District 71, IAM

100 DECISIONS OF NATIONAL LABOR RELATIONS BOARD District No. 71, International Association of Machin- ists and Aerospace Workers, AFL-CIO and Harris Truck and Trailer Sales, Inc Cases 17-CC-578 (formerly Case 14-CC-982) and 17-CE-13 (for- merly Case 14-CE-25) May 25, 1976 DECISION AND ORDER Harris Truck and Trailer Sales, Inc, filed charges in Cases 14-CC-982 and 14-CE-25 on October 2, 1974 1 On October 10, the General Counsel of the National Labor Relations Board issued his order transferring the cases from Region 14 to Region 17 and continuing them as Cases 17-CC-578 and 17- CE-13, respectively The charges in said cases were amended on November 18 Upon the aforesaid charges, the General Counsel, by the Regional Direc- tor for Region 17, issued complaints and notices of hearing in Cases 17-CC-578 and 17-CE-13 on No- vember 21, alleging that the Respondent, District No 71, International Association of Machinists and Aerospace Workers, AFL-CIO, has engaged in and is engaging in unfair labor practices affecting com- merce within the meaning of Section 8(b)(4)(A) and (B) and Section 8(e) of the National Labor Relations Act, as amended Copies of the charges and com- plaints and notices of hearing before an Administra- tive Law Judge were duly served on the parties to this proceeding Thereafter, on November 22 the Region- al Director issued an order consolidating the above cases for all purposes, including hearing, as sched- uled 2 Thereafter, the Respondent Union filed timely answers to the complaints issued herein, admitting certain factual allegations but denying the commis- sion of any unfair labor practices With respect to the unfair labor practices, the com- plaint in Case 17-CE-13 alleges, in substance, that the Respondent Union has entered into an agree- ment in violation of Section 8(e), as said agreement permits Harris Truck to sell its business to a purchas- er only if the purchaser assumes all of Harris Truck's obligations under the latter's collective-bargaining agreement with the Union, thus agreeing, in effect, to cease and refrain from handling, using, selling, trans- porting, or otherwise dealing in the products of other employers, and agreeing to cease doing business with other personsI i Unless otherwise noted, all dates herein refer to 1974 2 On December 9, the Regional Director issued and duly served on the parties an order postponing the hearing indefinitely 3 Sec 8(e) reads, in pertinent part It shall be an unfair labor practice for any labor organization and any employer to enter into any contract or agreement, express or implied In substance, the complaint in Case 17-CC-578 alleges that, by seeking to enforce or otherwise cause Harris Truck to give effect to the aforesaid agree- ment which violates Section 8(e), the Respondent Union has violated Section 8(b)(4)(A), and, further, that by the same conduct the Respondent Union has sought to force or require Harris Truck to cease doing business with other employers or persons in violation of Section 8(b)(4)(B) of the Act 4 On March 10, 1975, the Respondent Union, the Charging Party, and the General Counsel entered into a stipulation in which they agreed that certain formal papers filed in this proceeding and the stipu- lation, together with the exhibits attached thereto, constitute the entire record in this case The parties waived a hearing before an Administrative Law Judge, the making of findings of fact and conclusions of law by an Administrative Law Judge, and the is- suance of an Administrative Law Judge's Decision They submitted this proceeding directly to the Board for findings of fact, conclusions of law, and the entry of an appropriate Order by the Board The parties waived oral argument in this case and requested that the Board allow 35 days within which to file briefs On March 14, 1975, the Board issued an order ap- proving the stipulation and transferring this proceed- ing to the Board Thereafter, the General Counsel, the Charging Party, and the Respondent Union filed briefs The Board has considered the entire record in this proceeding, including the briefs, and makes the fol- lowing FINDINGS OF FACT I THE BUSINESS OF THE EMPLOYER Harris Truck, a Missouri corporation with its prin- cipal office and place of business at Cape Girardeau, Missouri, is engaged in the retail sale and service of whereby such employer ceases or refrains or agrees to cease or refrain from handling, using, selling transporting or otherwise dealing in any of the products of any other employ ers, or to cease doing business with any other person 4In pertinent part, Sec 8(b)(4) of the Act makes it an unfair labor prac- tice for a union (u) to threaten, coerce, or restrain any person engaged in com merce or in an industry affecting commerce where an object thereof is (A) forcing or requiring any employer or self employed person to join any labor or employer organization or to enter into any agreement which is prohibited by section 8(e) (B) forcing or requiring any person to cease using selling handling transporting, or otherwise dealing in the products of any other produc- er processor or manufacturer or to cease doing business with any other person or forcing or requiring any other employer to recognize or bargain with a labor organization as the representative of his employees unless such labor organization has been certified as the representative of such employees 224 NLRB No 10 DISTRICT 71, IAM automotive trucks and trailers in the State of Missou- ri In the course and conduct of its business opera- tions within the State of Missouri, Harris Truck an- nually purchases goods and services having a value in excess of $50,000 directly from firms or enterprises located outside the State of Missouri and its gross volume of business exceeds $500,000 per annum The parties stipulated and we find that Harris Truck is now, and at all times material herein has been, an employer and a person engaged in commerce or in an industry affecting commerce within the meaning of Section 2(2), (6), and (7) of the Act, and we further find that it will effectuate the purposes of the Act to assert jurisdiction herein II THE LABOR ORGANIZATION INVOLVED The parties agree and we find that District No 71, International Association of Machinists and Aero- space Workers, AFL-CIO, is now, and at all times material herein has been, a labor organization within the meaning of Section 2(5) of the Act III THE ALLEGED UNFAIR LABOR PRACTICES A The Relevant Stipulated Facts As previously stated, Harris Truck is a Missouri corporation engaged in the retail sale, rental, and ser- vice of automotive trucks and trailers It operates as a franchised dealer for a number of major manufac- turers of trucking equipment and trailers, and has its corporate headquarters and principal place of busi- ness at Cape Girardeau, Missouri However, at all times material herein, prior to May 20, 1974, Harris Truck also operated franchised dealerships at Mem- phis, Tennessee, and Joplin, Missouri The Joplin fa- cility is the only one immediately involved in this proceeding On or about October 19, 1973, Harris Truck volun- tarily recognized the Respondent Union as the exclu- sive bargaining representative for a unit of its em- ployees located at the Joplin facility Thereafter, the Company and the Union entered into a collective- bargaining agreement, effective from February 8, 1974, through February 7, 1977 This agreement con- tains a union-security clause, a grievance and arbitra- tion provision, and the following provision concern- ing the disposition of physical assets, which lies at the center of the instant controversy ARTICLE XV-SALE OF PHYSICAL ASSETS The Employer agrees that if during the contract year it shall sell or lease the business it shall in- 101 form the purchaser or the lessee of the exact terms of this Union agreement and shall make the sale or lease conditional on the purchaser or lessee assuming all the obligations of the agree- ment until its expiration date, at which time a new agreement will be negotiated between the Unions [sic] and the new employer The agreement does not obligate the Union to re- fer individuals to the Company for employment nor has the Union operated a hiring hall or referral ser- vice which Harris Truck was obligated to use In May 1974, Howell-Kerr Enterprises, a firm op- erating out of Oklahoma City, Oklahoma, ap- proached Harris Truck concerning the possible sale of the latter's facilities at both Joplin, Missouri, and Memphis, Tennessee Thereafter, the companies en- tered into negotiations dealing with the sale of assets at the Joplin and Memphis facilities In the course of these negotiations, Harris Truck apprised Howell- Kerr of its existing collective-bargaining agreement with the Respondent Union covering certain of its employees at the Joplin facility I On or about May 20, Harris Truck and Howell- Kerr entered into a purchase agreement whereby the former agreed to sell to the latter all real property and improvements, new and used trucks and trailers, various equipment, and the entire inventory of truck parts and accessories at the two facilities The pur- chase agreement was conditioned upon Howell- Kerr's securing approval from Peterbilt Motors for the transfer of the Peterbilt franchise that Harris Truck possessed at the Joplin facility However, Ho- well-Kerr did not seek or obtain the Ravens Metal Co franchise, a franchise to sell trailers and trailer- related inventory, previously held by Harris Truck On or about the same date, Harris Truck notified the Respondent Union of the state of negotiations then in progress On May 30, Harris Truck terminated all of its em- ployees at both its Joplin and Memphis facilities and ceased its operations at those locations However, the Company offered all employees the opportunity to transfer from the Joplin and Memphis facilities to the Company's principal place of business at Cape Girardeau, Missouri The employees uniformly re- jected the Company's offer The final agreement between the two companies was closed on or about June 1, with Howell-Kerr acquiring physical possession of the real property, physical assets, and inventory at the two facilities On the same date, all eight employees employed by Harris Truck in the unit represented by the Respon- 5 The Company s employees at its Memphis facility were not represented by any labor organization 1 .2 DECISIONS OF NATIONAL LABOR RELATIONS BOARD dent Union at the Joplin facility were hired by How- ell-Kerr Thereafter, Howell-Kerr commenced op- erations at the Joplin facility under the name Mid- America Peterbilt Joplin, Inc, using the physical as- sets and inventory purchased from Harris Truck heretofore mentioned On June 17, the Respondent Union requested in -writing that Howell-Kerr remit union dues pursuant to the collective-bargaining agreement between it and Harris Truck In a letter dated June 24, 1974, Howell-Kerr denied the Union's request and in- formed the latter that it had not assumed the existing collective-bargaining agreement of its predecessor By letter dated July 29, 1974, the Respondent Union demanded that Harris Truck agree to arbitrate an alleged breach of the "Sale of Physical Assets" clause of their collective-bargaining agreement The Com- pany declined to do so On August 9, the Respondent Union instituted a lawsuit in the United States District Court for the Western District of Missouri, pursuant to Section 301 of the Labor Management Relations Act of 1947, as amended 6 The Union's lawsuit seeks to compel Har- ris Truck to arbitrate the alleged breach of article XV of the collective-bargaining agreement between the parties and, further, seeks to recover damages for the Company's alleged breach of the aforesaid article B Contentions of the Parties The General Counsel contends, inter alia, that the "Sale of Physical Assets" clause here in question vio- lates Section 8(e) of the Act because the limitations placed on transactions covered by the clause are en- compassed within the "cease doing business with any other person" language of that section of the statute, and as the clause itself cannot be viewed as primary under National Woodwork' Specifically, the General Counsel urges application of our Decision in Commerce Tankers,' holding that somewhat similar contract provisions both fell within the literal language of the 8(e) prohibition and were secondary in character, i e, tactically calculated to satisfy union objectives elsewhere In this respect, the General Counsel concedes that a requirement which merely assures the retention of incumbent employees and the economic benefits they then enjoyed would appear to be grounded solely on primary consider- ations However, the General Counsel asserts that where, as here, an agreement requires that a purchas- 629USC §185 'National Woodwork Manufacturers Association et al v N L R B, 386 U S 612 (1967) 8 National Maritime Union of America, AFL-CIO, Commerce Tankers Corporation, 196 NLRB 1100 (1972), enfd 486 F 2d 907 (C A 2 1973) er assume such noneconomic provisions as union recognition, union security, checkoff, and the previ- ously negotiated grievance-arbitration machinery, that agreement bears no relationship to primary ob- jectives, but merely serves to protect and advance the institutional interests of the Respondent Union Further, the General Counsel contends that the Respondent Union has violated Section 8(b)(4)(A) by demanding arbitration to enforce the clause here in controversy and by instituting judicial proceedings against Harris Truck toward that end Likewise, the General Counsel avers that the Union has violated Section 8(b)(4)(B), as the object of the aforesaid con- duct is to cause a cessation or interruption of the business relationship between Harris Truck and Ho- well-Kerr, because of the latter's failure to adopt the collective-bargaining agreement of its predecessor Similarly, the Charging Party contends that the clause here in question falls within the literal lan- guage of Section 8(e) and, further, is directed to- wards secondary objectives, namely, the labor rela- tions of prospective purchasers of Harris Truck's assets Further, the Charging Party asserts that the Union's conduct is unlawful, apart from the exis- tence of the clause here in controversy, since the ob- ject of such conduct is to coerce Harris Truck and, by example, others to cease doing business with those who are unwilling to become a signatory to the Union's agreement, and who thereby fail to support union institutional objectives elsewhere The Respondent Union contends that the "Sale of Physical Assets" clause is primary in nature, having as its objective the preservation of work opportuni- ties under conditions memorialized in its collective- bargaining agreement, such as seniority, wage rates, and fringe benefits The Union contrasts this case with Commerce Tankers, supra, wherein the court agreed with the Board's holding that the clause there in question not only was designed to preserve work for employees within the bargaining unit, but also was intended to acquire work for members of the union as a whole through the operation of the latter's hiring hall and was thus secondary in nature By con- trast, the Union points out that the agreement here in question does not provide for the maintenance or use of a hiring hall, nor is the Employer obligated to use the Union as a referral service It thus contends that the purpose of the clause in question is not the pro- tection of union interests but rather the interests of the work unit and its members The Union further contends that it took no action of a coercive nature within the meaning of Section 8(b)(4)(B) of the Act, as both its letter demanding, and its lawsuit to compel, arbitration represent con- duct undertaken wholly within the framework of its DISTRICT 71, IAM 103 collective-bargaining agreement with Harris Truck Kerr to succeed to its rights as a manufacturer's fran- and was not accompanied by any other action of an chisee Further, the stipulated facts, including those "extra-contractual" nature pertaining to the franchise arrangements, indicate C Discussion and Conclusions Unlike the General Counsel, we do not view the "Sale of Physical Assets" clause here in question as an agreement to cease "doing business" within the meaning of Section 8(e) of the Act, nor do we find support for such a theory in Commerce Tankers, su- pra, on which he relies In our recent Decision in Cascade Employers Asso- ciation," we concluded, upon a careful examination of the legislative history of Section 8(e) and its ac- commodation with other relevant sections of the Act, that the sale or transfer of an enterprise is generally to be viewed not as a business transaction, but as a substitution of one entity for another while the con- duct of business continues without interruption We found a material distinction between that case, where an entire business entity may be transferred from one person to another, and Commerce Tankers, wherein we held that the sale of vessels in the maritime indus- try was not a novel situation but a fairly common occurrence in the normal course of "doing business " Thus, in Cascade, we found that the disputed con- tract provisions did not amount to an agreement to refuse to deal in "hot goods," "unfair materials," or "blacklisted" products, or an agreement to withhold services from an "unfair" employer, which was the primary concern of Congress in legislating Section 8(e), whereas in Commerce Tankers we did indeed find that the contractual limitation placed on busi- ness transactions fell within the scope of the 8(e) proscription To be sure, the instant case is factually distinguish- able from Cascade in that here only a portion of the predecessor's business was transferred to the pur- chaser As previously stated, Harris Truck sold to Howell-Kerr all real property, physical assets, and inventory at two of its three facilities However, in giving up those facilities, Harris Truck gave up as well its franchise to represent major manufacturers of trucking equipment and trailers Howell-Kerr con- ditioned its acquisition of the two facilities upon the transfer of one such franchise to it In this manner, Harris Truck gave up its right to do business in the future as it had in the past and permitted Howell- 9International Union of Operating Engineers Local No 701 AFL-CIO (Cascade Employers Association Inc) 221 NLRB 751 (1975) that these facilities were operated as separate entities, and there is no evidence of temporary transfers of employees between the facilities sold to Howell-Kerr and Harris Truck's principal place of business at Cape Girardeau, Missouri Although Harris Truck's employees were offered the opportunity to transfer to the Company's latter place of business, all declined and those in the Joplin bargaining unit were immedi- ately hired by Howell-Kerr for employment in their former positions In such circumstances, we cannot but view the Joplin facility as a separate business enterprise, not only surviving and continuing after a formal change of ownership but, further, as being the same employ- ing industry without any apparent disruption in the normal business relationships between the new own- er and Harris Truck's former suppliers and custom- ers Accordingly, we find, as we did in Cascade Em- ployers Association, that the cease "doing business" language contained in Section 8(e) does not embrace the "Sale of Physical Assets" clause here in question and that the Respondent Union did not violate that section of the Act by entering into such an agree- ment 10 A fortiori, we find that the Union did not violate Section 8(b)(4)(A) of the Act Nor do we find, as suggested by the Charging Party, that, apart from the existence of the clause here in question, the Union violated Section 8(b)(4)(B) by demanding arbitration under the contract or by instituting a lawsuit toward that end Section 8(b)(4) interdicts coercion and re- straint where such tactics are applied for a proscribed object We do not view recourse to contractual reme- dies alone as the kind of tactic thus proscribed 11 We shall, therefore, dismiss the complaints filed herein in their entirety ORDER It is hereby ordered that the complaints herein be, and they hereby are, dismissed in their entirety 10 In view of our determination that the Sale of Physical Assets clause here in controversy is not encompassed within the literal language of Sec 8(e) we find it unnecessary to pass on whether that clause is primary or secondary in character ti See e g Retail Clerks Union Local 770 cnartered by Retail Cleiis Inter national Association AFL CIO (Hughes Markets Inc and Saba Prescription Pharmacy) 218 NLRB 680 (1975) Sheet Metal Workers International Asso ciation Local Union No 49 (Los Alamos Constructors Inc) 206 NLRB 473 (1973)