M & M Transportation Co.

M & M TRANSPORTATION CO. M & M Transportation Co., Inc., Employer and Debtor-in-Possession, a subsidiary of Qualpeco Services, Inc. and Local 478, a/w International Brotherhood of Teamsters, Chauffeurs, Warehouse- men and Helpers of America. Case 22-CA-7423 October 24, 1978 DECISION AND ORDER BY MEMBERS JENKINS, MURPHY, AND TRUESDALE On March 6, 1978, Administrative Law Judge Marvin Roth issued the attached Decision in this proceeding. Thereafter, the General Counsel filed ex- ceptions and a supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings, findings, and conclusions' of the Administrative Law Judge and to adopt his recommended Order. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board adopts as its Order the recommended Order of the Administrative Law Judge and hereby orders that the complaint be, and it hereby is, dis- missed in its entirety. I In agreeing with the Administrative Law Judge that the Respondent did not unlawfully fail to bargain with the Charging Party over the effects of the shutdown of its general commodity operation and the total cessation of its business. we do so solely on the grounds that the Respondent, in bargaining with the International Union and the Eastern Conference of the Union. met its bargaining obligations with respect to such matters, as the Administra- tive Law Judge found. We do not rely on the comments of the Administra- tive Law Judge that the Respondent could not have negotiated monetary benefits bacause it lacked the funds to do so or that certain matters affecting terms and conditions of employment could better be dealt with in the bank- ruptcy proceeding. DECISION STATEMENT OF THE CASE MARVIN ROTH, Administrative Law Judge: This case was heard at Newark, New Jersey, on November 16, 1977. The charge and amended charge were filed, respectively, on January 21 and June 7, 1977, by Local 478, a/w Interna- tional Brotherhood of Teamsters, Chauffeurs, Warehouse- men and Helpers of America (herein the Union or Local 478). The complaint, which issued on June 8, 1977, and was amended at the hearing, alleges, as amended, that M & M Transportation Co., Inc., Employer and Debtor-In-Pos- session, a subsidiary of Qualpeco Services, Inc. (herein the Company, M & M, or Respondent),' violated Section 8(a)(l1) and (5) of the National Labor Relations Act, as amended. The gravamen of the complaint is that the Com- pany allegedly refused to bargain with the Union, the col- lective-bargaining representative of its driver and ware- house employees at its Hackensack, New Jersey, terminal, concerning the company's decision to close that terminal and the effects of such a decision. 2 The Company's answer denies the commission of the alleged unfair labor practices and affirmatively alleges that the Board lacks jurisdiction or authority to hear and determine this matter. All parties were afforded full opportunity to participate, to present relevant evidence, to argue orally, and to file briefs. Upon the entire record in this case,3 and having consid- ered the arguments of counsel and the briefs submitted by General Counsel and Respondent, I make the following: FINDINGS OF FACT I. THE BUSINESS OF RESPONDENT. THE LABOR ORGANIZATION INVOLVED. AND THE BARGAINING UNIT INVOLVED The Company, a Massachusetts corporation, was until January 19, 1977,4 engaged in the business of interstate motor freight transportation as a common carrier of gener- al commodities, under a certificate of public convenience and necessity and various public subnumbers thereto is- sued by the Interstate Commerce Comrmssion. The Com- pany maintained terminals at various locations, including the truck terminal at Hackensack, New Jersey (herein the Hackensack terminal), which is the only facility alleged to be involved in this proceeding. The Company annually performed transportation services valued in excess of $50,000 in States of the United States other than New Jer- sey. The Company was at all times material an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. The Union is a labor organization within the meaning of Section 2(5) of the Act. As of January 19, the Union had been for some 45 years the collective-bargaining represen- tative of the Company's employees in an appropriate unit consisting of all employees employed at the Hackensack terminal, including drivers and warehousemen, but exclud- ing office clerical employees, professional employees, guards and all supervisors as defined in the Act. The most recent collective-bargaining contract was executed by the parties on or about April 1, 1976, and was to be effective until March 31, '979. The contract consisted of a Teamster Master Freight Agreement and Local supplement. 'At the heanng the complaint was amended to delete "Ronald Lipshie. Trustee" as a named Respondent. Al the hearing, the complaint, on motion of General Counsel, was amended to delete allegations that the Company transferred work from the terminal and thereby violated Sec. 8(aXI) and (5) of the Act: and that it discharged its employees because of their union affiliation, thereby violating Sec. 8(a )I). (3), and (5) of the Act. 3 Errors in the transcript have been noted and corrected. 'All dates herein are in 1977 unless otherwise indicated. 73 DECISIONS OF NATIONAL LABOR RELATIONS BOARD II. THE ALLEGED UNFAIR LABOR PRACTICES A. Facts The material operative facts are undisputed and were submitted in evidence by stipulation of the parties. How- ever, the parties are not in total agreement on the implica- tions of those facts. As of January 18, Qualpeco Services, Inc. (herein Qualpeco), M & M's parent holding company, anticipated that it would be able to negotiate a million- dollar loan, including an immediate loan of $500,000, to meet M & M's working capital needs. However, on that date Qualpeco learned from the lending institutions that the loan would not be forthcoming. At this point, company officials determined that there were no funds available for payrolls, pension contributions, welfare contributions, pay- roll taxes, and the like and that the Company could not continue to operate. On January 19, the Company filed a petition for an arrangement under Chapter XI of the Bank- ruptcy Act in the United States District Court for the Southern District of New York. By an order issued on Jan- uary 20, the Company was granted permission to operate as a debtor-in-possession. Also on January 19, the Compa- ny shut down all of its operations except for (1) deliveries of freight on hand and (2) an operation known as the "min- ute man" operation, discussed infra.5 Prior to January 19, the Company had 88 employees in the Hackensack unit. Within a week the Company laid off all but 15, and a week later all but I of these were laid off. The remaining employ- ee worked until July 8. At the present hearing, company counsel submitted that the decision to terminate the Com- pany's operations was made because of the refusal of the lending institutions to make funds available and because Interstate Commerce Commission regulations precluded Qualpeco from obtaining such funds from its other subsid- iaries. General Counsel declined to so stipulate. However, in light of the facts that were stipulated, and in the absence of any evidence showing otherwise, the inference is war- ranted that this representation was correct. On the morning of January 19, Hackensack Terminal Manager Matt Buckley informed Union Business Agent Joseph Uzzolino that it appeared that the Company was going out of business. Later in the morning, by telex letter from Company President Charles Lamback, the Hacken- sack personnel were informed that the Company was shut- ting down its general commodity division, i.e., the work performed by the unit employees, that the drivers were not to make any further pickups after 5 p.m. that day, and that its road operation would cease as of the last roadman leav- ing the terminal that night. Uzzolino attempted to contact someone in the Company who was knowledgeable about the decision, and in response to his effort, Company Attor- ney Herbert Burstein called him at about 5 p.m. Burstein told Uzzolino that the Company was going to file a chapter 5At the hearing, the parties stipulated that the Company shut down all of its operations except for the minute-man operation. However, in its brief the Company stated that it kept certain terminals open to deliver freight on hand. If this statement has any significance at all. it would constitute an admission against the Company's interest in this case. Therefore, I am ac- cepting the statement as evidence in this case. XI proceeding, that it intended to reorganize, and that Qualpeco had been unable to obtain needed financing. Uz- zolino said that he knew some people who wanted to go into the trucking business, and he asked Burstein to get Herb Kerr (not identified in the record, but apparently an official or representative of the Company), to let Uzzolino know what the Company wanted. A three-way telephone conversation was then set up among Uzzolino, Burstein, and Kerr. They talked for about 20 minutes, but, according to Uzzolino, "[W)e did not discuss in any way what I want- ed [or] what they wanted." Uzzolino attempted to discuss the matter with other company officials, specifically Termi- nal Manager Matt Buckley and Vice President John Si- mone, including exploration of the possibilities of the Company going back into business and, if necessary, changes in the contract. However, both indicated that they lacked any authority in the matter. The minute-man operation, heretofore mentioned, in- volved the transportation of what are known as "special commodities," e.g., iron and steel. Because they are low rated, carriers do not find it feasible to transport such com- modities except through the use of owner-operators, i.e., individuals not included in the Hackensack bargaining unit. Under its collective-bargaining arrangements, the Teamsters International or one of its conferences may au- thorize transportation of special commodities under a spe- cial commodity rider. However, the Union was not a signa- tory to such a rider. Rather, such work was covered by a contract with two other Teamster locals. On February 14, the International, through its eastern conference, met with its interested local unions, including Local 478, which like some other locals was dissatisfied with the minute-man op- eration. The Company had decided to continue the min- ute-man operation in order to preserve the salability of the operating authorities. That same day (February 14) the In- ternational met with Attorney Burstein and representatives of Qualpeco, M & M, and B & P (another subsidiary of Qualpeco, whose employees were also covered by a Team- ster contract or contracts) to discuss keeping or putting M & M in business and what to do with the minute-man oper- ation. The International informed its locals that it was will- ing to permit M & M to continue the minute-man opera- tion as long as the Company did not expand that operation. Some of the local unions complained about the operation. Speaking for Local 478, Uzzolino complained that the International was not taking care of his people and asserted that he would not withdraw its pending unfair la- bor practice charge. However, the International told its lo- cals that they were not to strike or picket the Company. In August the International or its eastern conference met with its local unions (Local 478 was not present at this meeting) to consider allegations that the Company had im- properly expanded the scope of the minute-man operation. The International or its eastern conference ruled that the Company had improperly included general commodities in the operation, that operations involving such general com- modities should be terminated, and that the Company, i.e., M & M as debtor-in-possession, should execute a master freight agreement and local supplements. The Company then met with the Creditors Committee, which included the attorney for the eastern conference and its local affiliates, 74 M & M TRANSPORTATION CO. including Local 478. The Company proposed to continue its minute-man operation, including certain commodities which were not traditionally regarded as special commodi- ties, and to reopen three terminals with a limited general commodities operation, rehiring Teamsters drivers for this purpose. This proposal would have required committee ap- proval for the funding of such operations. The committee declined to make the funds available. The Teamsters attor- ney opposed the proposal because it would have included general commodities in the minute-man operation. There- upon the Company terminated all of its operations. Since August the Company has filed a public auction in the bankruptcy court, has entered into agreements to dispose of its operating authorities, and has disposed of virtually all of its rolling stock and many of its terminals. In the mean- time, the Union filed grievances under its collective-bar- gaining contract, asserting that the minute-man operation, by sometimes operating in the Union's territorial jurisdic- tion, deprived union members of work opportunities. The grievances were settled on the basis of monetary awards to the grieving employees. At no time did the Company ex- pressly repudiate or deny its collective-bargaining obliga- tions to the Teamsters Union, including Local 478, or re- quest the district court to relieve it from its obligations under its collective-bargaining contracts; nor did the Union at any time inform the Company that the Teamsters International or its eastern conference lacked authority to bargain on its behalf. B. Analysis and Concluding Findings An adjudication in bankruptcy of the Respondent in an unfair labor practice proceeding, including an order of the district court staying all judicial and administrative pro- ceedings against that Respondent, does not deprive the Board of its jurisdiction or authority to entertain and pro- cess the unfair labor practice case to its final disposition. W. T. Grant Regional Credit Center, 225 NLRB 881, fn. 1 (1976). Therefore, the Board has jurisdiction and authority to hear and determine the present case. Moreover, as a general proposition of law, a debtor-in-possession, like any other employer, is obligated to bargain in good faith with the representative of his employees. Shopmen's Local Union No. 455, etc., v. Kevin Steel Products, Inc., 519 F.2d 698, 704, 706 (2d Cir. 1975), citing N.L.R.B. v. Baldwin Locomo- tive Works, 128 F.2d 39, 43 (3d Cir. 1942).6 However, this does not mean that an employer's financial situation or its adjudication in bankruptcy are irrelevant or immaterial in determing the extent of that obligation in the facts of a particular case. General Counsel's threshold contention is that the Com- pany violated Section 8(a)(5) of the Act because it shut 6 The principal issue involved in Kevin, namely whether sec. 313(I) of the Bankruptcy Act authorizes the bankruptcy court to permit a debtor-in-pos- session to reject. as an onerous executory contract, a collective-bargaining agreement, is not present in the instant case. The Company never requested such authorization, nor is the complaint predicated on any alleged violation or repudiation of the contract. Rather, the complaint is predicated on the contention that the Company refused to bargain with the Union over its decision to close its Hackensack terminal and over the effects of that deci- sion. down its general commodities division operating out of the Hackensack terminal without prior notice or consultation with the Union. Putting aside for the moment certain other problems which I have with this theory, the first problem is that in the circumstances no meaningful bargaining was possible at that point in time. It is undisputed that the Company ceased its general commodities operation imme- diately upon learning that it lacked the funds to continue that operation. The Company took this action because it lacked even the money to pay its employees. In these cir- cumstances there is no factual basis for finding that the Company acted unlawfully by failing to consult with the Union about a decision which had to be made immediately and about which it had no immediate alternative. National Terminal Baking Corp., 190 NLRB 465, 466 (1971). There remain, however, the questions of (I) what, if any, bargaining obligations the Company owed to the Union after closing its operations on January 19 and (2) whether the Company violated any such obligation. The situation is somewhat complicated by the facts that, notwithstanding the Company's action on January 19, the Company partial- ly continued its operations until August and that in the interim there were discussions concerning the closure, the Company's continuing operations, and the possibility of a resumption of the pre-January 19 operations. I shall deal first with the second question, i.e., whether there was a violation, because in the circumstances of this case I find that, assuming the Company was obligated to bargain with the Union over the decision and its effects, the Company fulfilled that obligation and therefore did not violate the Act. General Counsel's theory of the case is that the decision at issue is the Company's decision to close its general com- modities division operating out of the Hackensack terminal and that the Company's bargaining obligations concerning that decision and its effects ran directly to Local 478 and specifically to Business Agent Joseph Uzzolino, who un- successfully sought to act as spokesman for his Union. This conception of the facts overlooks the forest for the trees. The Company did not decide to shut down the Hacken- sack operation; rather it shut down its entire systemwide general commodities division, of which the Hackensack terminal was only a small part. That closure caused the layoff of employees represented by various Teamster locals affiliated with the Teamsters International Union and its eastern conference, including some with competing inter- ests in the matter.7 If the Company's decision was not indi- visible, it was at least a decision involving integrated and interdependent relationships. The Company could not con- duct an interstate trucking operation with one terminal. In the circumstances in which the Company found itself on January 19, Uzzolino's suggestion that meaningful collec- tive bargaining could have taken place if only the Compa- ny had talked about amending its contract with Local 478, or about unit drivers who wanted to become owner-opera- tors, was tantamount to suggesting that a charging lion may be fought off with a flyswatter. Even as to these sub- jects, meaningful bargaining necessarily could only be fully 7In its brief, the Company states that it had collective-bargaining con- tracts with more than 15 Teamsters locals 75 DECISIONS OF NA'FIONAL LABOR RELATIONS BOARD carried on at a higher level. The Union could discuss changes in its local rider, but only the Teamsters Interna- tional or its eastern conference could negotiate changes in the master freight agreement. The Company and the Union could not negotiate an agreement to convert the drivers into owner-operators without predictably coming into conflict with the legitimate interests of other Team- sters locals, particularly those which represented the own- er-operators engaged in the minute-man operation. Both the Teamsters International and the Company's manage- ment recognized the need for high-level negotiations, and they did in fact conduct such negotiations. They met and bargained about the extent to which the Company could continue its remaining operations, the terms of such con- tinuance, and the possibility of resuming the general com- modities operations. When, as ultimately occurred, the par- ties were unable to reach an agreement which was acceptable to the creditors' committee (including the mem- ber who spoke for all of the Teamsters unions), which com- mittee alone could approve financing for continued or re- sumed operations, the Company went completely out of business. The local unions, including Local 478, were kept informed of these negotiations. Although Local 478 com- plained to the International that the interests of its mem- bers were not being adequately protected in the negotia- tions, the Union never told the Company that the International or its Eastern Conference lacked authority to bargain on its behalf. Internal union bickering does not make for a refusal to bargain. In an analogous situation, the Board held that an employer does not violate Section 8(a)(5) of the Act by dealing with the parent International Union, instead of the designated or Board-certified local union, concerning multiunit matters. Radio Corporation of America, 135 NLRB 980, 983 (1962). As the Board held in that case: Surely the Board is not such a prisoner of a narrow interpretation of its own findings concerning appro- priateness of a separate bargaining unit that it cannot recognize a workable pattern of bargaining developed by the parties which, while giving due recognition to such separate units, also seeks to accommodate the interests of local and national bargaining. Indeed, the Board has held that an employer, while en- gaged in national negotiations with the parent union, may violate Section 8(a)(5) by attempting to deal separately with locals on matters which are properly the subject of national negotiations. General Electric Co., 150 NLRB 192, 193 (1964), enfd. 418 F.2d 736, 755 (2d Cir. 1969), cert. denied 397 U.S. 965. Conversely, the Board has held that an employer does not violate Section 8(a)(5) by dealing with a local union, even though the parent International is the designated or certified collective-bargaining represen- tative, when the International has acquiesced in such bar- gaining at the local level. Braeburn Alloy Steel Division, Continental Copper & Steel Industries, Inc., 202 NLRB 1127 (1973); American Laundry Machinery Company, 107 NLRB 1574, 1577 (1954). In sum, the Board looks to the realities of the relationship among the parties, not merely to the identity of the designated or certified collective-bargaining representative. In the present case, the matters of continuation of the Company's operations, including the minute-man opera- tion; whether general commodities could be included in the minute-man operation: and whether and on what terms the parties could agree to a resumption of the general com- modities operation were properly subject to negotiation at the International or eastern conference level. Whether or not the Company was obligated to bargain about a re- sumption or continuation of all or part of the Company's business after January 19, the fact remains that the Com- pany did bargain with the International or eastern confer- ence about those matters and Local 478 acquiesced in that bargaining by failing to inform the Company that the In- ternational had no authority to engage in such bargaining, if indeed Local 478, as an affiliated local of the Teamsters Union, could have even done so. Therefore, at no time did the Company unlawfully refuse to bargain over the deci- sion to shut down its general commodity operations, in- cluding the Hackensack terminal. As for the effects of that decision, the evidence indicates that there were no effects which were susceptible to collective bargaining but which the Company refused to negotiate either at the Internation- al or at the local level. The record evidence indicates only one effect which arose as an issue between the parties, i.e.. whether the owner-operators in the minute-man operation were depriving unit employees of work by transporting general commodities. Not only was that matter taken up at the international level, but the Company also bargained directly with Local 478 by accepting and resolving griev- ances over the matter through the existing contractual ma- chinery. As for converting unit employees to owner-opera- tors, this was an area in which local interests conflicted and which could only be resolved through multiunit bargain- ing, which in fact took place. The Company could not have negotiated monetary benefits, e.g., severance pay, because it lacked the funds to pay such benefits. Moreover, disposi- tion of the Company's assets was a matter which had to be handled through the bankruptcy proceeding. To the extent that the Company had any outstanding obligations to the unit employees by virtue of the collective-bargaining con- tract, such claims could have been and presumably were submitted through the bankruptcy proceeding. Therefore, the Company did not refuse to bargain with the Union over the effects of its decision to terminate the general commodities division or its ultimate decision to completely terminate its operations. CONCLUSIONS OF LAW I. At all times material, Respondent was an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. The Board has jurisdiction and authority under the Act to hear and decide this case. 4. At all times material, the Union was the exclusive collective-bargaining representative of the Company's em- ployees in an appropriate unit consisting of all employees employed at the Company's Hackensack terminal, includ- ing drivers and warehousemen, but excluding office clefn- 76 M & M TRANSPORTATION CO. cal employees, professional employees, guards and all sup- ervisors as defined in the Act. 5. Respondent has not engaged in the unfair labor prac- tices alleged in the complaint. Upon the foregoing findings of fact, conclusions of law. and the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: ORDER The complaint is dismissed in its entirety. In the ecent no excepiions Ire filed as proided hs Set 102 46 of Ihe Rules and Regulations of the National Iahor Relations Board. Ihe findings. conclusions. and recommended Order herein shall. as pro, ided In Sec 102 48 of the Rules and Regulations, he adopted hs the Board and hecome its findings, conclusions. and Order. and all ohJections thereto shall he deemed waled for all purposes 77