Opposition Brief — New Breed Leasing Corp. v. National Labor Relations Board

FILED

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No. 97-185

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In the Supreme Court of the Gnited States

OCTOBER TERM, 1996

NEW BREED LEASING CORPORATION, PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE

NATIONAL LABOR RELATIONS BOARD

IN OPPOSITION

SETH WAXMAN

Acting Solicitor General

Department of Justice

FREDERICK L. FEINSTEIN Washington, D.C. 20530-0001

General Counsel 202) 514-2217

LINDA SHER

Associate General Counsel

NORTON J. COME

Deputy Associate General Counsel

MARION GRIFFIN

Attorney

National Labor Relations Board

Washington, D.C. 20570

QUESTION PRESENTED

Whether the National Labor Relations Board may

remedy a successor employer’s unlawful refusal to

hire its predecessor’s employees and to bargain with

their unions by ordering the employer to reinstate

those employees, to engage in bargaining with the

unions, and to adhere to the previous terms and

conditions of employment during the bargaining

process.

(I)

TABLE OF CONTENTS

Page

I 1

EGRESS ES SR Aa se a 1

RES TES ae See ee a eae 2

Pa idiideialintahcecchihaibeiesenidacetebtimboseiniccnsactisidtidelwesciidn 6

Res. ra ATES ae ee a. 14

TABLE OF AUTHORITIES

Cases:

American Press, Inc. v. NLRB, 833 F.2d 621

Ci RT eae 10

Armco, Inc. v. NLRB, 832 F.2d 357 (6th Cir.

1987), cert. denied, 486 U.S. 1042 (1988) ................. 10

Canteen Corp. v. NLRB, 103 F.3d 1355 (7th Cir.

I ictal hdhiapidictiigUikcbiedsessecncchcadenscediekeaeensienvenieeceoce... 11

Fall River Dyeing & Finishing Corp. v. NLRB,

I i a 7

Fibreboard Paper Products Corp. v. NLRB, 379

Fa TRIE IIS Se Og SS g

H.K. Porter Co. v. NLRB, 397 U.S. 99 (1970) ........ 7

International Ass’n of Machinists v. NLRB,

595 F.2d 664 (D.C. Cir. 1978), cert. denied, 439

2 SEL Ep SA 5 a 2 11

Kallmann v. NLRB, 640 F.2d 1094 (9th Cir.

OMRON MS SS kee se 10

NLRB v. Burns Int'l Sec. Servs., Inc., 406 U.S. 272

APRESS oa RC ee 7, 8, 10, 11, 12

NLRB vy. Gissel Packing Co., 395 U.S. 575

eR USGS OR SAIESS IRR Tat Sita a ee 9

NLRB v. Horizons Hotel Corp., 49 F.3d 795

PREPRESS Sa a eR 10

NLRB vy. Spruce Up Corp., 529 F.2d 516 (4th Cir.

1975), enforcing 209 N.L.R.B. 194 (1974) .................. 11

NLRB v. Staten Island Hotel Ltd. Partnership,

101 F.3d 858 (2d Cir. 1996) 20.0.0... eee 8, 9, 10, 12, 13

(III)

Cases—Continued: Page

Nazareth Regional High School v. NLRB, 549 F.2d

OD Gar Ca Bee. tts cccamieiaae 12

Pace Industries, Inc. v. NLRB, 118 F.3d 585

CORR GI, BIND | hatinistcdetaccisscttanslsstaaiindiisiniamigtignisdee 10

Phelps Dodge Corp. v. NLRB, 313 U.S. 177

COI Sin cincstnscheccitinicsinaecoececcindcpniatalieabai atthe tie a nation 9

Systems Management, Inc. v. NLRB, 901 F.2d

Se GE Gs Be etntcsistiniersardnntiteceiliabicbuasiainlimiiitanees 10, 12, 13

U.S. Marine Corp. v. NLRB, 944 F.2d 1305 (7th

Cir. 1991), cert. denied, 503 U.S. 936 (1992),

enforcing, 293 N.L.R.B. 669 (1989) ................000 10, 13, 14

Virginia Elec. & Power Co. v. NLRB, 319 US.

| RR SOT RE KLE UI De ee 9

Statutes:

National Labor Relations Act, 29 U.S.C. 151 et seq.:

© SLE, BD DBA. FEBIONDD cecenesdencodisncccscecnnntinens 3, 4, 12

§ 8(a)(2), 29 U.S.C. 158(a)(2) .........cceeeeeerreeeeenennees 12

5 Bla), FO UBC... TAI seccncccccecccccsasasesinatsceosas 3, 4

S QEm ER), BR EEF RD este stciensecarsseytinssantesavees 3, 4

| fie aie ie 3, 5, 6

Jn the Supreme Court of the United States

OCTOBER TERM, 1996

No. 97-185

NEW BREED LEASING CORPORATION, PETITIONER

Vv.

NATIONAL LABOR RELATIONS BOARD

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE

NATIONAL LABOR RELATIONS BOARD

IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1-27)

is reported at 111 F.3d 1460. The decisions and orders

of the National Labor Relations Board (Pet. App. 28-

36) and the administrative law judge (Pet. App. 36-101,

102-128) are reported at 317 N.L.R.B. 1011.

JURISDICTION

The judgment of the court of appeals was entered on

April 30, 1997. The petition for a writ of certiorari

was filed on July 29, 1997. The jurisdiction of this

Court is invoked under 28 U.S.C. 1254(1).

(1)

STATEMENT

1. Petitioner received a subcontract to operate a

United States Army freight station and vehicle

processing facility in Compton, California. A series

of other private employers had previously operated

the facility and had recognized locals of the Interna-

tional Longshoremen’s and Warehouseman’s Union

(the unions) as the collective-bargaining represen-

tatives of their employees. Petitioner’s immediate

predecessor, Maersk Pacific Limited, had employed

12 persons at the facility. Maersk was a member of

the Pacific Maritime Association (PMA), a multi-

employer organization that represents its members

in negotiating and administering collective bargain-

ing agreements with the unions. The unions repre-

sented the 12 employees, who worked under union

contracts. Pet. App. 2, 41-44.

Before submitting its bid for the subcontract, peti-

tioner had contacted the PMA and had secured mem-

bership applications and other materials, including

copies of PMA’s current collective-bargaining agree-

ments. Pet. App. 46. In its bid, petitioner stated that

“{cjonversations have been initiated and provision

made to work with” PMA in obtaining “both long-

term and occasional workers” and that “[m]Jembership

in PMA assures the experience level of the work

force and simplifies personnel administration.” Jd. at

45. Thereafter, petitioner submitted a membership

applicaticn to PMA, together with a $1,000 application

fee. Id. at 3, 46.

After receiving notice that its bid for the subcon-

tract was successful, petitioner gave repeated assur-

ances to inion representatives and individual employ-

ees that the current work force at the facility would

3

be retained. Pet. App. 47, 49-53, 56-57, 68-70. Nonethe-

less, petitioner began to run anonymous employment

advertisements in the local newspaper, soliciting out-

side job applicants. Petitioner screened the outside

applications it received and interviewed applicants at

a local hotel. Petitioner did not notify the unions and

the current employees of those employment solicita-

tions. Jd. at 4, 51-52, 55, 77-80.

After conducting the outside interviews, petitioner

notified the Army and the unions that it did not intend

to retain the current employees. At about the same

time, petitioner determined not to complete its mem-

bership agreement with PMA and hired its work force

from the outside applicants. Pet. App. 55-56, 58-59.

When petitioner began operation of the facility, it

unilaterally established the employees’ terms and

conditions of employment and refused to recognize or

bargain with the unions. Jd. at 59-60.

2. The unions filed unfair labor practice charges

against petitioner. Pet. App. 37. The Regional Direc-

tor of the National Labor Relations Board, on behalf

of the Board’s General Counsel, issued administrative

complaints on the charges, alleging that petitioner

had violated Section 8(a)(1), (3), and (5) of the National

Labor Relations Act, 29 U.S.C. 158(a)(1), (3), and (5),

by discriminating in hiring against the predecessor’s

employees, refusing to recognize and bargain with the

unions, and unilaterally setting the employees’ terms

and conditions of employment. Pet. App. 37-38.

3. While the administrative complaints were pend-

ing, the Regional Director petitioned the United States

District Court for the Central District of California

for temporary injunctive relief under Section 10(j) of

the National Labor Relations Act, 29 U.S.C. 160(j).

The district court granted the Regional Director’s

4

request for an order requiring petitioner to offer full

reinstatement to the predecessor’s employees,

restore the preexisting terms and conditions of

employment, and recognize and bargain with the

unions. Pet. App. 132-136. The court of appeals

concluded that an injunction was appropriate, but it

found no need to order an interim restoration of

preexisting terms and conditions of employment,

noting that if the Board ultimately found that peti-

tioner had committed the unfair labor practices

alleged, the Board could “fashion a back pay award to

remedy that harm.” Jd. at 130-131.

4. Following a hearing on the merits of the Re-

gional Director’s administrative complaints, an ad-

ministrative law judge (ALJ) found that petitioner

had excluded the predecessor’s employees from hiring

to avoid a bargaining obligation with the unions,

thereby violating Section 8(a)(1) and (3) of the Na-

tional Labor Relations Act, 29 U.S.C. 158(a)(1) and (8).

Pet. App. 75-84. The ALJ additionally found that peti-

tioner would have hired the predecessor’s employees

but for its desire to avoid bargaining with the unions

and that petitioner’s refusal to recognize and bargain

with the unions and its unilateral~changes in terms

and conditions of employment therefore violated Sec-

tion 8(a)(1) and (5), 29 U.S.C. 158(a)(1) and (5). Pet.

App. 87-88.

5. The National Labor Relations Board affirmed

the ALJ’s findings and conclusions. Pet. App. 28-36.

Because the evidence showed that petitioner refused

to hire the predecessor’s employees based on its

desire to avoid bargaining obligations, the Board

agreed with the ALJ that petitioner “was not free

to change the prevailing terms and conditions of em-

ployment unilaterally.” Jd. at 29 n.3. The Board

5

essentially adopted the ALJ’s recommended order, id.

at 29-31, which directs petitioner to offer reinstate-

ment to the predecessor’s employees; to give them

back pay and other make-whole relief; to bargain with

the unions; and to restore the previous terms and con-

ditions of employment until petitioner “negotiates in

good faith with the Unions to agreement or to

impasse,” id. at 94-96."

6. The court of appeals affirmed the Board’s unfair

labor practice findings and enforced the Board’s

order. Pet. App. 1-27. The court specifically approved

the provisions of that order directing petitioner to

restore the preexisting terms and conditions of em-

ployment and to make the employees whole for

petitioner’s unilateral changes. Jd. at 13-18, 96. It

rejected petitioner’s threshold contention that the

court’s disapproval of some of the terms of the tempo-

rary restoration order in the Section 10(j) injunction

established “law of the case” that precluded the Board

from employing those terms in its final restoration

order. Id. at 13-15.

The court agreed with the Board’s rationale that

the parties must be restored to the status quo ante as

a predicate for bargaining. The employees were

therefore entitled to reinstatement under appropriate

terms and conditions of employment. Because peti-

tioner had wrongfully refused to hire the employees

or bargain with their unions, petitioner bore the

burden of proving that, had it done so, it “would not

have agreed to the wage scale provided by the

a

1 The Board reserved to future compliance proceedings

the issue of how many employees would be entitled to rein-

statement and back pay. It modified the ALJ’s recommended

order to make clear that limitation. Pet. App. 29 & n.4.

predecessor’s labor agreement, and the resulting

impasse would have resulted in reduced wages.” Pet.

App. 15-18. The court concluded that, because peti-

tioner had failed to satisfy that burden, “the Board’s

grant of back pay based on the predecessor’s [uJnion

pay scale restores as nearly as possible the employ-

ment situation that would have occurred absent [peti-

tioner’s] discrimination against the Union employ-

ees.” Id. at 18.

Judge O’Scannlain agreed that petitioner had com-

mitted unfair labor practices, but dissented from the

court’s enforcement of the Board’s remedy. Pet. App.

19-27. In his view, the law of the case doctrine pre-

vented the Board from employing a remedy in its final

restoration order that the court of appeals had not

allowed in the Section 10(j) proceeding for a tempo-

rary injunction. Jd. at 19-20. Judge O’Scannlain also

concluded that the Board’s remedy was inconsistent

with a successor employer’s normal privilege to set

initial terms and conditions of employment. Jd. at 22-

25.

ARGUMENT

The court of appeals properly affirmed the Board’s

exercise of remedial discretion in this case. Contrary

to petitioner’s contentions, the court’s decision does

not conflict with any decision of this Court or another

court of appeals. The decision, which affirms a Board

remedy based on the particular facts of the unfair

labor practices at issue here, does not present any

issue of general importance warranting this Court’s

review.

1. Petitioner contends (Pet. 13-17) that the court

of appeals’ decision directing petitioner to restore its

predecessor’s terms and conditions of employment

pending bargaining is “[iJrreconcilable” with this

Court’s decisions in H.K. Porter Co. v. NLRB, 397

U.S. 99 (1970), and NLRB v. Burns Interxational

Security Services, Inc., 406 U.S. 272 (1972). ‘Tha. -on-

tention is incorrect. This Court ruled in H.K. Porter

that the Board may not compel an employer to adopt

terms of a collective bargaining agreement that the

employer has rejected in the collective bargaining

process. 397 U.S. at 107-109. Applying that principle,

the Court ruled in Burns that, while a successor

employer may be under an obligation to bargain col-

lectively with the union representing its predeces-

sor’s employees, the Board may not compel the suc-

cessor to adopt a predecessor’s collective-bargaining

agreement. 406 U.S. at 281-291. See also Fall River

Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27

(1987).?

Those well established principles are not at issue

here. In this case, petitioner pursued a discrimina-

tory hiring scheme specifically to avoid creating any

bargaining obligations that would result from hir-

ing its predecessor’s employees. By doing so, it com-

mitted unfair labor practices in violation of the

2 The Court ruled in Burns that a successor is ordinarily

free to establish its initial terms and conditions of employment,

without bargaining with the union, because the union’s major-

ity will not be established until the successor hires a majority of

its work force from the predecessor’s employees. 406 U.S. at

292-296. The Court indicated, however, that an exception may

exist when “it is perfectly clear that the new employer plans to

retain all of the employees in the unit”; in that setting, it may

“be appropriate to have him initially consult with the employ-

ees’ bargaining representative before he fixes terms.” Id. at

294-295. See Fall River Dyeing & Finishing Corp., 482 U.S. at

47 n.14.

8

_

National Labor Relations Act. Pet. 3, 15,17. As part

of the remedy for those violations, the Board ordered

petitioner to bargain in good faith with the employees’

representatives until an agreement or an impasse in

bargaining is reached. The Board additionally or-

dered that petitioner, on request of the employees,

must restore the predecessor’s terms and conditions

of employment during that bargaining process. See

Pet. App. 96.

Contrary to petitioner’s argument, the Board’s

order does not impose a collective-bargaining agree-

ment on petitioner in violation of H.K. Porter and

Burns. The restoration provision is a “temporally

limited” requirement to restore the status quo that

existed before petitioner committed the unfair labor

practice. NLRB v. Staten Island Hotel Ltd. Partner-

ship, 101 F.3d 858, 862 (2d Cir. 1996). It reinstates the

predecessor’s terms and conditions of employment

only as a predicate for bargaining. Petitioner is free,

through fulfillment of its bargaining obligation, to

reach a different agreement with the employees or to

reach a good faith impasse. In either event, petitioner

would not be bound to maintain the predecessor’s

terms. See Pet. App. 96.

The Board’s order also does not infringe on a suc-

cessor employer’s normal right to set initial employ-

ment terms in the course of nondiscriminatory

hiring. See Burns, 406 U.S. at 292-296. The Board

took remedial action in response to petitioner’s viola-

tion of its bargaining obligations, and it fashioned a

remedy that sought to restore the collective bargain-

ing environment that would have prevailed if peti-

tioner had not violated the law. In formulating that

remedy, the Board had to determine the situation that

would have existed in the absence of petitioner’s

9

unlawful conduct. The Board properly concluded that

petitioner, as the wrongdoer, bore the burden of any

uncertainty over the bargaining environment that

would have existed if it had not engaged in illegal

acts. See, e.g., Staten Island Hotel Ltd. Partnership,

101 F.3d at 862.

As the court of appeals explained, the record in this

case was “devoid of any evidence that the employees’

wages would have changed had [netitioner] initially

recognized and bargained with the Unions.” Pet. App.

18. The Board therefore selected the predecessor’s

terms and conditions of employment as the best esti-

mation of the status quo ante. The Board did not im-

pose a “punitive” remedy (Pet. 17). It simply sought

to restore the situation, to the extent possible, to the

one that would have prevailed but for the violations.

See Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 194

(1941). In doing so, the Board appropriately exercised

its remedial discretion. See generally Virginia Elec.

& Power Co. v. NLRB, 319 U.S. 533, 539-540 (1943)

(Board’s order must stand unless it represents “a

patent attempt to achieve ends other than those which

can fairly be said to effectuate the policies of the

Act”); NLRB v. Gissel Packing Co., 395 U.S. 575, 612

n.32 (1969); Fibreboard Paper Products Corp. v.

NLRB, 379 U.S. 208, 216 (1964).

2. Petitioner contends (Pet. 18-21) that the court

of appeals’ decision in this case conflicts with deci-

sions of other courts of appeals. That contention is

incorrect. The courts of appeals have uniformly up-

held the Board’s imposition of similar restoration

remedies in cases in which a successor has discrimi-

nated in hiring, based on anti-union animus, to avoid a

bargaining obligation.

10

Seven courts of appeals have ruled that, when an

employer kas engaged in hiring discrimination to

avoid a successorship obligation, the Board may

appropriately remedy that violation by requiring the

successor to reinstate the predecessor’s terms and

conditions of employment until the successor bar-

gains in good faith with the union to agreement or

impasse. See NLRB v. Horizons Hotel Corp., 49 F.3d

795, 806 (ist Cir. 1995); NLRB v. Staten Island Hotel

Ltd. Partnership, 101 F.3d 858, 861-862 (2d Cir. 1996);

Systems Management, Inc. v. NLRB, 901 F.2d 297,

306-307 (8d Cir. 1990); American Press, Inc. v. NLRB,

833 F.2d 621, 624-625 (6th Cir. 1987); U.S. Marine

Corp. v. NLRB, 944 F.2d 1305, 1319-1324 (7th Cir.

1991) (en banc), cert. denied, 503 U.S. 936 (1992); Pace

Industries, Inc. v. NLRB, 118 F.3d 585, 593-594 (8th

Cir. 1997); Kallmann v. NLRB, 640 F.2d 1094, 1102-

1103 (9th Cir. 1981).’

Petitioner’s assertion of a conflict rests, in pri-

mary part, on decisions that deal with a different

issue arising from a qualification that this Court

3 In Kallmann, the court agreed with the Board that “the

employer should not be permitted to benefit from his illegal

conduct” and therefore could be required retroactively to

apply the predecessor’s terms. 640 F. 2d at 1103. The court,

however, concluded that the backpay period should be limited,

in light of evidence that the employer “would not have agreed

to union demands to pay the higher rate.” Jbid. As explained

above, the court of appeals found no such evidence here. The

Sixth Circuit’s decision in Armco, Inc. v. NLRB, 832 F.2d 357,

365 (1987), cert. denied, 486 U.S. 1042 (1988), which petitioner

cites (Pet. 21), is similarly distinguishable. In that case, the

court remanded a backpay order for further consideration

because of the court’s concern that, as in Kallmann, the facts

indicated the successor would never have agreed to the

predecessor’s terms.

11

attached to its successor employer ruling in Burns.

The Court stated in Burns that when “it is perfectly

clear that the new employer plans to retain all of the

employees in the unit,” it may “be appropriate to have

him initially consult with the employees’ bargaining

representative before he fixes terms.” 406 U.S. at

294-295. See note 2, supra. Petitioner mistakenly

suggests that decisions dealing with that particular

circumstance conflict with the situation presented

here, in which petitioner committed unfair labor

practices precisely to avoid hiring its predecessor’s

employees.

For example, petitioner argues (Pet. 18-19) that the

court of appeals’ decision here conflicts with NLRB v.

Spruce Up Corp., 529 F. 2d 516 (4th Cir. 1975), enfore-

ing mem. 209 N.L.R.B. 194, 195 (1974), and Interna-

tional Association of Machinists v. NLRB, 595 F.2d

664, 671-676 (D.C. Cir. 1978), cert. denied, 439 U.S.

1070 (1979). In each of those cases, the courts of

appeals upheld the Board’s conclusion that successor

employers who expressed a willingness to hire the

predecessors’ employees, but stated from the outset

that the terms of employment would be different, were

not required to bargain over the initial employment

terms.* Those cases do not involve review of the

4 Contrary to petitioner’s suggestion (Pet. 19 n.9), the

Board’s decision here does not rest on Spruce Up. Rather, the

ALJ merely noted as background, in his discussion of the

timing of a successor employer’s bargaining obligation, that the

“Board discusses these timing issues and their consequences in

Spruce Up Corp.” Pet. App. 87. Accordingly, the divergent

opinions of the Board members on Spruce Up, to which

petitioner refers (Pet. 19 n.9), citing Canteen Corp. v. NLRB,

103 F.3d 1355, 1359-1360, 1362 (7th Cir. 1997), are irrelevant

here.

12

Board’s discretion to impose a remedy in response to

a successor employer’s use of unfair labor practices

to avoid a bargaining obligation. They therefore are

not in conflict with the court of appeals’ decision

here.’

Petitioner also contends (Pet. 19-21) that the court

of appeals’ decision conflicts with Systems Manage-

ment, Inc. v. NLRB, supra, and NLRB vy. Staten Is-

land Hotel Ltd. Partnership, supra. Those decisions,

however, actually support the propriety of the Board’s

resiuration order. In Systems Management, the

court approved the restoration of preexisting terms of

employment as part of the backpay remedy for the

predecessor’s employees who were improperly denied

jobs. 901 F.2d at 307-308. The court merely refused to

extend the remedy to the employees hired in their

stead who were not financially injured by the dis-

crimination against the former employees, ibid., and

declined to order compliance with the backpay award

° The same distinction applies to Nazareth Regional High

School v. NLRB, 549 F.2d 873 (2d Cir. 1977). The court held

in that case that a successor employer that had originally indi-

cated an intent to retain the predecessor’s employees, without

stipulating new employment terms, had not clearly indicated

an intention to be bound by the predecessor’s terms and thus

was free unilaterally to change those terms. I/d. at 881-882.

Petitioner seems to suggest (Pet. 20) that Nazareth Regional

High School is similar to the present case because it involved

“inherently coercive” Section 8(a)(1) violations, 549 F.2d at

878-879. That comparison is unsound. The unfair labor prac-

tices at issue in that case are not the equivalent of a discrimina-

tory hiring scheme to evade bargaining, which provided the

basis for the particular form of relief that the Board provided

here. The same is true of the unlawful Section 8(a)(2) assis-

tance to a rival union in Burns, 406 U.S. at 276, on which

petitioner also relies (Pet. 16).

13

until the Board had determined the duration of the

backpay period and the specific amounts of back pay

due, id. at 308-309. In Staten Island, the court of ap-

peals affirmed the same type of “temporally limited”

restoration order that the Board employed in this

case. Compare Staten Island, 101 F.3d at 862, with

Pet. App. 17.

Petitioner also relies on the dissenting opinion in

U.S. Marine Corp., 944 F.2d at 1327-1331. Signifi-

cantly, the dissent acknowledged that the Board could

resolve against the wrongdoing employer “all factual

ambiguities created by its illegal conduct,” 944 F.2d

at 1329, but concluded, on the facts of that case, that it

was “unimaginable” that the employer would have

agreed to use the preexisting terms. Jd. at 1330. In

this case, by contrast, the court of appeals found the

record “devoid” of evidence that petitioner “would not

have agreed to the [predecessor’s] wage scale” had it

hired the predecessor’s employees on a nondiscrimi-

natory basis and bargained in good faith with the

Unions about the employment terms. Pet. App. 15,

18.°

6 The dissent in U.S. Marine also concluded that the

Board’s order was a “penalty,” rather than a remedy (944 F.2d

at 1330), based on the Board’s statement that the successor had

“forfeited any right [it might] have had as a successor to

impose initial terms.” 293 N.L.R.B. 669, 672 (1989). No such

language appears in the Board’s decision here. Pet. App. 28-29,

84-88. In any event, the Board’s statement in U.S. Marine is

consistent with its holdings in this and like cases that, since the

successor’s unlawful conduct made it impossible to determine

what terms the predecessor’s employees would have received

absent the successor’s unlawful scheme to avoid bargaining

with the union, it was necessary to return to the status quo

ante and send the parties to the bargaining table. The majority

14

3. Petitioner’s contention (Pet. 21-23) that the

Board’s approach in this case will inhibit business

transfers is without merit. The Board’s approach

does not raise “enormous practical obstacles for em-

ployers attempting to revitalize failing businesses or

compete with uncompetitive ones” (Pet. 21). A new

employer is free to offer its new employees the initial

terms it chooses and to hire the employees it chooses,

so long as it does not engage in illegal activity. The

remedy at issue in this case comes into play only in

the unusual situation in which the employer unlaw-

fully discriminates against its predecessor’s employ-

ees. The holding does not imperil lawful business

transfers; it simply addresses the unique remedial

problems raised when an employer such as petitioner

embarks on a calculated scheme to evade bargaining

with a union through discriminatory refusals to hire.

of the court in U.S. Marine so understood the Board’s

rationale. 944 F.2d at 1322-1324.

15

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.

SETH WAXMAN

Acting Solicitor General

FREDERICK L. FEINSTEIN

General Counsel

LINDA SHER

Associate General Counsel

NORTON J. COME

Deputy Associate General Counsel

MARION GRIFFIN

Attorney

National Labor Relations Board

SEPTEMBER 1997