Coastal Cargo Co., Inc.

200 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Coastal Cargo Company, Inc. and General Truck- drivers, Warehousemen and Helpers, Local Union No. 270, a/w International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America and General Longshore Workers Union No. 3000 of International Long- shoremen's Association, AFL-CIO. Cases 15- CA-9770 and 15-CB-3104 30 September 1987 DECISION AND ORDER By MEMBERS JOHANSEN, BABSON, AND STEPHENS On charges filed by General Longshore Workers Union No. 3000 of International Longshoremen's Association, AFL-CIO (the Charging Party), the General Counsel of the National Labor Relations Board issued a complaint dated 24 October 1985 against General Truckdrivers, Warehousemen and Helpers, Local Union No. 270 a/w International Brotherhood of Teamsters, Chauffeurs, Warehouse- men and Helpers of America (the Respondent Union), and a complaint dated 24 October 1985 against Coastal Cargo Company, Inc. (the Re- spondent Employer or CCC, Inc.). The General Counsel also issued on 24 October 1985 an order consolidating cases and notice of hearing. The complaints allege that on 1 July 1985 the Respondent Union and the Respondent Employer entered into, and have since maintained in full force and effect, a collective-bargaining agreement covering the Respondent Employer's stevedoring and marine terminal employees and recognizing the Respondent Union as the exclusive bargaining rep- resentative of those employees. The complaints fur- ther allege that when the collective-bargaining agreement was executed, the Respondent Union did not represent a majority of the contractual unit and the Respondent Employer did not have a sub- stantial and representative employee complement. The complaint against the Respondent Union al- leges that it violated Section 8(b)(1)(A) of the Act by the above conduct. The complaint against the Respondent Employer alleges that it violated Sec- tion 8(a)(1) and (2) of the Act by the above con- duct. The Respondent Union and the Respondent Employer each filed an answer denying that it had committed any unfair labor practices. On 27 March 1986 the parties jointly filed a motion to transfer proceeding to the Board and a stipulation. The motion states that the parties agree that the charges, complaints, order consolidating cases and notice of hearing, answers, and attached stipulation of facts with exhibits constitute the entire record in this case. The motion further states that the parties waive a hearing before an adminis- trative law judge and desire to submit this case di- rectly to the Board for findings of fact, conclusions of law, and order. On 9 July 1986 the Associate Executive Secretary, by direction of the Board, issued an order granting the motion, approving the stipulation, and transferring the proceeding to the Board. The General Counsel and the Respondent Employer filed briefs. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. On the entire record in this case, the Board makes the following FINDINGS OF FACT 1. JURISDICTION The Respondent Employer is a Louisiana corpo- ration with an office and place of business in New Orleans, Louisiana, where it operates a cargo com- pany. Based on a projection of the Respondent Employer's New Orleans operations since they commenced about 16 July 1985, the Respondent Employer will derive annual gross revenues in excess of $50,000 for services performed as a link in interstate commerce and will annually purchase and receive goods and materials valued in excess of $50,000 directly from points outside the State of Louisiana. Accordingly, the Respondent Employer is an employer engaged in business affecting com- merce within the meaning of Section 2(2), (6), and (7) of the Act. The Respondent Union and the Charging Party are labor organizations within the meaning of Sec- tion 2(5) of the Act. II. ALLEGED UNFAIR LABOR PRACTICES A. Facts The Kearney family has been involved in mari- time operations since before the turn of this centu- ry. In 1973, Neeb Service Inc., founded years earli- er in part by William J. Kearney Jr., resumed oper- ations as a public warehouse company with Mi- chael W. Kearney Sr., grandson of William J. Kearney Jr., as president. Coastal Cargo Company (CCC) was formed in 1984 as a division of Neeb Service Inc. CCC had its principal office and place of business in New Orleans, Louisiana, where it engaged in the steve- doring and terminal operation business between 4 May and 1 October 1984. CCC operated Lighter Aboard Ship (LASH) barge terminals for Delta Steamship Lines (Delta) at facilities on the Harbey Canal at Peters Road in the Port of New Orleans, and on the Houston ship channel in the port of 286 NLRB No. 14 COASTAL CARGO CO 201 Houston. Neeb Service Inc.'s president, Kearney, assumed overall responsibility for the operation of CCC. Dee B. Scott was employed by CCC as su- perintendent of stevedoring and terminal operations at CCC's New Orleans terminal and directly super- vised all terminal and stevedoring employees. Since 1975 Neeb Service Inc. has had a collec- tive-bargaining agreement covering its warehousing employees with the Respondent Union. In May 1984 President Kearney entered into a separate col- lective-bargaining agreement with the Respondent Union covering the employees of CCC. The CCC agreement is effective by its terms from 1 May 1984 through 30 April 1987. There were 21 employees in the unit covered by the CCC contract. All 21 executed checkoff au- thorization cards for the Respondent Union while working for CCC. CCC ceased its LASH terminal operations in October 1984, when Delta formed a wholly owned subsidiary, T.O.P.S., to operate LASH barge terminals for Delta vessels in the same locations at which CCC had been operating terminals. CCC released its LASH barge terminal employees for lack of work on 30 September 1984. T.O.P.S. operated the LASH barge terminals from 1 October 1984 until the terminals were closed in January 1985. To operate the terminals, T.O.P.S. employed all but 1 of the 21 employees formerly employed by CCC. T.O.P.S. and the Re- spondent Union entered into a collective-bargain- ing agreement in October 1984. All of the T.O.P.S. employees executed checkoff authorization cards for the Respondent Union while working for T.O.P.S. T.O.P.S. released its terminal and steve- doring employees in March 1985. After CCC ceased operations in October 1984, Dee B. Scott was retained by Neeb Service Inc. as a warehouse superintendent. CCC's bank accounts and accounting functions remained open. Scott and Neeb Service Inc. President Kearney continued to seek additional stevedoring business. In May 1985 J. Durel Landry, former vice president of carrier relations for Delta, was employed by Neeb Service Inc. to secure additional vessel or barge stevedor- ing and/or terminal operations work for CCC in the Port of New Orleans. In June 1985 Neeb Serv- ice Inc. entered into an oral agreement with Nexos Lines to provide stevedoring services to Nexos vessels calling on the Port of New Orleans. The of- ficers of Neeb Service Inc. intended that this work be performed by CCC. Dee B. Scott had received specific instructions from President Kearney to stay in touch with key employees who had worked for CCC.at the LASH barge terminal in New Orleans. In June 1985 J. Durel Landry told Scott to secure commitments from the same individuals who had performed ste- vedoring and terminal operations work for CCC during the operation of the LASH barge terminals to perform stevedoring work under the Nexos con- tract. Before the end of June, Scott had contacted all of the former regular employees of CCC. All of these employees told Scott that they would work under the same terms and conditions of employ- ment they enjoyed while working for CCC at the LASH terminal. Landry and Scott determined that this meant the employees wanted to work under a Teamsters contract. President Kearney met with Mitch Ledet, the president of the Respondent Union, in June 1985 and announced that Neeb Service Inc. wanted to incorporate CCC to perform stevedoring and ter- minal operations for Nexos. Ledet reminded Kear- ney that a collective-bargaining agreement with the Respondent Union remained in effect covering CCC's stevedoring and terminal operations. Ledet agreed to negotiate a separate agreement covering the Respondent Employer if the Respondent Em- ployer would employ, on the basis of seniority within classification, the employees who had worked for CCC at the LASH barge terminal in New Orleans. The plan to incorporate CCC to become Coastal Cargo Company, Inc., the Respondent Employer, had been put in motion in May 1985. The purpose of the planned incorporation was to further reduce casualty liability exposure and the profile of Neeb Service Inc. as a potential target for ILA economic pressure. Incorporation was accomplished on 16 July 1985 by Neeb Service Inc. President Kearney. The articles of incorporation indicate that CCC, Inc. has authority to issue 100 shares of stock with no par value. The record does not reflect if, or to whom, this stock was issued. The articles of incor- poration also provide that CCC, Inc. shall be man- aged by a board of directors consisting of no less than two or more than three directors, a majority of whom shall constitute a quorum. The initial report of CCC, Inc. indicates the following "first directors" were elected at a meeting held 16 July 1985: J. Durel Landry Sr.-president; Michael W. Kearney Sr.-executive vice president;' and Dee B. Scott-secretary/treasurer. In another Board proceeding involving the Respondent Employer,2 Landry testified he was involved in CCC, Inc., as organizer, partner, and part owner. There is no ' Alongside Kearney's name, the designaton executive vice president is crossed out and in substitution "Chairman of Board" is written in by hand. The record contains no explanation for this change 2 The parties stipulated that the record in Case 15-CD-293 be made a part of the record in this case. 202 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD other evidence concerning ownership of the Re- spondent Employer. The Respondent Employer placed its first em- ployee, clerk Howard White, on the payroll on 1 July 1985 to prepare for the first Nexos Line ship to arrive in the Port of New Orleans. The first Nexos ship, the M/V Marina Heeren, did not arrive until 16 July 1985. During the second week of July, Dee B. Scott contacted the former CCC em- ployees to inform them of the starting time, date, and location at which they were needed to perform stevedoring work under the Nexos contract. He started at the top of the CCC seniority roster and continued down the list until all the needed classifi- cations were filled. On 16 July 1985 the Respond- ent Employer employed eight employees. Of these, five had been regular employees of CCC.3 The Respondent Employer and the Respondent Union entered into a collective-bargaining agree- ment effective from 1 July 1985 through 30 June 1988. This agreement covered the same classifica- tions as the prior agreement between the Respond- ent Union and CCC. The new agreement modified the wage rates and health and welfare payments provided for under the CCC contract. It retained all of the remaining provisions contained in that contract. The 'Respondent Employer and the Re- spondent Union executed the new collective-bar- gaining agreement on 1 July 1985, before any em- ployees were placed on the Respondent Employ- er's payroll and before any employees actually loaded or unloaded any vessels. After 16 July 1985 when CCC was incorporated under the name of Coastal Cargo Company, Inc., its employee complement increased. The payroll report for the year ending 31 December 1985 lists 51 employees who worked for the Respondent Em- ployer more than 88 hours during 1985.4 The Re- spondent Employer's stevedoring operation for Nexos expanded from the Galvez Street Wharf to various locations in and around New Orleans.5 The Respondent Employer has unloaded a vessel for a shipping line other than Nexos and continues to so- licit new business. Employees of CCC, Inc. load grain, break-bulk, or containerized cargo onto ves- 3 Of the remaining employees, one had been a casual employee of CCC who had executed checkoff authorizations for the Respondent Union while working for both CCC and T.O.P.S., one was the son of Dee B Scott, and one was the son of Michael W Kearney Sr 4 The payroll report also lists approximately 80 employees who worked less than 24 hours, and approximately 60 employees who worked from 24 to 88 hours The most hours worked by any employee in 1985 was 754. Of the 51 employees who worked more than 88 hours, at least 26 executed checkoff authorization cards for the Respondent Union after 1 July 1985 Twenty-nine employees worked more than 160 hours in 1983 Of these, at least 20 executed checkoff authorizations for the Re- spondent Union after 1 July 1985 5 Prior to its agreement with the Respondent Employer, the Nexos Line did not call at the Port of New Orleans sels and discharge cargo from vessels or barges onto the dock. They handle any kind of cargo the shipping line or shipping agent designates. Dee B. Scott is the stevedoring superintendent for the Re- spondent Employer. B. Contentions of the Parties The General Counsel argues as follows. The Re- spondents entered into a collective-bargaining agreement recognizing the Respondent Union before the Respondent Employer employed any employees. Therefore, the Respondent Union could not have represented a majority of the Respondent Employer's employees when the contract was signed. For the same reason, the Respondent Em- ployer cannot claim that, when it executed the con- tract, it employed a substantial and representative employee complement or was engaged in normal operations. The Respondents cannot rely on the prehire statements of employees that they wished to work under the terms and conditions they for- merly enjoyed at CCC to establish majority sup- port for the Respondent Union. These statements cannot be construed as unambiguous expressions of desire for Teamsters representation. Finally, the majority status of the Respondent Union among the barge terminal employees of CCC is immaterial because the Respondent Employer is an entirely new operation that did not come into existence until its incorporation on 16 July 1985, almost 9 months after the CCC employees were laid off. The Respondent Employer's new stevedoring oper- ation began servicing Nexos Lines vessels at the Galvez Street Wharf on 16 July 1985. Neither Neeb Services Inc. nor CCC had ever performed such work for Nexos or worked at the Galvez Street Wharf. Accordingly, the Respondents en- tered into an invalid prehire agreement unlawfully recognizing the Respondent Union when it did not have majority status. The Respondent Employer contends that it is a "successor" to CCC and must, therefore, assume the bargaining obligation of CCC to the Respond- ent Union. It contends that CCC had a bargaining obligation to the Respondent Union arising from the collective-bargaining agreement between the two, the validity of which has not been challenged. Further, it points out that all of CCC's employees executed checkoff authorizations declaring that they were Teamsters members. Contrary to the General Counsel's assertion, the Respondent Em- ployer contends that there is a high degree of con- tinuity between the business operations of CCC and the Respondent Employer. It argues that the hiatus during which CCC was without work does COASTAL CARGO CO. not defeat the commonality of identity between CCC and the Respondent Employer. C. Discussion and Conclusions We cannot agree with the General Counsel's at- tempt to characterize this case as one of initial rec- ognition of a union by a newly formed employer. Rather, we find that, in effect, CCC resumed oper- ations on 16 July 1985 as CCC, Inc.; as. CCC, Inc., it was the same employer that ceased operating the LASH barge terminals in 1984. In other words, the two were alter egos. Overall control of these oper- ations has at all times rested with Michael W. Kearney Sr. Dee B. Scott was stevedoring superin- tendent for the LASH barge terminals and contin- ues as stevedoring superintendent for the Nexos operation. The addition of J. Durel Landry to CCC's management team in 1985 did not change CCC's management hierarchy significantly. Landry was hired to solicit business. He augmented, rather than usurped, the functions of Scott and Kearney. Further, there is no evidence that the designation of Landry, Kearney, and Scott as corporate offi- cers of the Respondent Employer effected a change in their managerial duties. In addition, the record fails to establish that a significant change in ownership occurred with in- corporation. CCC was a division of Neeb Service Inc., and the impetus for its incorporation was the desire of the parent company, also operated by Neeb Service Inc. President Kearney, to limit its casualty liability exposure and reduce its profile as a target of ILA economic pressure. Landry did tes- tify that he was a partner and part owner of CCC, Inc. However, without more information on the extent of Landry's ownership interest and what, if any, changes in ownership occurred with incorpo- ration, it cannot be said that the Respondent Em- ployer was under totally new ownership. To the contrary, there is no evidence that the new corpo- ration issued stock, despite the authority to do so, or that anyone outside the management of the Re- spondent Employer has ownership in CCC, Inc. Accordingly, we find that CCC, both before and after incorporation as the Respondent Employer, had substantially identical supervision, manage- ment, and ownership. The October 1984 termination of CCC's LASH terminal and stevedoring operations marked a tem- porary cessation in business for CCC rather than a permanent shutdown. The employees were not ter- minated; they were "released by CCC for lack of work .116 During the hiatus between the LASH op- 203 erations for Delta and the Nexos contract, CCC's parent company, Neeb Service Inc., retained CCC's stevedoring superintendent in its employ and sponsored his search for more stevedoring work. Michael W. Kearney also solicited stevedor- ing work during this period while continuing in his capacity as president of the parent company. CCC's bank account and accounting functions were kept open, and Kearney instructed Scott to maintain contact with the released CCC employees. Thus, the business operation of CCC before and after incorporation remained substantially the same. On resuming operations in July 1985, the Re- spondent Employer performed essentially the same type of work it was performing when its LASH operations for Delta ended in October 1984. The General Counsel, while asserting that in July 1985 the Respondent Employer commenced "an entirely different operation," fails to cite any evidence es- tablishing that CCC's essential business purpose- the loading and unloading of vessels-changed on resumption of operations. CCC's temporary cessa- tion of operations was precipitated by the decision of Delta, CCC's sole customer, to form a subsidi- ary to operate its own LASH barge terminals. CCC's continued existence was thus dependent on securing a new customer base. The contract with Nexos, which had never been a customer of CCC or Neeb Service Inc., breathed new life into CCC's dormant operations. In these circumstances, the fact that CCC had a new customer when it re- sumed operations does not render it a different em- ploying entity. Nor does the contraction of CCC's location of operation from the Port of New Orle- ans and the Port of Houston with Delta, to assort- ed locations within the Port of New Orleans with Nexos, establish, as the General Counsel asserts, that the Respondent Employer is a completely new entity. Accordingly, we find the Respondent Em- ployer's business purpose remained substantially the same after incorporation and commencement of op- erations pursuant to its contract with Nexos. On the basis of the foregoing evidence, we find that the Respondent Employer commenced oper- ations 16 July 1985 as a continuation of CCC in substantially identical form without significant al- teration of its supervision, management, ownership, location, organization, or business purpose. In short, the Respondent Employer and CCC are the same employing entity or, as we would find in the context of an alleged unlawful refusal to bargain, the Respondent Employer is the alter ego of CCC. 6 Art II of the 1984 collective-bargaining agreement between CCC and the Respondent Union gave CCC the exclusive right to "lay off be- cause of lack of work " 204 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD E.g., Rogers Cleaning Contractors, 277 NLRB 115 (1985).' As the continuation or alter ego of CCC, the Re- spondent Employer is subject to whatever bargain- ing obligation CCC had to the Respondent Union. See, e.g., E. G. Sprinkler Corp., 268 NLRB 1241 (1984). The Respondent Employer's liability thus turns on whether CCC acted unlawfully in recog- nizing and entering into a contract with the Re- spondent Union on 1 July 1985. The General Counsel's view seems to be that when unit employees were released by CCC in Oc- tober 1984 for lack of work, CCC's obligation to bargain with the Respondent Union ceased and the contract between them became a nullity; hence, the Respondent Employer was foreclosed from recog- nizing the Respondent Union absent a showing that a majority of those employed to perform the Nexos work wanted to be represented by the Respondent Union. We find no merit to this view in the cir- cumstances of this case. The term of the collective- bargaining agreement between CCC and the Re- spondent Union ran throughout the period CCC was without work. During this time CCC contin- ued to seek work of the type normally performed by bargaining unit employees. Indeed, on success- fully obtaining an oral agreement with Nexos, CCC contacted unit employees, in order of seniority, to inform them of the starting time, date, and location they were needed to perform work under the Nexos contract. Consequently, the facts establish that the bargaining unit continued at all times rele- vant to this proceeding. See Finger Lakes Plumbing Co., 253 NLRB 406 (1980) (bargaining obligation continued though all employees on layoff; fluctuat- ing work opportunities were characteristic of busi- of the type typically performed by the bargaining unit). It is undisputed that the Respondent Union en- joyed the status of exclusive representative of em- ployees in the bargaining unit until the cessation of CCC's operations for lack of work in October 1984. Further, the validity of the collective-bar- gaining agreement between CCC and the Respond- ent Union is not contested. As a result of that agreement, extending through 30 June 1988, the Respondent Union enjoyed an irrebutable presump- tion of continued majority status among the unit employees for the contract's duration. Hexton Fur- niture Co., 111 NLRB 342 (1955). This fact, com- bined with our finding that the bargaining unit con- tinued during the hiatus in CCC's operations, leads us to conclude that CCC's bargaining obligation, and therefore the bargaining obligation of the Re- spondent Employer, was not extinguished by the hiatus. See Finger Lakes Plumbing Co., supra at 410.8 Accordingly, we conclude that the Respondent Employer did not violate Section 8(a)(1) and (2) as alleged in the complaint because CCC had a con- tinuing obligation to bargain with the Respondent Union when it executed the collective-bargaining agreement on 1 July 1985. We further conclude that the Respondent Union did not violate Section 8(b)(1)(A) as alleged in the complaint because it continued to enjoy a presumption of majority status when it accepted recognition and executed the collective-bargaining agreement on 1 July 1985. We shall therefore order that the complaint be dis- missed. ORDER ness and the employer continued to seek new work The complaint is dismissed. , The absence of evidence of a disguised continuance often found in 9 That the parties signed a new agreement rather than proceeding to alter ego cases involving 8(a)(5) violations is not material here , where operate under the existing one is not surprising CCC now had a new alter ego status is an affirmative defense to the complaint allegation that name as a result of the incorporation, and the new agreement took ac- the Respondent violated Sec. 8(a)(2) count of this.