Hagerman Trucking

National Labor Relations Board - Board Decisions

Feb 25, 1985

274 N.L.R.B. 296 (N.L.R.B. 1985)

296 N & G COAL CO
N & G Coal Co., Inc., Robert Wick, Trustee in
Bankruptcy; and its Successor , Blane Hager-
man, a Sole Proprietor, d/b/a Hagerman
Trucking and United Mine Workers of Amer-
ica, District 29. Cases 9-CA-20479 and 9-CA-
20679
25 February 1985
DECISION AND ORDER
By CHAIRMAN DOTSON AND MEMBERS
HUNTER AND DENNIS
On 27 September 1984 Administrative Law
Judge Bernard Ries issued the attached decision.
The General Counsel filed exceptions and a sup-
porting brief.
The Board has considered the decision and the
record in light of the exceptions and brief and has
decided to affirm the judge's rulings, findings, and
conclusions and to adopt the recommended Order.
ORDER
The recommended Order of the administrative
law judge is adopted and the complaint is dis-
missed.
DECISION
BERNARD RIES , Administrative Law Judge This case
was tried in Princeton , West Virginia , on July 11, 1984.
The amended complaint essentially alleges that Respond-
ent N & G Coal Co., Inc, which operated a mine at Mo-
began, West Virginia, for a 9-month period in 1983,
failed during that period to comply with various terms of
its collective bargaining and other agreements with
United Mine Workers of America, District 29, the
Charging Party, thereby violating Section 8 (a)(5) and (1)
of the Act, and that Respondent Hagerman Trucking,
which has been operating the mine since the latter part
of December 1983, is a "successor " to N & G (and pre-
sumably, although neither the complaint nor the General
Counsel's brief expressly so assert , is liable to make good
on the defaults of N & G).
It is useful to set out the procedural background of
this proceeding The charge in Case 9-CA-20479 was
filed on December 19, 1983, against N & G, and a com-
plaint issued in that case on February 2, 1984 , alleging
that N & G had failed to remit dues to the Union since
September 1983, had failed to pay employees in accord-
ance with the contract wage rates since August 1983,
and had failed to comply with a grievance settlement
since December 1983. The file does not show that N &
G submitted an answer to the complaint within the re-
quired 10 days after service or sought an extension to do
SO.
On February 24, the Union filed another charge, in
Case 9-CA-20679, naming "N & G Coal Co., Inc And
Its Successor , Hagerman Trucking Co," as the employ-
er; the only material addition to the earlier charge was
an assertion that Hagerman Trucking had, "on or about
December 22," assumed the operations of N & G "with
knowledge of the outstanding contractual obligations of
and pending unfair labor practice charges against" N &
G It was only after that charge was filed that, on March
12, N & G filed an answer to the first complaint, which,
in a short paragraph, merely stated that "all allegations
contained in the complaint and notice of a hearing are
denied" and asserted that a Chapter 7 bankruptcy peti-
tion filed by N & G on February 2 in the District Court
for the Western District of Virginia "stays these pro-
ceedings pursuant to law "
On March 30, the Regional Office issued an amended
order consolidating the two cases. The only changes
from the original complaint were recitations of Hager-
man's entry into the picture and of the appointment of a
Chapter 7 trustee in bankruptcy for N & G on February
16, and the naming in the case caption of Hagerman as a
successor and the N & G trustee in bankruptcy as a
party. The record indicates that until May 4, N & G
filed no answer; at that time, it briefly responded by as-
serting that it had filed a Chapter 7 petition "which op-
erates as a stay of these proceedings" and asking in effect
that the Board proceeding be terminated. The trustee in
bankruptcy filed no separate answer. Hagerman did not
file an answer.
On June 8, the Region filed a second consolidated
amended complaint, the chief purposes of which were to
modify the jurisdictional allegations of the previous com-
plaints and to add another substantive allegation relating
to the failure to keep in force and effect, since September
30, 1983, the health care insurance program. None of the
named Respondents, or so the formal documents indi-
cate, filed an answer to this last version of the complaint.
Having considered the entire record and the brief filed
by counsel for the Acting General Counsel, i I make the
following findings of fact,2 conclusions of law, and rec-
ommendation.
I. THE EFFECT OF THE RESPONDENTS' FAILURE TO
FILE APPROPRIATE ANSWERS
Section 102 .20 of the Board 's Rules and Regulations
provides:
Sec. 102 20 Answer to complaint, time for filing;
contents; allegations not denied deemed admitted.-
The respondent shall, within 10 days from the serv-
ice of the complaint , file an answer thereto. The re-
spondent shall specifically admit, deny, or explain
each of the facts alleged in the complaint , unless the
respondent is without knowledge , in which case the
respondent shall so state , such statement operating
as a denial. All allegations in the complaint, if no
answer is filed , or any allegation in the complaint
not specifically denied or explained in an answer
I Neither N & G nor Hagerman Trucking was represented at the hear-
ing by counsel Hubert Stevenson, president and co-owner of N & G, en-
tered an appearance for N & G (and, I infer, for N & G's trustee), Blanc
Hagerman entered an appearance and actively participated on behalf of
his firm Neither man is an attorney None of the Respondents has filed a
brief
2 Certain errors in the transcript were noted and corrected
274 NLRB No. 45
N & G COAL CO 297
filed, unless the respondent shall state in the answer
that he is without knowledge, shall be deemed to be
admitted to be true and shall be so found by, the
Board, unless good cause to the contrary is shown.
As set out above, N & G apparently filed only two
tardy replies to the three editions of the complaint.
Clearly, the two responses did not comport with the
quoted Board regulation E.g, SDS Distributing Corp.,
245 NLRB 322, 323 (1979); Pipeline Construction Workers
Local 692 (Fulhgum Construction), 248 NLRB 1315, 1316
(1980). As also discussed above, Hagerman Trucking
filed no answer at all to either of the two versions of the
complaint to which it was a party.
In such circumstances, the regulation set out above
would appear to require that the complaint allegations
must be considered as true ("shall be deemed to he ad-
mitted to be true and shall be so found by the Board"),
unless "good cause" for withholding such action is
"shown." The record before me suggests no particular
"good cause" for the failures of compliance.
The General Counsel has, however, made no effort, by
motion for summary judgment or otherwise, to take ad-
vantage of the inadequate and nonexistent answers. In-
stead, at the hearing, the General Counsel attempted to
present a fully developed case, including the calling of a
witness from out of town to supply commerce informa-
tion for the purpose of demonstrating that the Respond-
ents satisfy the Board's jurisdictional standards.
The question presented, as I see it, is whether the Gen-
eral Counsel has the right to so proceed under the
Board's regulation. The words "shall be deemed" seem
to plainly constitute a mandate; the exception, for "good
cause" being "shown," appears to mean a showing of
such cause approved by the Board.
I shall, however, proceed on the basis deliberately
chosen by the General Counsel. In the interest of good
order, it would seem appropriate that the sanctions of
Section 102.20 not be invoked unless the General Coun-
sel has so requested. There may have been known to the
General Counsel what he deemed to be "good cause" for
all the inadequacies in the answers or failures thereof,
and which he determined would be accepted by the
Board if motions for summary judgment had been made
In such circumstances, it would seem to be within the
General Counsel's allowable discretion to avoid what he
thought might turn out to be wasted time and effort; to
consider that appropriate denials had been filed, and to
proceed directly to trial Accordingly, I shall turn to the
first issue presented. whether the Board should assert ju-
risdiction over the Respondents
H. JURISDICTION
As amended, the complaint alleges that N & G (and
thereafter Hagerman), in the 12 months preceding the
amended complaint, "sold and caused to be shipped from
their Mohegan, West Virginia, facility products, goods
and materials valued in excess of $50,000 directly to
points outside the State of West Virginia." Although the
evidence as to the critical legal relationships here is not
very well developed, it can safely be said that only in an
indirect sense does the evidence show that either of the
Respondents "caused to be shipped [more than
$50,000 worth of goods] directly to points outside the
State of West Virginia."
Aside from the Respondents, two other businesses are
involved in the sale of coal from the mine here involved.
The record shows that the mine property was owned by
one W. B. Swope and that he leased the property, and
the right to mine coal there, to N & G (apparently
Swope used the name of "Bankers Pocahontas Coal Part-
nership," see G C Exh 2). The lease agreement is not in
evidence. After mining the coal, N & G (and, similarly,
Hagerman) transferred the coal to Swope The character
of this transaction, while most important to this issue, is
less than certain . At the hearing, in answer to the ques-
tion, "Who was your contract with for the sale of the
coal?" N & G's president Stevenson answered, "Mr
Swope." Stevenson further testified that all of his pay-
ments came directly from Swope, that Swope "let Can-
nelton Coal Company have" the coal, and, when asked
whether Swope was a "coal broker," answered, "I guess,
I don 't know." The most likely interpretation of this tes-
timony , in my view, is that after Stevenson, and later
Hagerman , mined the coal, they sold it to Swope. The
record shows that the amounts of coal sold to Swope by
Stevenson (and Hagerman) exceeded $50,000 per year.
William C. Miller, the secretary of Cannelton Indus-
tries, Incorporated, testified that the parent of Cannelton,
Algoma Steel Corporation, Ltd., a Canadian corporation,
buys coal from Swope and has it delivered to Cannel-
ton's preparation plant in Superior , West Virginia. The
amount of coal bought by Algoma from Swope is con-
siderable : in a one-half-month period in 1983, Algoma
purchased from Swope over $314,000 worth, and that
was "not an unusual figure" for the year The coal pur-
chased from Swope is commingled at Cannelton's Supe-
rior plant both with coal purchased elsewhere and with
coal mined by Cannelton itself, and after preparation, a
"majority" of the coal is shipped to Algoma for use in
Canada.
At the beginning of his testimony, Miller referred to
Swope as "the agent for-broker for N & G Coal " But
when he was later asked whether Swope "actually owns
the coal that is being sent to Algoma through Cannelton
Industries," Miller replied, "The arrangement between
Algoma is strictly purchased from Mr. Swope. [sic] His
relationship or legal relationship with his suppliers is un-
known to me."
Thus, while the record is less than definitive as to the
legal status of Swope in these transactions, and could
have been much better documented, on the evidence as
presented I feel obliged to conclude that Swope was a
purchaser of the coal from N & G (and, later, Hager-
man).3 On the basis of that conclusion, it also seems to
a I recognize that Hagerman testified that he "sold" the coal to Can-
nelton Industries, but then when asked if the coal was "actually sold" to
Algoma, he said, "The only thing I do is put the coal on the truck and
send it to Superior" and that he gets paid by Swope The General
Counsel's witness Miller testified that Algoma ' s dealings with Hagerman
were "through Mr Swope " in the same manner that it had business
dealings with N & G Coal Company "
298 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
me that I am further obliged to conclude that the Board
would not assert jurisdiction in this matter under its
present standards.
While the Board's jurisdiction over American com-
merce is virtually unlimited, see Polish National Alliance
V. NLRB, 322 U.S. 643, 647-648 (1944), NLRB v. Fainb-
latt, 306 U.S. 601, 607 (1939), the Board has chosen to
establish jurisdictional standards of general application
for determining whether , in various situations, it will
exert authority over a labor dispute. Those standards are
designed to relieve the Board of the burden of making
case-by-case adjudications and to provide guidance to
the Board staff and the public to avoid "confusion and
uncertainty as to exactly where the dividing line will be
drawn in particular cases.. . " Siemons Mailing Service,
122 NLRB 81, 83 (1959). In Sremons, at 85 the Board set
out the standard which it would apply to "nonretail en-
terprises ," a category which plainly encompasses coal-
mining.
[T]he Board has concluded that it will best effectu-
ate the policies of the Act if jurisdiction is asserted
over all nonretail enterprises which have an outflow
or inflow across State lines of at least $50,000, whether
such outflow or inflow be regarded as direct or indi-
rect For the purposes of applying this standard,
direct outflow refers to goods shipped or services
furnished by the employer outside the State Indirect
outflow refers to sales of goods or services to users
meeting any of the Board's jurisdictional standards
except the indirect outflow or indirect inflow stand-
ard. Direct inflow refers to goods or services fur-
nished directly to the employer from outside the
State in which the employer is located. Indirect
inflow refers to the purchase of goods or services
which originated outside the employer's State but
which he purchased from a seller within the State
who received such goods or services from outside
the State . In applying this standard , the Board will
adhere to its past practice of adding direct and indi-
rect outflow , or direct and indirect inflow It will
not add outflow and inflow.
The facts described above make clear that neither N &
G nor Hagerman could be said to have had any "direct
outflow," i.e., "goods shipped . by the employer out-
side the State " As I have found, they sold to Swope,
and he sold to Algoma, which then shipped most of the
coal outside of West Virginia.4 Nor is there any evi-
dence that Swope was himself a "user . . . meeting any
of the Board 's jurisdictional standards " other than indi-
rect outflow. While he did meet the latter standard, by
virtue of his sales to Algoma, that cannot qualify Re-
spondents for the assertion of jurisdiction under the "in-
direct outflow" test.
4 Southern Dolomite, 129 NLRB 1342 (1961), holds that there need be
no showing that , in applying the indirect outflow test , the purchasing
company which is directly engaged in the interstate business actually
"used " the intrastate -purchased goods across state lines There is effect
enough on commerce , says Southern Dolomite, if the purchasing firm is
engaged in interstate commerce as defined by the Board 's standards
Thus, the only possible basis for application of the "in-
direct outflow" standard here would be a contention that
the two Respondents each annually sold more than
$50,000 worth of coal to Algoma, a "user . . . meeting
any of the Board's jurisdictional standards" (except the
indirect outflow or inflow standards), which Algoma
clearly is. This contention, however, would be valid only
if the evidence showed that Swope was acting as an
agent of N & G/Hagerman or in some other allied role
which would allow Swope/N & G/Hagerman to be re-
garded as a single entity. In that event , it could appropri-
ately be said that Swope/N & G/Hagerman sold the req-
uisite amount of coal to Algoma, a commerce situation
over which the Board would plainly exercise jurisdic-
tion, and hence "indirect outflow " existed On my find-
ings on this particular record , however , the evidence
does not weigh in favor of finding that any such relation-
ship existed between N & G or Hagerman and Swope.5
I thus conclude that, under the Board ' s announced
standards , it would be improper to assert jurisdiction
over the Respondents . It is not a conclusion in which I
find particular satisfaction , since a good argument can be
made that the Board should exercise jurisdiction in a
case such as this one, where there is evidently a consist-
ent and substantial flow of coal from the Mohegan mine
across state boundaries. The Board could very well
choose to ignore or modify its own nonretail standards in
this case if it believed that a reason presented itself for
doing so, see NLRB v. Erlich's 814, 577 F.2d 68 (8th Cir
1979).
It appears to me, however , that I have no such option.
Iowa Beef Packers, 144 NLRB 615, 616 (1963), and many
other cases have firmly established that it is my duty to
"apply established Board precedent." Siemons Mailing
Service is such a precedent , and it makes no provision for
me to deviate from the prescribed standards in a case
like this one 6
One other possibility for asserting jurisdiction suggests
itself. The Board has held that where the employer in-
volved in the proceeding is a member of a mu ltiemploy-
er bargaining unit, the commerce data of the other em-
ployers in the unit may be considered in assessing direct
or indirect outflow or inflow. Sremons, supra at 84. But
the Board will only permit such aggregation where the
evidence establishes that the employer in question has
participated in or demonstrated an intent to be bound by
5 I have found no case which construes the word "user," quoted above
in Sremons , to be confined to an entity which actually makes some pro-
ductive use of the goods in question , an argument which might allow
middlemen such as Swope to be disregarded and businesses such as
Algoma to be considered the real "user " Taking the Board 's language at
face value , it would be difficult to construe "sales of goods to users"
as comprehending such an indirect relationship as that between N & G
and Algoma , so far as the record shows, no "sale" was transacted be-
tween those firms The word "user" was employed by the Board in Sre-
mons to permit consideration , for purposes of assessing "indirect out-
flow," of entities which are not "employers" covered by the Act, but
which otherwise engage in a volume of activity substantially affecting
commerce Sremons , supra at 85 fn 12
6 I note that at times the Board has been very strict in applying its
standards In Love's Barbecue Restaurant, 209 NLRB 220 (1974), it dis-
missed a petition where the standard for retail enterprises was $500,000 in
annual revenue and the employer 's projected gross was $497,250
N&GCOAL CO
multiemployer bargaining R. J. Causey Construction Co,
238 NLRB 52 (1978), Marty Levitt, 171 NLRB 739
(1968)
There is not, in the present case, any indication that
either of the Respondents have ever evinced an intention
to be bound by multiemployer bargaining At the hear-
ing, Stevenson testified that when N & G went into busi-
ness in March 1983, it "signed the National Bituminous
Coal Wage Agreement of 1981." The agreement referred
to is in evidence. It is executed by the UMWA and the
Bituminous Coal Operators' Association, Inc., a collec-
tion of employer associations and independent operators.
The contract could be read to constitute the signatories
into a single multiemployer unit, but the language is un-
clear. The document signed by Stevenson in 1983 is not
in evidence, and thus there is no showing that Stevenson
(and the same is true of Hagerman) expressed an inten-
tion to be bound by multiemployer bargaining. In the ab-
sence of any such expression or other showing of inten-
tion, the possibility of aggregating the commerce data of
the other employer parties to the contract as a predicate
for asserting jurisdiction must fail. R. J. Causey Construc-
tion Co, supra 7
I conclude, therefore, that the complaint must be dis-
missed for want of proof of compliance with the Board's
jurisdictional standards 8
Technically speaking, there is no evidence in the record that the
other members of the BCOA collectively met the Board's standards, but
that speculation would seem supportable if that point were reached
8 1 need not, therefore, reach the other issues presented I might, how-
ever, gratuitously make the following observations
It is clear that N & G failed to abide by the bargaining agreement in
various respects, and also failed to honor certain grievance settlements
made with the Union Existing Board law would very likely brand these
breaches of contract as violations of Sec 8(a)(5) (which may also be rem-
edied by civil action under Sec 301) The fact that N & G is now under-
going bankruptcy proceedings makes that company a very unpromising
source of recovery, however, and the only viable possibility of recovery
is from Hagerman (to whom, however, the bankruptcy court is also
available)
But the wellspring of Hagerman's potential liability under the Act for
N & G's defaults is Perma Vinyl Corp, 164 NLRB 968, 969 (1967), hold-
ing that a successor employer (which, under the law, Hagerman clearly
would be) may be held liable for remedying his predecessor's unlawful
299
CONCLUSIONS OF LAW
1 Under existing Board standards, it is inappropriate
to exercise jurisdiction over Respondents N & G Coal
Co., Inc., Robert Wick, Trustee in Bankruptcy for N &
G Coal Co, Inc., and Blane Hagerman, d/b/a Hagerman
Trucking.
2. The consolidated complaints should, accordingly, be
dismissed.
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed"
ORDER
The consolidated complaints in Cases 9-CA-20479 and
9-CA-20679 are dismissed in their entirety.
conduct where he acquires the business "under circumstances which
charge him with notice of unfair labor practice charges against his prede-
cessor " In Golden State Bottling Co v NLRB, 414 U S 168, 181 (1973),
which approved the Perma Vinyl principle, the Supreme Court referred
to the opportunity which had been given the successor in Golden State to
litigate the issue of "its knowledge of the pendency of the unfair labor
practice litigation at the time of purchase "
In the present case, Hagerman signed the purchase agreement with N
& G on December 19, the first charge was also filed on December 19
Unobjected-to, and therefore probative, hearsay testimony is that at some
time prior to the signing, Hagerman was made aware of all of the "debts"
owed by N & G The extent to which Hagerman was put on notice of all
the alleged unfair labor practices, including N & G's failure to comply
with the contract wage rates, and the effect of the fact that the original
charge was not filed until the same day that the sale was consummated,
are nowhere discussed in the General Counsel's brief, which terminates
its discussion of the issue after arguing that Hagerman was a successor,
but does not go on to argue that the successorship was one which should
entail remedial liability for the defaults of the predecessor Indeed, in
view of the truncation of the briefs legal discussion, it may be that the
General Counsel does not seek to so hold Hagerman, although the inart-
fully drawn complaint (it is inaccurate to allege that Hagerman, as one of
the "Respondents," failed to pay employees properly since August 1983,
failed to remit union dues since September 1983, etc , since Hagerman
was not even in the picture at those times, and, at best, can be held only
to remedy any such violations) would seem to be attempting to do so
9 If no exceptions are filed as provided by Sec 102 46 of the Board's
Rules and Regulations, the findings, conclusions, and recommended
Order shall, as provided in Sec 102 48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses