# Opposition Brief — Modern Manufacturing Co. v. National Labor Relations Board > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386417_1184%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Opposition Brief - **Published:** January 1, 1952 - **Citation:** 344 U.S. 816 ## Text © 905.5500 vce bindddens basekdeseoniaeekonas ST nc endst0isbe0sskababerdavesesidewtvencsiin IOI 5s sv-o5 v4 nid v's 00005600043 >hk56 bu ee ru EE I 0 vn es cidVinsscddainnddewedkcanercel Statement : A. The Board’s findings of fact and conclusions of law 1. Petitioner’s status as an employer ............ 2. The unfair labor practices .................. 3. The facts relating to petitioner’s procedural con- PUNE Chad bidchchae vhs cree steccwws ce cus CITATIONS Cases: National Labor Relations Board v. Don Juan, Inc., 178 MEM US ha duidok arent Ctelwacec avid uss ae National Labor Relations Board v. Greater New York Broadcasting Corp., 147 F. 2d 337 .................. Nati or Relations Board v. MacKay Radio ¢ Telceeted co, 1 4 8 ee eon National Labor Relations Board v. Nu-Car Carriers, Inc., 189 F. 2d 756, certiorari denied, 342 U. 8.919 ...... National Labor Relations Board v. Reliable Newspaper * Delivery, Inc., 187 F. 24 547 ...................... Press Co., Inc. v. National Labor Relations Board, 118 F. 2d 937, certiorari denied, 313 U.S. 595.............. Statutes : National Labor Relations Act, as amended (61 Stat. 136, 29 U. 8. C., Supp. IV, 141, et seq.) : PP NU vb pax uadeviccsvesceuns toate” a") wows © “a © 6 14 12 12 14 13 14 12 12 14 Ynthe Supreme Court of the United States OcToBER TERM, 1952 No. 54 MopERN Manvracturine Company, INc., PETITIONER v. Nationa Lasor RELATIONS Boarp ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT BRIEF FOR THE NATIONAL LABOR RELATIONS BOARD IN OPPOSITION OPINIONS BELOW The original opinion of the court below (R. 479- 483) is reported at 193 F. 2d 613. The order deny- ing rehearing (R. 489) was issued February 13, 1952, without opinion. The findings of fact, con- clusions of law, and order of the National Labor Relations Board (R. 15-155), are reported at 90 NLRB 1676. JURISDICTION . The judgment of the court below was entered on February 14, 1952 (R. 490). The petition for a (1) 2 writ of certiorari was filed on May 9, 1952. The jurisdiction of this Court is invoked under 28 U.S. C. 1254 and under Section 10 (e) and (f) of the National Labor Relations Act, as amended. STATUTE INVOLVED The pertinent provisions of the National Labor Relations Act, as amended (61 Stat. 136, 29 U.S. C., Supp. IV, 141, et seq.), are set forth in the Appen- dix to the petition, pp. 10-13. QUESTIONS PRESENTED 1. The complaint alleged that petitioner unlaw- fully locked out all of its employees between Octo- ber 27, and November 29, 1949. At the hearing it appeared that the lockout continued as to a portion of the employees after November 29. The legal- ity of petitioner’s continuation of the lockout was fully litigated. The Board found that the lockout, illegal in its inception, was illegally continued after November 29 and ordered appropriate remedial re- lief. The first question presented is whether, under these circumstances, the Board was precluded from finding that the illegal lockout continued after November 29, because continuation of the lockout was not alleged in the complaint. 2. Whether the Board properly found that peti- tioner, together with Somerset Classics, was respon- sible as an ‘‘employer’”’ for the unfair labor prac- tices in question. 3 STATEMENT A. THE BOARD’s FINDINGS OF FACT AND CONCLUSIONS OF LAW Upon the usual proceedings under Section 10 of the National Labor Relations Act, as amended, the Board, on August 2, 1950, issued its findings of fact, conclusions of law, and order. In large part the Board’s decision on the merits is not presently in issue. The narrow questions presented here involve only petitioner’s status as an employer and the sufficiency of one aspect of the complaint. The facts pertinent to these issues may be sum- marized as follows: 1, Petitioner’s status as an employer The complaint alleged and the Board found that petitioner, Modern Manufacturing Company, Inc., and Somerset Classics, Inc., were joint employers and were jointly responsible for the unfair labor practices which occurred at Somerset’s plant at Rome, New York.’ Both petitioner and Somerset are New York corporations, engaged in the ladies’ garment business. Modern purchases piece goods for the manufacture of ladies’ dresses, cuts the ma- terial into garment sections at its own plant,’ ships the sections to other firms for sewing and com- * Somerset Classics, Inc., has not appealed from the decision of the court below. In the proceedings before the court below, Somerset all that it was insolvent and on the verge of dissolution (R. 483). * Modern operates a cutting plant under the trade name of Beacon Company (R. 101, 162, 171). 4 pletion, and then sells the completed garments to retail concerns (R. 23, 36; 169). Somerset works exclusively for Modern (R. 36; 165-166, 325, 350, 362). Outdoor Frocks, Inc., of Philmont, New York, and Greenwich Garment Company of Green- wich, New York, like Somerset, also work ex- clusively on Modern’s garments (R. 23, 36, 132-133; 166, 159, 359-360). These three firms do the bulk of Modern’s work (R. 133; 400, 458, 460, 461). Petitioner Modern and its three major contrac- tors, Somerset, Outdoor and Greenwich, are com- pletely owned, controlled, and operated as an in- tegrated enterprise by members of the Friedman family which consists of Sigmond Friedman, Bertha, his wife, David their son, and Joseph and Max Donner (also known as Friedman) the sons of Mrs. Friedman by a previous marriage (R. 23, 35- 36; 164, 169-170, 172, 352, 356, 468-470). The ma- jority stockholder of Modern is Sigmond Fried- man; the remaining shares are held by his wife and three sons (R. 35, 131; 374-375, 470). Mrs. Friedman and the three brothers own all the stock of Greenwich and Outdoor (R. 36, 131-132; 167, 171, 468, 469). Outdoor owns all of the Somerset stock (R. 24, 36, 132 ; 165, 172, 469). The five mem- bers of the Friedman family serve as directors and officers of the various Friedman companies (R. 131-132 ; 468-470). The president, vice president, and secretary-treasurer of Somerset are also, re- spectively, second vice president, vice president and * In the parlance of the ent industry Modern is known as a jobber and the other » contractors (R. 23, 36; 166). 5 secretary of Modern (R. 23-24 ; 164, 165, 469, 470).* The business affairs of all the Friedman com- panies, as a practical matter, are carried on as if they were one firm.® Sigmond Friedman, founder of the business, stated that he “ran the whole busi- ness with the boys and [his] wife as more or less a family matter.” (R. 406). Although Sigmond * The following tabulation, based upon exhibits in the record (R. 469-470), depicts the interlocking character of the Fried- man enterprises: on Mod 6 ich Outd i» Sigmond Friedman Joseph Donner Max Donner David Friedman 2nd V. Pree. David Friedman a _ . MA Max Donner David Friedman | B. }Max Donner 8. Friedman J. Donner B. Friedman D. Friedman M. Donner M. Donner M. Donner BT B. Friedman J. Donner J. Donner ® Historically, as well as operationally, Modern is the parent company of the Friedman enterprises. Modern was originall & partnership consisting of Sigmond Friedman and Bertha ner, @ widow. e two partners were subsequently married and pe ge J Mrs. Friedman’s sons by her former oseph, were taken into the business, along with David Friedman, a son of the present lage. In 1935, the entire assets of Modern were transferred to a _— formed corporation of the same name, the ownership of the new corporation being divided among the various members of the family (see n. 4). In 1933, prior to the incorporation of Modern, Friedman formed corpora- tion, Outdoor Frocks, and distributed the ownership Among the various members of his family. The Greenwich an corporations were formed by the Friedmans in 1943 and 1947 respectively, and the ownership and control of these rations is divided amon the Friedmans in the manner indicated above = n. 4) (R. 131-132; 374-376, 406, 356- 79-380) . 6 Friedman exercises ultimate control over Modern, he is aided in the conduct of the business by his sons, David and J oseph, who are in charge of Mod- ern’s sales and production matters (R. 24, 133 ; 356, 361-362, 384-385, 406-407). In addition to their duties for Modern, David and J oseph also exercise full control over the production operations and la- bor relations of Somerset, Outdoor and Greenwich (R. 23, 24, 133, 137 ; 327, 362, 365-367, 371 ; 407-408, 417). The financial records and books of all the firms are kept in Modern’s offices in N ew York or at the office of a commonly employed accountant (R. 134; 168, 171, 378) ; Somerset’s payroll lists are sent to Modern’s offices where Modern’s bookkeeper per- forms the necessary clerical work and prepares the payroll checks on Somerset’s account (R. 134; 350- 351, 426-427, 452); when necessary, Modern ad- vances funds to Somerset in order to meet the pay- roll (R. 135, 363) ; no formal billing practices are followed between Modern and the other Friedman concerns (R. 135; 160, 162). Each of the three Friedman brothers draws a salary from the con- tracting firm of which he is president, and also draws a salary from Modern (R. 134-135 ; 415, 429- 430). When Sigmond Friedman became ill in October 1948, at about the time the unfair labor practices occurred, David acquired the additional responsi- bility for allocating Modern’s work to the subsidi- ary firms (R. 19, 24, 139-140 ; 388-389, 389-390, 398- 399, 346-347, 425-426, 433-437). While acting in =... 7 this capacity, as an officer of Modern, David made the decision to stop sending work to Somerset, which was then being organized by the Union, and to curtail its workload when it resumed operations, and thus, as the Board found (R. 24, ibid.), “‘made Modern the means of accomplishing the anti-union policies of Somerset.’’ On the foregoing facts the Board found (R. 23- 24, 128-140) that Modern and Somerset were en- gaged in a single integrated enterprise and that both were employers of the employees involved and jointly responsible for the unfair labor practices summarized below. 2. The unfair labor practices Early in October, 1948, representatives of the Union * asked Somerset’s local manager for a bar- gaining conference (R. 22, 116-117, 119, 125; 318, 319). He referred this request to David Friedman in New York (R. 22, 122, 127; 408, 450). Shortly thereafter, the shop forelady, wife of the local man- ager, made a speech to the employees stating that the plant would be closed if the Union campaign was successful (R. 17, 39, 41-47; 189-190, 201-202, 210-211, 229, 248-244, 263-264, 271, 291, 301, 304). A week or so later J oseph Donner [Friedman] made a similar speech to the Somerset employees (R. 17, 47-48; 190-192, 202-203, 204-206, 211-212, 220, 230-231, 232-233, 238-239, 244-245, 256-258, * International Ladies’ Garment Workers Union, A. F. of L,, which had been designated by the employees as their bargain- ing agen TL ean 8 264-266, 291, 292-293, 296, 297-298, 304-305, 311- 315). Thereafter, with the consent of the local manager (R. 54-60), an anti-union petition was circulated among the employees (R. 17, 54-60; 244, 252-253, 305, 471-472). Finally, starting October 25, David Friedman, who was then president of Somerset and also, in his father’s absence, the effec- tive head of Modern, stopped sending goods to Somerset, thereby causing the plant to close down entirely on October 27, 1948 (R. 24, 139-140; 346- 347, 433-437). A month later, Modern, still under David’s control, resumed shipments to Somerset but on a greatly curtailed scale (R. 139-140; 425- 426). Thereupon, Somerset partially resumed op- erations (R. 91-95; 425). Upon these facts the Board found (R. 17-25; 41- 128) that Modern and Somerset, in violation of Séction 8 (a) (1) of the Act, interfered with, re- strained and coerced their employees; in violation of Section 8 (a) (5), refused to honor the Union’s bargaining request; and, in violation of Section 8 (a) (3), closed the Somerset plant on October 27, 1948, in order to discourage membership in the Union. The Board further found (R. 19, 88-95, 110), that Modern and Somerset, in violation of Section 8 (a) (3), continued, for the same illegal purpose, partially to maintain the lockout after November 29. The Board accordingly ordered (R. 27-31) petitioner and Somerset to cease and desist from the unfair practices found, to bargain col- lectively with the Union, to reinstate those em- ployees locked out on October 27 who have not yet been reinstated, and to make whole all employees 9 for losses of pay suffered by reason of the dis- criminatory lockout. 3. The facts relating to petitioner’s procedural contention The complaint initiating this proceeding alleged, inter alia, that Modern and Somerset locked out Somerset’s employees on October 27, 1948, and re- fused to reinstate them until November 29, 1948 (R. 11). The complaint further alleged, as a sepa- rate violation, that petitioner and Somerset dis- criminatorily refused to rehire eleven named em- ployees after the plant reopened on November 29 (R. 11). On the basis of evidence adduced at the hearing the examiner found that the lockout of October 27 was not motivated by economic consid- erations, as petitioner and Somerset alleged, but was designed to defeat the Union (R. 64-88). The examiner also rejected the companies’ contention that Modern limited its shipments to Somerset after November 29 for legitimate business reasons, and found that the reduction in shipments was de- signed, like the initial lockout, to defeat the Union (R. 88-95, 110). As a consequence of the reduction in shipments, of 70 employees on the payroll prior to October 27, only 49 were taken back on or after November 29 and 21 remained locked out (R. 96- 97). In these circumstances the examiner found it unnecessary to pass on the allegation (R. 11, par. 12) that petitioner and Somerset had discrimina- torily refused to rehire the employees named in the complaint, stating that ‘‘once an employee’s rights have been violated by discriminatorily locking him 10 out, it is unnecessary to show that he was twice wronged by having been further discriminated \ against in the process of rehire’? (R. 90). Al- though the examiner noted that more than the eleven persons alleged to have been discrimina- torily denied reinstatement were affected by the partial continuation of the illegal lockout after No- vember 29 (R. 96-97), he did not recommend rein- statement or back pay for all because they were not all named in the complaint. The Board agreed with the examiner’s finding that the lockout was illegally continued in part after November 29 (R. 19), and held that it was not precluded from remedying the violation in full by the failure of the complaint to allege that the lockout was partially continued after November 29. The Board said : ‘‘the violation found is of the same class of violation as that set up in the charge and complaint, and was a continuation of it in pur- suance of the same objective” (R.19,n. 11). Dis- agreeing with the trial examiner, the Board fur- ther held that in affording a remedy for this viola- tion it was not limited by the independent allega- tion of the complaint, upon which it did not rely, that eleven employees were discriminatorily denied reinstatement after November 29. Consequently, the Board awarded reinstatement and back pay to all victims of the partial lockout (R. 25, 22, n. 21). B. THE DECISION OF THE COURT BELOW The Court of Appeals for the Second Circuit held that evidence on the record considered as a : whole sustained the findings of the Board. The court found (R. 482) that ‘‘substantial evidence supports the mutual responsibility of the two cor- porations [Modern and Somerset] for the acts in question.”” With respect to petitioner’s proce-: dural contention the court held (R. 483) that the Board’s ‘‘jurisdiction having been invoked in re- gard to the initial plant shutdown and measures properly remedial thereto, any unfair labor prac- tice growing out of and related to this form of vio- lation comes within the Board’s authority.” ARGUMENT 1, Petitioner’s contention that in the absence of ay allegation in the complaint that the illegal lock- out was continued after November 29, the Board was powerless so to find raises no substantial issue warranting review by this Court. As the facts set forth above show, and as the trial examiner, the Board and the Court of Appeals found, the con- tinuation of the lockout was part and parcel of the very transaction alleged in the complaint as a viola- tion of Section 8 (a) (3) of the Act. Moreover, the precise question—the reason for reduced shipments from Modern to Somerset after November 29— was the subject of proof and counterproof by the Board and by petitioner at the hearing (R. 421-425, 465, General Counsel’s Exhibits 3 and 4).’ Spe- "R. 465 shows the number of employees excluded after Somerset resumed operations on November 29. General Counsel’s Exhibits 3 and 4 are accounting records of the Friedman enterprises which were not fully incorporated in the printed record because of their volume. On the basis of these accounting records the Board concluded (R. 91-95), 12 cifically, petitioner attempted to prove that the re- duction in shipments which resulted in the partial lockout after November 29, was motivated by busi- ness considerations (R. 421-425). There is thus no merit in petitioner’s claim (Pet., p. 3), that at the hearing ‘‘There was no issue of a general or partial lockout after November 29, 1948,’ and ac- cordingly, there is no basis for its assertion that (Pet., p. 7), a “‘question of unfairness’’ is present which distinguishes this case from National Lico- rice Co. Vv. National Labor Relations Board, 309 U. S. 350. Indeed, although the trial examiner found that the continuation of the lockout was il- legally motivated (R. 88-95), petitioner made no effort to reopen the record to adduce additional evidence on that question, and petitioner made no such motion either to the Board or the court below even after the Board in its decision granted full relief to the victims of the partial lockout. Cf. National Labor Relations Board v. Greater New York Broadcasting Corp., 147 F. 2d 337, 339 (C. A. 2). Far from raising a substantial due process issue, petitioner’s claim, at best, is ‘‘highly technical’’ (National Labor Relations Board Vv. MacKay Radio and Telesson Co., 304, U. 8. 333, 349-351) and merits no further review. See our brief in opposition to certiorari in Olin Industries, Inc. v. National Labor Relations Board, No. 586, contrary to petitioner’s contention (R. 421-425), that Modern could have shipped Somerset enough work to keep it operating at pre-lockout capacity, but failed to do so for the same illegal reasons which motivated the original lockout. Pe 13 October Term, 1951, p. 21, certiorari denied, 343 U. 8. 919. Petitioner’s reliance upon the fact that the Gen- eral Counsel did not amend the allegation of the complaint which named eleven specific employees as having been discriminatorily denied reinstate- ment after November 29, is misplaced. As the court below observed (R. 482-483) : The Board relied upon the trial examiner’s finding not of discrimination, but of the con- tinued partial lockout, a violation of Sec. 8 (a) (1) and (3) which affects all those not rehired. For this reason, National Labor Relations Board v. Reliable Newspaper Delivery, Inc., 187 F. 2d 547 (C. A. 3), cited by petitioner (Pet., p. 6), is not in point, as the court below noted (R. 482). That case, in the Third Circuit’s view (187 F. 2d, at 550), involved only allegations that named indi- viduals had been discriminated against, and did not involve a blanket unfair labor practice, such as a lockout, which, by its very nature, affects all em- ployees.® 2. The holding of the Board and the court below that petitioner, as well as Somerset, was respon- sible for the unfair labor practices here involved rests entirely upon the Board’s factual finding, sus- *In addition, it should be observed that the language in the Reliable case to which petitioner refers is merely dictum and not a holding. The case was decided on entirely different grounds. 187 F. 2d, at 550. 14 tained by the court below, that the two firms were operated as a single integrated business (R. 23-24, 128-140, 482). That finding, as the evidence set forth above (supra, pp. 3-7), shows, is abundantly supported. In any event, petitioner’s challenge poses no issue of general importance which war- rants review by this Court. National Labor Rela- tions Board v. Nu-Car Carriers, Inc., 189 F. 2d 756 (C.A. 3), certiorari denied, 342 U. S. 919. Contrary to petitioner’s claim (Pet., p. 8), there is no conflict on the proposition that when two or more nominally separate corporations operate as a single entity, both may be held responsible for unfair labor practices affecting the employees of one of the corporations. National Labor Relations Board v. Stowe Spinning Co., 336 U. 8. 226, 227; National Labor Relations Board v. Don J uan, Inc., 178 F. 2d 625, 627-628 (C. A. 2). Indeed, in Press Co., Inc. v. National Labor Relations Board, 118 F. 2d 937, 947 (C. A. D. C.), certiorari denied on matters not here relevant, 313 U. 8. 595, with which petitioner claims conflict (Pet., p. 8), the court suggested that if the corporate respondents there involved had operated as a single integrated busi- ness, the court would have sustained the Board’s order. — 15 CONCLUSION For the reasons stated, it is respectfully sub- mitted that the petition for a writ of certiorari should be denied. Puiuip B. PERLMAN, Solicitor General. GeorGE J. Bort, General Counsel, Davip P. Finpiina, Associate General Counsel, Mozart G. Ratner, Assistant General Counsel, Louis ScHwaktTz, Attorney, National Labor Relations Board. JUNE, 1952. wus. GOVERNMENT PRINTING OFFICE: 1982 2ioses 1907 ee --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386417_1184%3A2. Public record. Not legal advice.