Chen-Ault Trucking Co.

National Labor Relations Board - Board Decisions

Jan 18, 1989

292 N.L.R.B. 530 (N.L.R.B. 1989)

530 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
R & L Cartage and Sons, Inc , Schaller Trucking
Corporation , John V Loudermilk , BVZ Enter-
prises, Inc , and Danny Chenault d/b/a Chen-
ault Trucking Company and Teamsters Local
No 414, a/w International Brotherhood of
Teamsters , Chauffeurs, Warehousemen and
Helpers of America , AFL-CIO i Cases 25-
CA-18023-1, 25-CA-18023-2, 25-CA-18171-
1, 25-CA-18171-2, 25-CA-18171-3, 25-CA-
18171-4, and 25-CA-18171-5
January 18, 1989
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
JOHANSEN AND CRACRAFT
On February 24, 1988, Administrative Law
Judge John H West issued the attached decision
Respondent Schaller Trucking Corporation filed
exceptions and a supporting brief, and the General
Counsel filed limited cross-exceptions and a sup-
porting brief Respondents Schaller Trucking Cor
poration and John V Loudermilk filed a joint brief
in opposition to the General Counsel's limited
cross-exceptions
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, 2 and
conclusions3 and to adopt the recommended Order
as modified and set forth in full below
The judge found, inter alia, that Respondent
Chenault acted unlawfully in failing to hire a ma-
jority of Respondent R & L's former employees,
and that had a majority been hired, Chenault
would be a successor to R & L The judge also
found that as a successor, Chenault unlawfully
' On November 1 1987 the Teamsters International Union was read
nutted to the AFL-CIO Accordingly the caption has been amended to
reflect that change
2 The Respondent has excepted to some of the judge s credibility find
rags The Board s established policy is not to overrule an administrative
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 reversing
the findings
3 The judge found that R & L had committed several unfair labor
practices including a refusal to recall six employees from layoff reneging
on and refusing to abide by a grievance resolution agreement with the
Union and refusing to bargain with the Union about the effects of its de
cision to close its operations In the absence of exceptions we adopt the
judge s findings as to the violations committed by R & L The j udge also
found that R & L is not a joint employer single employer or alter ego of
any of the other Respondents The General Counsel noted in her brief
that the judge erroneously cited Remke Central Division 227 NLRB 1969
(1977) a case involving a single employer in his analysis of whether
Schaller and R & L are joint employers This mistake by the judge does
not affect our decision to adopt the judge s finding that R & L is not a
joint employer with any of the other Respondents
failed to recognize and bargain with the Union, un
lawfully departed from existing rates of pay and
benefits without first consulting with the Union,
and unlawfully bypassed the Union to deal directly
with employees We disagree
I BACKGROUND
Respondent Schaller Trucking Corporation is en
gaged in the interstate transportation of freight and
commodities Respondent John V Loudermilk pur
chased Schaller in 1973, and currently serves as its
president In 1977, Schaller contracted with Re
spondent R & L Cartage and Sons, Inc to haul
freight for Schaller's main customer, General
Motors, for a percentage of the gross revenues gen-
erated by what R & L hauled One year later, R &
L's employees were organized and have been rep-
resented by the Union since 1978 On July 29,
1986,4 R & L filed for bankruptcy On August 1,
1986, R & L ceased operations and laid off all its
employees
When R & L filed for bankruptcy, Loudermilk
called Respondent Danny Chenault, an individual
who operated a trucking company that had hauled
other GM freight for Schaller,5 and made arrange-
ments with him to go to the GM Central Foundry
to handle the traffic there for which R & L had
been responsible The following day Loudermilk
and Chenault agreed that Chenault would take
over the work for GM that had previously been
handled by R & L, and would do so under the
same terms as R & L As a result, Chenault leased
its tractors and trailers from Schaller, used
Schaller's terminal in Bedford rent free, and re
ceived 82 percent of the revenues generated by the
GM account
On July 31 Roland Atchison, who had been em-
ployed as a mechanic by R & L since early 1985,
was at the Bedford terminal and asked Chenault
about a job Chenault said that he needed drivers
Atchison told Chenault to talk to Richard Borck
ardt, another former R & L employee Chenault re-
plied that he did not think that Loudermilk wanted
him to hire anyone that had worked for R & L
Chenault also stated that he might hire Willy Bolin
(another former R & L employee) or Atchison be-
cause Atchison had not worked for R & L for very
long Former R & L employee Robert Terry was
also present during this conversation and heard
Chenault tell Atchison that Loudermilk did not
want him to hire anybody that previously worked
at R & L Atchison refused Chenault's offer of a
4 All dates are in 1986 unless otherwise noted
5 As noted by the judge the complaint was amended at the hearing to
reflect the fact that Chenault did business first as DC Enterprises and
later as DC & Sons Trucking Inc
292 NLRB No 59
R & L CARTAGE & SONS
job, but Chenault did hire Bolin Bolin was initially
hired by Respondent BVZ Enterprises who leased
the tractor he drove to Chenault The lease expired
in mid December 1986, at which time Chenault
bought the tractor from BVZ and hired Bolin di
rectly There is no evidence that any other former
R & L employee ever sought employment with
Chenault
Chenault engaged in another conversation con
cerning his inability to hire former R & L employ
ees in January 1987 Former R & L employee
Jerry Terry had begun working with a different
trucking company and was at the Bedford terminal
on business Chenault told Terry that he needed
drivers Terry asked Chenault why he did not hire
the former R & L drivers who were out of work
Chenault replied that Loudermilk would not let
him hire anyone who used to work there until the
bankruptcy and labor matters were straightened up
Approximately 2 months after R & L had ceased
operations, Loudermilk sent a letter, dated Septem
ber 30, 1986, to all the former R & L employees
The letter stated that Loudermilk was willing to
pay a total of $37,500 to the former R & L employ
ees He also stated in the letter that he had been
informed that Chenault was willing to put any
driver back to work at 18 cents per mile The letter
closed by saying that Loudermilk had made this
offer to the union leadership who had refused to
return his calls, and that if the employees were in-
terested in accepting this offer, they should contact
their business agent and ask him to settle the case
II CONTENTIONS AND FINDINGS
An amended consolidated complaint issued on
October 31, 1986, alleging, inter alia, that Schaller
and Chenault are joint employers, alter egos, and a
single employer, and that Chenault is the successor
employer to R & L's operations The complaint
also alleges that the Respondents had violated the
Act by refusing to recognize and bargain with the
Union, by departing from existing rates of pay and
benefits without first consulting with the Union,
and by bypassing the Union and dealing directly
with the employees through Loudermilk's Septem
ber 30 letter
The judge found that Schaller and Chenault are
not a single employer or alter egos, but that they
do constitute joint employers 6 The judge also
6 We find it unnecessary to pass on whether Schaller and Chenault are
joint employers because of our finding infra that Chenault is not a suc
cessor employer to R & L and therefore has not violated the Act by
refusing to bargain with or by bypassing the Union We adopt the judge s
finding that Schaller and Chenault are not alter egos or a single employ
er
531
found that Chenault meets the criteria for a succes-
sor employer except for the fact that it did not hire
a mlajority of the former R & L employees With
respect to Chenault's hiring policy, the judge noted
that the Board has never held that an employer
that purchases the assets of a business is obligated
to hire its predecessor's employees, but that the
failure to do so solely because the former employ
ees are members of a union violates Section 8(a)(3)
of the Act' The judge also noted that while there
is no obligation on the part of a purchasing em
ployer to initiate an employment relationship with
the predecessor's employees," the company coming
in cannot prevent the union from establishing a ma-
jority by hiring discrimination
In the present case, the judge found that regard-
less of how many employees actually sought em
ployment, Schaller and Chenault, by hiring dis-
crimination , prevented the Union from establishing
a majority The judge determined that Chenault's
statements to Atchison created a "climate of futili
ty" regarding the hire of former R & L employees
The judge then cited State Distributing Co,9 and
stated that because Schaller and Chenault's unlaw
ful actions created the uncertainty concerning
whether the former R & L employees would have
applied or been hired, that uncertainty must be re-
solved against them as wrongdoers, and the
Union's majority status is presumed to continue
Had Schaller and Chenault acted in a nondiscrim-
inatory manner in the instant case and hired a ma-
jority of the former R & L employees, the judge
reasoned, they would have been obligated to rec-
ognize and bargain with the Union i 0
Contrary to the judge, we find the General
Counsel has not established that Chenault unlawful-
ly discriminated against any former R & L employ
ees There is no showing that Chenault refused to
hire any former R & L employees Rather, the evi
dence indicates that both of the former R & L em-
ployees who did express an interest in working for
Chenault were offered jobs, and there is no indica-
tion that other former employees either applied or
were prevented from applying for employment
The judge found that the former R & L employees
should be excused from their failure to apply for
jobs with Chenault because of the climate of futili
ty created by Chenault's remarks to Atchison in
August We believe, however, that there is insuffi-
cient evidence to establish a climate of futility
In State Distributing, relied on by the judge, sev
eral factors established that it would have been
7 See NLRB v Burns Security Services 406 U S 272 (1972)
8 Vantage Petroleum 247 NLRB 1492 (1980)
9 282 NLRB 1048 (1987)
10 Short way Suburban Lines 286 NLRB 323 (1987)
532 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
futile for the employees of the predecessor employ-
er to apply for employment with the purchasing
employer (the respondent). There, the respondent
indicated to three employees in separate conversa-
tions that it would not hire union help, and that it
had been advised not to hire the predecessor's em-
ployees.' 1 The employees' union representative
was also told that the respondent did not intend to
hire a majority of the predecessor's employees, and
that the respondent was not going to be a union
shop. In addition, the Board noted that the re-
spondent failed to solicit applications from three
unit employees who had stated that they would be
in need of work after the sale took place, despite
the fact that it did solicit applications from nonunit
employees. Further, in order to conceal its hiring
process, the respondent made use of blind adver-
tisements in the local paper.
The facts relied on by the Board in State Distrib-
uting establish a much stronger case for finding a
climate of futility than the facts in the present case.
Here, Respondent Chenault made only one state-
ment immediately after taking over for R & L indi-
cating that he was not able to hire former R & L
employees.12 In addition, the evidence indicates
that Chenault did solicit an application from at
least one former R & L employee. Thus, despite
the fact that Chenault told Atchison that Louder-
milk did not want him to hire any former R & L
employees, in the same conversation, Chenault of-
fered Atchison a job and indicated that he would
consider hiring another former R & L employee,
Willy Bolin.
Further, we note that no obstacles were put in
the way of former R & L employees who wished
to apply for employment with Chenault, and there
is no evidence that Cherault's statements deterred
the former R & L employees in general from ap-
plying to Chenault.13 Any potential feelings of fu-
tility that might have been created by Chenault's
remarks to Atchison were undercut by the fact that
in that very same conversation, Chenault offered
Atchison a job.
Without evidence that Chenault unlawfully
denied employment to any former R & L employ-
ee, and with insufficient evidence to establish that a
climate of futility was created, we do not find that
11 One employee was told that the respondent could only hire two of
the predecessor 's employees and that those positions had already been
filled.
12 The second comment made by Chenault concerning his limitation
on hiring former R & L employees was made to Jerry Terry in January
1987, some 6 months after R & L closed . Although this comment in Jan-
uary is significant in establishing motive, it is too far removed in time
from the closing of R & L to have contributed to a feeling of futility in
August on the part of the former R & L employees concerning Chen-
ault's hiring process.
13 See Kessel Food Markets, 287 NLRB 426 (1987).
the Respondents committed an 8(a)(3) and (1) vio-
lation by the failure to hire a majority of former
R & L employees. Thus, Chenault is not a succes-
sor employer to R & L, and it had no obligation to
recognize or bargain with the Union. Accordingly,
we reverse the judge's findings that the Respond-
ents violated Section 8(a)(5) and (1) of the Act by
failing to recognize and bargain with the Union
since August 1, 1986, by departing from existing
rates of pay and benefits without first consulting
with the Union, and by attempting to bypass the
Union on September 30, 1986, through Louder-
milk's letter to the former R & L employees.14
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge as modified below and orders that the Re-
spondent, R & L Cartage and Sons, Inc., Fort
Wayne, Indiana, its officers, agents, successors, and
assigns, shall
1. Cease and desist from
(a) Refusing to recall six employees about April
29, 1986, from work suspension.
(b) Reneging on and refusing to abide by a griev-
ance resolution agreement entered into between it
and the Charging Union about May 5, 1986.
(c) Refusing to bargain with Teamsters Local
No. 414 and Local 135, a/w International Brother-
hood of Teamsters, Chauffeurs, Warehousemen and
Helpers of America, AFL-CIO with respect to the
effect on its employees of its decision to close its
operation.
(d) In any like or related manner interfering
with, restraining, or coercing employees in the ex-
ercise of the rights guaranteed them by Section 7
of the Act.
2. Take the following affirmative action neces-
sary to effectuate the policies of the Act.
(a) Make whole the six drivers who were not
timely recalled for an unlawful reason from work
suspension for any loss of earnings they may have
suffered up until they were recalled to work in
mid-July 1986, with interest.
(b) Make whole the members in the unit de-
scribed below who were terminated on August 1,
1986, when the Respondent closed its operations,
normal wages for the period specified in the
remedy section of the judge's decision.
(c) On request, bargain collectively with the
above-named labor organization , with respect to
the effects on its represented employees of its deci-
sion to close its operation, and reduce to writing
14 Accordingly , we reverse the judge 's Conclusions of Law 9, 10, and
11.
R & L CARTAGE & SONS
any agreement reached as a result of such bargain
ing
(d) Establish a preferential hiring list of all em-
ployees in the unit described below following the
system of seniority provided for under the collec
tive-bargaining contract with the Union and, if op-
erations are ever resumed anywhere in Indiana,
offer reinstatement to those employees If, howev
er, R & L Cartage and Sons, Inc were to resume
its operations at its former Fort Wayne, Indiana fa-
cility or at any facility in these areas it shall offer
all the employees in the unit described below rein-
statement to their former or substantially equiva-
lent positions
All full time and regular part-time drivers and
mechanic employees of the Respondent R&L
Cartage and Sons, Inc formerly employed by
it at its Fort Wayne and Bedford, Indiana fa
cilities including all full-time and regular part
time yard helpers, but excluding all office cler-
ical employees, all janitors, all professional em-
ployees, all guards and supervisors as defined
in the Act
(e) Preserve and, on request, make available to
the Board or its agents for examination and copy
ing, all payroll records, social security payment
records, timecards, personnel records and reports,
and all other records necessary to analyze the
amount of backpay due under the terms of this
Order
(f) Mail a copy of the attached notice marked
"Appendix" 15 to each of the employees in the unit
described above who was employed by R & L
Cartage and Sons, Inc at its Fort Wayne and Bed-
ford, Indiana facilities immediately prior to R & L
Cartage and Sons Inc 's cessation of operations on
August 1, 1986 Copies of the notice, on forms pro-
vided by the Regional Director for Region 25,
after being signed by R & L's authorized represent
ative, shall be mailed immediately on receipt, as di
rected above
(g) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent has taken to comply
15 If 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 Nation
al 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
533
The National Labor Relations Board has found
that we violated the National Labor Relations Act
and has ordered us to post and abide by this notice
WE WILL NOT refuse to recall six employees
about April 29, 1986, from work suspension
WE WILL NOT renege on and refuse to abide by
the grievance resolution agreement entered into be-
tween us and the Charging Union about May 5,
1986
WE WILL NOT refuse to bargain with Teamsters
Local No 414 and Local 135, a/w International
Brotherhood of Teamsters, Chauffeurs, Warehouse-
men and Helpers of America, AFL-CIO, with re-
spect to the effect on our employees of our deci
sion to close our operation
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the exer
cise of the rights guaranteed you by Section 7 of
the Act
WE WILL make whole the six drivers who were
not timely recalled for an unlawful reason from
work suspension for any loss of earnings they may
have suffered up until they were recalled to work
in mid July 1986, with interest
WE WILL make whole the members in the unit
described below who were terminated on August
1, 1986, when we closed our operations, normal
wages for a period specified by the National Labor
Relations Board, plus interest
WE WILL, on request, bargain collectively with
the Union with respect to the effects on its repre-
sented employees of our decision to close our oper-
ation, and reduce to writing any agreement
reached as a result of such bargaining
WE WILL establish a preferential hiring list of all
employees in the unit described below following
the system of seniority provided for under the col-
lective-bargaining contract with the Union and, if
our operations are ever resumed anywhere in Indi-
ana, offer reinstatement to those employees If we
resume operations at our former Fort Wayne, Indi-
ana facility or at any facility in these areas we shall
offer all the employees in the unit described below
reinstatement to their former or substantially equiv-
alent positions
All full-time and regular part-time drivers and
mechanic employees of R & L Cartage and
Sons, Inc formerly employed by it at its Fort
534 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Wayne and Bedford, Indiana facilities includ-
ing all full time and regular part -time yard
helpers, but excluding all office clerical em-
ployees, all janitors , all professional employees,
all guards and supervisors as defined in the
Act
R & L CARTAGE AND SONS, INC
Robert Hayes Esq for the General Counsel
Karen S Walker Esq (Boxberger Wernet Swihart Anta
lis & Renz), of Fort Wayne, Indiana , for R & L Cart
age and Sons , Inc and BVZ Enterprises, Inc
Stephen M Gentry Esq, of Indianapolis Indiana for
Schaller Trucking Corporation and John V Louder
milk
Daniel C McCarthy Esq, of Indianapolis Indiana , for all
the Respondents
Dan Chenault, of Bedford Indiana
DECISION
STATEMENT OF THE CASE
JOHN H WEST, Administrative Law Judge Unfair
labor practices were filed against R & L Cartage and/or
R & L Fleet Service and/or Schaller Trucking Corp, as
joint employers in Cases 25-CA-18023-1 and 25-CA-
18023-2 both on 27 May 1986 t by the Teamsters Local
No 414, a/w International Brotherhood of Teamsters
Chauffeurs Warehousemen and Helpers of America
AFL-CIO (the Union) A consolidated unfair labor prac
tice complaint issued on 9 July in the above described
cases, alleges among other things, that Respondent
Schaller Trucking Corporation (Schaller) controls the
labor relations policy of Respondent R & L Cartage and
Sons Inc (R & L) and adminstered a common labor
policy with R & L for the employees of R & L, that
Schaller and R & L have been joint employers of the
employees of R & L that on 22 June Schaller, acting
through its owner and president John Loudermilk un
lawfully warned its employees that they would be dis
charged or they would not be recalled from disciplinary
layoff and Respondents would not consummate a collec
tive bargaining agreement if the Union2 did not concede
to demands made by Respondents and if the Union did
not withdraw its unfair labor practice charges against the
Respondents 3 that since on or about 29 April Respond
ents have unlawfully failed and refused to recall six
named employees' because these employees among
i All dates are in 1986 unless otherwise stated
2 The allegation includes Teamsters Local No 135 which as asserted
in a subsequent complaint assisted Local No 414 in the administration of
its representation of the employees in the involved unit as described
infra
8 At the hearing the General Counsel amended this complaint to
allege that on 4 February 1987 Respondents interrogated R & L employ
ee Toni Hardesty in violation of Sec 8(axl) of the National Labor Rela
tions Act (Act)
4 Gary Gase Charles Quinn Gail Miller Shabby Monssawalla
Norman Beeks and Michael McKee The involved unit which is repre
sented by the Union consists of all full time and regular part time truck
drivers and mechanic employees of the Respondent R & L at its Fort
other things, filed grievances against the Respondents
and that on 5 May R & L reneged on and refused to
abide by a grievance resolution agreement entered into
between the Respondent R & L and the Charging Union
providing inter alia that the Respondent R & L would
reinstate to their employment those employees named in
footnote 4 and that the Respondent R & L would pay to
each said employee backpay as agreed on between the
Respondent R & L and the Charging Party Union In
their separate answers R & L and Schaller deny the
commission of any unfair labor practice and they deny
that they are joint employers
Unfair labor practice charges were filed on 8 August
by the Union in Cases 25-CA-18171-1 25-CA-18171-2,
and 25-CA-18171-3 against R & L and/or BVZ Enter
prises, Inc (BVZ) and Schaller These three charges
were amended on 19 September to among other things,
change the name of the employer to Loudermilk an indi
vidual, Schaller, R & L, BVZ Danny Chenault an mdi
vidual as individuals, joint employers and alter egos A
consolidated unfair labor practice complaint was issued
on 22 September in all five of the above described cases
alleging that Schaller, R & L, and Respondent BVZ con
stitute a single integrated business enterprise, a single em
ployer, and alter egos that on 1 August, Schaller and R
& L unlawfully ceased operations at the aforementioned
Fort Wayne and Bedford facilities and discharged the
employees because, inter alia the Union would not grant
the above described concessions and because certain of
the employees cooperated with the Board by giving tes
timony and that on I August Respondents reopened and
resumed the operations without prior notice to the Union
and without having afforded the Union an opportunity
to negotiate and bargain Schaller filed an answer deny
ing that it committed any unfair labor practice and de
nying the above described allegations regarding single in
tegrated business enterprise single employer, joint em
ployer and alter ego
Unfair labor practice charges were filed by the Union
on 19 September in Cases 25-CA-18171-4 and 25-CA-
18171-5 against the employers described in the amended
charges treated in the next preceding paragraph An
amended consolidated unfair labor practice complaint
was issued on 31 October in all seven of the aforemen
tioned cases alleging additionally among other things
that Loudermilk is, and has been at all times material an
individual proprietorship doing business under the trade
name Schaller Trucking Corporation that Respondent
Danny Chenault doing business under the trade name
DC & Son Trucking Inc (Chenault) and Schaller, and
Loudermilk exercised control over the labor relations
policy of Chenault and administered a common labor
policy with Chenault for the employees of Chenault that
the Respondents have been joint employers of the em
ployees of R & L, that on 1 August BVZ and Chenault
were established as disguised continuations of R & L,
that Respondents are alter egos and a single employer,
Wayne and Bedford Indiana facilities including all full time and regular
part time yard helpers but excluding all office clerical employees all
janitors all professional employees all guards and supervisors as defined
in the Act
R & L CARTAGE & SONS
that on 1 August, Chenault and BVZ entered into an
agreement with the other Respondents to acquire the
business operations of R & L including the transporta
tion of goods and materials for General Motors Corpora
tion (GM) and since that date, have been engaged in the
same business operations at the same location providing
the same service to substantially the same customers that
but for the acts and conduct described below Chenault
and BVZ would have employed as a majority of their
employees, individuals who were previously employees
of R & L, that BVZ and Chenault have continued the
employing entity and are a successor of R & L, that be
cause of the acts and conduct described below a demand
for recognition and bargaining by the Charging Union
on the BVZ and Chenault would have been futile, that
on 1 August the Respondents ceased certain operations
at the Fort Wayne and Bedford Indiana facilities and
unlawfully discharged specified employees, that BVZ
and Chenault on and after their 1 August resumption of
the operations of the Respondents, failed and refused to
employ and/or reinstate the aforementioned discharged
employees and/or acceded to discharge of said employ
ces, that the discontinuance of R & L s operations, the
discharge of the above described employees, and the re
sumption of operations by BVZ and Chenault were done
without prior notice to the Charging Union and without
having afforded the Charging Union an opportunity to
negotiate and bargain as the exclusive representative of
the Respondents employees with respect to such acts
and conduct and the effects of such acts and conduct
and that on or about 30 September, Loudermilk bypassed
the Union and dealt directly with employees in the unit
by soliciting employees to work for Chenault at reduced
wages In their separate answers, Respondents deny the
commission of any unfair labor practice and they deny
the complaint allegations regarding joint employers dis
guised continuations alter egos single employer, and
successor
A hearing on these consolidated cases was held before
me on 2-5 February 1987 Briefs were filed by the Gen
eral Counsel and Respondents in April 1987
On the entire records in this case and from my obser
vation of the witnesses and their demeanor I make the
following
FINDINGS OF FACT
I JURISDICTION
At all times material Schaller, which is incorporated in
Indiana, has maintained its principal office and place of
business at Indianapolis, Indiana and is and has been en
gaged in the transportation of freight and commodities in
interstate commerce At all times material R & L, which
is incorporated in Indiana, maintained its principal office
and place of business in Fort Wayne Indiana and vari
ous other facilities in the State of Indiana inclusive of a
Fort Wayne facility and a Bedford, Indiana facility and
is and has been engaged at these facilities in the transpor
tation of freight and commodities under contract to
Schaller At all times material BVZ, which was incorpo
5 Transcript corrections are noted and corrected
535
rated in Indiana in 1982, maintains its principal office and
place of business at Fort Wayne, Indiana, and is and has
been engaged in the transportation of freight and com
modities as agent of Schaller, R & L and Loudermilk 6
At all times material Chenault has maintained its princi
pal office and place of business as here pertinent at Bed
ford, and it is engaged in the transportation of freight
and commodities as an agent of Schaller R & L and
Loudermilk 'i The record reflects, and I find, that Re
spondents Schaller R & L, BVZ, and Chenault are each
individually and collectively engaged in commerce
within the meaning of Section 2(2), (6) and (7) of the
Act
II THE LABOR ORGANIZATION
The Charging Union and Teamsters Local Union No
135 are labor organizations within the meaning of Sec
tion 2(5) of the Act
III ALLEGED UNFAIR LABOR PRACTICES
A Background Facts
Loudermilk purchased Schaller Trucking Corporation
along with its certificates of public convenience and ne
cessity in 1973 8 At the time there were about eight dif
ferent agents hauling under the Schaller authority Lou
dermilk began to hire other agents including R & L a
nonunion hauler at the time, to replace another agent of
Schaller R & L was unionized 1 year later in 1978
Loudermilk testified that under the ICC authority and
the Federal Department of Transportation (DOT) regu
lations, the certificate holder is required to (1) check the
drivers record periodically (2) make sure proper driv
ers logs are maintained (3) make sure the equipment uti
lized has safety checks (4) make sure the drivers are
properly trained (5) make sure that the rules and regula
tions pertaining to safety conditions are followed, (6)
maintain the cargo property and public liability insurance
coverage, (7) bill the shippers and (8) pay its agents
Loudermilk also testified that regarding the ICC certifi
cate and under DOT regulations he has the authority to
inform the agent that a specified driver or drivers cannot
operate a truck with Schaller s placard on it that while
he believes he could he does not hire any of the agent's
employees that except for 22 June, treated infra he has
never participated in any of R & L s contract negotia
tions, that neither he nor anyone else from Schaller ever
participated in any grievance, contract negotiation or
anything to do with labor relations of R & L and that
he neither authorized nor precluded R & L utilizing
Schaller s letterhead for any of their labor relations pur
poses
6 At the hearing Respondents amended their answers to admit among
other things this allegation
r This allegation was also admitted at the hearing As indicated in fn I
supra Chenault does business as DC & Son Trucking Inc which as
separately alleged in the amended consolidated complaint and as further
amended in the hearing was incorporated in Indiana
8 The authority had been granted by the Interstate Commerce Com
mission (ICC) and the Public Service Commission of Indiana
536 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
R & L was incorporated in 1974. Its president, Robert
Vande Zande, testified that when R & L began hauling
for Schaller, he, Robert Vande Zande, leased the tractors
and the trailers, and managed the entire operation includ-
ing the hiring and the firing; that Schaller supplied the
operating authority and the insurance and for that it re-
ceived 18 percent of the revenues; that as business grew
Loudermilk built a terminal at Bedford and he advised
Robert Vande Zande that R & L could use the terminal
free of rent as long as it paid the utilities; that R & L
paid for the gasoline, the telephone charges, equipment
repairs, and eventually the cost of leasing vehicles; that
the operation in question involved having (1) a local
driver (spotter) go from the Bedford terminal to the
nearby GM Central Foundry where he would pick up a
load of castings and bring it back to the Bedford termi-
nal, (2) an over-the-road driver take the load from Bed-
ford to the Fort Wayne terminal where he dropped that
trailer and hooked up to another trailer which he re-
turned to Bedford, and (3) the Fort Wayne driver take
the load to wherever it was going, i.e., Flint, Lansing, or
Detroit, Michigan, where he would unload, then reload
empty bins or scrap which was remelted to make more
castings, at another point, and return to the Fort Wayne
terminal; that R & L would type the documentation for
the load at Fort Wayne and a copy would go to
Schaller's office which in turn would forward a check to
R & L the following day; that the documentation would
be sent to the Bedford terminal from where the bills
were sent to the customer; and that the Schaller letter-
head was used at the Bedford terminal to bill customers,
mainly GM, for the hauling done by R & L. A certifi-
cate of use of an assumed name dated March 9, 1977, Re-
spondents' Exhibit 5, indicates that R & L conducts busi-
ness under the following name other than as shown in its
articles of incorporation: Schaller Trucking Company,
Inc.
R & L's first 5 years of operation were very profitable.
It started with 2 tractors and at the peak of its operations
it had about 50 trailers and 20 tractors. Deregulation of
the motor carrier industry and high costs were cited as
reasons, among others, Robert Vande Zande for the de-
cline of R & L's profits.9 Although at one time R & L
hauled between 45 and 50 loads a day out of the afore-
mentioned foundry, by the mid-1980s it was only han-
dling about 4 or 5 loads a day of the involved traffic.
Sometime in 1984 Schaller lost the movement of castings
to the GM hydramatic plant located at Willowrun,
Michigan, when the routing was changed to another car-
rier that was willing to handle the movement for less
money than Schaller using R & L. The movement repre-
sented $1 million in revenue a year, which was a signifi-
cant portion of R & L's overall annual revenue. Schaller
made a number of loans to R & L on Schaller Trucking
Corporation checks. These advances were paid back out
of the commissions R & L received from Schaller. Asser-
9 He also asserted that the Union "played a big part" in R & L's de-
cline alleging "[W]e couldn't control the costs. Everytime we got slow in
come all the grievances, all the drivers wanted free money. It just wasn't
there."
tedly all the loans except the last one, treated infra, were
paid back.
As noted above Robert Vande Zande testified that he
managed R & L's entire operation. When he testified that
Loudermilk did not control the day-to-day operations of
R & L, he was shown an affidavit he gave to an agent of
the National Labor Relations Board (Board) on 3 July
(G.C. Exh. 12, par. 2, pp. 1 and 2):
John Loudermilk as president of Schaller has com-
plete authority over the day to day operations of R
& L including control over the hiring and the em-
ployment of the drivers. Schaller is paid 18% of the
gross revenues of R & L.
Robert Vande Zande testified that this portion of the af-
fidavit was not correct;1° that he read the affidavit
before signing it; that he had his attorney, Bruce Box-
berger, also read the affidavit and Boxberger "said it's all
right to sign"; that he and Boxberger told the Board
agent that the above-described portion of pages 1 and 2
of the affidavit was incorrect; and that he and Boxberger
had the Board agent add paragraph 6 on pages 3 and 4
of the affidavit which reads as follows:
Schaller actually exercises control over the hire of
drivers only in the areas of driver qualifications
since Schaller pays for the insurance coverage.
With respect to Robert Vande Zande's above-de-
scribed affidavit, Boxberger testified as follows:
I reviewed, read, the affidavit, and Paragraph 2,
to me, did not look right. I did not recall Mr.
Vande Zande saying it quite as indicated in the affi-
davit, and I conferred then with Mr. Vande Zande
concerning Paragraph 2.
Specifically on the issue of control, or any ele-
ment of control, exercised by Schaller over R & L,
and I-again, as I say, was conferring with Mr.
Vande Zande and indicated to him that, from my
knowledge, and isn't it true that basically the con-
trol that Schaller exercises with respect to your em-
ployees, is one in the area of driver qualifications
because of insurance.
And Mr. Vande Zande confirmed that under-
standing to me, and I then talked to Mr. Brase [the
Board agent who took the affidavit], and I said, to
Mr. Brase, that I did not think that Paragraph 2 re-
flected reality, and it was incorrect, and I asked Mr.
Brase to add a paragraph explaining the situation as
far as the element of control.
Mr. Brase then added Paragraph 6.
Q. Okay. Do you have any recollection as to
whether Mr. Brase agreed to take any action with
regard to Paragraph No. 2?
11 He also testified that the second and third sentences of par. I on p. 1
of the affidavit are not correct where it is stated: "R & L leases the trac-
tors from Schaller Trucking. Schaller owns the trailers and owns the
Bedford terminal," because he and R & L owned the tractors and trailers
and it leased them to Schaller.
R & L CARTAGE & SONS
A I believe I was under the impression that
Paragraph 2 would be stricken from the affidavit
but my recollection of that isn t any better than
that I can t say for sure 11
Boxberger also testified that he represented R & L
about 12 years including their labor contract negotia
tions grievances, and things of that nature, that neither
Loudermilk nor Schaller was ever involved in those ne
gotiations that he never received any instructions from
Loudermilk or anybody involved with Schaller regard
ing R & L s labor negotiations, that he negotiated several
contracts for R & L with the Charging Union, that he
handled a number of grievances for R & L, that he re
ceived his instructions from Robert Vande Zande con
cerning the labor negotiations, and that he never had any
contact with Schaller or Loudermilk for Schaller
Jerry Terry, who was employed by R & L as a spotter
out of the Bedford terminal, testified that while he
worked for R & L, Robert Vande Zande or his son
Bruce directed him, Jerry Terry to do certain things at
the Bedford terminal stating that John [Loudermilk)
wants this cleaned up, wants these trailers moved off of
here, and over there , that Chenault would come into
the Bedford terminal when Vande Zande was not there
and say Well, John told me to come over here and do
this or this , that he was told to move unusable
trailers around by Robert or Bruce Vande Zande per the
instructions of John Loudermilk three or four times in
that last 4 years, and that the things he did at the behest
of one of the Vande Zandes for Loudermilk which read
sly came to mind involved the maintenance of the real
estate the facilities or the cleaning up of those areas
Dennis Arnold, a business agent with Local 414 spon
sored the General Counsels Exhibit 2 which is a collec
tive bargaining agreement between R & L and Local 414
effective from 16 January 1985 through 15 January 1988
The agreement was entered into 25 March 1985 and
made retroactive to 16 January 1985 In addition to pro
viding for ongoing negotiations regarding language it
provided for an annual wage reopener commencing 15
January 1986 and 15 January 1987 for the years in ques
tion In September and October 1985 R & L requested
wage concessions from the Union involving an approxi
mately 20 percent wage reduction for the drivers The
Union commissioned a certified public accountant to ex
amine R & L s financial records
The following is the text of the letter forwarded to the
Union from the certified public accountant on 22 No
vember 1985 (R Exh 1)
Pursuant to your request I met with Pattie
Vande Zande of R & L Cartage & Sons, Inc at the
company offices, 3220 Coliseum Blvd on Thurs
day November 21 1985 The purpose of the meet
mg was to examine certain financial information to
11 By subpoena dated 26 January 1987 Schaller attempted to have
Brase appear at the hearing here on 4 February 1987 The petition to
revoke the subpoena ad testificandum was granted because under Sec
102 118 of the Board s Rules and Regulations for a Board employee to
testify prior written consent must be obtained from the General Counsel
and such consent was not obtained
537
determine if the company s contention that they
were experiencing severe financial hardship was
warranted
Pattie Vande Zande was extremely cooperative
and made available to me all documents, records
and financial statements that I requested
During my review of the financial date [sic] I
noted the following
1) The Corporation's revenues and profit (loss)
has been as follows
1984 1983
To October 31
1985
Gross revenues 2 217 136 2 266 716 2 523 309
Profit (loss) (59 104) (15 743) (91 289)
2) At October 31 1985 the balance sheet indicat
ed a negative net work of $194,294, which means
that the company is technically bankrupt
3) The financial statements issued by the compa
ny s independent CPA s have a Going Concern
paragraph in their audit report This is normally in
serted to alert readers that the company is experi
encing financial problems and without some change
in operations may not survive
4) Cash flow appears to be a real problem Ac
counts payable have increased significantly since
January 1 The company has also been advanced
some $38 000 by John Loudermilk to make payroll
in the last few weeks
5) The company s fleet appears to be rather old
and maintenance costs are eating them up Mainte
nance for the current year to October 31 is $335,000
compared to $146,000 for all of last year
6) Their insurance is up for renewal in early
March and I would expect this to increase $50 000
to $60 000
I believe that the company s contention they are
experiencing severe financial hardship is well
founded
Robert Vande Zande subsequently met with Walter
Lytle the secretary treasurer of the Union who accord
ing to Robert Vande Zande indicated that he felt sure
that some concessions could be granted and that he
would do everything in his power no guarantees but he
was willing to work with us Robert Vande Zande tests
fled that he told Loudermilk what Lytle said and Lou
dermilk loaned R & L $250,000 to pay off R & L s loan
on its trailer and repair its equipment 12 Loudermilk
took title to R & L s trailers and a security interest on R
& L s tractors and Robert Vande Zande s two homes R
& L ordered engines for the tractors, bought $10000
worth of tires and started to repair the trailer roofs
Lytle then advised Robert Vande Zande that the Union
could not agree to R & L s proposal to reduce wages
12 At one point Robert Vande Zande testified when asked if the
money was owed to Loudermilk or Schaller that to the best of his
knowledge it was owed to Loudermilk
538 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Boxberger sponsored Respondents' Exhibit 6 which is
a letter from Local 135 dated 28 February 1986 indicat-
ing, as here pertinent, that "this Local Union is not inter-
ested in any concessions."
Robert Vande Zande testified that General Counsel's
Exhibit 13 is a mistake in that the secretary at the Bed-
ford terminal should not have used the Schaller letter-
head to notify specified R & L employees of their hours
effective 14 January 1986; that he never authorized his
secretary to use Schaller stationery for this purpose; and
that Schaller's stationery was available at the Bedford
terminal because that was where all the billing was done
and R & L was authorized by Loudermilk to use
Schaller's stationery on its behalf with GM. The in-
volved secretary, Hardesty, testified that paper with the
Schaller letterhead and paper with the R & L letterhead
were available in the office in the Bedford terminal; that
when she was instructed to use the R & L letterhead she
did; and that she typed the above-desribed notice (G.C.
Exh. 13) on Schaller letterhead because it was handy and
she more than likely was not instructed to use R & L's
letterhead.
Arnold sponsored two exhibits, namely, General
Counsel's Exhibits 20 and 21, which are notifications the
Union received in the mail dated 13 February and 16
May, respectively. Both are on R & L letterhead and
both are initialed by Bruce Vande Zande. The former
states "Dick Uptgraft is being terminated from R & L
Cartage and Sons/Schaller Trucking for the reason of
lack of work. Dick's last day driving was 2-12-86." The
latter states "Everett Davis is being terminated from
Schaller Trucking/R & L Cartage for the reasons of per-
sonal back problems."
Paul Mills Sr., a retired Internal Revenue Service
agent , testified that during the period of September
through approximately December 1985 he conducted,
before he retired, an examination of the employment
taxes for Schaller. With respect to the examination, he
testified as follows:
By Mr. McCarthy:
Q. Mr. Mills, during the course of your examina-
tion, did you have an occasion to consider whether
or not the employees of Schaller Trucking Corpora-
tion's agents were employees of Schaller Trucking?
A. No, because Schaller Trucking- I've made a
determination that Schaller Trucking was in the
nature of a broker, and that he had multiple compa-
nies within Schaller Trucking.
He explained to me , or I'm sorry. Mr. Louder-
milk explained to me that he owned the franchises
throughout the State of Indiana, and that when a
trucking company, or a transport carrier, was estab-
lished, that franchise was assigned to that company,
so that this was a separate company, then, from
Schaller Trucking.
And I determined that the employees that
Schaller Trucking Company.was reporting on their
941 were Schaller Trucking employees.
The employees of these multiple companies, I did
not examine. So therefore, I really couldn't say that
they were Schaller Trucking agents.
I would assume that they were the agents or
working with these separate companies.
Q. Okay.
A. That's a usual procedure, you know.
Mills, after the tax examination, recommended no change
in Schaller's employment tax for 1982, 1983, and 1984.
Mills believed his district director accepted the recom-
mendation "because there were no reprecussions [sic] or
a rebuttal that came back to . . . [Mills] signifying other-
wise."
R & L drivers Richard Borckardt and Quinn were
fired assertedly because they intentionally damaged
R & L's trucks while operating them over the highway.
Allegedly the former ruined a transmission and the latter
jack-knifed into a ditch.13 Before these incidents, the
former worked for R & L for 6 or 7 years and the latter
worked for R & L for 4 to 5 years. Both drivers filed
grievances and, according to Robert Vande Zande's tes-
timony, R & L owed backpay.
Subsequently, April 1986, the Union was notified by
R & L that nine of its drivers were laid off because they
were declared uninsurable by the liability insurer of
motor vehicles after their driving records were re-
viewed. Borckardt and Quinn were among the nine.
R & L's attorney, Boxberger, forwarded the following
letter to Robert Vande Zande on 5 May (G.C. Exh. 3).
Re: Insurance Coverage
Dear Van:
Enclosed you will find a copy of the letter I've
received from the insurance company concerning
six drivers. These drivers can now come back to
work inasmuch as they are now covered by insur-
ance.
Denny Arnold is receiving a copy of this letter,
as well as a copy of the insurance company's re-
sponse. Both of you should note that in three
months another check will be made by the insur-
ance company.
The enclosed letter was from the integral Insurance
Company dated 29 April to International Risk Place-
ment, Inc. and it reads as follows:
In follow-up to Greg's letter of April 2, 1986, we
received contact from Mr. Denny Arnold, a repre-
sentative of the Teamster's Union regarding our
driver exclusions.
As a result, I agreed to allow the following driv-
ers to remain on a probation basis:
Michael Mckee Norman Beeks
Shabbir Morissawalla Gary Gase
Charles Quinn Gail Miller
We agreed that MVR's would be ordered in 3
months and any further violations on any of these
drivers would require them to be placed in a non-
driving capacity. In the case of Mr. Beeks, he
13 As treated infra, Loudermilk subsequently referred to R & L's trac-
tors as "junk."
R & L CARTAGE & SONS
claims the 8/30/85 accident was not his fault We
will need a copy of the police report
Please ensure that the insured understands these
terms
Arnold testified that between May 1983 and May 1985
McKee filed 10 grievances against R & L, Gase filed 26,
Quinn filed 16, Miller filed 16, Morissawalla filed 6, and
Beeks filed 3 The number of grievances filed by the first
four drivers named above was said by Arnold to be
above average for the involved period 14 Arnold also
pointed out that McKee was the steward for Local 414
in Fort Wayne and Miller was the steward in Bedford
Arnold advised the insurer that he was advised that
Beeks accident , the reason he was initially declared un
insurable , was not Beeks fault
The Union received a self explanatory letter from Box
berger on 5 May (G C Exh 4), which , as pertinent,
reads as follows
Re R & L Cartage/Teamsters-Labor Management
Meeting of May 5, 1986
Gentlemen
We met in my office on Monday , May 5 1986
The meeting was attended by the three of us and
stewards Terry and McKee representing Locals 135
and 414 , respectively We reviewed various con
tractual language changes, and we will continue to
meet on this subject , however , we also did meet
and confer with respect to various pending gnev
ances as follows
1 Insurance Related Grievances
I have given to you the insurance company's re
sponse and the six drivers in question will be put
back to work immediately It appears that the union
continues to maintain that the Company has a mon
etary obligation for back pay , etc The Company
disagrees If agreement cannot be reached on this
subject the matter will be taken to arbitration By
mutual agreement , the Tuesday , May 6 1986, panel
date has been continued This continuance would be
for all matters otherwise scheduled before the panel
including the Janes grievance
2 Messrs Acheson , Miller , and KcKee will be
paid by the end of this week , and Messrs Parks,
Uptgraft and McIntyre by the end of next week
Evidently there is a discrepancy on what has been
paid Charles Quinn Van informs me that he has
given Mr Quinn a breakdown I requested that Van
forward Mr Young a copy of this paperwork for
review
3 We have pending Borckardt Grievance No
88454 This is put on Company hold There appears
to be some discrepancy in Mr Borckardt s driving
record I ask that Van forward this information to
me for review and dissemination to the Business
Agents
14 Loudermilk testified that he did not know whether any of these
drivers filed a higher than average number of grievances and that he
never knew and never cared about how many grievances the Union filed
against R & L
539
By letter dated 7 May (G C Exh 6 ), Boxberger ad
vised the Union , as here pertinent , as follows
Gentlemen
Per our negotiation session of May 5 , 1986, I
write you this letter
Please note that my client , Mr Vande Zande, is
receiving a copy of this letter I would specifically
ask that he send to all reinstated drivers a registered
letter requesting that they come back to work
On 12 May Loudermilk went to Local 414 to discuss
Schaller Courier Corporation Robert Vande Zande in
troduced him to the union officials While there Louder
milk brought up the R & L situation to the union offi
cials and he asked what happened on the concessions
The union officials advised Loudermilk that R & L s
drivers were not interested Loudermilk then offered to
speak to R & L s drivers The union officials indicated
that they were not interested
However, the next day , 13 May , the Union forwarded
the following (R Exh 2)
Mr John Loudermilk
Schaller Trucking Corp
5702 W Minnesota St
Indianapolis, Indiana 46241
Mr Robert Vande Zande
R & L Cartage
3220 Coliseum Blvd W
Fort Wayne Indiana 46808
Sirs
Following our meeting of May 12, 1986 wherein
you both pointed out problems with your company
regarding non union competition rates being cut
losses of accounts of Schaller Trucking etc, we at
Local 414 [sic ] further discussions regarding our
mutual problems as listed above
We decided that , rather than refuse you gentle
men's offer to accept contract concessions , it would
be in the best interest of our members your em
ployees to accept Mr Loudermilk 's offer to hold a
joint meeting between representatives of Local 414
Mr Vande Zande , Mr Loudermilk and the
member/employees and allow Mr Loudermilk to
explain the state of the business difficulties
Will you both please advise me of some available
dates you have for such a meeting
Arnold met with Boxberger at the latter 's office on 20
May to negotiate with respect to the language in the col
lective bargaining agreement During the meeting Box
berger was asked why the aforementioned laid off driv
ers had not yet been recalled Arnold questioned Box
berger s authority to negotiate for R & L Boxberger
then telephoned Robert Vande Zande initially utilizing a
speaker phone while Arnold was in the same room
Arnold gave the following testimony about what then
transpired
A Mr Boxberger asked Mr Vande Zande if-
why-why the drivers had not been returned to
540 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
work. And there was a period of silence, and Mr.
Boxberger said, well, I'm quite concerned, seeing
that we issued a letter releasing those drivers to
return to work, and they have not been returned to
this day. He was quite concerned about the liability
for back pay.
Q. Did Mr. Boxberger make any comment about
spinning his wheels?
A. Yes. After that, he asked Mr. Vande Zande if
he wanted him to continue negotiations on behalf of
R & L Cartage. And there was another period of
silence, and Mr. Boxberger then hung up, and came
back to the table, and said there was no sense [in]
him sitting there spinning his wheels at $75.00 an
hour if the company's not going to agree to what
he's there for.
Arnold testified that he telephoned Robert Vande
Zande on 22 May and asked him why the laid-off drivers
had not been returned to work; and that Robert Vande
Zande stated that he was waiting for a decision from
Loudermilk to return these drivers to work, and "Lou-
dermilk was reviewing the situation, the whole insurance
matter." Robert Vande Zande also advised Arnold
during this telephone conversation that Boxberger had
full authority to negotiate the contract on Vande Zande's
behalf.
On 23 May Boxberger forwarded the following letter
(G.C. Exh. 5) to the Union:
Re: R & L Cartage/Insurance Coverage
Gentlemen:
This letter is sent to inform you that Mr. Louder-
milk is reviewing the insurance company represent-
atives in an attempt to resolve this situation.
Mr. Loudermilk informs us that we should have
some type of an answer by June 5, 1986. I will
advise as soon as I know something further.
Robert Vande Zande testified that he and Loudermilk
met on the night of 21 June; that he was getting ready to
file chapter 11; that Loudermilk came to see if there was
anything he could do to save the account; and that
during the meeting authorized Loudermilk to tell the
drivers the following evening, as treated infra, that if
they formed a new corporation, R & L would cease to
exist.
On the evening of 22 June Loudermilk spoke to R &
L's employees at Local 414's hall. Also present were
Mrs. Loudermilk, Robert and Bruce Vande Zande,
Lytle, Arnold, and David Young, who is a business
agent for Local 135.15
The following are pertinent portions of Loudermilk's
presentation:
So now, come January 1, and I keep telling them
they're going to have to cut rates, and he [Robert
Vande Zande] keeps saying we'll have to have
15 Because Bedford is in Local 135's jurisdiction, its request that R &
L drivers at Bedford be transferred to its jurisdiction was granted. R & L
drivers Quinn, Gase, and Miller are members of Local 135. Local 135's
representative, Young, assisted in negotiations with Boxberger.
more money, I suggested to him that he come to
you guys and ask for concessions of some kind or
other, and explain the case to you, that we cannot
survive, unless we're willing to all sacrifice some-
thing.
Well, he thought that he had got the message
across, and that we were going to be able to do
that. So, I loaned him a quarter of a million dollars
to get through, into this year, on the basis that we
would get the holes fixed in our trailers, put some
brakes on them, and get on down the road, and
hopefully, some of our competitors would go broke
by then, and you guys would all chip in, and we'd
get a line of communication. We would all work to-
gether, and we'd get on down the road. Well, that
hasn't happened. A quarter of a million dollars has
disappeared. It went right through the roofs of
those trailers, and through the drive lines and ev-
erything, and much of that equipment that you're
struggling to get up and down the road, and it's all
evaporated.
So now we're at a point where something's got
to give. I have to make a decision who is going to
be the agent that hauls the freight in and out of
Bedford. And I'm not going to invest any more
money in a losing cause, because it becomes-it be-
comes ridiculous.
Well, in the meantime, we're already-we've got
unfair labor practice charges, we've got grievances,
we've got a complete lack of communications be-
tween this whole group of people who is moving
my freight out of Bedford to start with. So, it's
compounded into this present meeting. And quite
frankly, if it hadn't been-I discussed this with your
Union officials about a month or so ago, and there
wouldn't have been any need for this meeting, be-
cause I was planning on turning your moves over to
another company, as of June the 1st, anyway. There
wouldn't have been any of you here at this meeting.
And these guys are in the hot seat. There is no
way for them to solve my management problems.
I've been around long enough to know that. There
is no way for the union to solve my management
problems. And I suggested to them that we have a
meeting, and I present it to you, and-to give you a
picture of my side, and to present to you an alterna-
tive to just giving somebody else the freight. Be-
cause I wanted to make sure you understood that
the move belongs to me and Schaller Trucking Cor-
poration, not to R & L Cartage, or not to Robert
Vande Zande. That move is my move. That termi-
nal is my terminal. Those trailers are my trailers.
And I just wanted to make sure that you under-
stand that all the investment; all the capital, at the
beginning, was mine. And now then, Van has 10 or
12 years of his equity capital investment poured
right in there. He also has a mortgage on his house
and cottage that's poured in there. We have-I
have combined net of somewhere around three mil-
lion bucks, that a lot of its is [sic] hinged right
R & L CARTAGE & SONS
down there with this particular move and my other
businesses Van has a combined net probably, of a
half of million dollars And I didn t ask him for per
mission to expose some of this but this is the way it
is, and it our role here to try to figure out do we
survive
We have a group of people, we have Bruce and
Vande Zande that moves freight as efficiently as
anyone does in the United States You have a cus
tomer that s paying us around two, two and a half
million dollars a year to move that freight I have
the capital to buy, work with it, or do whatever I
want if somebody can show me that we re all
going to work together, and there 11 be some return
that will at least get that investment back And
these are some of the things that I asked to be able
to present my own case to the guys, and quite
frankly, they-they were not very interested in
giving me the floor to do that because they have
heard that shit now so much here lately about con
cessions , that they realize that you people are-or
their membership don t want to hear it either And
so I told them the alternative was that none of you
would be driving after June 1st anyway
And then I got a letter back where somebody
here decided that before that happens and we have
that kind of response, then they wanted to know if
I d still be interested I want to thank them for
agreeing to let me get in front of you and talk to
you
Now, the solution is going to be whether or not
we all chip in and make the thing work and the al
ternative then is I in going to try to make it work
all by myself if nobody else in here wants to And
that s-that s where we re at right here today
Do you have any questions? I see you have a
question right here
Employee You want everybody to work togeth
er I been with this outfit for six and a half years
How do you expect us to work together when we
been cheated we been lied to we get taken off the
board fired every other week And I don't know
whose insurance company it was that tells us that
we re uninsurable but we re still not back to work
Now how can-how can you expect us to sit
here and want to help want to give what you need
to keep you going and to keep them going when
all we get s the rotten end of the deal?
Loudermilk Well Integral Insurance is the one
who said that you and five other guys and I1 coun
er drivers could not drive those vehicles, otherwise
our insurance would be cancelled Coastal Truck
Lines run into the same thing, and now the Coastal
drivers are unemployed, because they don t have in
surance
It s because the period of time we re in The two
reinsurance companies that I used to have when I
wrote liability insurance, both went broke Which is
Universal Reid, owned by Armco, and Mission out
in California So that was their decision
541
Now somewhere you guys have pulled an amaz
mg-your Union or somebody got them to turn that
around to where they said we could put you back
to work
Were you the one responsible for the?
Well that s the first time I ve heard of that hap
pening, so that young man right there is the one
who got the insurance company-not even-when
you investigated that, did you-did they ever say
anything about that we were the cause of it or-
Arnold They said they d be willing to put back
six guys immediately, May, whatever it was
Loudermilk Did they justify why they did it in
the first place?
Arnold No
Lytle I think the thrust of his problem is, that
even though the insurance company says they can
go back to work Bob Vande Zande has not put
them back to work And you wonder why you get
grievances He s been notified that these people
were insurable at this point, and they re still off
work, yet today
Loudermilk Well, this has been a period of time
whether or not any of you were going to be work
mg
Employee Can you explain something else? How
come nobody in this room, tha [sic] I know of,
except a few in January, have been paid for their
Christmas and their holiday pay, which is an [sic]
the dadburn contract?
Now here we are six months down the road past
the holidays and we re still waiting to try and get
our money, that is owed to us
Loudermilk There is no money I can answer
that
Employee Aren t you asking for concessions
again?
Employee There s a bunch of us that s got vaca
tion time we can t even get I ve got seven years in,
and I can t get a vacation
Loudermilk There s no money to pay-
Employee You got money to pay the damn guys
that are driving every day What about the guys
that s already put their time in?
Loudermilk Well but if you don t pay those
guys, there won t be any customers because the
freight won t move
Employee There you go again (Inaudible)
Loudermilk You ve got a good point there
Employee Well, we got the personality part
cleared away how much is it going to cost us?
Loudermilk That s the most sensible question
brought up What I-what I propose to do, that
we-which I haven t even discussed this with your
union officials, but start an ESOP or some kind of
a stock ownership program where you guys have a
floor, and then you get whatever it costs to move
that freight
Employee Who s going to do the book work?
542 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Loudermilk: You do the book work.
Employee: (Inaudible.)
Loudermilk: Got no problem. You can keep the
books. Question here?
Employee: Yeah. You was talking about the
upkeep of these trucks. This upkeep of these trucks
is going right back into R & L Fleet Services.
Loudermilk: Well, first of all, we get rid of all
those trucks. Then you have no problem. We'd
have the fixed cost of the rental trucks.
Employee: Well, this is in the past, where the
money goes.
Loudermilk: Well, we quit talking about the past.
This man brought it right to a head. Who cares
about the past? What is it going to cost?
Employee: Some of us have lost seven, eight,
nine thousand dollars. We're waiting to hear a word
about the past.
Employee: Yeah, some of us is out of work,
kicked off the board. (Inaudible.) And you're won-
dering why we're worried about the past.
Loudermilk: No, I didn't say that.
Lytle: I got a question. I've got a question I've
got to ask at this point. What was that deal you just
threw out? You're going to do what?
Loudermilk: Provide where the group would
own the company. They'd be their own corpora-
tion.
Lytle: But all the money's going to go in, and
what's left after operating costs, you're going to let
them divide up as wages? Is that the way it's-
Loudermilk: No. No, no. Put a floor in there on
the wages . Put a 16 , 18 cents a mile floor. I'll stand
any loss in excess of that, and then they can have
anything that would accumulate in excess of that on
up.
In other words, I would make the investment.
We do away with all the unknown costs, which is
the tractors, the junk tractors, and we use the Gelco
tractors of Ryder tractors, and go from that point.
Employee: Then we'd be part of R & L Cartage?
Loudermilk: R & L would cease to exist.
Employee: I was going to say, anytime, if we
was part ownership of R & L, anytime you wished
to have it cease to exist, our stock and everything
would be worthless.
Loudermilk: That's right. That's the way it is
right now.
Employee: So it would be into what? Schaller or
what?
Loudermilk: No, we'd form a new corporation,
and you guys would own the corporation. And you
have no risk, other than the difference between the
16 or 18 cents floor, whatever we can do.
Employee: And what about the bids on the runs?
Loudermilk: I'd take care of all that. You mean
the bids on who drives what?
Employee: No. If you got stock into a company,
and let 's say, okay, you bid a run, we're going to
get a percentage of that run, right: Well, if you're
doing the bidding on the runs, you can really bid
cheap , and we 're going to be the losing end.
Loudermilk : But I 'm the one that 's going to be fi-
nancing the whole works.
Employee: We're going to be guaranteed a cer-
tain amount for our time-
Loudermilk: Yes.
Employee : -no matter what?
Loudermilk : Yes. And it's-quite frankly ,. I think
McLean did something like that , and they filed
bankruptcy then again , what , a year later?
Lytle: About a month later.
Loudermilk : A month later . I don ' t know of any
tremendous success in any of these ventures . That's
the same way with the one-Wilson . Wasn't it
Wilson , over in Cincinnati?
Lytle: Wilson, Suburban , Halls.
Loudermilk : Suburban . Now-guys, keep it
down.
The difference between those names we just men-
tioned , was the size and the complexity involved.
We are not that size and it 's not that complex for us
to do it on a smaller scale . I have-I make-that
company right there where you're drinking your
coffee , pays me 600 ,000 bucks a year. I have a little
appliance industry , that I took , with a group just
like this, was hemorrhaging, that we turned--
Lytle: Excuse me a minute . Let's just have one
meeting, so we can hear up here.
Loudermilk : And what I'm saying is, it 's some-
thing that a group this size can make it work, if you
want to. You cannot make it work with a group
like McLean , Halls, and with all the complexity and
all of the size , and all the customers , and all that
bullshit . But we 've got one customer that we have
to please, General Motors Corporation.
Employee: Who's going to run this company?
Loudermilk : You are.
Employee: Where does Van fit in?
Loudermilk : Van's going to be the dispatcher.
Employee: Well, this company-
Loudermilk: Well, now , is there someone here
that can do a better job at dispatching than him and
Bruce?
Employee: Now, wait a minute. You said Van
was going to be dispatcher. You didn 't say anything
about Bruce.
Loudermilk: Well, it's one entity back there. Lots
of blood flows in between them.
Employee: Let me ask you this. What are you
going to do about the labor charges that are filed?
Loudermilk : I'm going to ignore them.
Employee: Why?
Loudermilk: Because I'm more concerned with
moving the freight Monday and keeping the cus-
tomer , or there won't be any place you're going to
get runs from anyway. If we don't have-if we
don't move, and keep the account coming in, there
isn't going to be anything.
Employee: What about the rest of us, though,
that are sitting here, that have lost seven, eight
thousand dollars worth of back wages already, be-
R & L CARTAGE & SONS 543
cause some insurance company said no, and then
they say yes, and then the company refuses to put
us back to work, because the man says, well, I don t
know what was said, or this and that
He won t show up at meetings or anything else
But still yet you want us to forget everything, and
say, hey, it s cool we're going to go back to work
and we re going to make everything work
Well, I personally can t do that I in not going to
sit here after six and a half years, and keep bending
over and getting screwed every time I turn around
Not for you or anybody else Now, if I in treated
right fine
Employee I just have one more question, sir, and
like you said, if we keep running and go out there
and work at it, yes Go and solve the problems But
for how long? You know do you want us to just
get up and forget about it?
Loudermilk Yes
Employee Well, you tell us, okay, [inaudible]
anyway You re not going to need your employees
with no business
Loudermilk That s exactly right That's the only
reason I in here I in here because you guys have
the ability and the experience to take care of the
customer
Employee And we do
Employee How can you stand up there and dic
tate who our corporations dispatcher is going to
be, where our terminal is going to be so we can
continue to support R & L Fleet Services I am t
for that goddamn terminal
Loudermilk In the back of my office there s a
little-the Golden Rule You know what the
Golden Rule is? He who has the gold, rules If
you're going to use my-
Employee In other words you re the boss-
Loudermilk That s right If you re going to use
my gold and you re going to use my half a million
dollars to make this thing start and go then I in
going to set the rules
That s the only-
Employee You said something about we re going
to form a corporation What are you saying?
Loudermilk In order for you to get your gold
Somebody has to have-
Employee We re still going to have him running
it
Loudermilk Do you have someone better to run
it?
Employee Get that son of his Bruce
Loudermilk There s no problem there Van you
can t run it anymore We'll let Bruce run it
Employee Well, you say that Bruce has been in
charge all this time Nobody has ever told Bruce
Employee (Inaudible )-Van or Larry Larry
will tell him to go screw himself (Inaudible )-
Larry s been waiting to see him go broke for the
last eight years
Lytle One at a time
Loudermilk We 11 take care of that too 111 build
the building up there to do that We don t need to
go through R. & L Fleet Service
Employee Now you re saying Bruce is running
the show I ve got a record-
Loudermilk All I in saying is Monday morning
he can be running the show
Employee I got a letter in my pocket from Ken
tucky that says they want to take my drivers license
because of a damn ticket I got in one of their trucks
for improper cab card When I called up to find out
about it, hey we have no record of you turning the
ticket in
But still yet, the very next day they start getting
the shit squared around in the damn truck
Now, I ve not received any call, I ve not re
ceived any letter I don t know if this ticket s ever
been taken care of or not But I m facing losing my
license on account of their junk equipment Now,
what do you got to say about that? Bruce-
Loudermilk Were going to park all the junk
equipment
Employee Well, who s going to take care of this
ticket?
Employee It warn t junk to begin with It was
good equipment when we bought it
Loudermilk Because it s wore out
Employee Because it wasn t maintained
Loudermilk Well a truck-when you get a mil
lion miles on some of them trucks, and so forth,
they re hard to maintain
Employee None of them s got a million miles on
them
Loudermilk What are we going to do Monday
The man right here asked the question First of all,
as I say, your union officials were not all for this
meeting They said it was-they thought it was a
hopeless situation That you guys were so bitter
that everybody d be wasting their time
So we re at that point now to-I in just telling
you here let s tell you what I'm willing to do I in
willing to capitalize a company, and we 11 use all
rental tractors We 11 fix the trailers We 11 put
Bruce in charge You are going to be guaranteed 17
cents a mile regardless if we go broke, you re going
to get 17 cents Then you can have whatever s left,
after we pay the insurance after you pay Bruce s
wages whatever your mechanics are How many
mechanics do you want? And after all the costs are
out of there the corporation-whatever is in the
corporation belongs to you
Employee Well the only way you re going to
solve everything is to give everybody their back
wages, pay the grievances that we got coming and
you 11 have the happiest group here that you know
what to do with
Loudermilk I am not trying to make you happy
That is for-that s forces that are out of my control
544 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Employee: It seems to me, my single impression
is, that you're a little bit scared yourself, or you
wouldn't be here wanting us to give up our mileage,
to give up everything, and go work like this, be-
cause I think you know in the back of your head
that you're not going to find a better group of em-
ployees, who's going to care about your company,
and keeping your business going. And still yet, you
want to stand there and tell us that you could give
a shit about what's happened. And you want us to
forget about everything, too.
Well, you have been a major part of this compa-
ny all down the line, just like the Vande Zandes
have, and you want us to forget all this garbage and
say, okay, we're willing to take a cut in pay and do
this and do that. When you're just as scared as any-
body else..
Loudermilk: Question here?
Employee: Yeah. I heard 17 cents. Is there any-
thing that goes with it, like hospital insurance.
Loudermilk: Well, first of all, is there a meeting
of the minds to address what this young man brings
up first? If you all take a position that we're going
to clean up all those old grievances, and pay all
these guys for all the time they've been off and so
forth, we're never going to get to the 17 cents.
So, it's going to be-and you're not going to
decide this while we're here. That's what you pay
these guys dues for, for their counsel and advise.
And that's where-when he mentioned that after
we leave, you're going to have your own meeting.
Because that's what a democratic society is about.
And again, I would say those who are not here,
they shouldn't have any voice in what the hell hap-
pens anyway, because they were supposed to have
been here.
Then I would say you're going to-the next step
should be, are you willing to sit down and discuss,
is it 16 cents? Is it health care? Is it the various
other things? Or, do you, number one, have to be
paid for all old grievances, redress all the things
that have been in the past? And you have to come
back to me and tell me what the result is of your
own demands and meeting, that is going to be after
we leave.
And then I'll respond to that. But I'm just telling
you, my proposition is, that we will park the junk;
that we will repair them and rebuild the trailers;
that we will kiss the customer 's ass to keep the ac-
count, and figure out how much I'm going to have
to cut the rates in order to do that. And after we do
that, we'll put Bruce in charge.
Employee: Nobody wants to walk the streets.
Nobody wants to collect unemployment. Hell, jobs
don't just grow on trees. We all know this. But,
when you got labor charges that has been filed, you
got numbers of employees that have wages, vaca-
tions, holidays, stuff like this, that is owed to them,
and as I said before, you've been a major part of
this company, and, you know, you're wanting to
say the heck with it. I think, to me, that if you
helped clean this act up, and get everybody happy,
that they'll be more than willing to try to help you
to get the gold and everything.
I know darn well that you're not going to sit
there, and if you got a company that owes you
eight, nine, $10,000.00, for your services, that you're
not going to say, oh well, hey, that's in the past,
forget about it. Lord no. You're going to get your
high-powered attorneys on him and get your
money.
Loudermilk: There is no way to bring redress to
the past and get anything done in the future. That's
a waste of effort. That's water already passed under
the bridge. I'm talking about what to do Monday,
as to whether or not we survive and go on down
the road.
I think we can do a better job than they're get-
ting done by those brokers down there, and I think
eventually we're going to get some of those moves
back, if we get off of this here demoralization,
which we brought up earlier, to where everybody's
concerned about making it work. And I'm the one
that can help make-I've made the thing work so
far. But, I'm about at my end of making it work.
Somebody brought that up. Someone says, you're
scared I am scared that this thing is on its last legs.
He's right.
But I'm rather fortunate. I have a few other
things going, that to me, it will just be, that was my
experience of hauling long haul trucks. . . . you've
got to get past whether or not you're going to let
the dead stuff lay dead. If you're not going to let
that lay dead, we're all wasting our time anyway. If
we're not going to start off with a new, fresh atti-
tude, and get down the road, as of Monday, then
there's no point in worrying about the other.
Employee: You said yet, you'd hire every one of
us as brokers. How are you going to hire us, if they
won't even insure half of us now?
Loudermilk: Well, but he said that they would.
He said that they agreed to take-
Employee: Well, I used to own my tractor. I
didn't have no trouble with insurance.
Loudermilk: Well, okay, but he said the ones that
the insurance company bounced out, now he's
saying that we can take them back.
Loudermilk: Am I right about that? Did they say
they would take-they could drive?
Arnold: That's right.
Employee: Van told us that you were the one
that wouldn't let us come back.
Employee: That's right. You're the one explain-
ing. You're the one standing up there telling us
why.
Loudermilk: Im just telling you, if this-if you're
all ready to go to work, it will be whatever the in-
surance company says.
R & L CARTAGE & SONS
Employee (Inaudible ) Van says that you would
not let the guys come back (Inaudible )
Loudermilk Well, we re talking about Monday
Employee Is that true?
Employee Why do we keep evading the ques
tions that we ask you?
Loudermilk Because they re unlimited
Employee No, they re not unlimited
Employee You can answer yes or not
Loudermilk They would have no meaning, to
keep it boiling on and on
Employee What you re trying to tell us is, you
want us to set up another trucking, you re going to
manage it with your money but you re the one
that s managed the money this whole time that
Vans had it, and we re still all going broke, and
you had to set up a special meeting, to come up and
try to straighten it up Why didn t you do it 2 years
ago?
Loudermilk Because I was never invited
Employee Why do you have to be invited? If
you got the finances of the company? If we set up
another company, are we going to have to fight
with you to straighten it up?
Loudermilk This is-this what you fellows will
have to decide after I leave
Employee But that s what we re saying, though
You want us to set up a company, and you finance
it, but you didn t come in earlier to straighten it up,
we're in the position we re in now
Loudermilk Well first of all, you have to decide
what s best for yourself
Employee That s what we re trying to do
Employee Most of us are sitting around not
working
Loudermilk I decided-I decided against it
Employee Did you keep these guys from coming
back to work?
Loudermilk Yes
Employee That s what we want to know
Employee Why?
Loudermilk Because I didn't figure we d be here
June anyway because there was going to be an
other agent hauling your freight if we don t agree
to solving these problems
Lytle Excuse me a minute Excuse me a, minute
guys Keep it down You were the sole purpose of
these guys not being put back to work even after
they filed a grievance? And they were insurable?
Loudermilk Well, yes
Lytle You told Vande Zande not to put the
people back to work
Loudermilk Yes
Lytle Why?
Loudermilk Because we needed to see whether
or not they're going to exist
Lytle Damn they could have been existing for
the last 2 months with a paycheck
545
Loudermilk Well but-I have-I have another
agent that wants this move that I already told him
he could have this move as of June 1st And I told
the president of your union that That as of June
1st, none of these people would be hauling Schaller
freight anyway
Lytle So were the one that was solely response
ble for these people to be out of work , and now
you want to turn around and ask them to forget
their grievances?
Loudermilk No you 're jumping right over Inte
gral Insurance is the one that said you cannot run
these people , they can t be insured
Lytle From the time that they said they could
run these people , you were the one that was solely
responsible for them not working and then you
have the audacity to ask them to forget about their
money?
John that s a little low cut
Employee He ought to be horsewhipped
Loudermilk Okay I think we re reached the
point where , you know there s nothing more to be
said The decision is all you guys
Employee Just lock the goddamn doors and
forget it That s just the whole ball of wax
The presentation was tape recorded by the Union unbe
known to Loudermilk to almost the end
With respect to the drivers who were cleared by the
insurer to drive again but not reinstated at that time,
Loudermilk testified
And these particular six drivers or nine drivers-
they were not really critical to anything as far as
moving the freight as long as the freight was
moved
And it really was not an important thing to me
The important thing to me was whether or not we
were going to be a viable company to stay in buss
ness
Arnold testified that neither Schaller nor Loudermilk
was ever a party to the grievances pending against R &
L before the Local freight board panel and the Union
did not notify Schaller or Loudermilk other than to
notify Robert Vande Zande as Loudermilk s represents
tive and that other than 22 June and when Loudermilk
asked to speak to R & L s drivers Arnold never contact
ed Loudermilk concerning R & L s employees
The six drivers who were originally declared uninsur
able returned to work in mid July 1986 None of R & L s
drivers were paid for the last 2 weeks in July when R &
L declared bankruptcy and ceased operations on 1
August
Danny Chenault, who has been an agent of Schaller
and who has transported GM traffic, among others for
Schaller testified that he received a phone call from
Loudermilk on Friday 29 July that Loudermilk told him
to go to central foundry to start to handle the involved
traffic, that Loudermilk indicated that R & L filed for
bankruptcy and no one was running the terminal, that
during this conversation he and Loudermilk did not dis
546 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
cuss the terms of the arrangement, that nonetheless, he
went to the terminal and started to operate it and that
the following day, 30 July Loudermilk told him he,
Chenault, would receive 82 percent of the ievenue,
which were the same terms R & L had
Hardesty, who was the secretary of the Schaller term[
nal in Bedford, testified that she started working in 1977
for Schaller and in 1978 she was paid and hired by R &
L, that on 31 July she was advised that R & L went
bankrupt, and that Robert Vande Zande telephoned her
from Fort Wayne and asked her to be in the office 4
August at 8 a in and he would tell her what was going
to happen
Roland Atchison, who was a mechanic for R & L
since the beginning of 1985, testified that on 31 July, at
the Bedford terminal, he asked Danny Chenault about a
job, that Danny Chenault said that he was looking for
drivers at that time and he did not know what he was
going to do about the people in the garage, that Danny
Chenault said that there was some money coming
down that John was sending down to start his op
eration that Danny Chenault said he needed some dnv
ers for that night and Atchison told Chenault to talk to
Borckardt who worked for R & L and Danny Chenault
said that he didn't think John wanted him to hire
anyone that had worked for R & L , that Danny Chen
ault also said that they might hire Willy Bolin or him,
Atchison, because he had not worked at R & L that
long, that he asked Danny Chenault about getting paid
for the last 2 weeks in July and Danny Chenault replied
that he did not have any control over that and he did
not know if the money owed would be paid that Danny
Chenault said that John was planning a trip to
Europe, or was in Europe and that John would pay us
our 2 weeks pay when he returned from Europe and
that R & L employee Robert Terry was with him when
he had the above described conversation with Chen
ault 16
Danny Chenault testified that he told Atchison that
Loudermilk said that he would try and see if he could
get them [R & L employees] their last two weeks pay
they had coming if all the tools that belong to Schaller
were returned to [the Bedford terminal] 17
Loudermilk explained the circumstances as follows
When I sent Danny [Chenault] over to fire up his
operation and to start moving the freight, he dis
covered that the tools had all disappeared Our
impact wrenches our cutting torches, our spare
parts, our tires, our wheels-the place had been
cleaned out more or less
And then in further conversation he related to
me that he would see if he could find out who did
it
16 Robert Terry testified that he heard Danny Chenault tell Atchison
on that day that he Chenault did not know whether he was not sup
posed to or he didn t feel like he [was] supposed to hire anyone that had
previously worked there that John [Loudermilk] didn t want him to
hire anybody that previously worked there
17 Ethyl Ilene Chenault testified that she overheard her husband tell
Atchison that if the tools were returned Loudermilk would see
their last two weeks of pay was paid to them Loudermilk would see
that they got their last 2 weeks pay
I said, `Well, find out who it is and pay a
reward And whatever it takes see if you can t get
the tools in there Either that, or you re going to be
out of your pocket to have to go to buy the tools in
order for you to operate Monday
And I think that was the gist of the conversation,
and nothing come of it As far I know to this date,
the tools haven t reappeared yet
Robert Terry testified that the following day, 1
August, he went to the Bedford terminal to see if any
checks had been sent down from Fort Wayne, that a
lady in the office who he did not know asked him to
wait because Danny Chenault wanted to speak to him,
that Danny told him that there was no pay yet but that
there would be pay down there but he [Danny Chen
ault] was waiting on John to send it down, John was
going to pay us our two weeks backpay , and that when
Danny Chenault referred to John he was referring to
John Loudermilk
Ethyl Chenault testified that she was in the terminal
office throughout 4 August, that Danny Chenault hired a
Shawn Browning who began working in the office on 4
August, that she was there the entire time Browning was
there on 4 August that she did not see either of the
Terry brothers at the Bedford terminal on 1 or 4 August,
and that she never told either of the Terry brothers that
Danny wanted to see them
Danny Chenault testified that he began hauling freight
for Schaller on 1 August after R & L ceased to exist,
that Schaller supplied the trailers, that neither Louder
milk nor anyone else from Schaller told him who to hire
or who to fire or the rate of pay that he never received
any kind of advance moneys from Loudermilk or
Schaller that he has never been paid anything by
Schaller other than commissions for services rendered
that on 1 or 4 August Atchison asked him for a job in
the presence of his wife Ethyl that he did not recall
anyone else being present when Atchison asked for the
job that he offered Atchison and accepted a job but he
did not show up the next morning that he knew Atchi
son previously worked for R & L 18 that Loudermilk
did not tell him he could not hire R & L personnel or
that he Loudermilk would be unhappy if Chenault
hired somebody who had previously worked for R & L,
that he did not recall Atchison ever suggesting the
names of some drivers who would be available that at
one point he also offered Atchison a driving job but he
did not show up for that either and that when he started
the involved operation on 1 August he had no knowl
edge that unfair labor practice charges had been filed
against R & L
Initially Loudermilk testified that he never told Danny
Chenault who to hire Loudermilk then gave the follow
mg testimony
18 Ethyl Chenault corroborated her husband regarding what was said
who was there and the fact that Atchison did not show up for work the
next day When asked how she answered the telephone at the Bedford
terminal she testified [l]ust like always Schaller Trucking
R & L CARTAGE & SONS
And I would like to qualify on who to hire
was-as the NLRB charges did develop and I tried
to see some peaceful solution to all of this, and I
didn't like the idea of people not getting paid
either, then I had discussed with Danny that should
we be able to resolve that, then he should hire who
ever it is that's qualified and can move the freight
And they do have to be qualified to be out on
the road They do have an acceptable BMV record,
which is a Bureau of Motor Vehicles record, and be
insurable
On or about 1 August Danny Chenault entered into a
verbal business arrangement with Barry Vande Zande,
through Bruce Vande Zande, to lease a tractor which
was driven by Bolin, a former driver of R & L Chenault
agreed to pay BVZ 80 cents a mile Barry, who is vice
president of R & L is president of BVZ (R Exh 4)
BVZ paid Bolin At the time of the hearing here Bolin
had become an employee of Danny Chenault
With respect to movements that occurred when
Danny Chenault initially began hauling the involved
freight, Loudermilk testified that the pros had been al
ready cut on some of those loads by R & L Accordingly
the box in the upper right hand of the pro utilized to
designate the agent that handled the traffic continued to
show R & L s agency number Loudermilk testified that
the pro is matched with the delivery receipt and he spec
ulated that during the transition period the agent desig
nation was changed on certain pros to reflect the fact
that Danny Chenault received the revenue because he
was probably the one who consummated the delivery
(R Exhs 12 and 13 )
Katherine Ann Smith, a Schaller employee who han
dles the pros that are submitted by the various agents for
Schaller, testified, with respect to Respondents Exhibit
12 which are the pros with the agents designation
changed, that the pros are pretyped and if another agent
handles the movement the latter would change the agent
number on the pro so that it would get paid and that
evidently the changes on the involved pros were made in
Danny Chenault s office
The parties stipulated that R & L transported three
loads on 1 August and one load on 2 August 19
Hardesty testified that Robert Vande Zande tele
phoned her at the Bedford terminal on 4 August that
Vande Zande told her he filed for bankruptcy and he
asked her if she would be willing to work for Danny
Chenault to which she replied no and that she then
spoke with Danny Chenault asking him what was going
on and Chenault told her he had no idea yet he was
waiting to receive a check from John Loudermilk to get
things going and he had anticipated nothing as far as
what would be going on with the office work '
On 5 August the Union filed a grievance asserting that
various articles of the involved collective bargaining
agreement were violated when on 1 August R & L and
Schaller as joint employers through Robert Vande
Zande and Loudermilk ceased operations under R & L
19 Previously the parties stipulated that R & L hauled five loads on I
August and one load on 4 August for GM to Michigan
547
terminated all drivers, and then used nonunion drivers 20
(G C Exh 8)
Robert Vande Zande testified that a petition in bank
ruptcy was filed on 5 August, that he believed21 that
R & L's operation ceased at midnight 2 August, that R
& L's employees were laid off because R & L had no
money, and that to survive the Union would have to had
to agree to a 20 percent reduction in wages and also (1)
the cancellation of all insurance coverage on the employ
ees, (2) the cancellation of all work rules, and (3) the em
ployees giving up their days off with pay, their sick days
with pay and their vacation
Bolin testified that he worked for R & L from 1977
until I or 2 August, that he found out that R & L filed
for bankruptcy when he saw the notice posted on the
bulletin board in Fort Wayne, that the following day he
received a telephone call from Barry Vande Zande
asking if he, Bolin, wanted to drive for BVZ, that he ac
cepted the offer and he transported castings and scrap
from Bedford to points in Michigan in a truck which he
believed was leased to Schaller, that BVZ s lease agree
ment was terminated 13 December, that when he han
dled the traffic after R & L closed he used Schaller logs
and Schaller's permit was on the side of his tractor, that
he told the Board agent who took his affidavit that while
he worked for R & L about two loads a day were trans
ported to the Oldsmobile plant in Michigan, three loads a
week went to Pontiac, Michigan, and about three loads a
day went to the Cadillac plant in Michigan, that he start
ed driving for Danny Chenault on 14 December, that
while he worked for BVZ he observed about six drivers
who previously did not drive for R & L making runs out
of the Bedford terminal, that he did not know whether
the drivers were new employees of Danny Chenault, that
while he drove for BVZ Danny Chenault and not
Schaller did the dispatching that he did not know for
sure" where the other trucks were going when Danny
Chenault was at the Bedford terminal that he believed
the statement in the affidavit he gave to the Board on 9
September namely,
There are about four broker trucks new to me at
Bedford They are running like me We have about
two loads a day to Oldsmobile about three a week
to Pontiac about three a day to Cadillac and scrap
back from Willowrun Detroit and Warren varied
from one day to more
was true because that s about the amount we d always
run , that he intended the Board agent to take his word
on this point as the truth and that his word was not
based on specific personal knowledge but rather on an
assumption
Danny Chenault testified that he did not confer with
Loudermilk or anybody from Schaller about whether he
could hire Bolin, that he and not Schaller dispatches his
20 On cross examination Arnold conceded that R & L and not Schaller
hires lays off and fires the dnvers participates in the grievances dis
patches and maintains the fleet
21 Robert Vande Zande explained that as of 3 February he became an
agent for Schaller Courier Service in Fort Wayne and his son Bruce was
in charge of running R & L
548 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
drivers that also runs a spotting service for Can Truck,
and that he hired all his drivers
On the date indicated , the following was forwarded on
Schaller letterhead by Loudermilk who signed as presi
dent of Schaller (G C Exh 15)
To Employees of R&L Cartage, Inc
September 30 1986
Elvin E Jones Leonard G McIntyre
Norman Beeks Jack J Johnson
Paul J Goff Jr M Rex Bussard
Gary M Childress Paul L Trout
Everett M Davis Charles J Quinn
S H Monssawalla Gail R Miller
Michael McKee Richard J Barchardt
Timothy S Rigby Gary J Gase
Dennis C Lucas Daniel D Melton
Matthew McIntosh Jerry D Terry
Roland E Atchison Robert E Terry III
Toni Hardesty Donna Baker
Willis L Bolin
As you are aware R&L Cartage, Inc has filed
for protection under the US Bankruptcy Code
Many of you were owed two weeks wages that
were not paid
Your union has taken the approach of a deep
pocket theory which means they are now seeking
money from me, since they realize that in all proba
bility R&L will never be able to pay you anything
In all the years I have owned Schaller Trucking
Corporation no driver has lost any wages or been
abused by myself My one and only meeting with
you was as an agent of R&L at the request of
Dennis Arnold The purpose of that meeting was to
try and prevent you from becoming unemployed
At the end of R&L Cartage being able to move
Central Foundry GM freight I gave the move to
Danny Chenault who moved GM freight for me for
years
It was told to me by Danny that he was willing
to hire any of you who would drive for him with
two of you expressing that desire He stated to me
that he was offering $ 18 per mile wages He further
stated to me that the office ladies refused to work
for him and left Should this not be a true statement
I would be interested in hearing from you
From the day that R&L shut its doors your
Teamster Union has directed all your anger and
frustration toward me in order to get the heat off
their back The Teamsters knew that all the compe
tition at Bedford for Schaller were non union driv
ers who were working for 25% less wages than you
were making They also knew the financial situation
of R&L Cartage, Inc and were told that GM was
reducing the rates paid to Schaller which meant the
82% agent commission paid to R&L was being re
duced On moves that Schaller did not reduce the
rates GM gave those moves to non union compa
rites
To my knowledge the Teamsters made no at
tempt to organize the Schaller competition thereby
making it possible for R&L and Schaller to remain
competitive
As a result of the attack by the Teamsters I have
spent $7,000 00 in representative fees through this
date that would have been better spent for groceries
for your families
Until October 10, 1986, I am willing to pay
$37,500 00 to all the former R&L Cartage, Inc em
ployees In talking to Danny Chenault he stated to
me that subject to a settlement with the NLRB he
agreed to put to work any driver who will work for
the $ 18 per mile, the maximum he can offer to pay
and remain a viable agent of Schaller Trucking Cor
poration
As of this date Schaller is not broke and is able
to make you this offer which was made to your
union leadership who has refused to return the
phone calls to my representatives
I would suggest that you consider my offer care
fully and realize that Schaller Trucking Corporation
wishes only what is best for you and would like to
remain in business as a viable corporation that could
offer to employees a good place to work
If you are interested in accepting this offer, then
contact Dennis Arnold and ask him to settle the
case
At the hearing counsel for the General Counsel took
the following position regarding Loudermilk s above de
scribed 30 September letter
This exhibit was offered into evidence to show
that Mr Loudermilk dealt directly with the em
ployees and by passed the union A B, it shows that
Mr Loudermilk has-and Schaller Corporation-
effect the labor relations of R and L Employees and
that its further evidence of General Counsel s
theory that Mr Loudermilk Schaller Corporation
are now-are joint employers and that Schaller
Corporation and R and L and Danny Chenault are
alter egos
And the fact that Mr Loudermilk offered 37
thousand dollars to individual members by passed
the union is not evidence of settlement as advanced
by Mr McCarthy especially when we re talking
about back pay in the neighborhood of 400 thou
sand dollars
Counsel for Respondents, McCarthy, subsequently
elicited the following from Loudermilk regarding the
above described 30 September letter
Q Okay Were you trying to settle this case-
A Yes
Q -with this letter9
A Yes I wanted to be rid of it I wanted to-we
can t survive in this day of age-be rid of the mci
dent and if these people wanted to go drive trucks
and they go drive trucks seniority wise
Q Now I would like you to look through the
list of the names of the employees at the head of
that letter please
R & L CARTAGE & SONS 549
A Yes
Q Okay Now do you know all the employees
of Schaller Trucking personally'
A No I know Toni, the young lady that was
here, and I know none of them actually personally,
I ve had no personal dealings with any of these
with the exception of Hi, How are you, as I walk
by or something
Q Okay Let me rephrase the question With
regard to Schaller Trucking-
A Well, Schaller Trucking-
Q -do you know-
A -their records-
Q -do you know all your employees of Schaller
Trucking?
A No
Q Okay Are any of those people on that list
Schaller Trucking employees that you re aware of?
A Today
Q Back on the 30th of September
A Well Willie Bolin I see is still on here
Q Who was driving for?
A I believe he was driving for R&L Cartage
and then he drove for Barry and then Danny hired
him in there in the process too, somewhere along
the line
Q Okay but he wasn t a Schaller Trucking em
ployee
MR HAYES Objection Leading the witness
JUDGE WEST Overruled
THE WITNESS No He was not an employee of
Schaller Trucking
Subsequently Loudermilk testified that Hardesty was
an employee of Schaller 10 years ago
Jerry Terry, a former R & L employee, testified that
about mid January 1987 he spoke to Danny Chenault
who said he needed drivers that he asked Danny Chen
ault why he did not hire some of the drivers that were
out of work and Chenault then said John won t let me
hire anyone that used to work here until we get the
bankruptcy and the labor matters straightened up that
as a driver for Santana Express he is at Schaller s Bed
ford terminal daily to pick up loads and he has seen six
to eight new drivers employed by Danny Chenault or
Schaller at the Bedford terminal that the work he did
is still being done by Schaller It s different people with
some-some different equipment but it is still the same as
it was when I was there except it s just different people
that the paperwork for the new drivers is in the same
place in the terminal as his paperwork and he sees the
paperwork for the new drivers which shows that the
destinations are Cadillac Buick-these are the names of
the plants now We re talking Livonia Michigan Flint
Michigan Lansing Michigan-the same-its the same
freight that we were pulling
Ethyl Chenault testified that one of the Terry brothers
comes to the Bedford terminal to pick up trailers which
are spotted there for his employer that she has seen the
Terry brothers in the outer office of the terminal and
that she did not have an occasion to see either of the
Terry brothers in the last 17 days in January 1987 or the
first 4 days in February 1987 speak to Danny Chenault
Hardesty testified that just before testifying on 4 Feb
ruary 1987 she was questioned by the Respondents at
torneys Gentry and McCarthy neither of whom advised
her that her participation in the questioning was volun
tary and that no reprisals would be taken against her if
she refused to answer their questions
On cross examination Hardesty who was an office
clerical employee was specifically excluded from the in
volved unit, testified that she talked with Respondents
two attorneys in the hall outside the hearing room in
volved here and that when she talked to two of Re
spondents attorneys she (1) did not feel threatened (2)
did not think she would not get a job if she did not talk
to them, (3) did not think there would be any repercus
sions if she did not talk to the Respondents two attor
neys (4) was not intimidated by either of the attorneys,
and (5) did not feel compelled to talk to Respondent s
two attorneys When the interview occurred Hardesty
had already testified for the General Counsel After the
interview, she was called as a witness by Respondents to
explain how Schaller s letterhead came to be used in
typing General Counsels Exhibit 13 Respondents did
not subpoena Hardesty
Danny Chenault testified that at the time of the hear
ing he was making between 6 and 11 runs a day for GM
Respondent introduced certain summaries making
available to counsel for the General Counsel the volumi
nous underlying documents More specifically Respond
ent introduced R & L s general ledger computer printout
covering the period 1 January 1985 through 31 July
1986 (R Exh 7) A one page summary of the total and
average R & L monthly revenue between January 1985
and August 1986 (R Exh 9) was then introduced to
demonstrate the decline in business The exhibit shows
that in January 1985 R & L had $268 196 in pertinent
revenues in July 1985 it had $229 871 in pertinent reve
nues and in July 1986 it had $134 579 in pertinent reve
nues Respondents Exhibit 10 is a computer printout
covering Schaller checks issued to specified agents in
cluding R & L between 3 January 1985 and 31 Decem
ber 1986 As here pertinent the printout specifies the
purpose of the check the amount the number the agent
and the date 22 Respondent s Exhibit 11 is a computer
printout covering the pro information, the voucher infor
mation and the check payment information The purpose
of this printout, according to its sponsor is to show that
Schaller paid R & L exactly what it owed R & L Re
spondents Exhibits 14 15 and 16 all graphs, were intro
duced to show the decline in R & L s business and the
22 The exhibit demonstrates a fact that the General Counsel attempted
to demonstrate with the checks themselves G C Exhs 16(a)-(q) namely
that on I week intervals beginning I April Schaller advanced either
$4000 or $5000 a week to R & L with 15 of the checks dated on a
Monday 2 of the checks on a Tuesday and I of the checks dated on a
Sunday Additionally there was an advance of $10000 on 27 March
1985 an advance of $8000 on 9 August 1985 an advance of $26 000 on 5
September 1985 an advance of $25 000 on I January an advance of
$5000 on 21 March and Schaller issued a check to R & L dated 23 Jana
ary for $139 935 for trailer repair
550 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
first two of the above described graphs show a decline in
the number of runs and in the gross billing dollars
The following occurred when certain of the above de
scribed exhibits were offered
MR MCCARTHY Your Honor , at this time, Re
spondents would offer R&L Exhibits 9,10 11, 14,
15, and 16 into evidence
JUDGE WEST Any objection?
MR HAYES Yes , Your Honor I object on the
grounds that the exhibits that Mr McCarthy is of
fermg into evidence have not been authenticated by
underlying documents , in that the witness [as indi
cated above , Katherine Ann Smith , who works for
Schaller , is responsible for filing the pros which are
submitted by the agents to Schaller] has not demon
strated that she had actual control of the records in
terms of their preparation and handling Therefore,
the summaries are hearsay
JUDGE WEST Are you differentiating now or dis
tinguishing between the pros and the checks?
MR HAYES The-yes, Your Honor , I m saying
that the pros have not been authenticated, and I m
saying , therefore , the summaries are hearsay
JUDGE WEST Any comment'?
MR MCCARTHY None, sir
JUDGE WEST Objection overruled
Respondent R&L Cartage s 9, 10, 11 14 15 and
16 are received in evidence
B Contentions
On brief the General Counsel contends that R & L
and Schaller are joint employers in that they shared or
codetermined those matters governing the essential terms
and conditions of employment that evidence of record
which demonstrates joint employer status includes (1)
Robert Vande Zande s above described affidavit to the
Board which affidavit indicates that Loudermilk as
president Schaller has complete authority over the day
to day operations of R & L, (2) Loudermilk s 22 June
relevations that Schaller controlled and made important
decisions regarding , inter alia hiring rate of pay layoff
discharge and insurance coverage, (3) Schaller and Lou
dermilk controlled the very existence of R & L to cease
to exist (4) Loudermilk s 22 June firing of Robert
Vande Zande (5) Schaller s participation in the gnev
ances of R & L by soliciting employees on 22 June to
drop their grievances (6) Schaller s participation in the
collective bargaining process of R & L by soliciting
wage concessions , (7) the loan of substantial sums of
money by Schaller and/or Loudermilk to R & L to assist
it in remaining operational and to meet its payroll, (8)
the use of Schaller letterhead paper to post the R & L
work schedules , (9) the documentary evidence that at
least two R & L employees in 1986 were terminated
from Schaller and R & L, (10) the testimony of employ
ees that they considered R & L and Schaller to be one
and the same ( 11) the trailers pulled by R & L drivers
bore the name of Schaller (12) logbooks maintained by
R & L drivers were in Schaller s name ( 13) Schaller s
and Loudermilk 's direct bargaining with R & L employ
ees in offering them jobs with Chenault and direct bar
gaining employees in an attempt to settle the instant
case and ( 14) the fact that since 9 March 1977 R & L
has been doing business under the assumed name of
Schaller Trucking , Inc according to its articles of incor
poration that Chenault and BVZ are alter egos of
Schaller and R & L because (a) there was no hiatus be
tween the demise of R & L and the commemcement of
operations by Chenault and BVZ, (b) Chenault utilizes
the same terminal in Bedford formerly utilized by R & L
rent free, (c) Schaller provided the trailers for Chenault s
operation , (d) the primary customer , GM, remained the
same and the work remained unchanged , (e) the tele
phones at the involved Bedford terminal answered
Schaller , (f) BVZ assisted Schaller in continuing the
operation of R & L (g) there is no evidence of a sale or
purported arm s length transaction but rather the record
shows only the incredible testimony of Danny Chenault
that about the first of August Loudermilk told him to get
over to the Schaller terminal and start handling the GM
traffic because Robert Vande Zande went out of busi
ness, and the terms of the arrangement were not dis
cussed until the following day, (h) the destinations of the
traffic were unchanged from when R & L performed the
work, (i) that
there is union animus which flows from the finding
by the Board in 1984 [in Schaller Trucking Corpora
tion , 269 NLRB 392] that Schaller Trucking Corpo
ration violated Section 8 (a)(5) (3) and (1) of the
Act by discharging 50% of the bargaining unit be
cause they supported Local 414 and by refusing to
bargain with the Union
union animus was demonstrated by Robert Vande
Zande s testimony that the Union played a big part in
R & L s demise and (k ) Schaller and Loudermilk cre
ated R & L s successor for the purpose of avoiding the
collective bargaining obligations imposed on R & L that
all the Respondents are a single integrated business enter
prise and all the above described elements which estab
lish joint employer and alter ego also establish this that
there is functional integration of operations in that Chen
ault is totally dependent for its existence on Schaller and
Loudermilk as was R & L that the lack of an arm s
length transaction with respect to the commencement of
BVZ and Chenault s involvement in the involved oper
ation demonstrates that they are alter egos/successors
that but for the unfair labor practices of the R & L
Schaller and Loudermilk a majority of R & L employ
ees would have been hired by Chenault and/or BVZ to
continue the employing industry serving the same cus
tomer without a hiatus in operation that neither Lou
dermilk nor Chenault specifically denied that the latter
told Jerry Terry that Loudermilk would not let him hire
anyone who use to work at R & L until the bankruptcy
and labor matters were straightened out that the con
duct of R & L Schaller, and Loudermilk is so inherently
prejudicial to employee rights that no other proof of an
tiumon motive is required , even if weight is given to evi
dence introduced that purports to establish business or
economic motivation , and in the alternative assuming ar
guendo , that the effect of the discriminatory conduct is
R & L CARTAGE & SONS 551
comparatively slight then R & L, Schaller and Louder
milk harbored an antiunion motivation and failed to
show a business justification for their unlawful conduct
that by conditioning continued employment on wage
concessions, withdrawal of grievances, and unfair labor
practice charges, R & L Schaller and Loudermilk violat
ed Section 8(a)(1), (3), (4), and (5) of the Act that the 22
June threats of discharge constitute independent viola
tions of Section 8(a)(1), that by reneging on the 5 May
agreement to reinstate the six drivers R & L, Schaller,
and Loudermilk violated Section 8(a)(5), that by refusing
to recall the six drivers by closing the terminal on 1
August and by discharging all employees of R & L, R &
L, Schaller, and Loudermilk further violated Section
8(a)(1), (3), (4), and (5) of the Act, that Hardesty s
above described interrogation was coercive and did not
take place in a context free from Employer hostility to
union organization, that Loudermilk should be found
personally liable because he so integrated or intermingled
his assets and affairs that no distinct corporate lines are
maintained i e (a) the $250,000 loan to R & L, (b) Lou
dermilk was an active participant in the scheme to evade
statutory and collective bargaining obligations, (c) while
the record is unclear that Loudermilk owns Chenault, it
is clear that he controlled the labor relations of that com
pany, and (d) Respondents Exhibit 10 does not show
that any advances were paid out by Schaller to R & L
for the period 1 October to 31 December 1985 but rather
shows moneys disbursed by Schaller to R & L for fuel
or for commissions that conflicts with Respondents' Ex
hibit 1 in that it shows that toward the end of 1985
Schaller advanced $38,000 to R & L in order to help
meet its payroll that because of the lack of identification
and authentication of the checks, Respondents Exhibits
9, 10 11, 14 15, and 16 are hearsay and he renews his
objection to the admission of these exhibits 23 and that
Respondents should be required to (1) offer all employ
ees discriminatorily refused recall since 29 April or dis
charged on 1 August as a result of the Fort Wayne ter
minal closing, and all employees who lost 2 weeks pay
immediately prior to the discharges immediate and full
reinstatement to their former jobs in its present operating
enterprise or if those jobs no longer exist to substantial
ly equivalent jobs, without prejudice to their seniority or
other rights and privileges previously enjoyed dismiss
ing if necessary present employees of Respondents and
make the aforesaid employees whole for any loss of earn
ings they may have suffered by reason of the discrimina
tion against them, and (2) apply the terms of the extant
collective bargaining agreement to all alter egos of R &
L/Schaller
23 The ruling stands Initially one of Respondents attorneys indicated
that 9000 documents consisting of checks vouchers and pros were going
to be offered into evidence It was agreed that instead summaries would
be offered into evidence and all the underlying documentation the 9000
documents would be given to the General Counsel for his review before
the summaries were offered This was done The General Counsel used
some of the underlying documentation in his cross examination When it
came time to make his objection the above described exchange occurred
The pros were authenicated The evidence was introduced to show the
financial condition of R & L As noted above in November 1985 the
Union s own certified public accountant indicated that R & L was techm
cally bankrupt
Respondents, on brief, contend that the General Coun
sel has filed to allege the requisite jurisdictional limits to
show that Loudermilk personally, as opposed to the
president of Schaller, was engaged in commerce as de
fined by the Act, that consequently the only work the
General Counsel can assert jurisdiction over Loudermilk
personally is to show that Loudermilk was an alter ego
of, single integrated enterprise with or a joint employer
with one of the other Respondents because no jurisdic
tion is independently plead or proven by the General
Counsel
Respondents also contend that the General Counsel
failed to prove that Loudermilk s actions were not on
behalf of Schaller, that R & L has a Wright Line defense
(251 NLRB 1083 (1980)) and the General Counsel did
not demonstrate that the bankruptcy and the loss of
income over the last 18 months of its operation was a
sham or pretextual, that there is not a single shred of evi
dence that any employee was discharged for cooperating
with the Board by giving testimony as alleged in para
graph 5(c) of the amended consolidated complaint and
the record is completely devoid of any indication who
these employees might be, that Schaller s delay in allow
ing the reinstatement of the six drivers was not occa
sioned by union animus and the General Counsel failed
to show that the business reasons for Loudermilk s and
Schaller's action was a sham, and that there is no evi
dence that Loudermilk or Schaller independently moved
the GM work from R & L to Chenault because of the
protected activities of R & L employees
Respondents further contend that the above described
30 September letter was forwarded by Loudermilk as an
agent of Schaller to specified individuals who are not
employees of Schaller or Loudermilk that the letter was
not an attempt to bargain directly with the individuals
because the letter specifically indicates that the recipients
should contact the union business agent and ask him to
settle the case that the above-described 30 September
letter informed the specified individuals that an offer had
been made to the Union and taken as a whole the letter
was [an] attempt to get the unfair labor practice com
plaint outstanding at the time settled (R Br 22) that
the 30 September letter is not an admission that Schaller
is the employer of the addresses, that the General Coun
sel s witnesses who testified regarding what Danny
Chenault said about Loudermilk not wanting Chenault to
hire former R & L employees are not credible
Furthermore Respondents contend that with respect to
the Hardesty interview, while Schaller concedes that its
representatives interviewed her without advising her of
her rights, it takes the position that such an interview
was not a coercive interrogation under the Board's totals
ty of circumstances approach that when one considers
the pertinent factors, namely, the location of the interro
gation, the parties that are participating, the subject
matter discussed and whether the employee is there vol
untarily, a violation of the Act did not occur in view of
Hardesty s testimony that (1) the interview occurred in
the hallway outside the hearing room, (2) she was nei
ther threatened nor felt threatened by either McCarthy
or Gentry and (3) she did not feel that there would be
552 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
any reprisals for her participation or nonparticipation in
the interview or that she was compelled to participate in
the interview that after the interview Hardesty testified
voluntarily for Respondents regarding a matter not relat
ed to her union activities and when the totality of cir
cumstances are considered the interview did not consti
tute a violation
In addition Respondents contend that there is no evi
dence of record that BVZ or Danny Chenault commit
ted any unfair labor practice independently that a major
ity of the courts in alter ego cases usually find facts that
include an element of intentional employers evasiveness
or at least indicate that the original employer received or
could reasonably expect to receive a benefit from the
transfer of operations to the new business entity that the
General Counsel presented no evidence that Loudermilk
manipulated R & L for his own personal gain that while
the pleadings admit that Loudermilk is the president of
Schaller and as late as 1973 owned all of Schaller there
was no showing that Loudermilk during any relevant
time owned any of Schaller let alone the majority of
it 24 that Loudermilk represented himself at all times as
an agent of Schaller that there was no showing that
Loudermilk owned R & L that Loudermilk and R & L
are not alter egos, that the General Counsel has failed to
show common ownership common management or di
rectors common supervision or that Loudermilk even
held himself out as one and the same as any of the same
as any of the Respondents and therefore the General
Counsel has failed to establish a prima facie case that
Loudermilk was an alter ego with R & L or any other
Respondent that the General Counsel has failed to
present any evidence that there was any common owner
ship between any of the corporate respondents and
Schaller or that any of the Respondents shared common
management or supervision or that they shared common
premises and facilities or that Schaller even held itself
out as any other entity than itself that although
Schaller s name was on the building that R & L used it
indicates only ownership of the building that while all
the agents driving under the Schaller certificate are re
quired by DOT regulations to show a banner of the cer
tificate holder the public with whith Schaller Chenault
and R & L dealt would not be misled and none of the
Respondents held themselves out to the general public
that the General Counsel did not demonstrate that BVZ
was disguised continuance of R & L that the evidence
fails to disclose any common ownership between R & L
and BVZ that the only common director or manage
ment between R & L and BVZ was Robert Vande
Zande that there is no evidence that Robert Vande
Zande owned any part of R & L that the General Court
sel did not show that BVZ and R & L exercised any
common labor relations policy or that they ever held
themselves out to the public as a single integrated enter
prise
24 It is noted that in its answer to the aforementioned 22 September
consolidated complaint Schaller admitted the part of par 4 which assert
ed that at all times material Loudermilk was Owner and President of
Respondent Schaller (G C Exh 1 (ii))
Also Respondent contends that the General Counsel
has failed to demonstrate the alter ego status of BVZ
with R & L or any other Respondent that General
Counsel presented no evidence to establish that Chenault
shared a common management, common ownership
common directors or officers, common premises, facile
ties, common supervision of any respondent other than a
single employee of BVZ, Bolin , that there was any inter
change of employees between Chenault and any other
Respondent or that he Chenault held himself out to the
public as a single integrated enterprise that the General
Counsel failed to establish a prima facie case that Chen
ault was an alter ego with any of Respondents, that re
garding whether Chenault is a successor of R & L the
General Counsel has failed to show that the majority of
the Chenault s employees were employees of R & L that
regarding Atchison s testimony that Chenault said that
Loudermilk did want Chenault to hire R & L employees
there is absolutely no testimony that such a request, if it
occurred at all, was union related or that Chenault corn
plied especially in light of the fact that Chenault hired
former R & L employee Bolin and offered a job to
former R & L employee Atchison and telephoned him
about another job, that to determine whether a single in
tegrated enterprise exists the Board considers the extent
of administrative integration, the extent of employee
interchange common facilities and equipment, financial
interdependence the nature of the business enterprises
whether the businesses hold themselves out to the public
as one and whether centralized control and direction of
labor exists, that as noted above, Barry Vande Zande is
the only corporate officer in two of the involved corpo
rations, namely, R & L and BVZ that there is no evi
dence of any common administrative services that there
is no evidence of record that shows that any employees
of any of Respondents were interchanged that there is
no evidence that the building or equipment was ever
shared by any of the Respondents at any time that finan
cial operations between R & L and Schaller were at
arms length, that R & L billed GM for the runs that
they made, they purchased their own fuel did their own
maintenance and paid their own bills that is not just the
potential one company may have to exercise control
over the labor relations of another company in determin
ing the status of joint employer but the degree of control
that may be exercised by one company over the employ
ees of another company that while Schaller provided
the certificate of public convenience and necessity the
insurance for the drivers and cargo the building and the
tools, there is no evidence in the record of any agree
ment between R & L and Schaller that would permit the
latter to control the essential terms and conditions of em
ployment of the employees of R & L that there is no
evidence that Schaller had the authority to hire or fire
any employee, to direct work, to settle grievances, or to
set wages or hours or any other working conditions that
on 22 June when Loudermilk facetiously fired Robert
Vande Zande from the proposed new corporation which
he would be capitalizing he Loudermilk, was not talking
about R & L and those listening to the statement under
stood that, that neither Schaller nor Loudermilk was
R & L CARTAGE & SONS 553
ever a participant in any contract negotiation or griev
ance hearing involving R & L that the General Coun
sel s Exhibits 20 and 21, which purport to terminate cer
tam employees from Schaller and R & L, do no more
than to identify to the employee that portion of R & L
from which the driver was separated because R & L also
had a spotting service and maintenance operation that
the asserted admission by Robert Vande Zande in his
above described affidavit does not make it a fact in that
the statement must be viewed in the light of all other
facts and there is no evidence that Schaller ever partici
pated in setting wages, hours, resolved grievances, hired
or fired any employee or disciplined them or directed
the employees work, that Schaller had no right to refuse
employment of any individual, only the authority to
deny driving status to any employee that does not meet
the Company's driving standard and that R. & L hires
and fires its employees and the terms and conditions of
employment are provided for by collective bargaining
agreements
C Analysis
Are R & L and Schaller joint employers? Did they co
determine those matters governing the essential terms
and conditions of employment of the involved R. & L
employees9 Boire v Greyhound Corp, 376 U S 473
(1964), NLRB v Browning Ferris Industries, 691 F 2d
1117 (3d Cir 1982) As noted above there is a collec
tive bargaining agreement between R & L and the
Union Schaller is not a party to that contract The con
tract covers the terms and conditions of employment of
the involved employees Putting aside 22 June for the
moment, neither Loudermilk nor a representative of
Schaller was ever involved in either R & L s contract
negotiations with the Union or grievances involving R &
L employees
There is no common management, corporate officer
ownership, or financial control between R. & L and
Schaller 25 Nonetheless , these two separate business enti
ties can be joint employers But there is no written
agreement which gives Schaller a right of power of con
trol over R. & L s prerogatives of management in general
or over its labor relations in particular 26 Despite the
lack of such an agreement, did Schaller exercise control
over the labor relations affairs and policies of R. & L9
In other words did Schaller meaningfully affect matters
relating to the employment relationship such as hiring
firing discipline , suspension and direction Laerco Trans
portatton 269 NLRB 324 (1984)
Schaller held the involved operating authority it even
tually owned the trailers utilized, it eventually held title
to the tractors utilized it let R & L use rent free27 the
25 Consequently they are not a single employer
28 As pointed out in American Air Filter Co 258 NLRB 49 52 (1981)
control of the essential elements of labor relations is a prerequisite to the
existence of a joint employer relationship
27 On the one hand R & L paid Schaller the same percentage 18 per
cent of the revenues both before and after the terminal was built On the
other hand as the volume of traffic increased Schaller s 18 percent in
terms of dollars it received increased until GM began to pay less then it
had in the past for the same movement Despite the fact that when Chen
ault began to handle the involved traffic his volume was low he received
the same terms as R & L regarding the Bedford terminal
Bedford terminal which Schaller owned it owned the
tools R & L utilized, GM was Schaller s customer, it
paid the drivers insurance and cargo insurance, the
trucks carried Schaller s name the logbooks utilized
were Schaller s it has the right to advise R & L that a
driver could not operate a truck with Schaller s placard
on it its president Loudermilk testified that although he
has not done it he believes he has the authority to hire
any of the agent s drivers, and it advanced (loaned)
money to R & L for among other things, payroll pur
poses Also as noted above, R & L obtained a certificate
of use to conduct business under the assumed name of
Schaller
Regarding the only demonstrated use of the Schaller
letterhead to post the R & L work schedules Robert
Vande Zande s explanation that the secretary who typed
General Counsels Exhibit 13 should not have used
Schaller stationery is credited He did not sign the typed
work schedule and the secretary who did testify that she
used Schaller paper because it was handy and she more
than likely was not told to use R & L s letterhead
Robert Vande Zande testified that he never authorized
his secretary to use Schaller s stationery for this purpose
The General Counsels evidence does not warrant a con
clusion that Schaller played some role in establishing the
work schedules of some of R & L s employees
Bruce Vande Zande s reference to Schaller in the two
termination notices on R & L letterheads (G C Exhs 20
and 21) does not without more indicate that Schaller
played any role in these terminations This part of the
notice does nothing more then describe in Bruce Vande
Zande s terms the trucking operation from which the
men were terminated namely, the R. & L/Schaller oper
ation It does not demonstrate shared control by Schaller
of R & L s termination authority
The General Counsel cites Loudermilk s above de
scribed 22 June speech contending that portions thereof
demonstrate that (1) Schaller controlled and made im
portant decisions regarding hiring rate of pay, layoff
discharge and insurance coverage (2) Schaller could
make R & L cease to exist 28 (3) Schaller participated in
the grievances of R. & L soliciting employees to drop
their grievances and (4) Schaller participated in the col
lective bargaining process of R & L soliciting wage con
cessions
The focal point of Loudermilk s 22 June presentation
was the formation of a new corporation in which R &
L s drivers would hold stock Loudermilk did not want
to lose the GM traffic and this proposal was his attempt
to keep the traffic and R. & L s work force The discus
sion of a rate of pay and hiring referred to the new cor
poration and not to R. & L The layoff and drivers incur
ance coverage matters discussed during this presentation
28 Loudermilk s 22 June firing of Robert Vande Zande was nothing
more than Loudermilk s statement that Robert Vande Zande who Lou
dermilk originally said run the new corporation could not because of
driver opposition to this aspect of the proposal Robert Vande Zande tes
tified that in 1977 Loudermilk fired him but he Vande Zande was at the
terminal the next day and Loudermilk did not press the issue It appears
therefore that Loudermilk was of the opinion that he could fire Robert
Vande Zande He had not however attempted to exercise this preroga
tive since 1977
554 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
did deal with R & L. However, this aspect of the discus-
sion does not demonstrate that Schaller or Loudermilk
controlled or even codetermined R & L's layoff policy
or layoffs in general . The discussion, as set forth above,
centered on the fact that six of R & L's drivers who had
previously been determined to be uninsurable were not
recalled once the insurer decided they were insurable. As
Loudermilk conceded, he told Vande Zande not to put
the six drivers who were in layoff status back to work
"[b]ecause we needed to see whether or not they're
going to exist." Thus their recall did not turn strictly on
the insurability question , rather on an economic issue. It
must, however, be kept in mind that these six drivers
were not originally taken off the board for an economic
reason. They were removed over an insurance question.
It was not demonstrated that either Schaller or Louder-
milk had them declared uninsurable . Consequently, Lou-
dermilk ' s actions amounted to withholding approval of
their return to the board . This was an exercise , albeit
limited in scope, of control by Schaller through Louder-
milk. But it was not demonstrated that either Schaller or
Loudermilk played any role in any other layoff of R &
L's employees, if in fact other layoffs occurred.
Loudermilk 's one-time solicitation of what the General
Counsel describes as wage concessions and the dropping
of grievances on 22 June does not, as the General coun-
sel argues , amount to Schaller participating in R & L's
collective -bargaining process or grievance process, re-
spectively . Both of these points were made in a context
other than the normal collective -bargaining negotiating
process and the normal grievance process. These solicita-
tions, which were made in the union hall in front of
union representatives and most if not all the unit mem-
bers, were made in terms of forming a new corporation
in which the unit members would be stockholders.
When Loudermilk on 22 June said that "R & L would
cease to exist" and that if he "wished to have it cease to
exist" he could , what he was saying was that the traffic
was Schaller 's to give to whatever agent Schaller decid-
ed should handle the traffic and if Schaller decided that
the new employee stock ownership plan corporation
should handle the traffic, then R & L would cease to
exist . On 21 June Robert Vande Zande agreed with this
approach in his meeting with Loudermilk . In my opinion
Loudermilk's statement should not be interpreted to
mean that Schaller controlled R & L to the point where
it, Schaller , alone could bring about the dissolution of
the corporation.
As noted above , the General Counsel argues that
Robert Vande Zande's above-described affidavit demon-
strates that R & L and Schaller are joint employers in
that it is indicated:
2. John Loudermilk as president of Schaller has
complete authority over the day-to-day operations
of R & L including control over the hiring and the
employment of the drivers . Schaller is paid 18% of
the gross revenue of R & L. [Emphasis added.]
As noted above, the last paragraph of the affidavit reads:
6. Schaller actually exercises control over the hire
of drivers only in the areas of driver qualifications
since Schaller pays for the insurance coverage.
R & L's attorney, Boxberger, testified that he believed
that he was under the impression that paragraph 2 was
supposed to be stricken from the affidavit after para-
graph 6 was added but he was not sure. A comparison of
these two paragraphs of the affidavit indicates that the
paragraph which appears later in the affidavit, namely,
paragrpah 6, speaks only to "control over the hire."
Paragraph 2 speaks to "complete authority over the day-
to-day operations of R & L including control over the
hiring." (Emphasis added.) Paragraph 2 also speaks to
Schaller's share of the gross revenue. It does not appear,
therefore, that the inclusion of paragraph 6 in the affida-
vit in and of itself should result in removing or not con-
sidering the content of paragraph 2. As qualified by para-
graph 6, paragraph 2 would read as follows:
2. John Loudermilk as president of Schaller has
complete authority over the day-to-day operations
of R & L including control over the hiring [only
the areas of driver qualifications since Schaller pays
for the insurance coverage] and the employment of
the driver. Schaller is paid 18% of the gross reve-
nue of R & L.
The affidavit must be viewed in the light of (1).Robert
Vande Zande's testimony that Loudermilk did not con-
trol the day-to-day operations of R & L; (2) Louder-
milk's testimony that while he believes he could, he does
not hire any of the agent 's employees ; (3) Union Business
Agent Arnold's testimony that R & L and not Schaller
hires, lays off, and fires the drivers, participates in the
grievances , dispatches , and maintains the fleet; and (4)
the evidence of record which demonstrates that Schaller
was not involved in the day-to-day operation of R & L.
If what is stated in the affidavit is correct, it indicates
only that the authority existed. The evidence of record
fails to demonstrate that such authority was exercised on
a day-to-day basis.
As pointed out in Remke Central Division, 227 :NLRB
1969 (1977),
[In] Poole 's Warehousing Inc.,2 . . . . [t]here must
be . . . such actual or active common control, as
distinguished from merely a potential , as to denote
an appreciable integration of operations and man-
agement policies. 158 NLRB at 1286.
2 Drivers, Chauffeurs and Helpers Local No . 639, International
Brotherhood of Teamsters , Chauffeurs, Warehousemen and Helpers of
America (Poole's Warehousing, Inc.), 158 NLRB 1281 (1966).
Those usual accouterments of an interstate motor car-
rier 's operations as an agent of the certificate holder, i.e.,
insurance , placards, logbooks, drivers' qualifications,
drivers' records, safety checks of equipment , and the fact
that the shipper is Schaller's customer , speak to the exer-
cise of some control of the drivers' functions by Schaller.
But it does not speak to control of the essential elements
of labor relations such as wages , benefits, and working
R & L CARTAGE & SONS
conditions Compare American Air Filter Ca, supra and
Midlands Express, 236 NLRB 619 (1978) Rent free use
of the Bedford terminal and ownership of the tools
R & L utilized at that terminal considered either alone
or in conjunction with the aforementioned factors does
not in my opinion, warrant a finding that Schaller con
trolled the essential elements of labor relations
The agency relationship between Schaller and R & L
lasted from 1977 to 1986 It was not until just before the
end of that relationship that Schaller or Loudermilk
became involved with loans to R & L and taking and
holding title to the trailers and tractors, respectively
These actions were not indicia of control Rather they
were an attempt to bail out a failing R & L and retain
the 18 percent of the GM revenue and at the same time
protect Schaller/Loudermilk interests regarding the
loans to the extent possible under the circumstances
Those developments which occurred in the last months
of the R & L operation did not destroy the autonomous
operation of the two companies Compare Milo Express,
212 NLRB 313 (1974)
In my opinion the degree and the nature of Schaller s
involvement in the operations of R & L do not warrant a
finding that Schaller is a joint employer with R & L
The first complaint alleges that R & L and Schaller re
fused to recall six named drivers from work suspension
after they were declared insurable by Schaller s insurer
It is asserted that the six were not recalled because of the
number of grievances they filed and the fact that two
were union stewards On 22 June Loudermilk admitted
that he told Robert Vande Zande not to put the six back
to work because he needed to see if R & L was going to
continue to exist R & L s revenues had declined Lou
dermilk testified that he did not know whether any of
the involved drivers filed a higher than average number
of grievances But Robert Vande Zande was surely
aware of grievances because he testified [e]verytime we
got slow in come all the grievances, all the drivers
wanted free money It just wasn t there ' It is well set
tled that the filing of a grievance under a contractual
procedure is concerted activity protected by Section 7 of
the Act Town & Country LP Gas Service Co 255 NLRB
1149 (1981) Although the protected activity may not
have been a factor in the insurer originally declaring
them uninsurable, there was no demonstrated legitimate
justification no demonstrated lawful reason for not re
calling the six once they were declared insurable Lou
dermilk s asserted justification must be viewed in the
light of the fact that the six were recalled in mid July al
though nothing had changed regarding whether R & L
was going to continue to exist There was no lawful
reason for refusing to recall six One is left therefore
with the unlawful reason Loudermilk knew about the
grievances the president R & L Schaller s agent, knew
and he Robert Vande Zande, was the one who dealt
with Loudermilk regarding whether to recall the six
The six were treated as a group and so even though not
all in the group had a high number of grievances, none
were to be treated individually for that would have
served only to highlight the fact that R & L and Schaller
were taking advantage of an opportunity R & L s subse
quent reneging on the 5 May grievance resolution, be
555
cause it was a continuation of the unlawful activity de
scribed above, was also an unfair labor practice
Regarding Loudermilk s above described 22 June
speech, the General Counsel contends as noted above
that by soliciting wage concessions and the dropping of
grievances Loudermilk for Schaller participated in the
collective bargaining process and grievance process, re
spectively Also, it is contended that the threats of dis
charge made in 22 June speech are independent viola
tions of Section 8(a)(1) Pertinent portions of the speech
are set forth above Over 6 months before the speech
was given the Union s certified public accountant found
that R & L was technically bankrupt R & L had been
attempting to get concessions from the Union Are Lou
dermilk s 22 June comments to be viewed in a collective
bargaining negotiations context as apparently the Gener
al Counsel contends (at least in part)? In my opinion
Loudermilk's 22 June remarks were not unfair labor
practices Loudermilk was outlining a proposal and he
was stating the factors which he believed had to be con
sidered In that context nothing he said, in my opinion,
can be considered coercive or threatening
The second above described complaint alleges that
Schaller and R & L unlawfully ceased operations at the
Fort Wayne and Bedford facilities and discharged the
employees because the Union would not grant the afore
mentioned concessions and because certain of the em
ployees cooperated with the Board by giving testimony
R & L operated autonomously as a separate employer
Its closing and the discharge of its employees was not
unlawful In Textile Workers v Darlington Mfg Co, 380
U S 263, 273-274 (1965) the Court held that when an
employer closes his entire operation, even if the liquida
tion is motivated by vindictiveness towards the union,
such action is not an unfair labor practice "29
The amended consolidated complaint alleges that the
discontinuance of R & L s operations and the discharge
of R & L s employees were done without prior notice to
the Charging Union and without having afforded the
Charging Union an opportunity to negotiate and bargain
as the exclusive representative of the Respondents em
ployees with respect to such acts and conduct and the
effects of such acts and conduct Although R & L had
no duty to bargain about the decision to close, it did
have a legal obligation to bargain with the Union over
the effects on the employees of this decision 30 By failing
to notify the Union of its decision to shut down its oper
ations and to afford the Union an opportunity to bargain
about the effects of the shutdown on employees, Re
29 It was not demonstrated that R & L either owns or operates any
other facilities It was also not demonstrated that R & L was dissolved
R & L filed for bankruptcy under chapter 11 which according to Robert
Vande Zande is for reorganization as opposed to a termination Nonethe
less it has not been demonstrated that this is a partial or temporary shut
down In any event in my opinion R & L was closed for economic rea
sons and its cessation of all operations was not motivated by union
animus and was not an attempt to evade remedying unfair labor prac
tices
90 First National Maintenance Corp v NLRB 452 U S 666 (1981) The
obligation is unaffected by the fact that R & L has filed for bankruptcy
Burgmeyer Bros. 254 NLRB 1027 (1981)
556 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
spondent has engaged in unfair labor practices within the
meaning of Section 8(a)(5) of the Act.
Are Chenault and BVZ alter egos of R & L? Before
treating that matter, however, the relationship between
Chenault and BVZ should be resolved. In my opinion,
under the above-described joint employer criteria Chen-
ault and BVZ were joint employers of Bolin while he
drove BVZ's tractor which was leased to Chenault and
which was dispatched by Chenault. Other than leasing a
truck with a driver to Chenault there is no evidence that
demonstrates that BVZ or its president had anything to
do with the Chenault operation. Consequently, the ques-
tion actually is, "is Chenault the alter ego of R & L?"
For the reasons set forth below, in my opinion it is not,
To find alter ego status a threshold consideration is
common ownership and control. There is no common
ownership or control between R & L and Chenault.
Consequently, the latter is not, in ray opinion, the alter
ego of the former. Morton's I.G.A. Foodliner, 240 NLRB
1246 (1979), which distinguishes Crawford Door Sales Co.,
226 NLRB 1144 (1976).3'
But a finding that Chenault is not the alter ego of
R & L does not preclude a finding that it is a successor
of R & L. Bell Co., 243 NLRB 977 (1979).
In NLRB v. Burns Security Services, 406 U.S. 272, 281
fn. 5 (1972), the Court held:
The Board had never held that the National
Labor Relations Act itself requires that an employer
who . . . purchases the assets of a business to be
obligated to hire all of the employees of the prede-
cessor . . . . However, an employer who declines
31 Crawford, supra, states:
... each case must turn on its own facts but generally we have
found alter ego status where the two enterprises have "substantially
identical" management, business purpose, operation, equipment, cus-
tomers, and supervision, as well as ownership.
There both Respondents were wholly owned by members of the same
family and never lost their character as a closed corporation. Similarly in
Advance Electric, 268 NLRB 1001, 1004 (1984), "[alt all times all stock in
both corporations was owned by members of ... [one] family and all
corporate officers and directors also were members of that family." The
Board in Fugazy Continental Corp., 265 NLRB 1301 (1982), in listing the
aforementioned factors to be considered, indicated that not one of the
factors, taken alone, is the sine qua non of alter ego status. The Board
concluded, as here pertinent, that it must be determined whether (1) the
employers constitute "the same business in the same market," (2) the pur-
pose behind the creation of the alleged alter ego was legitimate or wheth-
er, instead, its purpose was to evade responsibilities under the Act. In
Fugazy, supra, Fugazy directed and managed both ends of the sale of the
involved business and Fugazy continued to retain a financial interest in
the alter ego assuming direct responsibility for the latter's electric bills,
secretaries, guards, and bill collectors. Such is not the case here. R & L
filed for bankruptcy 9 months after the Union's certified public account-
ant indicated that R & L was technically bankrupt. It has not been shown
that R & L's cessation was part of some scheme like that in NLRB Y.
Ozark Hardwood Co., 282 F.2d 1 (8th Cir. 1960), in which an unnecessary
default on a mortage was effected as a means of forcing a transfer in an
attempt to evade the consequences of the unfair labor practices commit-
ted there. Chenault is not a disguised continuance. See Southport Co. V.
NLRB, 315 U.S. 100 (1942). Whether Robert Vande Zande's testimony
that the union was to blame in big part for R & L's demise amounts to
union animus, as the General Counsel asserts, is highly questionable.
Unlike Woodline Motor Freight, 278 NLRB 1141 (1986), it cannot be said
here that the union animus was the sole motive for R & L's ceasing oper-
ations. As noted above, according to the Union's accountant, R & L was
technically bankrupt months before the alleged unfair labor practices
were committed.
to hire employees solely because they are members
of a union commits a § 8(a)(3) unfair labor practice.
But for the fact that Chenault hired a totally new com-
plement of employees, it would have been the successor
of R & L in that Chenault, without a hiatus, conducted
essentially the same operations out of the same Bedford
terminal utilized by R & L. In the circumstances present
here, the fact that R & L ceased operations and filed for
bankruptcy does not affect this.32
On the one hand, Atchison testified that on 31 July
Danny Chenault said "that he didn't think John wanted
him to hire anyone that had worked for R & L," and
Robert Terry testified that he heard Danny Chenault tell
Atchison that he, Chenault, did not "know whether he
was not supposed to, or he didn't feel like he [was] sup-
posed to hire anyone that had previously worked . . .
that John [Loudermilk] didn't want him to hire anybody
that previously worked there."33 On the other hand,
Danny Chenault testified that neither Loudermilk nor
anyone else from Schaller told him to hire. And initially
Loudermilk testified that he never told Danny Chenault
who to hire.
According to Danny Chenault's testimony, Atchison
was the only former R & L employee, in addition to
Bolin, who asked about working for Chenault. Atchison
did not deny Danny Chenault's testimony that he, Atchi-
son, was offered a job by Chenault. Indeed Atchison tes-
tified that on 31 July Danny Chenault told him that he
might be hired because he had not worked at R & L that
long.
As noted above, Loudermilk's 30 September letter in-
dicates that two of R & L's former employees expressed
a desire to Danny Chenault to drive for him. The only
former R & L employee who worked for Chenault was
Bolin, who drove a tractor of BVZ which was leased to
Chenault up to mid-December 1986 and then subsequent-
ly drove strictly for Chenault.
It is not clear exactly how many former R & L em-
ployees asked Danny Chenault for a job. While there
may not be an obligation on the part of a company
taking over an operation to "initiate the employment re-
lationship,"34 the company taking over the operation
cannot by hiring discrimination prevent the Union from
actually establishing a majority in the Respondent's work
force. Arguably Chenault and Schaller (as will be con-
32 Although R & L ceased to exist as a going concern when Chenault
commenced the involved operation (the few loads which the parties stip-
ulated were handled by R & L within a few days of its declared cessation
of operations do not effect this (conclusion) and R & L filed for bank-
ruptcy within a few days of the cessation operations, the situation at hand
is not the same as that which existed in Cladding Corp., 192 NLRB 200
(1971), because here (1) there was no hiatus, (2) the nature and the char-
acter of the employing industry at the involved facility had not been suf-
ficiently altered to preclude finding a successorship, and (3) the major
shipper of both was GM. In Gladding Corp., supra, the predecessor effec-
tively lost control over its own existence, and control over its day-to-day
operations during the hiatus was granted by the bankruptcy court to the
Small Business Administration, a Government Agency.
33 Robert Terry's brother, Jerry, testified that 6 months later Danny
Chenault, while indicating he needed drivers, said that "John won't let
me hire anyone that used to work here until we get the bankruptcy and
the labor matters straightened up."
34 Vantage Petroleum Corp., 247 NLRB 1492 (1980).
R & L CARTAGE & SONS
cluded, infra, they are joint employers) might have as
sumed that because R & L employees had already reject
ed wage and other concessions, they would not have
been willing to work for the rate Chenault/Schaller was
willing to pay (Arguably this was borne out by Atchi
sons failure to accept a job offer On the other hand
Bolin eventually did work for Chenault/Schaller) But
neither Chenault not Loudermilk indicated that this was
the case Indeed Loudermilk s 30 September letter would
seem to indicate otherwise
From the outset Chenault/Schaller by hiring discrimi
nation prevented the Union from actually establishing a
majority Atchison's and Robert Terry's testimony re
garding what Danny Chenault said on or about 31 July
is credited Chenault/Schaller created a climate of futil
ity" regarding the hiring of former R & L unit employ
ees Uncertainty whether a majority of the involved em
ployees would have sought the involved jobs and been
hired under lawful hiring practices is created by
Chenault/Schaller's own wrongful acts under Section
8(a)(3) and (1) and must be resolved against these Re
spondents State Distributing Co 282 NLRB 1048 (1987)
There the Board found that the Union s majority status
presumptively would have continued Had Chenault/
Schaller acted nondiscnminatonly and hired a majority
from R & L s unit employees, it would have been bound
to recognize their collective bargaining representative
and wages would at least have been subject to negotia
tion Shortway Suburban Lines 286 NLRB 323 (1987) 35
Chenault and Schaller are joint employers of Chen
ault's drivers As noted in Laerco Transportation, supra,
269 NLRB 324
The joint employer concept recognizes that two
or more business entities are in fact separate but that
they share or codetermine those matters governing
the essential terms and conditions of employment
Whether an employer possesses sufficient indicia of
control over employees employed by another
employer is essentially a factual issue To establish
joint employer status there must be a showing that
the employer meaningfully affects matters relating
to the employment relationship such as hiring
firing, discipline, suspension and direction
Although the GM account required immediate attention
and Danny Chenault was already an agent of Schaller
elsewhere, for Chenault to take over the involved oper
ation without first knowing the terms of the agency
agreement and without even attempting to look into the
possible ramifications demonstrates the control that Lou
dermilk had over Danny Chenault Loudermilk then dic
tated Chenault s hiring policy In turn Loudermilk dictat
ed whether Chenault would voluntarily be union The 18
cents a mile Chenault offered drivers was the same
ss There the Board indicated that a successor employer is ordinarily
free to set initial terms on which it will hire the predecessors employees
that this rule does not apply however when the successor has unlawful
ly failed to hire the employees because of their union affiliation and that
the successor therefore was not entitled to set the initial terms of em
ployment without first consulting the Union Loves Barbeque Restaurant
No 62 245 NLRB 78 (1979)
557
amount Loudermilk proposed on 22 June Loudermilk's
heavy hand, the one he refrained from using in the R &
L operation, is all too evident in the Chenault operation
Chenault was evading its responsibility This evasion was
orchestrated by Loudermilk Schaller through Louder
milk exercised sufficient control of the terms and condi
tions of employment of Chenault s employees to qualify
as a joint employer 36 NLRB v Browning Ferris Indus
tries supra and Boire v Greyhound Corp, supra (1964)
Having found that joint employers Chenault and
Schaller unlawfully refused to hire R & L employees, it
follows that Chenault and Schaller refused to recognize
and bargain with the Union and unilaterally changed the
terms and conditions of employment of the unit employ
ees 37
The amended consolidated complaint alleges that Lou
dermilk bypassed the Union and dealt directly with em
ployees in the unit by soliciting employees to work for
Chenault at reduced wages The vehicle, the 30 Septem
ber letter, which is set forth above, appears to raise, as
here pertinent, two questions namely, (1) can it be con
sidered in view of Respondents assertion that it was an
offer to settle, and (2) even if it can be considered does
the last sentence in the letter, [i]f you are interested in
accepting this offer, then contact Dennis Arnold [a union
business agent] and ask him to settle case preclude a
finding of direct dealing
Because Rule 408 of the Federal Rules of Evidence
excludes offers to compromise only when the purpose is
proving the validity or invalidity of the claim or its
amount, an offer for another purpose is not within the
3a The knowledge of one employer Schaller is imputed to the joint
employer Chenault as well American Air Filter Co supra No serious
question exists concerning Chenault s and Schaller s liability to remedy
unfair labor practices as successor with knowledge of the unremedied
violations at the time Chenault and Schaller took over the R & L oper
ation Golden State Bottling Co v NLRB 414 U S 168 (1973) Perma
Vinyl Corp 164 NLRB 968 (1967) enfd sub nom US Ape & Foundry
Co v NLRB 398 F 2d 544 (5th Cir 1968) The fact that the instant pro
ceeding does not involve an acquisition does not in my opinion warrant
a different result in view of the following Board language in Perma Vinyl
Corp supra at 969
When a new employer is substituted in the employing industry there
has been no real change in the employing industry insofar as the vie
tims of past unfair labor practices are concerned or the need for
remedying those unfair labor practices Appropnate steps must still
be taken if the effects of the unfair labor practices are to be erased
and all employees reassured of their statutory rights
And the Court in Golden State supra at 182-183 fn 5 held that as long
as there is continuity in the employing industry the public policy un
derlying the successorship doctrine will be served by its broad applica
Lion and the Board will not be required to distinguish among mergers
consolidations and purchases of assets Even though this case does not
fall into one of these specified categories in my opinion Golden State
supra and Perma Vinyl Corp supra apply in view of the continuity of
the employing industry Additionally certain equities namely (1) the
role Schaller played both regarding R & L s unfair labor practices and as
joint employer with Chenault in the continuing employer industry (2)
the fact that Schaller benefits from the continuation of the industry and
(3) the fact that Chenault acted in haste and in total disregard of possible
ramifications (Danny Chenault acted more like an employee than motor
carver agent) weigh in favor of taking this approach
31 A successor is obligated to bargain with the collective bargaining
representative of the employees of its predecessor NLRB v Burns Secure
ty Services supra The Union should have been given poor notice and
been accorded an opportunity to negotiate and bargain Chenault s and
Schaller s failure to do so violated the Act
558 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
rule.38 Additionally the rule states that it does not re-
quire exclusion when the evidence is offered for another
purpose such as proving an effort to obstruct a criminal
investigation or prosecution. The letter was not intro-
duced to show the strength or the weakness of the claim
Loudermilk ostensibly was trying to settle. Rather the
primary purpose was to prove that Loudermilk engaged
in an unlawful activity, bypassing the Union. While an
employer (as noted above, Schaller is a joint employer
with Chenault of Chenault's drivers) may communicate
to employees offers it has made to a union, and may
even urge the employees to prevail on the Union to
accept its offer, the employer's action must be viewed in
the light of the employer's entire course of action re-
garding this matter. Compare Safeway Trails, 233 NLRB
1078 (1977). Here Schaller was engaged in other unlaw-
ful activity in that its president, Loudermilk, directed
Danny Chenault not to hire R & L drivers because of
their union activity and to avoid an obligation to bargain
with the Union. The joint employers, Chenault and
Schaller,. by this conduct were refusing to recognize and
bargain with the Union while they unilaterally changed
the terms and conditions of employment. The letter was
part of Loudermilk's scheme to take advantage of
R & L's bankruptcy and undermine the Union's position
as the bargaining representative of the involved drivers.
Schaller's39 letter violated Section 8(a)(5) in that it was
an attempt to bypass the Union.
The amended consolidated complaint alleges:
(y) At all times material herein, the Joint Re-
spondents [Loudermilk, Schaller, and R & L], the
Respondent BVZ, and the Respondent Chenault
have been affiliated business enterprises with
common officers, ownership, directors, manage-
ment, and supervision; have formulated and admin-
istered a common labor policy affecting employees
of said operations, have shared common premises
and facilities; have provided services for each other;
have interchanged personnel with each other; and
have held themselves out to the public as a single
integrated business enterprise.
(z) By virtue of the operations described above in
.. . [the next preceding paragraph], the Joint Re-
spondents, the Respondent BVZ, and the Respond-
ent Chenault constitute a single integrated business
enterprise and a single employer within the meaning
of the Act.
Barry Vande Zande is vice president of R & L and
president of BVZ. Other than him, the companies do not
have common owners or common officers. As pointed
out in NLRB v. Browning-Ferris Industries, supra at 1122.
38 Under 29 U.S.C. § 160(b) the Board conducts its hearings in accord-
ance with the Federal Rules of Evidence "so far as [is] practicable." Al-
though the Federal Rules carry great weight, they do not absolutely bind
the Board. NLRB Y. Maywood Do-Nut Ca, 659 F.2d 108, 110 (9th Cir.
1981).
39 Although the complaint speaks to Loudermilk, he signed the letter,
however, as president of Schaller and nothing in the letter itself indicates
that he was acting in other than a representative capacity. Consequently,
the finding of this violation should be limited to Schaller vis a vis Lou-
dermilk.
A "Single employer" relationship exists where
two nominally separate entities are actually part of
a single integrated enterprise so that, for all pur-
poses, there is in fact only a "single employer."
In answering questions of this type, the Board
considers the four factors approved by the Radio
Union [C]ourt. (380 U.S. at 256, 85 S.Ct. at 877): (1)
functional integration of operations; (2) centralized
control of labor relations; (3) common management;
and (4) common ownership. Thus the "single em-
ployer" standard is relevant to the determination
that "separate corporations are not what they
appear to be, that in truth they are but divisions or
departments of a single enterprise." NLRB v. Deena
Artware, Inc., 361 U.S. 398, 402, 80 S.Ct. 441, 443, 4
L.Ed.2d 400 (1960). "Single Employer" status ulti-
mately depends on all the circumstances of the case
and is characterized as an absence of an arm's
length relationship found among unintegrated com-
panies."
Contrary to the allegations in the complaint, the in-
volved companies do not have common management and
supervision. Except for Schaller and Chenault, as treated,
supra, they have not formulated and administered a
common labor policy affecting employees of the oper-
ation, Although Chenault uses the same premises R & L
formerly utilized, the involved companies have not
"shared common premises and facilities," they do not
share equipment except on a lease basis familiar in the
trucking industry. They do not interchange personnel
with each other .40 Although (1) the office workers of
Chenault answer the phone "Schaller," (2) the trucks
have the name Schaller on them, and (3) according to
Respondents' brief, the involved Bedford terminal has
the name Schaller on it, the involved companies do not
hold or have not held themselves out to the public as a
single-integrated business. It was not demonstrated that
R & L or Chenault held themselves out as anything
other than an agent of Schaller. The only shipper in-
volved, GM, would appreciate the necessity for and the
significance or insignificance of the trappings of an agent
in the trucking industry. The Respondents are not a
single-integrated business enterprise.
Describe the above-made finding that Chenault and
Schaller are joint employers, these two do not meet the
criteria for a single employer and accordingly they are
not a single-integrated business enterprise.
As indicated in footnote 3, supra, at the hearing, the
General Counsel alleged that on 4 February 1987, Re-
spondents interrogated Hardesty in violation of the Act
in that she was not advised that her participation in the
questioning was voluntary and that no reprisals would be
taken against her if she refused to answer. In Johnnie's
4o Bolin was not interchanged. After being terminated by R & L he
was employed by BVZ and drove BVZ's tractor which was leased to
Chenault. When that lease terminated he became an employee of Chen-
ault. The services that any one of the companies provided for another of
the involved companies is minimal and considered either alone or in con-
junction with any other circumstances would not warrant a finding of
single employer or single-integrated business enterprise.
R & L CARTAGE & SONS 559
Poultry Co, 146 NLRB 770 at 774-775 (1964) it was
concluded
Despite the inherent danger of coercion therein
the Board and courts have held that where an em
ployer has a legitimate cause to inquire he may ex
ercise the privilege of interrogating employees on
matters involving their Section 7 rights without in
curnng Section 8(a)(1) liability The purposes which
the Board and courts have held legitimate are to
two types the verification of a union s claimed ma
jority status to determine whether recognition
should be extended, involved in the preceding dis
cussion, and the investigation of facts concerning
issues raised in a complaint where such interroga
tion is necessary in preparing the employers de
fense for trial of the case
In allowing an employer the privilege of ascer
taming the necessary facts from employees in these
given circumstances the Board and Courts have es
tablished specific safeguards designed to minimize
the coercive impact of such employer interrogation
Thus, the employer must communicate to the em
ployee the purpose of the questioning, assure him
that no reprisal will take place, and obtain his par
ticipation on a voluntary basis, the questioning must
occur in a context free from employer hostility to
union organization and must not be itself coercive
in nature, and the questions must not exceed the ne
cessities of the legitimate purpose by prying into
other union matters eliciting information concern
ing an employees subjective state of mind or other
wise interfering with the statutory rights of employ
ees When an employer transgresses the boundaries
of these safeguards he loses the benefits of the
privilege
In Safelite Glass 283 NLRB 929 (1987), the administra
tive law judge, citing Mineola Ford Sales, 258 NLRB 406
(1981)41 concluded that Johnnie s Poultry Co supra, ap
plies only to situations where an employer interrogates
employees about matters involving their Section 7
rights 42 As noted above the subject of the attorneys in
terrogation in the instant case had nothing to do with
Section 7 rights Alternatively even if Johnnie Poultry
Co supra does apply in my opinion it does not to the
case at hand the interrogation should be viewed in terms
of the totality of the circumstances Rossmore House 269
NLRB 1176 (1984) When viewed in these terms in my
opinion there was no violation of the Act in this regard
R & L Chenault and Schaller are jointly and severally
liable for remedying the unfair labor practices Riley Aer
onautics Corp 178 NLRB 495 (1969) The General
Counsel seeks to hold Loudermilk personally liable for
the unfair labor practices on the theory that he so ante
41 There the Board Members Fanning Jenkins and Zimmerman con
cluded that the alleged unlawful interrogation the Respondent there con
ducted did not pertain to the employees involvement in conduct protect
ed by Section 7 of the Act and accordingly the Johnnie Poultry Co
supra allegation was dismissed
42 Board Member Babson viewed such a reading of Johnnie s Poultry as
perhaps unduly restrictive especially in light of the circumstances of that
case
grated or intermingled his assets and affairs that no dis
tinct corporate lines are maintained
Riley Aeronautics Corp, supra at 501, sets forth the ap
plicable law
(E)asily the most distinctive attribute of the cor
poration is its existence in the eye if the law as legal
entity and artificial personality distinct and separate
from the stockholders and officers who compose it
Wormser, Disregard of the Corporate Fiction and
Allied Corporation Problems (Baker, Voorhis and
Company 1927) p 11 The insulation of a stock
holder from the debts and obligations of his corpo
ration is the norm, not the exception NLRB v
Deena Artware Inc, 361 U S 398, 402-403 Never
theless, the corporate veil will be pierced whenever
it is employed to perpetrate fraud evade existing
obligations, or circumvent a statute Isaac Schieber
et al individually and Allen Hat Co, 26 NLRB 937
964, enfd 116 F 2d (C A 8) Thus, in the field of
labor relations, the courts and Board have looked
beyond organizational form where an individual or
corporate employer was no more than an alter ego
or a disguised continuance of the old employer
(Southport Petroleum Co v NLRB, 315 US 100,
106), or was in active concert or participation in a
scheme or plan of evasion (NLRB v Hopwood Re
tinning Co, 104 F 2d 302 304 (C A 2)), or siphoned
off assets for the purpose of rendering insolvent and
frustrating a monetary obligation such as backpay
(NLRB v Deena Artware Inc supra, 361 U S 398),
or so integrated or intermingled his assets and of
fairs that no distinct corporate lines are main
tained (Id at 403)
Here the General Counsel has not demonstrated that
Loudermilk so integrated or intermingled his assets and
affairs that no distinct corporate lines are maintained R
& L as determined by the Union s own certified public
accountant, was financial trouble notwithstanding Lou
dermilk s attempts to aid it financially As noted above,
Loudermilk s involvement in R & L just before it filed
for bankruptcy was insufficient to find Schaller was a
joint employer with R & L R & L s bankruptcy filing
was not demonstrated to be other than bona fide and in
effect it was forseen by the Union s own certified public
accountant 8 months before R & L filed The General
Counsel failed to demonstrate that Loudermilk was
acting in any capacity other than as Schaller s president
In my opinion Loudermilk is not personally liable for
remedying the unfair labor practices
CONCLUSIONS OF LAW
1 The Respondents R & L Chenault Schaller, and
BVZ, are all employers engaged in commerce within the
meaning of Section 2(2) (6) and (7) of the Act
2 The Charging Union and Teamsters Local Union
No 135 are and have been at all times material labor
organizations within the meaning of Section 2(5) of the
Act
3 The following described unit is an appropriate one
for collective bargaining purposes
560 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
All full-time and regular part-time truckdrivers and
mechanic employees of the Respondent R & L for-
merly employed by it at its Fort Wayne, Indiana
and Bedford, Indiana facilities including all full-time
and regular part-time yard helpers; but excluding all
office clerical employees, all janitors, all profession-
al employees, all guards, and supervisors as defined
in the Act.
4. At all times since 1978, the Union, by virtue of Sec-
tion 9(a) of the Act, has been, and is, the exclusive repre-
sentative of the employees in the unit described above.
5. By refusing to recall the following named employ-
ees from work suspension on or about 29 April 1986,
R & L violated Section 8(a)(1) and (3) of the Act:
Gary Gase Shabbir Morissawalla
Charles Quinn Norman Beeks
Gail Miller Michael McKee
6. By reneging on and refusing to abide by a grievance
resolution agreement entered into between it and the
Charging Union, R & L, on or about 5 May violated
Section 8(a)(1) of the Act.
7. By failing to notify the Charging Union of the ces-
sation of operations and by failing to afford the Charging
Union an opportunity to negotiate and bargain concern-
ing the effects of that decision on unit employees, R & L
violated Section 8(a)(5) and (1) of the Act.
8. Chenault and Schaller are joint employers of the in-
volved employees of Chenault.
9. By their refusal on or about 31 July 1986, and there-
after to hire the employees of R & L after taking over
that operation because of the union affiliation of these
employees and to avoid an obligation to bargain with the
Union, Respondent joint employers Chenault and
Schaller violated Section 8(a)(3) and (1) of the Act.
10. Joint Employer Respondents Chenault and
Schaller are the successor employer to R & L and by
failing to recognize and bargain with the Union since 1
August 1986 as the exclusive collective-bargaining repre-
sentative of the employees in the above-described unit,
including by departing from preexisting rates of pay and
benefits without prior notification to and consultation
with the Union, they violated Section 8(a)(5) and (1) of
the Act.
11. By attempting to bypass the Union on 30 Septem-
ber 1986 joint employer Schaller violated Section 8(a)(1)
and (5) of the Act.
12. The aforesaid unfair labor practices affect com-
merce within the meaning of Section 2(6) and (7) of the
Act.
13. The Respondents have not violated the Act in any
other manner.
THE REMEDY
Having found that Respondents R & L, Chenault, and
Schaller have and are engaged in certain unfair labor
practices, I shall recommend that they cease and desist
therefrom and take certain affirmative action designed to
effectuate the policies of the Act.
Because it has been found that R & L unlawfully re-
fused to recall the six drivers named above from work
suspension on or about 29 April 1986, it shall be ordered
that R & L make them whole for any loss of earnings
they suffered up until that point in time when they were
recalled by R & L in mid-July 1986, as prescribed in
F. W. Woolworth Co., 90 NLRB 289 (1950), with interest
to be computed in the manner prescribed in New Hori-
zons for the Retarded, 283 NLRB 1173 (1987).43
With Respect to R & L's unlawful failure to bargain
with the Union about the effects of its decision to cease
operations, the terminated employees have been denied
an opportunity to bargain through their collective-bar-
gaining representative at a time when R & L still had
some loads to be handled and a measure of balanced bar-
gaining power existed. Meaningful bargaining cannot be
assured until some measure of economic strength is re-
stored to the Union. A bargaining order alone, therefore,
cannot serve as an adequate remedy for the unfair labor
practices committed.
Accordingly, it is deemed necessary, in order to effec-
tuate the purposes of the Act, to require R & L to bar-
gain with the Union concerning the effects of the show-
down on its employees, the order shall be accompanied
with a limited backpay requirement designed both to
make whole the employees for losses suffered as a result
of the violations and to recreate in some practicable
manner a situation in which the parties' bargaining posi-
tion is not entirely devoid of economic consequences for
R & L. This shall be done by requiring that R & L pay
backpay to its employees in a manner similar to that re-
quired in Contris Packing Co., 268 NLRB 193 (1983).44
Thus, R & L shall pay employees backpay at the rate of
their normal wages when last in R & L's employ from 5
days after the date of this Decision and Order until oc-
currence of the earliest of the following conditions: (1)
the date R & L bargains to agreement with the Union on
those subjects pertaining to the effects of the cessation of
operations on its employees; (2) a bona fide impasse in
bargaining; (3) the failure of the Union to request bargain
within 5 days of the date of this Decision and Order, or
to commence negotiations within 5 days of R & L's
notice of its desire to bargain with the Union; (4) the
subsequent failure of the Union to bargain in good faith;
but in no event shall the sum paid to any of these em-
ployees exceed the amount they would have earned as
wages from 1 August 1986, the date on which R & L
terminated its operations, to the time they secured equiv-
alent employment elsewhere, or the date on which R &
L shall have offered to bargain, whichever occurs
sooner; provided, however, that in no event shall this
sum be less than these employees would have earned for
a 2-week period at the rate of their normal wages when
last in the Respondent's employ.
43 Under New Horizons, interest is computed at the "short-term Federal
rate" for the underpayment of taxes as set out in the 1986 amendment to
26 U.S.C. § 6621. Interest accrued before 1 January 1987 (the effective
date of the amendment) shall be computed as in Florida Steel Corp., 231
NLRB 651 (1977).
44 The so-called Transmarine Corp., backpay remedy (170 NLRB 389
(1968)). Compare the administrative law judge's decision in Signal Com-
munications, 284 NLRB 423 (1987), and cases cited there, including Burg-
meyer Bros., supra at fn. 30.
R & L CARTAGE & SONS
Having found that Respondent joint employers Chen
ault and Schaller discriminatorily refused to offer em
ployment to the former employees of Respondent R & L
it shall be ordered that their employment status be re
stored to what it would have been but for the discrimina
tion against them and that Respondent joint employers
Chenault and Schaller offer them immediate and full re
instatement to their former jobs or if those jobs no
longer exist to substantially equivalent positions, without
prejudice to their seniority or other rights and privileges
previously enjoyed discharging, if necessary employees
hired from sources other than R & L to make room for
them, and make them whole for any loss of earnings that
they may have suffered due to the discrimination prac
ticed against them, as prescribed in F W Woolworth Co
supra, with interest thereon to be computed in the
manner prescribed in Florida Steel Corp, 231 NLRB 651
(1977) 45
Further, it shall be ordered that Respondent joint em
ployers Chenault and Schaller bargain with the Union,
on request, concerning any terms and conditions of em
ployment on which joint employers Chenault and
Schaller would have been required to bargain had the
Union s lawful status been acknowledged on 1 August
1986 the date Respondent joint employers Chenault and
Schaller took over the R & L operation In addition, it
shall be ordered that Respondent joint employers Chen
ault and Schaller cancel, on request by the Union
changes in rates of pay and benefits unilaterally effectuat
ed and make the employees whole by remitting all wages
and benefits that would have been paid absent the unlaw
ful conduct of Respondent joint employers Chenault and
Schaller as found herein from 1 August 1986 until these
Respondents negotiate in good faith with the Union to
agreement or to impasse
The following Board language in State Distributing
Co, supra, bears repeating
In sum we acknowledge that the make whole
remedy that the Board imposes in [successor] cases
such as this is not invulnerable to all criticism We
are however faced with a set of less than perfect
remedial choices The remedy the Board has chosen
has the drawback of retroactively imposing on the
Respondent terms and conditions of employment
that had been set by the contract negotiated by its
predecessor but it has the advantage of giving some
recompense to the victims of the discrimination and
preventing the Respondent from enjoying a finan
cial position that is quite possibly more advanta
45 As modified by New Horizons supra at fn 43
561
geous than the one it would occupy had it behaved
lawfully A remedy that allowed to stand the re
duced terms and conditions of employment that the
Respondent imposed unilaterally would give full
effect to the right of a Burns successor to set its
own terms but this would quite possibly leave vic
tims uncompensated and it would confer Burns
rights on an employer that has not conducted itself
like a lawful Burns successor because it has unlaw
fully blocked the process by which the obligations
and rights of such a successor are incurred A
remedy such as the court suggested in Loves Barbe
que [namely to require a successor employer only
to pay the higher contract rates for a reasonable
time of bargaining since in all probability bar
gaining would have led to an impasse allowing
the employer unilaterally to reduce wages] is
virtually impossible to calculate, and to the extent
that it involves imposing contractual terms based on
this Agency's conjecture without an adequate factu
al basis it seems hardly preferable to imposing on
the Respondent the terms under which the Allstate
employees had worked just before the Respondent
took over the enterprise
Finally it must be noted that the Board faces this
set of less than perfect remedial choices because of
the uncertainties created by the Respondents mis
conduct The Board makes such choices pursuant to
the congressional delegation of power to deter
mine when the policies of the Act would be effectu
ated by a particular remedy, and it makes those
choices subject only to a test of reasonableness She
pard v NLRB, 459 U S 348 (1983) Accord Fibre
board Paper Products v NLRB, 379 U S 203 215-
216 (1964) For all of the reasons set forth above,
we believe that the Love s Barbeque remedy meets
that test 4
4As explained above the circumstances in this case are some
what different from those in Loves Barbeque in which the Ninth
Circuit declined to accept the remedy in full We also note that a
similar order in a case subsequent to Love s Barbeque was enforced
in full by the court although it appears that the remedial issue was
not argued in the case Stone Boat Yard 264 NLRB 981 983
(1983) enfd 715 F 2d 441 (9th Cir 1983)
Because joint employers Schaller and Chenault are
successors to R & L they are also jointly and severally
liable for the backpay due to (1) the six drivers who
were not recalled for an unlawful reason and (2) unit
members under the limited backpay remedy recommend
ed herein regarding R & L
[Recommended Order omitted from publication ]