Opposition Brief — Alta Bates Corp. v. National Labor Relations Board

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Supreme Court, U.S.

(5) 7a & ED

NOV 14 1897

No. 97-465

In the Supreme Court of the Giited States

OCTOBER TERM, 1997

ALTA BATES CORPORATION, ET AL., PETITIONERS

NATIONAL LABOR RELATIONS BOARD, ET AL.

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 P. WAXMAN

Solicitor General

Department of Justice

Washington, D.C. 20530-0001

(202) 514-2217

FREDERICK L. FEINSTEIN

General Counsel

LINDA SHER

Associate General Counsel

NORTON J. COME

De puty Associate Gene ral

Counse /

JOHN EMAD ARBAB

Attorney

National Labor Relations

Board

Washington, D.C. 20570

QUESTION PRESENTED

Whether the National Labor Relations Board prop-

erly determined that petitioners constituted a “single

employer” for purposes of the National Labor Rela-

tions Act.

(I)

TABLE OF CONTENTS

Page

A RR RL ed SM Reg Se OE l

OD shh andes nchasnkanaiiracaha thisesesvelaossactaiun isckcsccsit 1

EY intnicdsnhcsidueiesinn ce 2

“votes cpt cy i RPO RSE IIO ANE DEIR De em ad Sa 10

RIOR: Streit cck anes tec hie 2 int 17

TABLE OF AUTHORITIES

Cases:

American Federation of Television & Radio Artists

v. NLRB, 462 F.2d 887 (D.C. Cir. 1972) ...0..00........ 15, 16

Bachman Machine Co. v. NLRB, 266 F.2d 599 (8th

ATU Tblahimcnvicsuceten ac a 16

Boich Mining Co. v. NRLB, 955 F.2d 431 (6th Cir.

eg Ae EE SCE NOOR OMAR 13, 14

Drivers Local No. 639 (Poole’s Warehousing),

Ser unk, BIE SID ci 14

International Bhd. of Elec. Workers, Local 613 v.

Fowler Industries, Inc., 884 F.2d 551 (11th Cir.

1989), cert. denied, 494 U.S. 1066 (1990) ................ 2

J.G. Roy & Sons Co. v. NLRB, 251 F.2d 77] (1st

SACRED taba bteincuschiiee aia 14

Limbach Co. v. Sheet Metal Workers Int'l Ass’n,

woe oe been tee Cor, 290) 16

Local No. 627, Int’l Union of Operating Eng’rs v.

NLRB, 518 F.2d 1040 (D.C. Cir. 1975), affd in

relevant part sub nom. South Prairie Construction

Co. v. Local 627, Int'l Union of Operating Eng’rs,

an 2-3

Miami Newspaper Pressmen’s Local No. 46 Vv.

NLRB, 322 F.2d 405 (D.C. Cir. 1968) ..................... 14

NLEB vy. Big Bear Supermarkets, 640 F.2d 924

(9th Cir.), cert. denied, 449 U.S. 919 (1980) ........... 2

(IIT)

Cases—Continued: Page

NLRB vy. Carson Cable TV, 795 F.2d 879 (9th Cir.

LOBE). .niorscrsesasdavneepoanednnstnesyescheneh nteiconhbionessntnontenliviin 12

NLRB vy. Don Burgess Construction Corp.,

596 F.2d 378 (9th Cir.), cert. denied, 444 U.S. 940

DITO) sccisiesiacincstesncsseuktcclavennaternddeesaimanncaniguaianiciens 2

Penntech Papers, Inc. v. NLRB, 706 F.2d 18 (ist

Cir.), cert. denied, 464 U.S. 892 (1988) .................... 12

Radio & Television Broadcast Technicians Local

Union 1264 v. Broadcast Service of Mobile,

FRC, BOR ES. TE CIO civestirsescnanienttiaeavesinsinioie 2

Royal Typewriter Co. v. NLRB, 533 F.2d 1030

RRR SIE. BOD sn isinicins wavs shdiamensncaninaicieegheiatinias 9, 12, 13

Sakrete of Northern California, Inc. v. NLRB,

332 F.2d 902 (9th Cir. 1964), cert. denied, 379 U.S.

BNE SG OOD sicnssicicstnrintancpncveedantnsesanaiabincaiesciuaiammakauehiciaigs 14, 15

Sheet Metal Workers Int’l Ass'n, Local Union

No. 223 v. Atlas Sheet Metal Co., 384 F.2d 101

CEE STUN - SID sivsndcs sedcisidcs tipctauiavevcchccchenaiedseuiesoeateasck 16

South Prairie Construction Co. v. Local No. 627,

Int'l Union of Operating Eng’rs, 425 U.S. 800

CRD ncssrrsscahc Saisie ersten ccennenradiudaaddeseabbs Sbciecbetiaciteasdie 2

Vance v. NLRB, 71 F.3d 486 (4th Cir. 1995) .......... 2

Wisniewski v. United States, 353 U.S. 901 (1957) ... 14

Statutes:

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

S SONG), SO U.G.C. IRGKE) ...censrcnscersenssnestecssonteses 4

5 OLOKO), BO UB. TRC oss ceccssescaccvesncscoececosnrees 13

Jn the Supreme Court of the Anited States

OCTOBER TERM, 1997

No. 96-465

ALTA BATES CORPORATION, ET AL., PETITIONERS

NATIONAL LABOR RELATIONS BOARD, ET AL.

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. 1a-4a)

is unpublished, but the decision is noted at 116

F.3d 482 (Table). The decision and order of the

National Labor Relations Board (Pet. App. 5a-13a) and

the decision of the administrative law judge (Pet. App.

13a-61a) are reported at 320 N.L.R.B. 1050.

JURISDICTION

The judgment of the court of appeals was entered on

June 4, 1997. A petition for rehearing was denied on

July 17, 1997. The petition for a writ of certiorari was

filed on September 11, 1997. The jurisdiction of this

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

(1)

STATEMENT

_ 1. Section 2(2) of the National Labor Relations Act

(Act), 29 U.S.C. 152(2), provides, in pertinent part,

that “the term ‘employer’ includes any person acting

as an agent of an employer, directly or indirectly.”

Under settled decisions of the courts and the

National Labor Relations Board (Board), two or more

nominally separate entities may constitute a “single

employer” under the Act, and in determining whether

two or more entities are in fact a single employer, the

Board considers four factors: (1) common owner-

ship, (2) common management, (8) interrelation of op-

erations, and (4) centralized control of labor re-

lations.' No one factor alone is controlling, nor is

any factor a necessary prerequisite for a finding of

single-employer status.” Rather, “[slingle employer

status ultimately depends on all the circumstances of

the case and is characterized as an absence of an

arm’s length relationship found among unintegrated

companies.”

1 See Pet. App. 3a; South Prairie Construction Co. v. Local

No. 627, Int'l Union of Operating Eng’rs, 425 U.S. 800, 802 n.3

(1976); Radio & Television Broadcast Technicians Local Union

1264 v. Broadcast Service of Mobile, Inc., 380 U.S. 255, 256

(1965).

2 See Pet. App. 3a; see also Vance v. NLRB, 71 F.3d 486,

490 (4th Cir. 1995); International Bhd. of Elec. Workers, Local

613 v. Fowler Industries, Inc., 884 F.2d 551, 553 n.3 (11th Cir.

1989), cert. denied, 494 U.S. 1066 (1990); NLRB v. Big Bear

Supermarkets, 640 F.2d 924, 928 (9th Cir.), cert. denied, 449

U.S. 919 (1980).

3 NLRB v. Don Burgess Construction Corp., 596 F.2d 378,

384 (9th Cir.) (internal quotation marks omitted), cert. denied,

444 U.S. 940 (1979); see also Pet. App. 3a; Vance v. NLRB, 71

F.3d 486, 490 (4th Cir. 1995); Local No. 627, Int’l Union of

2. Petitioner Alta Bates Corporation (ABC) is a

California non-profit corporation that coordinates the

operations of non-profit hospitals and other related

health-care organizations. Pet. App. 18a. Petitioner

Alta Bates Medical Center (ABMC) is a California

non-profit corporation that operates two hospitals

in Berkeley, California. Jd. at 19a.‘ Petitioner

Pathology Institute, Inc. (PI), before its closure in

‘1992, was a for-profit, wholly owned subsidiary of

ABC and ABMC that provided laboratory testing

services to numerous physicians and hospitals in the

Berkeley area, including ABMC. Id. at 6a, 21a, 22a,

33a.

In June 1992, ABC and ABMC closed PI for

financial reasons. PI’s assets were sold to a third

party, except for those located at ABMC’s two

hospitals, which were purchased by ABMC. Pet.

App. 21a-22a, 23a-29a. At the time of its closure, PI’s

medical laboratory technologists were represented

by Office and Professional Employees International

Union, Local 29, AFL-CIO (Union), and there was a

collective-bargaining agreement in place between

PI and the Union, effective from February 1, 1991

through October 31, 1993. Jd. at 6a. To staff the

laboratory operations at its hospitals, ABMC hired

Union-represented medical laboratory technologists,

Operating Eng’rs v. NLRB, 518 F.2d 1040, 1046 (D.C.

Cir. 1975), aff’d in relevant part sub nom. South Prairie

Construction Co. v. Local No. 627, Int’l Union of Operating

Eng’rs, 425 U.S. 800 (1976).

* Prior to 1992, ABMC was known as Alta Bates-Herrick

Hospital. Pet. App. 20a. The name change in 1992 “caused

no substantive change in the underlying entity.” Jd. at 32a.

Accordingly, we refer to both Alta Bates Medical Center and

Alta Bates-Herrick Hospital simply as ABMC.

all of whom had previously been employed by PI. /d.

at 29a. ABMC and the Union negotiated a labor

agreement for the medical laboratory technologists,

but the employees refused to ratify it. Jd. at 30a.

Thereafter, ABMC unilaterally instituted its own |

employment terms and refused to recognize the |

Union as the employees’ bargaining representative. |

Ibid.

3. a. Acting on unfair labor practice charges filed

by the Union, the Board’s Regional Director issued a

complaint against ABC, ABMC, and PI. Pet. App. 13a.

The administrative law judge (ALJ) found that “a

preponderance of the evidence, viewed in its entirety,

establishes [the] existence of a sufficient inter-

relationship among the three entities [i.e. ABC,

ABMC, and PI] * * * to conclude that they

constituted * * * asingle employer.” Jd. at 17a. He

therefore concluded that the three entities violated

Section 8(a)(5) and (1) of the Act, 29 U.S.C. 158(a)(5)

and (1), by failing to apply PI’s contract with the

Union to the medical laboratory technologists. Ibid.

The ALJ’s findings respecting the factors relevant

to the question of single-employer status may be

summarized as follows:

Common ownership. ABC and ABMC are non-

profit entities, which are operated by “members.”

ABC and an entity known as the Alta Bates Com-

munity Member are ABMC’s “members,” each of

which has a single vote. Thus, ABC may “preclude

action” by ABMC by “declin[ing] to vote as does the

Alta Bates Community Member.” Pet. App. 3la-32a.

ABC and ABMC each own 48% of PI’s stock, and

thereby “possess ownership of * * * PI to the same

degree as does any parent over its wholly owned

subsidiary.” Jd. at 21a, 38a.

i lal

Common management and control of operations.

In the years preceding PI’s closure, there was

“considerable overlap of members between the board

of directors of * * * ABC and the board of trustees

of * * * ABMC.” Pet. App. 48a. From 1989 through

1992, a majority of the members of ABMC’s board of

trustees also served on ABC’s board of directors, and

in each of those years, the chairman of ABMC’s board

of trustees was also a member of ABC’s board of

directors. Jd. at 43a-44a.

There was also substantial commonality of manage-

ment between ABC anu ABMC, on the one hand, and

PI, on the other. Pet. App. 44a-45a. In 1992, two

members of PI’s 12-member board of directors served

on ABC’s or ABMC’s boards, and another eight

members had ties to ABC or ABMC; all ten individu-

als were selected to serve on PI’s board by ABC and

ABMC. Ibid. From April 1991 until PI’s closure in

June 1992, Robert Reed, ABC’s chief financial officer,

simultaneously served on PI’s board and was PI’s

interim president and acting chief executive officer,

its “highest policy-making official.” Jd. at 45a, 46a.

Reed was appointed to that position by Robert Mont-

gomery, ABC’s chief executive officer and president.

Id. at 50a.

ABC possessed “institutional and operational con-

trol” over ABMC and PI, and exercised “significant

owner and membership control” over ABMC and PI.

Pet. App. 41a, 47a. ABC reviewed ABMC’s and PI’s

annual budgets, “both in the aggregate and by line

item,” and in certain instances ABC approved PI’s

budget subject to PI’s acceptance of ABC’s revisions.

Id. at 47a. ABC’s prior approval was required for

such matters as ABMC’s “major transactions or

major policies” and changes to ABMC’s by-laws. Id.

at 42a. Reed, PI’s chief executive officer, and Albert

Greene, ABMC’s chief executive officer, both

reported to Robert Montgomery, ABC’s chief

executive officer, regarding the overall “relation-

ships” between the entities, and “to meet the financial

targets and * * * whatever financial obligations”

existed among them. Id. at 47a. ABC and ABMC

“dictate[d] [PI’s] course and, indeed, its very exis-

tence”; thus, ABC and ABMC closed PI and sold its

assets without consulting the Alta Bates Community

Member about the decision. Jd. at 42a.

Interrelationship of operations. ABC, ABMC, and

PI possessed “a high degree of operational integra-

tion * * * exceeding what might be expected of truly

separate enterprises.” Pet. App. 4la. The “most

graphic display” of that operational integration was

the assignment of Reed, ABC’s chief financial officer,

to serve concurrently as PI’s acting chief executive

officer and interim president. Jd. at 24a, 40a, 45a.

Further, ABMC was PI’s “principal customer,” ac-

counting for about 40% of PI’s revenue; Montgomery,

ABC’s chief executive officer, periodically contacted

executives at other hospitals to encourage them

to purchase PI’s laboratory services. Jd. at 34a, 40a.

The prices that PI and ABMC negotiated for labora-

tory services that PI provided ABMC were reviewed

by ABC, and Reed, as ABC’s chief financial officer,

became involved in pricing disagreements between

ABMC and PI. 7d. at 39a-40a.

ABC provided ABMC and PI with “core services”

and “purchase services.” Core services generally in-

volved strategic planning matters, which ABMC and

PI were required to buy from ABC for a fee set by

ABC; the “most significant” purchase service was a

“cash pool fund” established by ABC, in which ABMC

and PI participated. Pet. App. 34a-35a. Through the

cash pool, ABMC granted PI a $1.1 million line of

credit in 1989, and in 1990, when that loan was not

timely repaid by PI, ABMC extended the loan and

granted PI an additional $500,000 line of credit. Jd. at

37a. Neither loan was collateralized by PI, and

neither was repaid until PI’s closure. Jbid. ABC

received $2.1 million in loans from ABMC through the

cash pool. Jbid. ABMC began paying PI’s accounts

payable in 1989 from ABMC’s checking accounts, for

which ABMC was reimbursed from the cash pool. Jd.

at 38a.°

Centralized control of labor relations. ABMC’s

labor relations were “directly supervised” by its vice

president of human resources, Ruth Robinson; PI’s

labor relations were “handled directly” by its director

of human relations, Beverly Chilton. Pet. App. 48a,

49a. Chilton reported directly on labor relations

matters to Reed, who served as both PI’s chief execu-

tive officer and ABC’s chief financial officer. Reed

acknowledged that, during the 14 months before PI

closed, he “‘would have made the decisions’ con-

cerning * * * PI’s labor relations.” Jd. at 48a.

Reed “admitted having been the official responsible

® The ALJ noted that his finding of a “degree of operational

integration * * * exceeding what might be expected of truly

separate enterprises” (Pet. App. 41a) was buttressed by the

facts that officials of ABC and ABMC were authorized to sign

checks drawn on PI's bank accounts (id. at 38a); ABC, ABMC,

and PI retained the same auditing firm (id. at 40a); ABC,

ABMC, and PI retained the same law firms to handle various

legal matters, including labor relations (ibid.); and PI leased

space on ABMC’s property without a written agreement, even

though it had written leases for space it occupied elsewhere

(ibid.).

for * * * PI’s negotiations with the Union for a

closing agreement,” and “in formulating positions on

labor matters, ‘the parameters that are set for [Reed]

are set through a budget, the global budget process,”

which was controlled by ABC. Reed reported on PI’s

labor matters to PI’s board of directors, almost all of

whom had been selected by ABC and ABMC to serve

on PI’s board. Jd. at 48a-49a.

Albert Greene, ABMC’s chief executive officer,

“occupie[d] the same role with respect to * * *

ABMC’s labor relations as did Reed * * * con-

cerning those of * * * PI.” Pet. App. 49a. “Greene

establishe[d] the parameters for [ABMC’s labor

relations] and [sought] approval and authority for his

actions from * * * ABMC’s governing board,” a

majority of whom also served on ABC’s board. ABC’s

approval was required for ABMC’s budget, and

Greene was under a duty to report to ABC’s chief

executive officer respecting “any labor relations

matter that might have an effect upon * * * ABMC’s

relationship with other entities.” Jd. at 49a-50a.

In addressing the factor of centralized labor-

relations control, the ALJ acknowledged that “there

has not been an actual exercise of labor relations

control here that is so extensive and intrusive as

occurs, for example, when a single proprietor oper-

ates two interrelated small companies.” Pet. App.

5la. The ALJ observed, however, that the factor of

centralized control of labor relations relevant to

single-employer status “does not require micro-

management of each entity’s labor relations by the

same individual,” and “(t]hat could not be expected to

occur whenever entities of any size are involved.”

Ibid. The ALJ also observed that “it is not crucial

that one of [petitioners’] officials did not directly

oversee the work forces of the other two”; rather,

“[iIn assessing the appropriateness of single-

employer treatment, the fact that day-to-day labor

matters are handled at the local level is not con-

trolling,” because the “more critical test is whether

the controlling company possessed the present and

apparent means to exercise its clout in matters of

labor negotiations by its divisions or subsidiaries.”

Pet. App. 48a (quoting Royal Typewriter Co. v.

NLRB, 533 F.2d 1030, 1043 (8th Cir. 1976)). The ALJ

concluded that “[a] preponderance of the evidence

shows that existed here.” Pet. App. 5la.

b. The Board affirmed the ALJ’s determinat-

ion that ABC, ABMC, and PI constituted a single em-

ployer, and it specifically rejected petitioners’ con-

tention that there was insufficient evidence of

centralized control of labor relations among them.

Pet. App. 5a & n.1. The Board also concluded (as had

the ALJ) that petitioners violated the Act by failing

to apply PI’s contract with the Union to the medical

laboratory technologists, and further concluded

(contrary to the ALJ) that petitioners had unlawfully

refused to recognize the Union as the employees’

bargaining representative. Jd. at 6a-9a. The Board’s

order requires petitioners to recognize and bargain

with the Union as the exclusive representative of

the medical laboratory technologists employed by

ABMC at its two hospital locations, and to make those

employees whole for any losses suffered as a result of

petitioners’ failure to apply to them the collective-

bargaining agreement between PI and the Union. Jd.

at 9a-1la.

4. The court of appeals enforced the Board’s order

in an unpublished opinion. Pet. App. la-4a. The court

noted that, under settled law, “(t]o find a ‘single

employer,’ all four factors [i.e., common ownership,

common management, interrelated operations, and

centralized control of labor relations] need not be pre-

sent,” and that “[s]ingle employer status ultimately

depends on all the circumstances of the case.” Id. at

3a. After reviewing the principles applicable to the

single-employer determination, the court ruled that

substantial evidence supported the Board’s deter-

mination that ABC, ABMC, and PI constituted a

single employer. Jbid.

ARGUMENT

Petitioners contend that they do not constitute a

single employer for purposes of the National Labor

Relations Act, and in particular, that the Board erred

in concluding that their labor relations were subject

to centralized control. See Pet. 7-17. The decision of

the court of appeals upholding the Board’s single-

employer determination as supported by substantial

evidence is correct, and the court’s decision does not

conflict with any decision of this Court or of another

court of appeals. Further review is therefore not

warranted.

1. a. Petitioners’ principal contention (Pet. 8) is

that the court of appeals applied an incorrect legal

standard in upholding the Board’s single-employer

determination. That is so, according to petitioners

(ibid.), because the ALJ, whose decision the court

upheld, ruled that “the single-employer doctrine

requires only the ability or potential for one entity

to exercise control over the labor relations of

other commonly owned entities.” There is no merit

to that argument, which rests on a mistaken charac-

terization of the ALJ’s decision.

Contrary to petitioners’ contention, the ALJ did

not hold that, as a general rule, a mere “ability or

potential” for one entity to control the labor relations

of another entity by virtue of its ownership interest

in that entity suffices to demonstrate common control

of labor relations between those entities. Rather,

the ALJ found that, although ABMC’s and PI’s

respective human resource directors, Ruth Robinson

and Beverly Chilton, handled labor matters on a “day-

to-day” basis (Pet. App. 48a, 49a), and although there

had not been an “actual exercise of labor relations

control here that is so extensive and intrusive as

occurs, for example, when a single proprietor

operates two interrelated small companies” (id. at

5la; emphasis added), nonetheless, ABC “possessed

the present and apparent means to exercise its clout”

over ABMC’s and PI’s labor relations through its

control over Reed and Greene, the executive officers

who established ABMC’s and PI’s respective labor-

relations policies. Jd. at 48a-5la. In other words, the

authority to set labor-relations policies for all three

entities was actually, if ultimately, located in ABC;

the responsibility for implementing those policies

was remitted to the entities’ responsible officials.

Thus, Reed, who was ABC’s chief financial officer,

also “made the decisions” respecting PI’s labor re-

lations during the 14-month period prior to its closure

in June 1992, when he served as head of PI, and he was

responsible for negotiating an agreement with the

Union regarding PI’s closure. Reed “formulat{ed]

positions on labor matters,” operating within “para-

meters” that were “set through * * * the global

budget process,” which was controlled by ABC. Reed

reported on labor matters to PI’s board of directors,

almost all of whom had been selected by ABC and

ABMC to serve on PI’s board. Pet. App. 48a-49a.

Similarly, Greene, ABMC’s chief executive officer,

“establishe[d] the parameters” for ABMC’s labor

relations and sought “approval and authority

for his actions from * * * ABMC’s governing

board,” a majority of whom also served on ABC’s

board. Greene was required to report to ABC’s chief

executive officer concerning “any labor relations

matter that might have an effect upon * * * ABMC’s

relationship with other entities.” And, like those at

PI, ABMC’s labor relations were formulated within

the “parameters” of a budget-approval process that

ABC controlled. Jd. at 49a-50a.

Accordingly, the facts of this case, as found by the

ALJ and upheld by the Board and the court of appeals,

demonstrate that ABC effectively controlled ABMC’s

and PI’s labor relations at the policy-making level.

While ABC did not engage in “micromanagement of

each entity’s labor relations” on a day-to-day basis

(Pet. App. 51a), the courts have recognized that that

circumstance is not dispositive of the inquiry; rather,

“[w]Jhere the major labor policy decisions are made

by a central authority, the Board may reasonably find

that the criterion of centralized control of labor

relations has been met.” NLRB v. Carson Cable

TV, 795 F.2d 879, 883-884 (9th Cir. 1986). As the ALJ

correctly ruled here, the evidence supported a finding

of single-employer status among ABC, ABMC, and

PI, for ABC “possessed and exercised control over

critical matters at the policy level, including the pre-

sent and apparent means to exercise its clout in labor

relations matters.” Penntech Papers, Inc. v. NLRB,

706 F.2d 18, 26 (1st Cir.), cert. denied, 464 U.S. 892

(1983); see also Royal Typewriter Co. v. NLRB, 533

F.2d 1030, 1042-1043 (8th Cir. 1976) (sustaining

Board’s single-employer finding where, “(bly staffing

the division offices with [the corporation’s] officers

and retaining control over all fundamental decisions,

[the corporation] had positioned itself to control the

course of [the division’s] negotiations”).*

b. There is no merit to petitioners’ contention

(Pet. 8-10) that the court of appeals’ decision, in

upholding the Board’s single-employer determination,

conflicts with the decisions of other courts of appeals.

The cases cited by petitioners generally recognize

(as the court below recognized) that separate entities

cannot be deemed a single employer or “allies” for

purposes of the Act’s secondary-boycott provisions

(see 29 U.S.C. 158(b)(4)) based only upon the potential

for operational control inherent in common owner-

ship. For example, in Boich Mining Co. v. NLRB,

955 F.2d 431 (6th Cir. 1992), the court noted that

“{c]lommon ownership and potential control of the day-

® There is no merit to petitioners’ contention (Pet. 13-14)

that the decisions of the Board and the court of appeals rest on

a “misreading” of Royal Typewriter. There, in upholding

the Board’s single-employer determination, the court noted,

among other things, evidence that the controlling entity “had

positioned itself to control the course of Royal’s negotiations,”

and that “Royal’s negotiators capitalized on this element of

subservience in an effort to induce the Union to accept Royal’s

proposed termination agreement.” Royal Tyepewriter, 533

F.2d at 1043. The court did not, however, hold that evidence

of such “subservience” on the part of the controlled entity’s

labor officials is a prerequisite of single-employer status, but

only that such evidence will support a finding of single-

employer status. Jbid. Petitioners are therefore incorrect

in asserting (Pet. 14) that “Royal Typewriter requires more

than just the means to control labor relations: it requires an

actual course of conduct at the local level to demonstrate the

existence of that clout.”

to-day activities of corporate divisions is inherent in

every corporate division relationship”; thus, the fact

that two entities are wholly owned subsidiaries of the

same holding company “in and of itself is not enough

to establish that the two companies are so closely

entwined as to be treated as a single entity.” Id. at

434, 435 (internal quotation marks omitted). Simi-

larly, in Miami Newspaper Pressmen’s Local No. 46

v. NLRB, 322 F.2d 405 (D.C. Cir. 1963), the court

observed that “common ownership alone does not

suffice” to establish ally status; rather, “[t]here must

be something more in the form of common control

* * * denoting an actual, as distinct from merely a

potential, integration of operations and management

policies.” Jd. at 408-409. See also J.G. Roy & Sons

Co. v. NLRB, 251 F.2d 771, 773 (1st Cir. 1958) (noting

that “there must be more than the potential control

inherent in common ownership” to establish ally

status); Drivers Local No. 639 (Poole’s Warehous-

ing), 158 N.L.R.B. 1281, 1286 (1966) (same).’

Petitioners also argue (Pet. 12-13) that the court of appeals

misconstrued Sakrete of Northern California, Inc. v. NLRB,

332 F.2d 902 (9th Cir. 1964), cert. denied, 379 U.S. 961 (1965),

in upholding the Board’s single-employer determination. Even

if petitioners were correct, a conflict among the decisions of

one court of appeals would not warrant review by this Court.

See Wisniewski v. United States, 353 U.S. 901, 902 (1957). In

any event, petitioners’ contention is without merit. In Sakrete

of Northern California, the Ninth Circuit (like the Board and

the court below in this case) rejected the contention that, in a

single-employer determination, “centralized control of labor

relations * * * must pertain to normal or current business

operations at the local level”; rather, the court concluded that,

“liJf there is overall control of critical matters at the policy

level, the fact that there are variances in local management

The decision below is consistent with the principles

articulated in those decisions, for the ALJ’s single-

employer determination did not rest solely on the

commonality of ownership among ABC, ABMC, and

PI, or the potential for inter-company control in-

herent in that common ownership. Rather, in addi-

tion to its ownership interest in ABMC and PI, ABC

exercised significant owner and membership control

over ABMC and PI—for example, by installing Reed,

ABC’s chief financial officer, to run PI (Pet. App. 34a-

35a, 48a-50a), and by requiring prior approval of

ABMC’s major transactions and major policies, and

requiring ABMC and PI to submit their annual

budgets to ABC for approval (id. at 41la-42a, 47a).

There was also “a high degree of operational integra-

tion” among petitioners that “exceed[ed] what might

be expected of truly separate enterprises” (id. at

41a)—for example, PI was dependent on ABMC’s

business and the operation of the “cash pool fund,” in

which all three entities participated (id. at 34a-35a);

ABC’s chief financial officer made PI’s _labor-

relations decisions (id. at 48a); ABMC’s chief

executive officer sought “approval and authority” for

his labor-relations decisions from ABMC’s governing

board, which was controlled by ABC (id. at 49a); and

ABC and ABMC “dictat[ed] [PI’s] course and, indeed,

its very existence.” Jd. at 42a.5

decisions will not defeat application of the ‘single employer’

principle.” 322 F.2d at 907.

* Petitioners cite several other cases involving the Act’s

secondary-boycott provisions in support of their contention of

a conflict of decisions (Pet. 9), but those cases are factually

distinguishable from the present case. In American Federation

of Television & Radio Artists v. NLRB, 462 F.2d 887 (D.C. Cir.

1972), the court agreed with the Board that two divisions of a

2. Petitioners also contend (Pet. 16-17) that the

court of appeals’ decision “effective[ly] repeal[s]” the

Act’s prohibition on secondary boycotts as it applies

to commonly owned but otherwise “autonomously

operated” businesses and “remove[s] * * * bargain-

ing rights from employers who hire workers from

businesses under common ownership.” There is no

merit to those contentions, for they are based, first,

on the erroneous factual premise that petitioners

were actually “autonomously operated,” and second,

on the erroneous legal premise that the Board’s

single-employer finding in this case was “based solely

on the potential for common control of management

corporation were separate entities, where “(the corporation’s]

ultimate power to control has not been exercised.” Jd. at 892.

In Bachman Machine Co. v. NLRB, 266 F.2d 599 (8th Cir.

1959), the court concluded that two entities were not “so

intimately and inextricably united as to constitute them one

employer,” where the majority stockholder of both entities

participated in one entity’s bargaining sessions, but not in those

of the other entity. Jd. at 605. See also Limbach Co. v. Sheet

Metal Workers Int'l Ass’n, 949 F.2d 1241, 1259-1261 (3d Cir.

1991) (en bane) (jury could reasonably find that a parent

corporation and two subsidiaries were not a single employer

where there was evidence that presidents of subsidiaries ran

them “independently” of the parent and “labor relations

were intentionally kept decentralized”); Sheet Metal Workers

Int'l Ass’n, Local Union No. 223 v. Atlas Sheet Metal Co., 384

F.2d 101, 107 (5th Cir. 1967) (upholding jury’s finding that

parent and wholly owned subsidiary were separate employers,

where “the evidence is capable of supporting both the inference

that [the parent] exercised actual control over [the subsidiary]

and the inference that such actual control was lacking”). The

differences ir outcome between this case and those relied on by

petitioner therefore reflect only differences in the facts, and

not the application of different legal standards by the courts of

appeals.

functions and labor relations.” See Pet. 16. As we

have explained, the ALJ (upheld by the Board and the

court of appeals) determined as a matter of fact that

ABC, ABMC, and PI were not “unaffiliated[] distant

cousins” (ibid.) but were in fact closely integrated

and subject to ABC’s control of labor-relations policy.

Nor, as we have explained, did the ALJ base his

single-employer finding solely upon the “potential”

for control inherent in petitioners’ common owner-

ship. There is accordingly no reason to regard the

Board’s decision, or that of the court below enforcing

it (which in any event is unpublished and without

precedential value, see Pet. App. 2a n.*), as having

changed existing law in the respects asserted by peti-

tioners.

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.