Petros Coal Co.

DECISIONS OF NATIONAL LABOR RELATIONS BOARD Petros Coal Company and United Mine Workers of America. Case 10-CA-12874 November 21, 1978 DECISION AND ORDER BY MEMBERS JENKINS, MURPHY, AND TRUESDALE On May 11, 1978, Administrative Law Judge James L. Rose issued the attached Decision in this proceeding. Thereafter, Respondent filed exceptions 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 brief and has decided to affirm the rulings, findings,' and conclusions of the Administrative Law Judge, as modified herein, and to adopt his recommended Or- der. The Administrative Law Judge found that Re- spondent unlawfully refused to hire Stanley Bunch, Robert York, Glenn Bunch, and Randall Bunch be- cause of their past union activity and, more specifi- cally, to avoid hiring applicants from a preferential hiring list established pursuant to a settlement agree- ment between the Charging Party and another em- ployer and which included the names of these four individuals. As the Administrative Law Judge found, on March 8, 1977, Respondent undertook from Indian Creek Coal Company (herein called Indian Creek) operation of a coal mine in Devonia, Tennessee. The record establishes that, on March 10, Stanley Bunch and Robert York applied for employment at Respon- Respondent has excepted to certain credibility findings made by the Administrative Law Judge. It is the Board's established policy not to over- rule an Administrative Law Judge's resolutions with respect to credibility unless the clear preponderance of all of the relevant evidence convinces us that the resolutions were incorrect. Standard Drv Wall Products. Inc. 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have carefully examined the record and find no basis for reversing his findings. The Administrative Law Judge found that "[wlilhout regard to whether Petros is a true successor or. as is more apparent from the record. a mere alter ego of Indian Creek, if its refusal to hire prospective employees was because of their union activity, such is an unfair labor practice . " Al- though we agree with the Administrative I aw Judge that refusal to hire applicants because of their union activity violates the Act, we do not adopt the foregoing statement to the extent that it implies that Petrois may be an alter ego of Indian Creek, for we find that the record fails to support such a finding. Accordingly, we do not pass on the consequences of a finding that Petros was an alter ego of Indian C'reek. We further conclude that, in the circumstances of this case, it is unnecessary to determine whether Petros was a successor to Indian Creek Furthermore, in the absence of exceptions thereto, we need not consider whether Petros, if a successor to Indian ('reek. was hound by Indian Creek's non-Board settlement with the Union. dent and, in so doing, insisted that Respondent was obligated to hire them because their names appeared on the preferential hiring list which Indian Creek ne- gotiated with the Union as part of a non-Board set- tlement in another unfair labor practice case. In re- sponse to their insistence that Respondent honor the preferential hiring agreement, Sherman Carroll, part owner of Respondent, told the two men they could "[tiake [the list] and shove it," and commented to employee Terry Daugherty that he would have hired Bunch and York, but since they "came up here wav- ing that list around, I won't hire them 'til hell freezes over.... Them two boys ain't nothing but union agitators." We agree with the Administrative Law Judge that Respondent violated Section 8(a)(3) and (I) of the Act by refusing to hire Stanley Bunch and Robert York. In this regard, it is clear from Carroll's remarks to Stanley Bunch and York and to Daugherty that Bunch and York's demand that the preferential hir- ing agreement be honored precipitated Respondent's decision not to hire from the list. Indeed, Respon- dent admitted that it was only after and because Stanley Bunch and Robert York insisted that Re- spondent honor the preferential hiring agreement that it determined that it would not utilize the prefer- ential hiring list. We find that Bunch's and York's insistence that Respondent honor the preferential hiring agreement negotiated by Indian Creek with the Union constituted protected concerted and union activity, notwithstanding that their action was based on the erroneous assumption that the preferential hiring agreement was binding on Respondent.2 Con- sequently, by specifically refusing to hire Bunch and York because they insisted that it adhere to the agreement and because they were viewed as "union agitators," Respondent violated Section 8(a)(3) and (I) of the Act. We further agree with the Administrative Law Judge that Respondent unlawfully refused to hire Glenn and Randall Bunch. In reaching this conclu- sion, the Administrative Law Judge found that, con- trary to Respondent's contention, work was available when Glenn and Randall Bunch applied for work. In adopting this finding, we note that three other em- ployees, Ted Bunch, Ricky Carroll, and Allen Lowe, who applied for work after Glenn and Randall Bunch had submitted their applications, were hired.3 In view of the conclusion that work was available when Glenn and Randall applied, Respondent's demonstrated hostility toward applicants whose names appeared on the hiring list, and union animus 2 Inierhoro ('ontractors. In,<. 157 NLRB 1295, fn 7 (1966) None of these employees were on the preferential hiring list, and only led Bunch hald been employed bh Indian (Creek. 410 PETROS COAL COMPANY shown by Sherman Carroll's remark to Walter Bunch that "he [Bunch] had got in this trouble one time . . . you know, been laid off so I would [sic] fool with it4 anymore," we conclude that Respondent refused to hire Glenn and Randall Bunch because of their earli- er union activity and because the)y appeared on the preferential hiring list. Respondent contends, however, that its employ- ment of three men whose names appeared on the preferential hiring list establishes that it did not dis- criminate against prospective employees whose names appeared on the list. However, the record in- dicates that Glenn and Randall Bunch applied for work after the incident in which Stanley Bunch and Robert York insisted that Respondent honor the preferential hiring agreement, and therefore Respon- dent's hire of three employees from the list before that incident is not material to the issue of whether Respondent later unlawfully discriminated against Glenn and Randall Bunch. Based on the foregoing, we agree with the Admin- istrative Law Judge's conclusion that Respondent was determined not to hire any applicant whose name appeared on the preferential hiring list because of their previous union activity and that Respondent implemented this determination by refusing to hire Robert York and Stanley, Glenn, and Randall Bunch. Accordingly, we find that the refusals to hire these employees violated Section 8(a)(3) and (1) of the Act. 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 Respondent, Petros Coal Corpora- tion, Devonia, Tennessee, its officers, agents, succes- sors, and assigns shall take the action set forth in the said recommended Order. ' The Administrativse Law Judge found and the record as a ihole sup- ports the finding, thai Carroll was referring to the Union DECISION STATEMENT OF THE CASE JAMES L ROSE, Administrative Law Judge: This matter was heard before me on January 17 and 18, 1978, at Clin- ton, Tennessee, upon the General Counsel's complaint, which alleged, in substance, that on or about March 8, 1977,' the Respondent, Petros Coal Corporation, refused to hire four prospective employees in violation of Section 8(a)(3) and (1) of the National Labor Relations Act, as amended, 29 U.S.C. § 151, et seq. All dates are in 1977 unless otherwise indicated. The Respondent denied that it engaged in any activity violative of the Act, although it admitted that it did refuse to hire the four individuals named in the complaint. Upon the record as a whole, including my observation of the witnesses, briefs, and arguments of counsel, I hereby make the following: FINDINGS OF FACT AND CONCLUSIONS OF LAW I. JURISDICTION It is alleged and adnumitted, and I find, that Petros Coal Corporation is a Tennessee corporation engaged in the op- eration of the No. 2 underground coal mine at Devonia, Tennessee. The Respondent commenced operations on March 8 and has since that time shipped coal valued in excess of $50,000 to the Tennessee Valley Authority, a cor- poration which in turn annually sells and distributes elec- trical power valued in excess of $50,000 directly to custom- ers outside the State of Tennessee. All parties admit, and I find, that the Respondent is, and at all times material has been, an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. IIL THE LABOR ORGANIZATION INvOLVED United Mine Workers of Amenrica (herein the Union) is admitted by all parties to be, and I find it is, a labor organi- zation within the meaning of Section 2(5) of the Act. III THE UNFAIR LABOR PRACTICES A. Background Facts In the summer of 1975, the Union commenced an orga- nizational campaign among the employees of Indian Creek Coal Company, which at the time was operating the No. 2 mine at Devonia. On August 26, 1975, Indian Creek laid off the 16 employees comprising its second shift. This lay- off was the subject of a Board charge and complaint in Case 10-CA-1 1458 alleging that the layoff was violative of Section 8(a)(3). Subsequently, on or about October 15, 1975, and for reasons not alleged to be violative of the Act, Indian Creek ceased operations. Thereafter, the Union and Indian Creek entered into a non-Board settlement of the allegations concerning the sec- ond-shift layoff whereby, in essence, Indian Creek paid each of the 16 laid-off employees $1,000 and gave them preferential hiring in case the company (Indian Creek) re- sumed its mining activities. In a letter dated November 9, 1976, from Indian Creek's attorney, Robert Young, Jr., to the Union's attorney, James A. Ridley 111, setting forth the terms of the agree- ment, it is stated, inter alia.: Before undertaking to hire hourly-paid employees for any resumption of its coal mining operations in the vicinity of Devonia, Tennessee, or for any new surface or deep mining operation in that vicinity during the 12-month period ending October 31, 1977, Indian 411 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Creek Coal Company, Inc., will notify through you the above listed former employees and will offer em- ployment to as many of them as may be needed, pro- vided, however, that the Company will have no such obligation to any of the above listed former employees who has heretofore obtained or hereafter obtained regular employment or has refused an offer of regular employment. Following the layoff in August 1975 and continuing through the spring of 1977, the Union, through certain of the 16 laid-off employees, engaged in picketing at the road entrance to the mine. On February 24, Petros Coal Corporation was formed with the adoption of its corporate charter. The four stock- holders of Petros, all of whom had worked for Indian Creek in a supervisory or management capacity, are Win- ston Meredith, Sherman Carroll, James Redden, and Hoyt Mullins (a 10-percent owner of Indian Creek). Each owns 25 percent of the stock, for which he contributed to the capitalization of the corporation $1,000. On March 8, Petros entered into a "Coai Mine Operat- ing Agreement" with Indian Creek, the essence of which is: for consideration of $15.37 per ton (apparently $17 less the royalty) FOB Kingston Steam Plant (owned by TVA), Pet- ros would mine the coal at Indian Creek's No. 2 mine. The agreement states further that Petros is entitled to use Indi- an Creek's equipment in performance of this operation. The principals of Petros set the value of this equipment at around $800,000 to $900,000. The principals also testified that Petros exists only for the purpose of mining coal at the Indian Creek mine. They indicated, although such is not definite in the record, that the coal ultimately sold to TVA yields about $23 a ton, with the difference between $23 and $15.37 going to Indian Creek. When Petros commenced operations, it did so mostly with former employees of Indian Creek. However, Petros specifically refused to hire on application Randall A. Bunch, Glenn Bunch, Stanley Bunch and Robert York. Petros did hire at least two employees who had not for- merly worked for Indian Creek, though how many more is unclear from the record. Most of those hired were former Indian Creek employees who were not on the preferential hiring list. B. Issue The General Counsel alleges that in refusing to hire the four named individuals, all of whom were on the preferen- tial hiring list executed in settlement of the previous com- plaint, Petros violated Section 8(a)(3) and (I) of the Act. The Respondent contends that when it undertook to hire employees, for those who had previously worked for Indi- an Creek, it looked at their work records, and determined they should not be hired. Specifically, the Respondent claims that the attendance of Stanley Bunch and York was the cause of their not being hired. The Respondent does not, and specifically did not at the hearing, contend that any of these four were incompetent miners. C. Analysis and Conclusions Most of the testimony involved Stanley Bunch and Rob- ert York, both of whom were principal spokesmen for the laid-off employees throughout the events here. However, Randall and Glenn Bunch were also laid off, were also involved in the earlier unfair labor practice, and were also on the preferential hiring list. There is no apparent reason, and none was suggested, why they should be treated differ- ently from Stanley Bunch and Robert York. Thus, con- cluding, as I do, that Stanley Bunch and York were not hired by Respondent for reasons proscribed by Section 8(aX3) of the Act, I further conclude that the failure to hire Randall and Glenn Bunch was unlawful. Initially, the General Counsel and the Charging Party argue that Petros, as a successor to Indian Creek, is bound by the settlement agreement of the earlier complaint. Thus, failure to abide by the preferential hiring stipulation is a violation of the Act. A successor is bound by the unfair labor practices of its predecessor and is required to remedy those unfair labor practices. Perma Vinyl Corporation, Dade Plastics Co., et al., 164 NLRB 968 (1967). Research, however, has disclosed no case in which this doctrine has been applied to a settlement entered into with Board approval, much less to a non- Board settlement. Further, a successor is not bound by the contracts of its predecessor, at least insofar as the failure to honor such a contract would be the basis for an unfair labor practice finding. N.L.R.B. v. Burns International Security Services, Inc., 406 U.S. 272 (1972). Petros, as a successor employer, would not necessarily be required to honor the preferential hiring agreement entered into by Indian Creek. However, a successor is liable for its own unfair labor practices. "Thus, a new owner could not refuse to hire the employees of its predecessor solely because they were union members or to avoid having to recognize the union." Howard Johnson Co., Inc. v. Hotel & Restaurant Employees, etc., 417 U.S. 249, fn. 8 (1974). Such I find to have been the situation here-that Petros refused to hire the four above-named individuals because of their previous activity on behalf of the Union, and spe- cifically to avoid the preferential hiring agreement and such renewed organizational activity as might reasonably occur upon recommencing operation of the Indian Creek mine. Without regard to whether Petros is a true successor or, as is more apparent from the record, a mere alter ego of Indian Creek, if its refusal to hire prospective employees was because of the union activity, it is an unfair labor prac- tice within the meaning of Section 8(a)(3) of the Act, analo- gous to refusing to recall laid-off miners because of their union activity. Buckhorn Hazard Coal Corporation, 194 NLRB 557 (1971). Whether Petros committed the violation alleged neces- sarily depends upon its motive in refusing to hire the four individuals. Direct evidence of antiunion animus in refus- ing to hire prospective employees is rarely available. Nev- ertheless, unlawful motive may be inferred from all of the facts, including a finding that the reasons advanced by the Respondent for acting as it did are not reasonable. Shat- 412 PETROS COAL COMPANY tuck Denn Mining Corporation (Iron King Branch) v. N.L.R.B., 362 F.2d 466 (9th Cir. 1966). Where the reason asserted for discharging, or refusing to hire, an employee is not reasonable, that fact is evidence that the true motive is something else. Here there is no suggestion why Glenn and Randall Bunch were not hired when they made application other than what they were told-that there was "no work available." There is no claim that they are poor workers or incompetent. Inas- much as the Respondent in fact hired individuals who were not on the list, including at least two who had not even been prior employees of Indian Creek, clearly work was available, and the two were early applicants. Since no ra- tional reason was advanced why they were not hired even though work was available, the conclusion is inescapable that the reason they were not was their earlier union activi- ty, and because they were on the preferential hiring list. As to Stanley Bunch and Robert York, the Respondent contends that they were not hired because, on evaluation by the principals of Petros, it was determined that their attendance while employees of Indian Creek was substan- dard. The Respondent does not argue that they are poor workers, except for contending that neither can run a high lift. I find Respondent's claim a pretext and its refusal to hire Stanley Bunch and York unlawful. Plymouth Cordage Com- pany d/b/a Wilson & Toomer Fertilizer Company, 151 NLRB 949 (1965), enfd. 381 F.2d 710 (5th Cir. 1967). While there is some evidence that York and Bunch missed what might be considered a substantial number of work- days, there is also evidence that other employees who were rehired missed as many, if not more. Whether and to what extent the attendance of Stanley Bunch and York is sub- stantive insofar as the operation of this mine is concerned is not in evidence. I would note, however, and do conclude that apparently their absenteeism was not particularly seri- ous, because both worked for Indian Creek for some time and neither was even counseled concerning his attendance, much less disciplined or discharged. From the record be- fore me, it appears that something less than perfect atten- dance has been tolerated in the operation of this mine, and by the same individuals who are the principals of Petros. Three of them were Indian Creek foremen, while the fourth was the bookkeeper-business manager. I conclude that had the attendance of Bunch and York been as substantial a problem as the Respondent now claims they would have been disciplined or discharged while employed by Indian Creek and by someone who is now an owner of Petros. The fact that this did not occur means that their attendance records while employees of Indian Creek were not consid- ered too bad. Their absenteeism could not have been the true reason they were not hired. Further, Dolphus Carroll had an even worse attendance record but was hired. He was not on the preferential hiring list. For these reasons I reject the claim that poor attendance was the reason Bunch and York were not hired. I infer that the true motive was related to their union activity. In addition to the inference of unlawful motive, there is direct evidence of such. On or about March 10, York and Bunch attempted to talk Ted Bunch, another employee who was not on the preferential hiring list, not to go to work for Petros until all of those on the list were hired. And Bunch and York confronted the owners of Petros with the list insisting that Petros honor it. At or about that time. Sherman Carroll, according to the testimony of Bunch and York, which I credit over Carroll's denial, stated that he would have hired them but for the fact that they were at- tempting to enforce the preferential list, telling Bunch to "[t]ake it and shove it." And Carroll said to Terry Daugh- erty, after noting that Bunch and York had "come up here waving that list around," that "I won't hire them 'til hell freezes over" and "[t]hem two boys ain't nothing but union agitators." When Walter Bunch was hired, in early March, he had a discussion concerning union membership with Sherman Carroll, during which Carroll told him, "that I had got into this trouble one time . . . you know, been laid off so I should [sic] fool with it [the Union] anymore." Though asserting that the Union was not a consideration in refusing to hire the four, Carroll did not deny the state- ments attributed to him. In fact, he admitted having said that he would close the mine if they had to hire Bunch and York. He testified that this was because they could not operate with such poor attenders. Subsequent to closing the mine in 1975, the principal owner of Indian Creek, Curtis Owens, suggested that em- ployees "gang work it," that is, in effect, become subcon- tractors or form a company to mine the coal. There is also testimony concerning statements by Owens during the pe- riod the mine was not in operation, to Stanley Bunch and others, to the effect that the "union had lost." Owens is not alleged to be an agent of Petros. This evidence, however, does have some relevance to the issue of whether or not Petros in fact came into existence for the purpose of flank- ing the Union's effort to organize the mine's employees. I conclude that this was a principal purpose for creating Pet- ros. Nothing of substance was changed with regard to min- ing coal at the No. 2 mine. The owners of Petros, who had been foremen for Indian Creek, continued to be supervis- ors. The same coal continued to be mined with the same equipment and was sold through the same broker to the same customer. While none of this is alleged to have been an unfair labor practice, it does corroborate the intent of Petros' owners to operate the mine without the principal union activists. To this end it was determined not to honor the preferential hiring list. Petros' determination not to be governed by the prefer- ential hiring list, as evidence by its actions as well as the statements of Carroll, shows an intent to weed out the prin- cipal union activists of Indian Creek, notwithstanding Pet- ros' protestations to the contrary. Such discrimination vio- lates the Act. Crawford Container, Inc., 234 NLRB 851 (1978) (member Jenkins dissenting). Nor is the violation made lawful by the fact that some union supporters were in fact hired. N.LR.B. v. W. C. Nabors d/b/a W. C. Nabors Co., 196 F.2d. 272 (5th Cir. 1951), cert. denied 344 U.S. 865. I therefore conclude that Petros, independent of Ow- ens or Indian Creek, violated the Act as alleged when from and after March 8 it refused to hire Randall Bunch, Glenn Bunch, Stanley Bunch, and Robert York. 413 DECISIONS OF NATIONAL LABOR RELATIONS BOARD IV. THE EFFECT OF THE INFAIR LABOR PRACTICES UPON COMMERCE The unfair labor practices found are unfair labor prac- tices affecting commerce and the free flow of commerce and tend to lead to labor disputes burdening and obstruct- ing commerce. V THE REMEDY Having found that the Respondent has engaged in cer- tain unfair labor practices, I will recommend that it cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. The Respon- dent will be ordered to offer employment as miners to Randall Bunch, Glenn Bunch, Stanley Bunch, and Robert York without prejudice to their seniority or other rights and benefits, and to make them whole for any loss of wag- es they may have suffered from March 8, 1977 (March 10, 1977, in the case of Glenn Bunch), in accordance with the formula set forth in F. W. Woolworth Company, 90 NLRB 289 (1950), with interest as prescribed by Florida Steel Cor- poration, 231 NLRB 651 (1977).2 Upon the foregoing findings of fact, conclusions of law, and the entire record in this proceeding, and pursuant to the provisions of Section 10(c) of the Act, I hereby issue the following recommended: ORDER 3 The Respondent, Petros Coal Corporation, Devonia, Tennessee, its officers, agents, successors, and assigns, shall: I. Cease and desist from: (a) Refusing to hire, or otherwise discriminating with re- gard to hire or tenure of employment against, potential employees because of their interest in or activity on behalf of United Mine Workers of America, or any other labor organization. (b) In any other manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action, deemed neces- sary to effectuate the policies of the Act: (a) Offer employment as miners to Randall Bunch, Glenn Bunch, Stanley Bunch, and Robert York and make them whole for any losses incurred by reason of the dis- crimination against them in accordance with the provisions set forth in the remedy section above. (b) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all pay- roll records, social security payment records, timecards, personnel records and reports, and all documents neces- sary and relevant to analyze and compute the amount of backpay due under the terms of this Order. (c) Post at its Devonia, Tennessee, facility copies of the attached notice marked "Appendix." 4 Copies of said no- tices, on forms provided by the Regional Director for Re- gion 10, after being duly signed by the Respondent's au- thorized representative, shall be posted by the Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are cus- tomarily posted. Reasonable steps shall be taken by the Respondent to insure that said notices are not altered, de- faced, or covered by any other material. (d) Notify the Regional Director for Region 10, in writ- ing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. 2See. generally, Isis Plumbing & Heating (o.. 138 NLRB 716 (1962). In the event no exceptions are filed as provided by Sec. 102.46 of the Rules and Regulations ol the National Labor Relations Board, the findings. conclusions, and recommended Order herein shall, as provided in Sec. 102.48 of the Rules and Regulations. be adopted by the Board and become its findings. conclusions, and Order. and all objections thereto shall be deemed waived for all purposes. In the event that this Order is enforced by ajudgment of a United States Court of Appeals, the words ill the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursuant to a Judg- ment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a hearing at which all parties participated, the Na- tional Labor Relations Board found that we violated the National Labor Relations Act and has ordered us to post this notice and to abide by its terms. WE WILL NOT refuse to hire or otherwise discriminate against our employees because of their interest in or activity on behalf of the United Mine Workers of America or any other labor organization. WE WIL.L NOT in any other manner interfere with, restrain, or coerce our employees in the exercise of the rights guaranteed them by Section 7 of the Act. WE WILL offer employment to Randall Bunch, Glenn Bunch, Stanley Bunch, and Robert York in jobs in our mine, and WE WILL give them backpay plus interest for any losses they may have suffered as a result of our refusing to hire them from and after March 8, 1977. Our employees have the right to join United Mine Work- ers of America, or any other labor organization, or to re- frain from doing so. PETROS COAL CORPORATION 414