Davis Van & Storage

National Labor Relations Board - Board Decisions

Jun 30, 1975

218 N.L.R.B. 1339 (N.L.R.B. 1975)

DAVIS VAN & STORAGE 1339
Davis Van & Storage ; Great Western Van & Storage
Co. and Chauffeurs , Teamsters & Helpers Local
No. 150, International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of
America . Case 20-CA-8998
June 30, 1975
DECISION AND ORDER
BY MEMBERS JENKINS, KENNEDY, AND
PENELLO
On April 10, 1975, Administrative Law Judge
Russell L. Stevens issued the attached Decision in
this proceeding. Thereafter, Respondent filed excep-
tions and a supporting brief, and the General
Counsel filed an answering brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, findings,
and conclusions of the Administrative Law Judge
only to the extent consistent herewith.
Mary B. Gehring owned two separate, incorpora-
ted moving and storage companies, Respondents
herein . Davis Van & Storage operated out of Davis,
California, and Great Western Van & Storage Co.
out of Sacramento. Both were affiliated with Allied
Van Lines. Mrs. Gehring was the president of both
corporations. She personally managed the Davis
operations and employed a separate manager at
Great Western. Great Western had a collective-
bargaining agreement with the Union. Davis was
nonunion and paid lower wages.' In January 1974,
the Internal Revenue Service closed Great Western
for tax delinquencies.
Great Western laid off its employees. Mrs. Gehring
met with representatives of the Union to discuss the
situation. She told them Great Western would not
reopen and that the business would not be sold or
transferred. She complained about the work habits of
the former employees and about the high costs of
operating under the collective-bargaining agreement.
In February 1974, Davis applied for and was
awarded Great Western's former franchise from
Allied Van Lines. At an unspecified time Davis
leased part of the premises formerly leased by Great
Western , assumed custody of some property in Great
Western's storage vaults, and hired some employees
to operate the facility, including the former manager
of Great Western. Some of the property in storage
had been in storage with Allied agents even prior to
their having been in the possession of Great Western.
The other moving and storage customers Davis
obtained at the Sacramento location were apparently
obtained through its status as an Allied agent rather
than through its relationship to Great Western. For
instance, Great Western had shared the business
generated by McClellan Air Force Base with another
Allied agent. Prior to going out of business, Great
Western had lost its share of the McClellan business,
presumably because of unsatisfactory performance.
When Davis acquired the Allied franchise, it ap-
proached the appropriate officials and obtained for
itself a share of the Air Force Base business. The
Internal Revenue Service auctioned off some of
Great Western's equipment in July 1974. Davis bid
successfully on five vehicles and used them at the
Sacramento facility thereafter. Presumably it had
used its own equipment there before the auction.
The Administrative Law Judge's findings of viola-
tions of Section 8(a)(5), (3), and (1) of the Act are
based on his conclusion that Davis continued the
business in Sacramento as the alter ego of Great
Western. In our view, this conclusion is not warrant-
ed.
As background, we note that despite the common
ownership and similar business operations of Davis
and Great Western, there is no evidence that they
were operated with such active common control or
integration of operations as to have constituted a
single enterprise or single employer.2 Therefore the
fact that Davis ultimately took over a substantial part
of Great Western's operations does not, by itself,
make Davis heir to any of Great Western's collec-
tive-bargaining obligations.3
Of crucial importance is the fact that in no sense
did Mrs. Gehring or Great Western voluntarily
transfer Great Western's business to Davis. The
closing of Great Western was involuntary. There is
no suggestion that it was fraudulent or illusory.
Further, the transfer of some of Great Western's
former customers, equipment, and lease to Davis was
accomplished for the most part as a result of arm's-
length transactions. Thus, in its acquisition of the
Allied franchise and the clientele that went with it,
Davis stood in the shoes of an independent Allied
agent, lacking the power to compel such transfer to
itself. As an auction bidder on Great Western's
1 Mrs. Gehring and her late husband owned Davis since 1955 and
operated it without any union since the mid-1950's They purchased Great
Western in 1967 and operated pursuant to agreements with the Union since
that year
2 Cf Milo Express, Inc, 212 NLRB 313 (1974).
218 NLRB No. 205
9 We need not decide here under what circumstances such a transfer of
obligations would occur if Great Western and Davis were considered to be
separate subdivisions of a single employer . See Park/ane Hosiery Co., Inc
and Mervyn Roberts d/b/a Park/ane Hosiery, 203 NLRB 597, 611-615
(1973).
1340 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
equipment it stood in the shoes of a stranger. Davis
informally took over part of Great Western's lease
simply by paying the appropriate rent, but there is no
evidence that the owner made other than an
independent business decision to allow Davis to do
so.
In short, we do not have a situation where an
employer had transferred work out of a unit of
represented employees. We do not have before us an
employer who was in a position to do so, at least not
after Great Western legitimately closed. Therefore,
the Administrative Law Judge's findings concerning
Respondents' desire to get rid of the Union, and the
fact that they may have welcomed the opportunity to
do so, lose their significance. The events which
resulted in the demise of the bargaining unit were
beyond Respondents' control. The partial recaptur-
ing of the business by Davis was something within its
reach but not necessarily within its grasp. Its securing
of the Sacramento operation was contingent on
several independent business transactions, the suc-
cess of which were not assured in advance.
In these circumstances, Davis, although commonly
owned with the defunct Great Western, is not its alter
ego for collective-bargaining purposes. Consequently
it had no obligation to abide by the collective-
bargaining agreement between Great Western and
the Union, or to seek out the former employees of
Great Western and offer them employment. Since
Davis never hired, or even indicated any intention of
offering employment to, a sufficient number of them
so that the Union would have continued as the
majority representative of its employees, Davis is not
a "successor employer" to Great Western with regard
to the latter's bargaining obligation.4
Accordingly, we shall dismiss the complaint in its
entirety.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board orders that the complaint herein be,
and it hereby is, dismissed in its entirety.
4 United Maintenance & Manufacturing Co, Inc, 214 NLRB No 31
(1974), The Boeing Company, 214 NLRB No. 32 (1974)
DECISION
STATEMENT OF THE CASE
RUSSELL L. STEVENS, Administrative Law Judge: This
matter was heard at Sacramento, California, on February
13, 1975.1 The complaint,2 issued December 12, is based
upon an original charge filed February 28 and a first
i All dates hereinafter are within 1974, unless stated to be otherwise
2 As amended at the heanng.
amended charge filed December 10, by Chauffeurs,
Teamsters & Helpers Local No. 150, International Brother-
hood of Teamsters, Chauffeurs, Warehousemen and
Helpers of America, hereinafter referred to as the Umon
(sometimes referred to as Local 150). The complaint alleges
that Davis Van & Storage; Great Western Van & Storage
Co., hereinafter referred to as Respondents (sometimes
separately referred to as Davis and Great Western),
violated Section 8(a)(5), (3), and (1) of the National Labor
Relations Act, hereinafter referred to as the Act.
All parties were given full opportunity to participate, to
introduce relevant evidence, to examine and cross-examine
witnesses, and to argue orally. Briefs, which have been
carefully considered, were filed on behalf of the General
Counsel and Respondent. Upon the entire record, and
from my observation of the witnesses and their demeanor,
I make the following:
FINDINGS OF FACT
1. THE BUSINESS OF RESPONDENT
At all tunes material herein,3 Respondent Great Western
is, and has been, a California corporation engaged in
transporting and storing household goods, operating at a
facility located in Sacramento, California. During the
calendar year preceding January 25, 1974, Respondent
Great Western performed services valued in excess of
$50,000 for customers, each of whom performed services
valued in excess of $50,000 from points located outside the
State of California. In the course of its conduct of business
during said calendar year Respondent Great Western also
provided services valued in excess of $50,000 to the United
States Air Force at McClellan Air Force Base.4 At all times
material herein Respondent Davis is, and has been, a
California corporation engaged in transporting and storing
goods, operating at a facility located in Davis, California.
During the past year Respondent Davis received gross
revenues in excess of $50,000 for transporting goods and
supplies in interstate commerce, and received gross
revenues in excess of $50,000 from customers, each of
whom purchased and received, or sold and delivered,
goods and supplies valued in excess of $50,000 from points
outside the State of California.
I find that Respondents are employers engaged in
commerce within the meaning of Section 2(6) and (7) of the
Act.
U. THE LABOR ORGANIZATION INVOLVED
Chauffeurs, Teamsters & Helpers Local No. 150,
International Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America, is a labor
organization within the meaning of Section 2(5) of the Act.
3 Great Western judicially was declared bankrupt on or about January 6,
1975
4 As stipulated by counsel at hearing
DAVIS VAN & STORAGE 1341
III. THE UNFAIR LABOR PRACTICES
A. Background
Mary B. Gehring (hereinafter Gehring) and her husband
purchased all the outstanding stock of Great Western on or
about May 5, 1967. Gehring has been the sole shareholder
of Great Western since the death of her husband on March
15, 1973.
Gehring and her husband began business as Davis Van
and Storage , a proprietorship , in 1955 and the business was
incorporated September 30, 1969, as Respondent Davis.
Gehring has been the sole shareholder in Davis since her
husband's death.
In January of 1974 Gehring was president of Respon-
dents Great Western and Davis, and corporate officers of
the two companies were the same individuals (vice
president and secretary-treasurer). In January of 1974 Fred
Mykleby (hereinafter Mykleby) was manager of Great
Western, and Gehring managed the business of Davis.
Great Western has had a contract with the Union since
prior to 1968,5 and at all times material herein Richard
Henry (hereinafter Henry), business agent for the Umon,
administered the contract for the Union. The six persons
named in the complaints as alleged discriminatees were
longtime employees of Great Western until on or about
January 22, 1974, and were members of Local 150 on and
prior to that date.
Respondent Davis is nonunion, and has not had a
contract with any union since at least the 1950's.
Great Western has been a marginal operation for several
years, and frequently has had problems with its Federal
taxes. Gehring loaned money to Great Western on three
occasions to make payment of delinquent Federal taxes.
On January 22, 1974 the Internal Revenue Service closed
Great Western after unsuccessful attempts to collect
delinquent assessments , and on July 30, 1974, that Agency
sold certain equipment of Great Western at auction, to pay
the delinquencies . Neither Henry nor any of the aforesaid
six employees were notified in advance by Gehring or
anyone else that the business would be closed, although
some of the six knew the Company's financial condition
was not good and there was a sense of impending changes.
Mykleby asked some of the six prior to January 22 if they
would be willing to go nonunion and continue to work if
there were changes . All declined to do so.
After Great Western was closed January 22, employment
of the six alleged discriminatees was terminated by Great
Western. Henry, Tony Santos (organizer for the Union),
Mykleby, and Gehring met to discuss the closing of Great
Western after the closure. Gehring said the facility would
not reopen, and that the business would not be sold or
transferred. At that meeting, Gehring complained about
the high costs of operation with union employees.
After Great Western was closed several events occurred.
Mykleby was hired by Gehring to manage Davis' Sacra-
mento facility. Some outside employees were hired by
5 Great Western admitted that the employees involved herein, whose
employment was terminated , constituted a unit appropriate for collective
bargaining.
8 Oscar Liedke was added to the complaint at hearing, without objection
by Respondent.
Davis after the closing. Great Western's Allied Van and
Storage franchise was revoked, and Davis was awarded the
franchise after applying therefor. Allied was awarded the
McClellan Air Force Base business previously handled by
Great Western. Davis assumed Great Western's facility
lease , and continues to occupy Great Western's former
business area , although it has been reduced from 30,000 to
18,000 square feet. Davis assumed control of items in the
Great Western storage area , and Davis bills the customers
for storage costs. Three of Great Western's employees
applied for work at Davis after Great Western closed:
Mykleby, Cotis Childs (hereinafter Childs), and John
Halpenny, a salesman . Of the three, only Childs had been a
member of Local 150, and he withdrew his membership
prior to being hired by Davis. Davis is nonunion, and pays
drivers less than Great Western paid. Finally, Davis bid on
seven Great Western vehicles sold at auction by IRS in
July of 1974, and purchased five of them. No member of
Local 150 applied for a job at Davis, nor did Henry ask
Gehring to hire any such member.
B. Analysis
Great Western and Davis are family corporations in the
strictest sense . Gehring owns all the outstanding stock in
both companies. In view of that fact, and the actions of
Davis in assuming Great Western's lease, storage area,
business (in part),7 and equipment (in large part, through
bid sale), it is quite clear, and it is found, that Davis is the
alter ego of Great Western. Bruce E. Kronenberger and
Gerbert Schoenbrod d/b/a American Needle and Novelty
Co., Kentucky Manufacturing Company and Harrisburg
Manufacturing Company, 206 NLRB 534 (1973); Rushton &
Mercier Woodworking Co., Inc., and Rand & Co., Inc., 203
NLRB 123 (1973).
Testimony shows Gehring's complaints (acknowledged
by Gehring) about the high cost of operating a unionized
business . She acknowledges her desire to do business
without a union ; Davis is nonunion. No move was made
by Gehring to notify the Umon of impending closure, nor
was the subject discussed with the Union prior to closing.
No offer or move was made by Davis to assume Great
Western's union contract , or any part thereof.
Being the alter ego of Great Western, and continuing to
operate a trucking and storing facility at Great Western's
former place of business, Davis is obligated to assume
Great Western's bargaining agreement with the Union.
Helrose Bindery Inc. and Graphic Arts Finishing, Inc., 204
NLRB 499 (1973); Interstate 65 Corporation d/b/a Conti-
nental Inn, 186 NLRB 248 (1970).8
The record shows that not only did Great Western fail
and refuse to bargain with the Union at any time relative
to the closing but, further, Gehring assured the Umon that
the facility would not be reopened. Further, Davis did not
bargain, or offer to bargain, with the Union when it
reopened the business. Davis has ignored the Union and its
contract , and has unilaterally changed existing wages and
r Operated with nonunion workers from Davis, as acknowledged by
Gehring
8 As pointed out in General Counsel's brief, Davis could be found to be
a successor of Great Western , and thereby bound by the latter's contract
with the Union.
1342 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
other rights, terms, and conditions of employment at Great
Western. Davis was careful to avoid reemployment of
Great Western's experienced employees, and staffed the
facility with Davis and outside nonunion employees.
Under such circumstances it is clear that Davis violated
Section 8(a)(5) and (1) of the Act, and it is so found.
Marquis Printing Corporation and Mutual Lithograph
Company, 213 NLRB No. 43 (1974).
Respondents argue that Davis is not the alter ego or
successor of Great Western, since the size of the facilities
and the customers of the two are not identical, and only
three of Great Western's employees applied for work at
Davis. That argument is without merit, since the nature of
the business is identical and the only reason the employees
involved herein did not apply at Davis is because they
knew Davis was nonunion and to work there would
jeopardize their union benefits. Gehring made it clear to
the employees that she felt Great Western could not
prosper as a union business, and there is no doubt but what
the changes she made were to divest Great Western of its
union affiliation.
It may well be, as Gehring testified, that Great Western
was a marginal business and that it was closed because of
inability to pay its taxes. Had the matter stopped there, no
violation of the Act would have been involved. However,
much more was done. The business was reopened, and
operated by Davis. The only substantial changes were that
the Great Western facility was reduced somewhat in size,
and its new employees were all nonunion. It was the
reopening that gave rise to the violation of the Act, since
the former employees had been displaced solely because of
their union membership. There is no basis for finding that
Gehring was partially or wholly responsible for Great
Western's closing ,9 but even assuming that the closing was
beyond any control by Gehring, that fact would not
protect Davis or Gehring from the consequences of hiring
new employees, transferring Davis employees to Great
Western, and failing to reemploy the members of the
bargaining unit at Great Western. Rushton & Mercier
Woodworking Co., Inc., and Rand & Co., Inc., supra.
Respondents argue "There is absolutely no evidence to
support the contention . . . that respondent Davis has
refused to retain or employ any of the six employees... .
The evidence . . . shows that none of the employees .. .
applied for work to respondent Davis." Respondent also
argues that the Union made no request to bargain. These
arguments sidestep the facts. First, neither Gehring nor
either of Respondents notified the Union that Great
Western would close , and Gehring misled the Union after
the closing, by stating that Great Western would not be
sold, transferred, or reopened. Second, Gehring frequently
stated to the Union and to Great Western employees that
she could not afford to pay union wages. Third, when
Great Western's business was reactivated by Davis, Davis
was nonunion and no unit employee was asked to return to
work.10 Finally, no question was raised about any Great
Western employee's competence or ability to do the work
at Great Western or Davis. Under such circumstances, it is
obvious that applications to work for Davis at the Great
9 Although it is apparent , based upon her statements to employees and
the Union , that she welcomed the opportunity to shift the business from
Western facility were not required of the six displaced
employees. They were entitled by law to recall, and the
Union was entitled to bargaining. American Trailer &
Equipment Corp. and its Brunswick Body Works Division,
151 NLRB 867 (1965); Rushton & Mercier, supra. Certainly,
in view of Gehring's misrepresentation of the facts, there
was no waiver by the employees or the Union of their
rights under the contract between Great Western and the
Union.
As found above, Davis was obligated to recall the former
employees of Great Western pursuant to the terms of the
collective-bargaining agreement between Great Western
and the Union, and failure to do so was inherently
destructive of employee interests, in that such action
discourages union membership. It is clear from the
evidence that failure to recall the Great Western employees
was motivated solely by Gehring's desire to nd herself of
the Union and its wage and benefit structure. Such action
and motivation constitute a violation of Section 8(a)(3) and
(1) of the Act. Rushton & Mercier, supra; Foodway of El
Paso, a Division of Kimbell Foods, Inc., 201 NLRB 933
(1973); K. B. & J. Young's Super Markets, Inc. v. N. L R. B.,
377 F.2d 463 (C.A. 9, 1967), cert. denied 389 U.S. 841.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES
UPON COMMERCE
The activities of the Respondents set forth in section III,
above, occurring in connection with the operations of
Respondent described in section I, above, have a close,
intimate, and substantial relation to trade, traffic, and
commerce among the several States, and tend to lead to
labor disputes burdening and obstructing commerce and
the free flow of commerce.
CONCLUSIONS OF LAW
1. Davis Van & Storage and Great Western Van &
Storage Co. are employers engaged in commerce within the
meaning of Section 2(6) and (7) of the Act.
2. Chauffeurs, Teamsters & Helpers Local No. 150,
International Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America, is a labor
organization within the meaning of Section 2(5) of the Act.
3. All drivers and loaders employed at the location
formerly occupied by Great Western and now occupied by
Davis at Sacramento, California, excluding office clerical
employees, guards and supervisors as defined in the Act,
constitute a unit appropriate for purposes of collective
bargaining within the meaning of Section 9(b) of the Act.
4. At all times relevant herein, the Union, described
above, has been, and now is, the representative for the
purpose of collective bargaining of the employees in the
unit described above, within the meaning of Section 9(a) of
the Act.
Great Western to Davis.
10 As mentioned above , Childs by then had withdrawn from the Union.
DAVIS VAN & STORAGE 1343
5. By laying off Great Western's employees and closing
the facility on January 22, 1974,11 by reopening as Davis
Van & Storage and thereafter refusing to recognize the
Union, by refusing to adopt and comply with the existing
collective-bargaining agreement, by refusing to recall laid-
off employees of Great Western, and by unilaterally
'changing existing wages and other terms and conditions of
employment, all without notice to or bargaining with the
Union and all with the purpose of reducing costs by
removing the Union as the representative of their employ-
ees, Respondents have violated Section 8(a)(3), (5) and (1)
of the Act.
6. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of
Section 2(6) and (7) of the Act.
THE REMEDY
In order to effectuate the policies of the Act, it is
necessary that Respondents be ordered to cease and desist
from the unfair labor practices found, and to remedy them.
Respondents' violations of Section 8(a)(3) require an
order that Davis undo the effects of the discrimination
against employees of Great Western by restoring, so far as
possible, the situation that would have existed but for the
unfair labor practices. Golden State Bottling Co., Inc.,
formerly Pepsi-Cola Bottling Company of Sacramento, v.
N.LR.B., 414 U.S. 168 (1973). Accordingly, it is recom-
mended that Respondents be ordered to offer immediate
reinstatement to those employees in the unit represented
by the Union who were laid off on January 22, 25, and 26,
as Davis now needs, discharging present employees, if
necessary, to make room for them. All remaining employ-
ees in the unit represented by the Union who were laid off
on or about January 22, 1974, must be placed on a
preferential hiring list. Employees to be offered immediate
reinstatement, and those to be placed on the preferential
hiring list, can be determined in the compliance stage.
Further, Respondents must make whole all of the aforesaid
employees. The amount due each, as prescribed in F. W.
Woolworth Company, 90 NLRB 289 (1950), with interest as
prescribed in Isis Plumbing & Heating Co., 138 NLRB 716
(1962), can be determined in the compliance stage
pursuant to the criteria set forth above.
In view of the nature and extent of the unfair labor
practices Respondents have committed , it is recommended
that Respondents be ordered to cease and desist from
interfering in any manner with the rights of their
employees to enjoy the statutory guarantees of self-
organization.
[Recommended Order omitted from publication.]
1' Employee Mathews testified his last day of employment was January
25, 1974, and employee Musante testified his last day of work was January
26, 1974.