackson’s employees at the Staten Island
yard was considered and decided, NLRB standards, policies, considerations
and precedents, in neither the unfair labor practice nor representation case
area were evaluated nor considered in the Article XX pr

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

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385017_2200%3A1. Public record. Not legal advice.