Bronaugh Motor Express, Inc.

National Labor Relations Board - Board Decisions

Nov 23, 1984

272 N.L.R.B. 1188 (N.L.R.B. 1984)

1188 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Bronaugh Motor Express, Inc. and Teamsters Local
651, a/w International Brotherhood of Team-
sters, Chauffeurs, Warehousemen and Helpers
of America and General Drivers, Warehouse-
men and Helpers, Local Union No 89, a/w
International Brotherhood of Teamsters, Chauf-
feurs, Warehousemen and Helpers of America
Bronaugh Motor Express, Inc and Quick Transpor-
tation, Inc and Truck Drivers, Chauffeurs and
Helpers Local Union No 100, a/w Internation-
al Brotherhood of Teamsters, Chauffeurs, Ware-
housemen and Helpers of America Cases 9-
CA-18430-1, 9-CA-18448, and 9-CA-18480
23 November 1984
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
ZIMMERMAN AND HUNTER
On 14 May 1984 Administrative Law Judge
Hubert E Lott issued the attached decision The
General Counsel filed exceptions and a supporting
brief, and the Respondent filed a brief in response
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings, findings, 1 and
conclusions and to adopt the recommended Order
ORDER
The recommended Order of the administrative
law judge is adopted and the complaint is dis-
missed
1 The General Counsel has excepted to some of the judge's credibility
findings The Board s established policy is not to overrule an administra
tive law judge's credibility resolutions unless the clear preponderance of
all the relevant evidence convinces us that they are incorrect Standard
Dry Wall Products, 91 NLRB 544 (1950) enfd 188 F 2d 362 (3d Cir
1951) We have carefully examined the record and find no basis for re
versing the findings
In affirming the judge s finding that Bronco Inc is not a respondent
we disavow reliance on his statement in sec I of his decision that since
Bronco, Inc is a separate corporate entity, It cannot be found to be the
alter ego of any other company
DECISION
STATEMENT OF THE CASE
HUBERT E LOTT, Administrative Law Judge The
consolidated cases were heard at Lexington, Kentucky
on May 11, 12, 17, 18, and 19 and June 14 and 15, 1983
The charge in Case 9-CA-18448 was filed by Teamsters
Local 89 (the Union), against Bronaugh Motor Express,
Inc (Bronaugh) on June 21, 1982 1 The charge in Case
' All dates stated are in 1982 unless otherwise Indicated
9-CA-18430-1 was filed by Teamsters Local 651 on
June 24 against Respondent Bronaugh The charge in
Case 9-CA-18480 was filed by Teamsters Local 100
against Respondent Bronaugh and Quick Transportation,
Inc (Quick) on June 28 A consolidated complaint in all
of the above issued on January 25, 1983 The issues in
the above cases are (1) Whether the Respondents Quick
and Comprehensive Management Services, Inc (CMSI)
constitute the alter ego of, and/or single employer with,
Respondent Bronaugh (2) Whether Respondent Bron-
augh laid off its employees in order to rid itself of the
Unions in violation of Section 8(a)(1) and (3) of the Na-
tional Labor Relations Act (the Act) (3) Whether Re-
spondent Bronaugh since April 1 implemented changes
in employees' rates of pay and benefits and refused to
pay cost-of-living allowances (COLA) in violation of
Section 8(a)(1) and (5) and Section 8(d) of the Act (4)
Whether Respondent Quick refused to recognize the
Unions in violation of Section 8(a)(1) and (5) and Section
8(d) of the Act (5) Whether Respondent Quick dealt dir-
etly with employees of Bronaugh by soliciting those em-
ployees to enter into individual employment contracts in
violation of Section 8(a)(1) and (5) and Section 8(d) of
the Act Respondents' answers to the consolidated com-
plaint, duly filed, deny the commission of any unfair
labor practices
The parties were afforded an opportunity to be heard,
to call, to examine and to cross-examine witnesses, and
to introduce relevant evidence Since the close of the
hearing, briefs have been received from the General
Counsel and from counsel for Respondents
On the entire record and based on my observation of
the witnesses, and consideration of the briefs submitted, I
make the following
FINDINGS OF FACT
I JURISDICTION
Bronaugh Motor Express, Inc (Bronaugh), a Ken-
tucky corporation with its principal office in Lexington,
Kentucky, is engaged in the interstate transportation of
freight with terminals in Lexington and Louisville, Ken-
tucky, and Cincinnati, Ohio During 1982, Bronaugh, in
the course and conduct of its business operations, de-
rived revenues in excess of $50,000 for the transportation
of freight from the State of Kentucky to points directly
outside of that State
Quick Transportation, Inc (Quick), a Tennessee coi-
poration with its principal office in Lexington, Kentucky,
is engaged in the interstate transportation of freight with
terminals in several States including Kentucky and Ohio
During the year 1982, a representative period, Quick, in
the course and conduct of its business, derived gross rev-
enues in excess of $50,000 for the transportation of
freight from the State of Kentucky directly to points out-
side of that State
CMSI, a Kentucky corporation with its principal
office in Lexington, Kentucky, is a wholly-owned subsid-
iary of Bronaugh and is engaged in the business of pro-
viding managerial, clerical, and maintenance services for
Bronaugh, Quick, and Bronco, Inc During the year
272 NLRB No 189
BRONAUGH MOTOR EXPRESS 1189
1982, a representative period, CMSI, in the course and
conduct of its business operations, derived gross reve-
nues in excess of $50,000 for services performed for
Bronaugh and Quick which are themselves directly en-
gaged in interstate commerce
Although facts were offered which would probably
support the Board's asserting jurisdiction over Bronco,
Inc , they were not submitted for that purpose Counsel
for 13ronaugh objected to the taking of any evidence
which would, in any way, implicate Bronco, Inc , unless
that company was named as a Respondent and properly
served Counsel further offered a motion at the hearing
and in brief to strike all allegations relating to Bronco,
Inc Bronco was never charged with any violations nor
was it named as a Respondent in the complaint or served
and was not represented by counsel at the hearing After
considerable discussion by counsel on the record, the
General Counsel took the position that he would not
amend the complaint alleging Bronco as a Respondent
and would not serve Bronco with the amended com-
plaint Consequently, I grant Respondent's motion and
find that Bronco, Inc is not a Respondent All informa-
tion relating to that company is purely for clarification
and background purposes I further find that, since
Bronco, Inc is a separate corporate entity, it cannot be
found to be the alter ego of any other company in this
case for that reason and other reasons explicated infra
Counsel for Respondents admit, and I find, that Bron-
augh, Quick, and CMSI are employers engaging in com-
merce within the meaning of Section 2(2), (6), and (7) of
the Act Counsel for Respondents further admit, and I
find, that the Unions named are labor organizations
within the meaning of Section 2(5) of the Act
II ALLEGED UNFAIR LABOR PRACTICES
A Alleged Alter Ego and/or Single Employer Status
1 Bronaugh Motor Express, Inc (Bronaugh)
Prior to the Motor Carrier Act of 1980, the trucking
industry was closely regulated Motor carriers operated
in accordance with grants of authority from the Inter-
state Commerce Commission (ICC), which specified the
area in which a carrier was allowed to operate and the
commodities which could be handled Authority was
granted by the ICC upon an application being filed by
the carrier with statements of support from shippers indi-
cating that the service (routes) applied for was needed
Authority was restrictively granted, allowing motor car-
riers to enjoy a virtual monopoly within its designated
territory which, in turn, rendered operating authority
very valuable
Bronaugh began operation in 1930 as a single propri-
etorship In 1968 the Company was incorporated with
John Bronaugh as president and sole shareholder Earl
Ison Sr (Ison Sr) was the secretary and vice president
of marketing and traffic John Geis is vice president of
operations and maintenance
Bronaugh is a short-haul regular routes feeder line,
hauling general commodity traffic under authority from
the ICC to operate within central and southern Ken-
tucky, with gateway terminals at Knoxville and Nash-
ville, Tennessee, Lexington, and Louisville, Kentucky,
and Cincinnati, Ohio The Company hauled truck load
(TL) and less than truck load (LTL) traffic to its gate-
way cities (terminals) where it interlined (exchanged
shipments with other carriers) outgoing, shipments and
picked up incoming traffic As a regular route carrier,
Bronaugh must travel over specified routes and this was
accomplished by operating from terminal to terminal In
contrast, irregular route carriers could operate over any
route it desires within a given geographical area
From the mid-1960s, Bronaugh grew steadily with
gross revenues of $80,000 per year to $5,500,000 in 1980
when it peaked Its principal traffic was LTL shipments
to interline cities Truck load shipments did not consti-
tute a significant portion of Bronaugh's business and in
1978 these were discontinued In 1981, 68 percent of
Bronaugh's freight was interlined LTL shipments
Since John Bronaugh had protected authority to oper-
ate within central and southern Kentucky, he saw this as
a chance to become a dominant carrier in that area In
1975 he embarked on an extensive expansion program
From that time to 1981, he applied for and was granted
additional authority to operate within his Company's
geographical area In order to accommodate this expan-
sion, Bronaugh increased its employees in Lexington
from 16 to a peak of 43 in 1980, opened the Louisville
terminal, where it had 11 employees, and opened the
Cincinnati terminal, which also employed 11 employees
The Company also increased the number of tractors
from 15 to 60 and its trailers from 50 to 140
Since Bronaugh was a closely held corporation, it fi-
nanced this expansion program through borrowing from
the First Security Trust Company in Lexington, Ken-
tucky, and the Freuhauf Credit Corporation at prime
rate plus 1-1/2 percent From 1977 to March 1979, Bron-
augh's debt rose from $200,000 to $1 1 million Since
1979, the bank has refused to lend Bronaugh any money
other than short-term loans to cover overdrafts Pro
forma projections prepared in 1979 by Hisle and Associ-
ates, a CPA firm, forecasted revenues of $4,800,000 for
1979, $6 million for 1980, and $7,500,000 for 1981 These
pro forma projections, in addition to Bronaugh's operat-
ing rights, equipment, and an outstanding judgment
against another trucking company formed the basis and
collateral for the bank's loans John Bronaugh did not
expect the Motor Carrier Act to be enacted, but did
expect his revenue to reach $12 million by 1985
In January 1980, the Motor Carrier Act was enacted
into law causing dramatic changes in the trucking indus-
try and Bronaugh After deregulation, carriers were
granted authority to operate in new geographical areas
on a very liberal basis which rendered Bronaugh's au-
thority worthless Bronaugh's competitors in the Lexing-
ton area increased from 15 to 50 Many of the carriers
that came into Bronaugh's territory were the ones that
Bronaugh had formerly interlined with In many cases,
they were large long-haul direct shipment carriers such
as Trans-Con, Associated, Helms, and Briggs that knew
Bronaugh's customers and could afford to discount
freight rates to attract business away from Bronaugh
Bronaugh attempted to compete with these trucking
1190 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
companies by discounting freight rates, however, this
practice resulted in heavy financial losses beginning in
September 1981 and continuing without interruption As
the economy grew worse, reliable customers began
switching their business to other carriers in order to get
cheaper rates As a result of Increased competition and a
downturn in business, Bronaugh's shipments dropped off
In 1979 the Company averaged 11,800 bills of lading per
month In 1980 the Company averaged 12,200 bills per
month In 1981 the figure dropped to 9300 per month
and in 1982 the average monthly bills reached only 4400
per month Net profit went from $54,600 in 1980 to a net
loss of $12,000 in 1981 and another net loss of $225,400
in 1982 The Company's operating ratio steadily in-
creased from 947 in 1980 to 969 in 1981 and 136 7 in
1982 Interest rates on company debt rose from 9 percent
in 1978-1979 to 21 percent in 1980-1981 requiring the
Company to pay 22-1/2 percent In 1982, the Company's
debt structure was 90 percent of net worth In February
Bronaugh became Insolvent and in April Bronaugh, and
its wholly owned subsidiary CMSI, jointly became insol-
vent
In 1981 George Geis and John Marlin, a part-time
consultant, advised John Bronaugh to reduce his oper-
ations in order to cut costs Following this advice, the
Company began laying off employees, however, the fi-
nancial picture did not improve At various times during
the fall of 1981 Geis, Marlin, and Dewitt Hisle, of Hisle
and Associates, advised John Bronaugh to file for bank-
ruptcy However, John Bronaugh did not take this
advice because he did not want the ,family business to fail
and did not want his creditors to suffer any losses In
January when John Bronaugh discovered that his Com-
pany owed $140,000 to the Internal Revenue Service, he
pledged his personal assets to meet company obligations
rather then file for bankruptcy These assets included
money from insurance policies, personal profit-sharing
plan, wife's automobile, family home, and money bor-
rowed from his mother
Throughout this period, the bank, through Vice Presi-
dent Donald Hutcherson, told John Bronaugh that, if the
Company's profitability did not change, the bank would
be forced to close it down and sell all the collateral
Based on these warnings and the advice of others, the
Company continued to reduce its work force and oper-
ations In April it closed its southern operation in Knox-
ville and Nashville, Tennessee, which involved no loss of
employee jobs It also closed its Cincinnati terminal that
month In June the Company closed its Louisville termi-
nal
In February, when the Company became insolvent, it
was no longer losing its money by the banks The bank
again advised John Bronaugh that the Company would
either have to liquidate its equipment or change its
method of operation and, if this advice was not taken,
the bank would have to close the Company and liquidate
all assets The number of shipments continued to drop to
the point where the Company only handled 1780 bills of
lading in May The bill count dropped to 1400 in June
and the Company was losing $3000 per day when it fi-
nally laid off all its employees but one, on June 25 The
Bronaugh terminal in Lexington is still open for business
and hauls some freight with the one remaining driver
The company still has 15 trailers and 30 tractors
2 Comprehensive Management Services, Inc
(CMSI)
CMSI was incorporated in August 1981 as a wholly-
owned subsidiary of Bronaugh in order to generate some
income to enable Bronaugh to make payments on its
bank obligations CMSI was created to perform the mar-
keting, administrative, clerical, and maintenance services
for Bronaugh, Quick, Bronco, and M&L Cartage Com-
pany To accomplish this mission, the employees per-
forming these functions for Bronaugh were transferred to
CMSI in October 1981 That same month Stephen
Schnettler, who was formerly director of finance and ad-
ministration for Bronaugh, became the president of
CMSI and remained in that position until September
when he was relieved of his duties and John Bronaugh
became acting president CMSI leases space in Bron-
augh's terminal at Nandino Boulevard in Lexington,
which is covered by a lease agreement at fair market
value CMSI provides such services as accounting, bill-
ing, sales, dispatching, maintenance, and supervision at
the terminal level These services are provided in ac-
cordance with a service contract entered into between
CMSI and the customer The customers are billed
weekly at a rate of two times the CMSI employees' rate
of pay and 2-1/2 times the rate if an automobile is used
CMSI has no signature authority from its customers
Two sales representatives of CMSI testified that they
continued to solicit business for Bronaugh after they
became employed by CMSI, however, they never at-
tempted to shift customers from Bronaugh to Quick or
Bronco They offered three different services provided
by three trucking companies Bronco offered TL long-
haul service, Quick offered LTL service over more terri-
tory, and Bronaugh had LTL short-haul interline serv-
ice
3 Quick Transportation, Inc (Quick)
Quick was incorporated in Tennessee by Earl Ison Jr
(Ison Jr) in March 1981 He was a marketing representa-
tive for Bronaugh at the time who saw no future at
Bronaugh because of its financial condition Ison Jr ap-
plied for Irregular route authority in an eight-state area
with the help and advice of his father Ison Sr who was
also employed by Bronaugh The application was submit-
ted to the ICC in May 1981 with statements of support
which were partly obtained by sales representatives then
working for Bronaugh The certificate of authority was
granted in December 1981 and Ison Jr in February re-
signed his position as marketing representative with
CMSI to become president of Quick That same month
Ison Jr signed a service contract with CMSI which pro-
vided the services listed above for which it was billed
weekly and paid for by Ison Jr
Ison Jr owns all the outstanding stock in Quick He
and his wife are the only officers of the corporation and
there are no outstanding options to buy stock in Quick
Ison Jr has no financial interest in Bronaugh, CMSI, or
Bronco Conversely, John Bronaugh and Ison Sr have
BkONAUGH MOTOR EXPRESS 1191
no financial interest in Quick Ison Jr obtained his work-
ing capital by borrowing from a Tennessee bank on his
own signature Ison Jr rents office space at Bronaugh's
Nandino Boulevard location, having a signed lease agree-
ment at fair market value Quick also has signed lease
agreements with Bronaugh for 42 trailers, dock equip-
ment, and an automobile, all at fair market value
Ison Jr is the sole employee of Quick He presently
has 10 road drivers under contract, none of whom
worked for Bronaugh He has 12 local cartage drivers
under contract in Lexington, Louisville, Cincinnati, and
Nashville, 4 of whom at one time worked for Bronaugh
Quick also has four dock workers under contract, one of
whom is a former Bronaugh employee The drivers are
owner- operators who have a signed contract with Ison
Jr Road drivers are paid by the mile plus percentage of
revenue They furnish their own tractors, choose which
loads they will carry, and which routes they will take
Since Quick's inception, it has employed 22 drivers in-
volving 21 tractors, 6 of which were leased from Bron-
augh City drivers are under written contract which calls
for payment based on a percentage of revenue Dock
workers are also under contract which calls for payment
based on percentage of freight pounds moved
Quick has authority to operate in Georgia, Tennessee,
Ohio, Indiana, Illinois, Missouri, and Michigan and has
irregular route authority for the entire State of Ken-
tucky Ison Jr has negotiated cartage agreements with
local cartage companies in various States and with
Bronco, all at fair market value
During 1982 approximately 12 shippers bills of lading
had Bronaugh's name scratched out and Quick's name in-
serted and the freight was picked up by Quick It is not
uncommon for drivers for a given truck line to "hustle
freight" by getting the shipper to change carriers When
this is successful, the shipper will merely cross out the
original carrier and insert the name of the carrier who
will haul the freight Furthermore, it is not uncommon
for a shipper to use one carriers bill of lading to ship
freight by a different carrier Bills of lading are used
interchangeably
As of December 31, Quick was insolvent and lost
$87,000 in the first 4 months of 1983
4 Bronco, Inc (Bronco)
Bronco was incorporated by John Bronaugh in May
1980 to furnish an income source for the John W Bron-
augh Trust from a company that was not in competition
with Bronaugh After its incorporation, all outstanding
stock was transferred to the trust fund for $1000 Appli-
cation for authority to operate as an irregular carrier of
general commodities in 38 States was made in February
1981 with statements of support which were secured by
Bronaugh's marketing personnel In May 1981, the ICC
in its recommended order raised the issue of common
control (also raised by John Bronaugh in his application)
which concerns one individual controlling more than one
carrier Counsel for John Bronaugh advised him that he
was unsure of when the issue of common control would
be resolved because of the changes in ICC regulations
after deregulation Therefore, John Bronaugh transferred
stock ownership in Bronco to Ison Sr in June 1981 be-
cause the certificate of authority, unless activated, could
be lost The certificate of authority was issued by the
ICC in September 1981 Ison Sr purchased the stock of
Bronco for $1000, resigned his position with Bronaugh,
and took over as president of Bronco in October 1981
At the same time he signed a service contract with
CMSI on the same terms as Quick
Bronco is a long-haul, irregular route, point-to-point
truck load carrier operating in 38 States using owner-op-
erators with leased equipment Ison Sr has a signed lease
with Bronaugh for space at Nandino Boulevard and, at
one time, leased two trailers from Bronaugh, all at fair
market value Presently it leases no trailers from Bron-
augh Ison Sr purchased 25 trailers from Bronaugh by
assuming its note owned to Fruehauf Corporation, and
another 25 trailers from the First National Bank of Lex-
ington Bronco owns no tractors Ison Sr has written
contracts with its owner-operators which are similar to
those of Quick Of the 130 contracts with owner-opera-
tors, only 1 was with a former Bronaugh employee
Ison Sr is the sole owner of Bronco and all income
goes to him He is responsible for the management of his
company to the exclusion of all others including John
Bronaugh Operating capital apparently was derived
from a personal loan to the corporation from Ison Sr
Ison Sr has no control over the operations at Bronaugh,
CMSI, or Quick Bronaugh and CMSI are not responsi-
ble for the debts of Bronco and there are no side agree-
ments between these companies Ison Sr has absolute
control over Bronco's bank account and signs all checks
with the exception that a dispatcher employed by CMSI
can authorize owner-operator advances only Bronco has
no city drivers or dock workers because it carriers
freight directly to the customers and therefore does not
interline freight In October 1981, Bronco made an aver-
age of three truck load shipments per day In June, the
company had an average of 11 truck load shipments per
day Bronco earned $50,000 in 1982 and lost $71,000 in
the first 4 months of 1983
Analysis and Conclusions
The test for single-employer or alter ego status is that
the two legal entities comprise a single employer or a
disguised continuance of the old employer where there is
common ownership and financial control, common man-
agement, interrelation of operations, and centralized con-
trol over labor relations, and there is an absence of an
arm's-length relationship found among unintegrated com-
panies NLRB v Big Bear Supermarkets No 3, 640 F 2d
924 (9th Cir 1980), All Kind Quilting, 266 NLRB 1186
(1983)
It seems obvious that Bronaugh and CMSI are a single
employer because all of the criteria for establishing such
a relationship are present John Bronaugh owns and con-
trols both companies absolutely However, this relation-
ship in and of itself does not give rise to any violation of
the Act The employees involved, i e , those transferred
from Bronaugh to CMSI, were not unit employees per-
forming unit work for either company, nor were they
members of any union The central issue appears to be
whether Bronaugh/CMSI and Quick are alter egos and
1192 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
as such one continuing enterprise With this in mind the
evidence establishes that Quick is separately owned and
controlled by Ison Jr who formed the corporation and
financed it He alone controls labor relations such as
they are because he has no employees However it is
clear that Ison Jr negotiates the owner operator con
tracts and there is no evidence that the employees of
CMSI do not take their orders from him While it is true
that Quick leases space equipment and trailers from
Bronaugh it is also true that all these were arm s length
transactions for fair market value
The General Counsel attempted to prove that Bron
augh transferred its freight business to Quick by offering
evidence that approximately a dozen bills of lading were
changed from Bronaugh to Quick that Quick picked up
freight from four of Bronaugh s prior customers and
that Quick serviced the same geographic territory as
Bronaugh had once serviced However Respondent s
counsel offered evidence that it is common practice in
the industry for shippers to change carriers as needs dic
tate There were for example bills of lading with various
carriers crossed out and Bronaugh written in It should
also be stressed that 49 other carriers were competing for
Bronaugh s customers with various financial and other
incentives which were calculated to put Bronaugh and
Quick out of business and largely succeeded Addressing
the 12 bills of lading that were changed this evidence
can only be considered inconsequential when compared
to the 26 000 bills of lading (shipments) handled by Bron
augh during 1982
The General Counsel offered evidence that Bronaugh s
vice president once solicited an employee to work for
Quick This evidence is inconclusive at best because
Quick and Bronco hired virtually none of the Bronaugh
employees who were laid off The evidence offered by
the General Counsel was that a few employees of Quick
were former Bronaugh employees—not that they were
Bronaugh employees who were laid off during the
period in question
The General Counsel in his brief torturously attempts
to fit the facts of this case into the various alter ego cri
teria while at the same time ignoring his theory of the
case which according to the evidence and pleadings is
that John Bronaugh transferred unit work from Bron
augh to Quick and Bronco This resulted in Bronaugh s
financial ruin which in turn enabled the company to rid
itself of the unions while at the same time Bronaugh
continued its operations with nonunion companies which
were nothing more than the disguised continuance of
Bronaugh Based on this theory the facts of this case
also mandate the conclusion that John Bronaugh deliber
ately submitted to personal financial ruin in order to free
himself of all union obligations This theory is not only
unsupported by the facts but is absurd I say this because
it Ignores all the relevant facts of the case a history of
good labor relations the lack of union animus the pas
sage of the Motor Carrier Act of 1980 and its resulting
effects not only on Bronaugh but many small carriers
the recession high Interest rates and John Bronaugh s
attempts to save his company It also ignores the fact
that John Bronaugh did not go out of business because of
the unions Bronaugh was operating profitably with the
unions prior to deregulation and the recession and had
been for years However the facts support the conclu
sion that a combination of circumstances brought finan
cial ruin and this would have occurred with or without
the unions Finally it cannot be overlooked that all the
companies at issue suffered financial losses during 1982
and became insolvent Their financial condition did not
improve in 1983
As I stated earlier Bronco is not a Respondent in this
case and therefore cannot be considered as an integral
part of this case except to bolster Respondent s defense
Bronco is separately owned and controlled by Ison Sr
who bought the stock in the corporation and financed it
with his own money Bronco is an entirely different
trucking operation from Bronaugh servicing different
customers in a vastly different area All of Bronco s fi
nancial transactions with Bronaugh/CMSI have been at
arm s kngth and at fair market value
Accordingly based on the above findings and for rea
sons stated above I conclude that there is no alter ego
relationship between Bronaugh/CMSI and Quick or
Bronco Chippewa Motor Freight 261 NLRB 455 (1982)
B Alleged Unlawful Layoff of Bronaugh Employees
In June 1980 Bronaugh had 43 employees at its Lex
ington terminal At the end of December 1980 4 em
ployees were laid off and 2 quit leaving 37 Five em
ployees were laid off in October and December 1981 and
4 employees quit for a total reduction of 14 employees
leaving a balance of 23 employees at the beginning of
1982 One employee was laid off in January nine in
April four in May and seven in June One employee
quit for a total reduction of 22 employees leaving 1 em
ployee still working for Bronaugh
At the beginning of 1981 Bronaugh had 11 employees
at its Cincinnati terminal Four employees were laid off
in October and two were laid off in December leaving
five employees at the beginning of 1982 One employee
was laid off in April and the remainder were laid off in
June when the terminal was closed
At the beginning of 1981 Bronaugh had 11 employees
at its Louisville terminal The Company laid off two em
ployees in November leaving a balance of nine employ
ees at the beginning of 1982 The Company laid off one
employee in March five in April and the balance in
June when the terminal was closed Virtually none of the
laid off employees were hired by Quick or Bronco
Analysis and Conclusions
It should be stated at the outset that the General
Counsel did not allege nor was there any evidence to
support a violation of Section 8(a)(1) and (5) of the Act
because the Employer failed to notify and bargain with
the Unions over the decision or the effects of the layoffs
and terminal closings
Analysis of the date indicates that all but four employ
ees were laid off by Bronaugh after it suffered severe
economic losses in September 1981 which continued una
bated until June when Bronaugh went out of business al
though it retained its operating rights The data also re
veals that 61 percent of the Bronaugh layoffs occurred
BRONAUGH MOTOR EXPRESS 1193
after the Company was insolvent The General Counsel
argues that somehow Bronaugh transferred its business
to Quick which to the exclusion of all other reasons
caused Bronaugh to lay off its employees This theory
simply does not comport with the facts Moreover the
financial data supplied by Quick indicates that during
1982 that Company lost money and was in fact insolvent
and continued in that condition to the present In short
the General Counsel could not show through any of the
financial data offered in this case that any company bene
fited financially from the practices alleged by him
Accordingly based on all the evidence presented in
this case I can only conclude that Bronaugh had legal
mate economic reasons for laying off all the employees
alleged to be discriminatees in this case and did not vio
late Sections 8(a)(1) and (3) of the Act by so doing
C Bronaugh s Alleged Unilateral Changes in
Employee Wages and Benefits and its Refusal to Pay
COLA Under the Old Agreement
From September 1980 until March 1981 John Bron
augh wrote a series of letters to the Teamsters Interna
tional president with copies to the unions requesting that
he be allowed to reopen the National Master s Freight
Agreement (NMFA) pursuant to article 27 because he
needed financial relief From late 1980 to March 1981
Jack Geis met with Emmet Nall vice president and as
sistant business agent for Local 89 and explained to him
that the company could not survive financially unless
some relief was granted under the NMFA Nall s reply
to Geis was that if the Company could work out some
thing with its employees he would look the other way
Finally on March 4 1981 John Bronaugh met with
Local 89 s president Marion Winstead and representa
fives of the other local unions and explained again that
the Company needed econmic relief under the NMFA
Winstead suggested that Bronaugh meet and work out
something with his employees that would enable the
Company to survive until the end of the contract term
which was April 1 at which time the Union would at
tempt to help the Company during negotiations for a
new agreement Winstead also stated that if grievances
were filed over any breach of contract the Union would
have to process them Representatives from other truck
ing companies testified that they were told virtually the
same thing by the unions involved and they acted on
these union assertions by meeting with their employees
and pursuadmg them to forgo wage and benefit increases
and to accept wage reductions all in violation of the
NMFA Prior to April 1 1981 John Bronaugh met with
his employee and explained the Company s financial
plight As a result of these meetings the employees
signed a waiver of wage and benefit increases due on
April 1 1981 which was sent to the unions From
March 1981 until the opening of negotiations on Febru
ary 25 John Bronaugh continued to communicate to the
Unions his need for more economic relief under the
NMFA
The parties met to negotiate a new agreement on Feb
ruary 25 At this meeting John Bronaugh made his ini
tial proposal calling for a wage rate of $8 per hour and a
mileage rate of 1895 cents per mile The unions repre
sented by Marion Winstead offered the new NMFA call
ing for a wage rate of $13 30 per hour and a milewage
rate of 32 cents per mile The Company s position was
that it could not accept the NMFA The parties met
again on March 11 and at this meeting the Company
through John Bronaugh offered a revised proposal call
ing for $10 per hour and a mileage rate of 2395 cents
per mile The union rejected the Company s initial pro
posal and offered the NMFA again This union proposal
was rejected by John Bronaugh who provided the
unions with updated financial statements (which were
presented at each negotiating session) to support his posi
tion On March 25 the parties met and John Bronaugh
presented the Company s last offer which was the same
offer presented at the March 11 session with the addition
of a profit sharing plan The Unions represented by
Marion Winstead rejected this offer and countered with
the NMFA with a rider The company rejected the
union s proposal because any rider agreed to was condi
tioned on signing the NMFA and riders reducing wages
have never been approved by the Teamsters Union be
cause of a me too provision in the NMFA At the con
elusion of this meeting John Bronaugh declared an im
passe and stated that the Company would implement its
last offer on April 1 which it did The parties continued
to meet thereafter however there has been no change in
their positions
According to Norman Hug secretary treasurer of
Local 89 at the March 25 negotiating session John Bron
augh agreed to pay the health and welfare and pension
COLA increases under the old agreement and in fact
did pay these increases
Analysis and Conclusions
The issue of impasse is virtually identical to that raised
in a similar case involving the same attorneys and the
same charging party (see Central Motor Express JD-514-
83 issued December 21 1983)
My opinion in this case is also the same as that ren
dered by me in the Central case The parties in the
present case were totally aware of the other s position
regarding the NMFA at least 2 years prior to negotia
tions In fact the Unions agreed with John Bronaugh
that he could not accept either the current NMFA or the
proposed NMFA When negotiations began in February
the Company again reiterated its position on the UniOns
proposed NMFA however the Union for all practical
purposes never offered anything else and has not
changed its position at any time As I pointed out in the
Central decision I see no point in the parties continuing
the charade of meeting in order to prove or disprove
that impasse has been reached Meeting in order to estab
lish a legal position is a waste of time I should also add
that based on the Union s waiver of its right under the
old agreement not only with Bronaugh but many other
carriers and its unofficial assurances that some accom
modation could be reached to help Respondent the
Union s position throughout negotiations in my opinion
borders on bad faith bargaining on its part
Accordingly I find that impasse was reached on
March 25 over acceptance of the NMFA and I further
1194 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
find that Respondent did not violate Section 8(a)(1) and
(5) of the Act when it implemented its last offer on April
1
With respect to the COLA increases due under the ex
pired agreement I am at a loss to understand the Gener
al Counsel s position when his chief witness testified that
the increases were paid and this evidence was presented
in his brief
Accordingly since the evidence does not support the
General Counsel s allegation with respect to COLA I
find no violation of Section 8(a)(1) and (5) of the Act as
alleged
D Alleged Failure of Quick to Recognize the Unions
I have found above that no alter ego relationship exists
between Bronaugh/CMSI and Quick Therefore I can
find no obligation on the part of Quick to recognize the
Unions emanating from the facts of this case
According to the evidence presented Quick has no
employees but instead has owner operators under con
tract These individuals were never employed by Bron
augh Moreover there is a lack of evidence that other in
dividuals under contract to Quick were the laid off em
ployees of Bronaugh Finally there is no evidence that
the Unions ever requested recognition
Accordingly I find no violation of Section 8(a)(1) and
(5) and Section 8(d) of the Act
E Quick s Direct Dealing with Bronaugh Employees
Since I have found no alter ego or single employer re
lationship between Quick and Bronaugh/CMSI I also
find that Quick was not bound by the NMFA nor was
Quick obligated to bargain with the Unions I also find
that Quick did not bypass or undermine the Unions when
it entered into various contracts with owner operators
and others
Accordingly I find that Quick s conduct did not vio
late Section 8(a)(1) and (5) and Section 8(d) of the Act as
alleged
CONCLUSIONS OF LAW
1 Respondents are employers engaged in commerce
within the meaning of Section 2(2) (6) and (7) of the
Act
2 The Unions are labor organizations within the
meaning of Section 2(5) of the Act
3 All drivers and warehousemen employed by Bron
augh Motor Express Inc excluding all office clerical
employees professional employees guards and supervi
sors as defined in the Act constitute a unit appropriate
for the purposes of collective bargaining within the
meaning of Section 9(b) of the Act
4 Respondents have not engaged in any violations of
Section 8(a)(1) (3) and (5) and Section 8(d) of the Act
On these findings of fact and conclusions of law and
on the entire record I issue the following recommend
ed 2
ORDER
It is ordered that the complaint be dismissed in its en
tirety
2 If no exceptions are filed as provided by Sec 102 46 of the Board s
Rules and Regulations the findings conclusions and recommended
Order shall as provided in Sec 102 48 of the Rules be adopted by the
Board and all objections to them shall be deemed waived for all pur
poses