Furniture Distribution Center, Inc.

FURNITURE DISTRIBUTION CENTER, INC. Furniture Distribution Center, Inc. and James Ed- wards Furniture Distribution Center, Inc. and Edward A. Scallet Company and Teamsters Local Union No. 688, affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Help- ers of America Compton Leasing, Inc. and Teamsters Local Union No. 688, affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. Cases 14-CA-9899, 14-CA- 9966, and 14-CA-9967 February 6, 1978 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS JENKINS AND PENELLO On September 26, 1977, Administrative Law Judge Martin S. Bennett issued the attached Decision in this proceeding. Thereafter, the General Counsel filed exceptions and a supporting brief, and Respon- dent Furniture Distribution Center, Inc. and Edward A. Scallet Company filed a brief in answer thereto. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the record and the attached Decision in light of the exceptions and briefs and has decided to affirm the rulings, find- ings,' and conclusions of the Administrative Law Judge only to the extent consistent herewith. The General Counsel alleged that Respondent Furniture Distribution Center, herein referred to as FDC, through its president, Edward A. Scallet, violated Section 8(a)(l) of the Act by telling two employees that future employment was conditioned on their abandoning the Union and becoming independent drivers. The General Counsel also alleged that FDC and Compton Leasing, Inc., herein referred to as Compton, acted as joint employers and violated Section 8(a)(3) and (1) of the Act by terminating their warehouse and delivery employees. In addition, the General Counsel alleged that FDC violated Section 8(a)(5) of the Act by refusing to bargain, following the expiration of its contractual relationship with Compton, over the decision to then 'The Administrative Law Judge, in the third paragraph of sec. Ill,B, of his Decision, inadvertently stated that the service agreement between FDC and Compton was made in 1976. The correct date is 1973. 2 An example of the Administrative Law Judge's being correct for the wrong reason is his dismissal of the 8(a)(3) allegation against Compton on the theory of an oral waiver at the heanng by the General Counsel. The 234 NLRB No. 119 subcontract the warehouse work to nonunion compa- nies. Finally, the General Counsel alleged that FDC and Compton, jointly, or, in the alternative, Comp- ton alone, violated Section 8(a)(5) and (1) of the Act by refusing to bargain over the effects on the terminated employees of the subcontracting decision. While we agree with the Administrative Law Judge's ultimate conclusions of law wherein he dismissed the 8(a)(3) and (5) allegations against both FDC and Compton, we disagree with much of his reasoning and with his choice of record evidence to support it.2 We also note that the Administrative Law Judge ignored completely the independent 8(aXl) allega- tions in the complaint which were litigated at the hearing. We find upon our examination of the record that Respondent FDC, through its president, Edward Scallet, violated Section 8(a)(1) of the Act by telling two employees of Compton, who had been his employees prior to the service agreement with Comp- ton, that they would have to abandon the Union if they wished to continue working in the warehouse and by offering them the alternative of independent driver status as an inducement to leave the Union. In June 1973 FDC was a party to two collective- bargaining agreements covering the drivers and the warehousemen with Teamsters Local 688. On June 4, 1973, FDC contracted with Compton whereby Compton agreed to provide warehouse and delivery service for FDC in return for a percentage of FDC's gross billings. This contract had a termination date of October 31, 1976. When Compton began servicing FDC, it immediately assumed the collective-bargain- ing agreements with Local 688 on the same terms which the Union had with FDC. When those agreements expired on October 31, 1973, Compton, without any participation by FDC's officials, negoti- ated new collective-bargaining agreements with Lo- cal 688. We agree with the Administrative Law Judge that as of June 4, 1973, all employees of FDC represented by Local 688 became the employees of Compton. We further agree with the Administrative Law Judge that FDC and Compton were at no time joint employers of the warehousemen and drivers repre- sented by Local 688. The Administrative Law Judge's discussion of this critical conclusion has merit but we now clarify and expand on some important points. The Administrative Law Judge record shows that while the General Counsel did state during the hearing that he was not pursuing an 8(aX3) allegation against Compton, he did correct himself shortly thereafter. The allegation was in the complaint and there was no showing that either Respondent relied to its detriment on the momentary misstatement. 751 DECISIONS OF NATIONAL LABOR RELATIONS BOARD applied the correct test for finding a joint-employer relationship,3 but he overstated his case when he asserted that there was not even an "iota" of evidence that FDC in any way controlled the labor relations policies of Compton. For example, the record does show that in February 1976 at a time of adverse economic conditions for both companies, Scallet and Hunt, an officer of Compton, did confer and jointly decide on the number of employees who were to perform the warehouse and delivery work as well as the number of hours that those employees would work each week. However, this one incident, standing alone, does not outweigh the evidence the Administrative Law Judge cites as to Compton's sole control of its employees' labor relations policies. After June 1, 1973, all collective-bargaining negotiations took place between Local 688 and Compton. Not only did FDC not participate in the negotiations but at no time did Compton consult with FDC about any contract proposals. All personnel actions including grievances, suspensions, and new hiring were han- dled by Compton alone. Compton prepared payroll checks, issued W-2 forms, and instituted new work rules. In addition, the record shows that Compton's control over labor relations even extended to closing down the warehouse on one occasion against the wishes of Scallet and without consulting him. We conclude that the February 1976 consultation was simply one of several instances in which FDC and Compton engaged in management coordination in the best interests of both companies. Since we agree with the Administrative Law Judge that FDC ceased to be the employer of the ware- housemen and drivers represented by Local 688 in October 1973, it follows that FDC can bear no liability for any subsequent unfair labor practices alleged under Section 8(a)(5). Accordingly, we affirm the Administrative Law Judge in his dismissal of the 8(a)(5) allegations against FDC. It had no obligation under the Act to bargain with Local 688 over either the decision to terminate the service agreement with Compton or the effects of the layoffs resulting from that termination. The complaint alleged that if a joint-employer relationship could not be sustained then Compton alone violated Section 8(a)(5) by refusing to bargain with the Union over the effects of the layoffs resulting from the failure to renew the service agreement with FDC. The Administrative Law Judge dismissed this charge without discussion. We agree with the dismissal for the following reasons. The record shows clearly that although Compton refused to admit that it was a joint employer with FDC it never refused to bargain with Local 688. In fact, the refusal to bargain can only be laid at the doorstep of the Union itself. In September 1976 Compton indicated its willingness to negotiate a new contract with the Teamsters and sent it a proposal. The Union did not respond until November 1976, after the termination of the service agreement and the subsequent layoffs. The Union wrote to FDC and to Compton, stated its conclusion that they were joint employers, and requested bargaining over the decision to lay off the employees and the effects of that decision. Compton replied by stating it was not a joint employer and would be pleased to discuss a new agreement even though it no longer had any employ- ees subject to the jurisdiction of Local 688. It made no specific reference to the Union's proposed agen- da. The record shows that several conversations then ensued over the next few months between Union Agent Ron McDermott and Billy Hunt, president of Compton. The gist of these conversations was that McDer- mott insisted that, despite Compton's express offer to bargain, he (McDermott) would negotiate if, and only if, Scallet joined with Hunt as management's representative. The Union thus conditioned any bargaining between Compton and the Union on the participation of Scallet. Since we have found that Compton alone was the employer of the workers represented by Local 688, it had neither the power nor the obligation to compel Scallet's participation in collective bargaining. We come now to the alleged 8(a)(3) violations of FDC and Compton as joint employers with respect to the 1976 layoffs. The Administrative Law Judge dismissed this portion of the complaint. He found union animus on Scallet's part in the period prior to the 1973 service agreement with Compton. He further found that the preponderance of the evidence supported his conclusion that FDC's motivation for entering into the contract with Compton was eco- nomic and financial. This finding is not relevant to any 8(a)(3) violation which may be associated with the layoffs resulting from the failure of Compton and FDC to renew their agreement 3 years later. In September 1976 Compton submitted to FDC a renewal proposal which would have increased FDC's costs by 35 percent. Later that month FDC advised Compton that the figure was too high. Compton answered that its proposal was in line with the current market. When Compton thereafter failed to make a proposal acceptable to FDC, the service agreement expired on October 31, 1976. Since Comp- ton no longer had any work for its employees at 3 Fidelity Maintenance and Construction Co., Inc., 173 NLRB 1032 (1968). 752 FURNITURE DISTRIBUTION CENTER, INC. FDC's warehouse, they were laid off. These facts do not support a finding of discrimination by Compton. With respect to the 8(a)(1) allegations, we find that in August 1976 Scallet approached James Edwards, a driver employed by Compton at FDC's warehouse, and offered to help him finance the purchase of a truck and to engage him as an independent driver if he would leave the Union. Scallet said he would never sign another union contract. We find that this statement conditioned Edwards' future employment on his leaving the Union and is a violation of Section 8(a)( ) of the Act. In late October 1976, just before the expiration of the service agreement, Scallet made a similar offer to driver Irwin Cheatham. He told Cheatham that he would not renew the service agreement and that the work would, in the future, not be done by union people. Scallet promised that Cheatham would have a job if he were no longer in the Union. Cheatham received an offer to help him become an owner- operator. These statements by Scallet also were violations of Section 8(a)(l) of the Act. We shall therefore order the appropriate remedial action. REMEDY We have found that Respondent Furniture Distri- bution Center, Inc., engaged in certain unfair labor practices in violation of Section 8(a)(1) of the Act. We shall therefore order that Respondent cease and desist therefrom and take certain affirmative action. AMENDED CONCLUSIONS OF LAW Substitute the following for the Administrative Law Judge's Conclusion of Law 3: "3. By stating to employees that their future employment was conditioned on their abandoning the Union, Respondent Furniture Distribution Cen- ter, Inc., has engaged in unfair labor practices within the meaning of Section 8(a)(1) of the Act. "4. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. "5. Respondents did not engage in unfair labor practices alleged in the complaint which are not specifically found herein." ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent, Furniture Distribution Center, Inc., St. Louis, Mis- souri, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Stating to employees that their future employ- ment is conditioned on their abandoning their union membership. (b) In any like or related manner interfering with, restraining, or coercing employees in the exercise of their rights under the Act. 2. Take the following affirmative action designed to effectuate the policies of the Act: (a) Post at its warehouse in St. Louis, Missouri, copies of the attached notice marked "Appendix." 4 Copies of said notice, on forms provided by the Regional Director for Region 14, after being duly signed by Respondent's authorized representative, shall be posted by 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 customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (b) Notify the Regional Director for Region 14, in writing, within 20 days from the date of this Order, what steps Respondent has taken to comply here- with. 4 In the event that this Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursuant to a Judgment 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 WE WILL NOT tell employees that their future employment is conditioned on their abandoning their union membership. WE WILL NOT in any like or related manner interfere with, restrain, or coerce employees in the exercise of their rights under the Act. FURNITURE DISTRIBUTION CENTER, INC. DECISION STATEMENT OF THE CASE MARTIN S. BeNNETT, Administrative Law Judge: This matter was heard at St. Louis, Missouri, on March 31 and April I and 26, 1977. The consolidated complaint, based on charges filed in Case 14-CA-9899 against Furniture Distri- bution Center, Inc., by James Edwards, an individual; on January 3, 1977, against Furniture Distribution Center, Inc., and Edward A. Scallet Company, herein called EASCO, in Case 14-CA-9966 by Teamsters Local Union 753 DECISIONS OF NATIONAL LABOR RELATIONS BOARD No. 688, affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; and against Compton Leasing, Inc., herein called Compton, in Case 14-CA-9967 on January 28, 1977, by the above-named labor organization, alleges that the various Respondents have engaged in unfair labor prac- tices within the meaning of Section 8(a)(5), (3), and (1) of the Act. The General Counsel has specifically disavowed on the record any violations of Section 8(aX3) against Compton, although in his brief he argues otherwise. Briefs have been received from the General Counsel, Furniture Distribution Center, Inc., herein FDC, and from Compton. Upon the entire record in this case, and from my observation of the witnesses, I make the following: FINDINGS OF FACT I. THE BUSINESS OF THE EMPLOYERS It is undisputed that Responent FDC maintains its principal office and place of business at 4616 North Broadway in the City of St. Louis, where it is engaged in the warehousing and delivery of furniture and related products. FDC is a subsidiary of Edward A. Scallet Company at the same address, and they are affiliated businesses with common offices, ownership, and directors and they are engaged in a common enterprise. FDC enjoys annual gross revenues in excess of $50,000 for services performed for enterprises located outside the State of Missouri. Respondent Compton maintains its principal office and place of business elsewhere in the City of St. Louis and is engaged in the business of providing furniture and appliance warehousing, leasing of equipment, and labor and related services. Respondent Compton enjoys annual gross revenues in excess of $50,000 and in turn receives annual revenues in excess of that sum for services performed for firms located outside the State of Missouri. I find that the operations of the foregoing concerns affect commerce within the meaning of Section 2(6) and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED Teamsters Local Union No. 688, affiliated with Interna- tional Brotherhood of Teamsters, Chauffeurs, Warehouse- men and Helpers of America, herein called the Union, is a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Introduction; the Issues Initially, it is clear that Edward Scallet is president of both Respondent FDC and Edward A. Scallet Company, that Billy Hunt is an officer of Respondent Compton, that Hollis Garrett is an officer of Respondent Compton and that Maurice Brasch is or was at various times a supervisor of Respondent Compton, Respondent FDC, and EASCO I The Board has long held that common ownership and common offices do not per se determine the issue as to whether they are a single employer, absent a common labor relations policy. Gerace Conslruction, Inc., and Helger Construction Company. Inc., 193 NLRB 645 (1971): Joe Robertson & and that the above-named are or were supervisors within the meaning of Section 2(11) of the Act at relevant times. B. Sequence of Events EASCO is a Missouri corporation with its office, as indicated, at 4616 North Broadway in St. Louis. EASCO acts as a factory representative for various furniture factories in the States of Missouri, Kansas, and Illinois. These include seven different furniture manufacturers, and a substantial part of the furniture sold by EASCO is shipped directly from the factories to retail stores; this involves five of the seven factories it currently represents. FDC is a subsidiary of EASCO and is engaged in the operation of a furniture warehouse at the same address for the merchandise of two factories. Except for one different vice president, both companies have the same officers.' At issue herein is whether EASCO, FDC, and Compton have engaged in unfair labor practices within the meaning of Section 8(a)(1), (3), and (5) of the Act. The General Counsel expressly conceded on the record that it seeks no remedy under Section 8(a)(3) against Compton, although in his brief he made a contrary argument. I have previously set forth the nature of the business of EASCO. Sometime in 1961, EASCO moved its business to its present location at 4616 North Broadway and, at the same time, a new company was formed in the name of Furniture Distribution Center, Inc., viz FDC; this company assumed the warehouse and delivery service operations with Scallet as president of both companies. Roughly, in 1962 EASCO voluntarily recognized Team- sters Local 709, which later became Local 688, and signed a contract to cover the drivers who performed the delivery functions for FDC. Shortly thereafter, Scallet entered into another contract with the same union covering the ware- housemen. Separate contracts were executed for the drivers and the warehousemen through October 1976. In June 1976, FDC entered into a contract with Comp- ton, wherein the latter assumed the responsibility of performing the warehousing and delivery functions for FDC; payment for this was made on the basis of a percentage of the gross billings that FDC received. Comp- ton continued recognition of the Union for both units. The record indicates that there is absolutely no corporate relationship between Compton and either EASCO or FDC. There are no common officers, no common directors, and no common stockholders. All parties understood that after June 4, 1973, the warehousemen and drivers were employed solely by Comp- ton. This is clearly established through the testimony of partner Hunt of Compton. Respondent argues, and I agree, that when Compton accepted this group of employees "as its own" they ceased to be employees of FDC. Indeed, the Union treated Compton as the sole employer of this group for purposes of contract negotiations and contract adminis- tration. All grievances filed named Compton as the sole employer and they were resolved without participation by any representative of FDC or EASCO. Son, Inc., and N. J. Drywall Company, Inc., 174 NLRB 1073 (1969); and Bel- Air Door, Alhambra Metal Products, Inc.; and Tyre Mfg Co., Inc.. 150 NLRB 481 (1964). See also J. G. Roy & Sons Company v. N.LR B., 251 F.2d 771 (C.A. 1, 1958). 754 FURNITURE DISTRIBUTION CENTER, INC. There is not an iota of evidence that FDC or EASCO in any way controlled the labor relations policies of Compton. Nor in any way did any representative of FDC or EASCO participate in any way in the negotiations which resulted in contracts between Compton and the Union. While Scallet was a most verbose witness, there is nothing to contradict his testimony that notices under Section 8(d) of the Act were never sent to him, FDC, or EASCO in connection with the expiration of 1973 and 1976 contracts between Compton and the Union. When the 1976 contract expired, the Union refused to meet with Compton representatives concerning effects of the impending layoffs unless Scallet was present. Compton rejected this concept. The record does indicate that when the warehousing and shipping work was turned over to Compton, FDC sold its moving equipment to Compton.2 Compton maintained its premises and rolling equipment at another location. Charging Party James Edwards testi- fied that the personnel files of Compton employees were kept in the office of Scallet. This was denied by Scallet, and Hunt similarly testified that the personnel files were maintained at the Compton office at another location. I do not credit Edwards herein. The General Counsel has argued that it was improper for Compton to hire one M. Brasch as its supervisor during the Compton regime because he had acted as a supervisor for FDC prior to June 1973. 1 see nothing amiss in this respect. Scallet never issued an order after June 1973 involving Compton employees; neither did Scallet ever substitute for Brasch after this date. The service agreement between Compton and FDC terminated on October 31, 1976. Compton was unhappy with the terms of this agreement and submitted a proposal to FDC which would have substantially increased the costs to FDC for the services of Compton. FDC, by letter dated September 28, 1976, advised Compton that its proposal for renewal was too high and suggested that Compton submit more realistic figures. Compton responded that its proposal was in line with the current market, but when it failed to make a proposal acceptable to FDC, the service agreement expired and the lease for the rolling stock was canceled. Late in October, all trucks and vehicles were driven to the Compton parking lot at another location and Compton, thereafter, sold all its equipment except for a tractor-trailer. FDC submits that it thereafter had a lawful right to utilize the services of independent contractors for its 2 Although the record does indicate that Compton leased this back to FDC under circumstances not explained herein or argued by any of the parties. delivery service as it did. It similarly argues that it had a lawful right to utilize an independent contractor, namely, the MB Company, standing for M. Brasch, to perform its warehouse work inasmuch as the latter had previously operated the warehouse. FDC similarly argues that it was not obligated to honor the request of the Union to bargain in December 1976 and January 1977. This request was conditioned upon FDC meeting with Compton at a time after FDC had terminated its relationship with Compton and at a time when FDC had no warehouse or driving employees. C. Concluding Findings As is apparent, the effect of the service agreement between FDC and Compton was to terminate the employ- ment of the drivers and warehousemen of the former in June 1973. Similarly, its decision to sell all its rolling stock was a major one which involved the withdrawal of capital investment. While there are some expressions of hostility on the part of Scallet that he would never sign another contract with the Union, a preponderance of the evidence warrants the conclusion that FDC made this change for economic and financial considerations. I find no basis to support the conclusion of the General Counsel that FDC was a joint employer with Compton; as indicated, there had been absolutely no connection in any way between the two companies. As for the true independent status of Compton, see Compton Service Company, Inc., 212 NLRB 557 (1974). As indicated, in no way was there any common control of labor relations which is a prerequisite to finding a joint employer relationship.3 CONCLUSIONS OF LAW 1. Furniture Distribution Center, Inc.; Edward A. Scallet Company; and Compton Leasing, Inc., are employ- ers whose operations affect commerce within the meaning of Section 2(6) and (7) of the Act. 2. Teamsters Local Union No. 688, affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, is a labor organi- zation within the meaning of Section 2(5) of the Act. 3. Respondents have not engaged in unfair labor practices within the meaning of Section 8(aX5), (3), and (1) of the Act. [Recommended Order for dismissal omitted from publi- cation.] 3 The extended record contains much othe' material which, in my judgment. does not affect the considerations expressed above. 755