District 71, IAM

National Labor Relations Board - Board Decisions

May 25, 1976

224 N.L.R.B. 100 (N.L.R.B. 1976)

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