Hydrolines, Inc.

National Labor Relations Board - Board Decisions

Oct 15, 1991

305 N.L.R.B. 416 (N.L.R.B. 1991)

416
305 NLRB No. 40
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The Respondents have excepted to some of the judge’s credibility
findings. The Board’s established policy is not to overrule an admin-
istrative law judge’s credibility resolutions unless the clear prepon-
derance of all the relevant evidence convinces us that they are incor-
rect. 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.
2 The judge found that Respondent Hydrolines, Inc.’s direct out-
of-state purchases exceeds $50,000 annually and that Respondent
TNT Hydrolines, Inc. derives in excess of $50,000 annually from its
operations in transporting passengers from New Jersey to New York.
We find that the Respondents are, and at all times material have
been, employers engaged in businesses affecting commerce within
the meaning of Sec. 2(2), (6), and (7) of the Act.
3 He is also a director of TNT Limited.
4 Arwood explained that in 1986 TNT Limited entered into a
worldwide program of prefixing a number of their corporations’
names with the initials ‘‘TNT.’’
5 Arwood’s testimony was unclear regarding whether he was refer-
ring to TNT Limited rather than to Respondent TNT.
Hydrolines, Inc. and TNT Hydrolines, Inc. and
Local 333, United Marine Division, Inter-
national Longshoremen’s Association, AFL–
CIO. Case 22–CA–16360
October 15, 1991
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
DEVANEY AND OVIATT
On May 25, 1990, Administrative Law Judge James
F. Morton issued the attached decision. The General
Counsel filed exceptions and a supporting brief. The
Respondents filed cross-exceptions and a supporting
brief, which also responds to the General Counsel’s
exceptions.
The National Labor Relations Board has delegated
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 de-
cided to affirm the judge’s rulings, findings,1 and con-
clusions only to the extent consistent with this Deci-
sion and Order.2
The complaint alleges that Respondent TNT
Hydrolines, Inc. and Respondent Hydrolines, Inc. are
affiliated business enterprises and constitute a single
integrated business enterprise and a single and/or joint
employer. The complaint further alleges that the Re-
spondents are a ‘‘partial successor’’ of Harbor Com-
muter Services, Inc. and Harbor Commuter Holding,
Inc. (collectively referred to as Direct Line), and have
violated Section 8(a)(5) and (1) of the Act by failing
and refusing to recognize and bargain with the Union.
The judge found that the Union had not demanded
recognition in the appropriate unit and recommended
dismissing the complaint. Assuming in the alternative
that a proper demand for recognition was made, the
judge concluded that the Respondents are a single em-
ployer but that they are not a successor employer and
that therefore they did not have a bargaining obliga-
tion.
The Respondents except to the judge’s conclusion
that they are an integrated business enterprise and a
single employer. The General Counsel excepts to the
judge’s conclusions that the Respondents are not a suc-
cessor of Direct Line and that the Union did not make
a proper demand for recognition. We reject the Re-
spondents’ exceptions and find merit in the General
Counsel’s exceptions.
I. BACKGROUND
TNT Limited is the parent corporation of the Re-
spondent TNT Hydrolines, Inc. (Respondent TNT). Re-
spondent TNT was originally incorporated in January
1983 as ‘‘TNT Containerships, Inc.’’ but changed its
name in February 1988 to TNT Hydrolines, Inc. Re-
spondent Hydrolines, Inc. (Respondent Hydrolines)
was incorporated as ‘‘TNT Hydrolines, Inc.’’ in May
1986, apparently as a subsidiary of TNT Limited, and
changed its name in 1987 to Hydrolines, Inc. when
John Arwood became its sole owner.
John Arwood is the chairman and owner of Re-
spondent Hydrolines, and chairman of the board of di-
rectors, and chairman of the corporation for Respond-
ent TNT. Arwood explained his relationship to Re-
spondent TNT as follows: TNT Limited is a publicly
held company based in Australia. Arwood merged a
number of his businesses with TNT Limited in 1977
becoming a ‘‘partner with them and a number of exist-
ing and new businesses . . . .’’ His two primary du-
ties for TNT Limited are (1) serving as the chief exec-
utive of the All Trans International group of compa-
nies, of which Respondent TNT is one, and (2) finding
and developing new business for the corporation3 In
1984 he presented the idea of a waterborne passenger
service to TNT Limited and it agreed that the idea was
worth pursuing. Therefore, to pursue the idea of a wa-
terborne passenger service, in May 1986, TNT Limited
formed Respondent Hydrolines.4 At some later date,
according to Arwood, TNT Limited decided it was not
certain that it wanted to proceed with a waterborne
passenger service and Arwood personally assumed the
opportunity. In 1987 Respondent Hydrolines became a
privately held company owned solely by Arwood. In
April 1987, Respondent Hydrolines purchased a type
of vessel known as a ‘‘hydrofoil’’ and in 1988 con-
tracted to purchase a catamaran.
In 1988, TNT Limited and/or Respondent TNT5 re-
newed its interest in the passenger service business.
Respondent Hydrolines determined that it would aban-
don its intentions of running the passenger service
‘‘and instead would continue its operation of owning
vessels which it would be prepared to charter to oth-
ers.’’ Thus, according to Arwood, Respondent TNT’s
417HYDROLINES, INC.
6 The closing occurred on May 8, 1989.
7 See Continental Radiator Corp., 283 NLRB 234 at fn. 4 (1987).
8 See Blumenfeld Theatres Circuit, 240 NLRB 206, 215 (1979),
enfd. 626 F.2d 865 (9th Cir. 1980); Emsing’s Supermarket, 284
NLRB 302 (1987), enfd. 872 F.2d 1279 (7th Cir. 1989).
9 Airport Bus Service, 273 NLRB 561 (1984), disavowed on other
grounds in St. Marys Foundry Co., 284 NLRB 221 fn. 4 (1987).
10 Arwood testified that the Respondents have separate boards of
directors and separate bank accounts.
‘‘present scope of business is to operate a passenger
service by water between points in the Metropolitan
New York area,’’ and Respondent Hydrolines’ primary
business is chartering vessels for use by others.
Direct Line operated a ferry service for individuals
commuting between various points in New Jersey and
points in New York City. On March 8, 1989, the
Union was certified as the exclusive collective-bar-
gaining representative of a unit consisting of all full-
time and regular part-time crewmembers, including
captains, engineers, deckhands, and assistant deckhands
employed on Direct Line’s vessels. Direct Line and the
Union entered into negotiations which resulted in a
collective-bargaining agreement effective from April
10, 1989, to April 10, 1992.
On April 14, 1989, Direct Line and the Respondents
entered into an agreement for the Respondents to pro-
vide waterborne commuter transportation service on
routes previously serviced by Direct Line between
Keyport and Highlands, New Jersey, and New York
City. Direct Line agreed not to compete on those
routes. The Respondents operate the catamaran and a
vessel chartered from Direct Line on the Highlands
run. Another vessel chartered from Direct Line pro-
vides commuter service on the Keyport run. The Re-
spondents also (1) chartered four surplus vessels and
purchased support barges from Direct Line; (2) sub-
leased or were assigned certain leases that Direct Line
had held; and (3) entered into an interim agreement
with Direct Line to cover the period between April 14,
1989, and either the closing of the other agreement or
May 22, 1989, whichever occurred earlier.6 During the
transition period Direct Line operated the service on
behalf of the Respondents.
On May 10, 1989, after the Respondents had as-
sumed the commuter ferry operations, the Union wrote
to Thomas Bruyere, Respondent TNT’s president, de-
manding recognition and bargaining. Arwood re-
sponded to the demand on May 19, 1989, stating that
Respondent TNT did not employ any employees for-
merly in the Direct Line bargaining unit and stating
further that Respondent Hydrolines did not recognize
the Union as the representative of its employees.
II. SINGLE EMPLOYER
The complaint alleged and the judge found that the
Respondents are a single employer. The Respondent
has excepted to the judge’s finding. We find no merit
in this exception for the reasons discussed below.
The Board applies four criteria in determining
whether separate entities constitute a single employer.
These criteria are: (1) interrelation of operations, (2)
common management, (3) centralized control of labor
relations, and (4) common ownership or financial con-
trol.7 No one of the four criteria is controlling nor
need all be present to warrant a single-employer find-
ing.8 The Board has stressed that the first three criteria
are more critical than common ownership,9 with par-
ticular emphasis on whether control of labor relations
is centralized, as these tend to show ‘‘operational inte-
gration.’’ NLRB v. Al Bryant, Inc., 711 F.2d 543, 551
(3d Cir. 1983), and cases cited therein. ‘‘[S]ingle em-
ployer status depends on all the circumstances of the
case and is characterized by absence of an ‘arm’s
length relationship found among unintegrated compa-
nies.’’’ Id. Accord: Hahn Motors, 283 NLRB 901
(1983).
Here, we find that the Respondents have interrelated
operations. Respondent Hydrolines was formed by Re-
spondent TNT’s parent corporation, TNT Limited, with
the intention of operating a waterborne passenger serv-
ice, using the hydrofoil that the parent corporation was
aware was available for purchase. The parent corpora-
tion became uncertain whether it wanted to proceed
with that type of service. Arwood then became the sole
owner of Respondent Hydrolines and continued to pur-
sue the business venture. Respondent Hydrolines’ in-
tention of running the passenger service was aban-
doned, however, when TNT Limited, through Re-
spondent TNT, renewed its interest in this service.
Thus, Respondent Hydrolines’ primary business be-
came chartering vessels for use by others and Re-
spondent TNT undertook to provide ferry services
through the use of chartered vessels.
Significantly, there is no evidence that Respondent
Hydrolines charters vessels to any person or company
other than to Respondent TNT. Thus, Respondent
Hydrolines’ history shows a strong relationship to Re-
spondent TNT’s parent corporation and Respondent
Hydrolines’ definition of its own business purposes has
borne a close relationship to Respondent TNT’s and
TNT Limited’s business plans. Further, Respondents
TNT and Hydrolines share a phone number, a telex
number, and an address.10 Also, the agreement among
Direct Line, Hydrolines, and TNT, dated April 14,
1989, was signed for both of the Respondents by
Arwood. The agreement provided that Direct Line
would transfer its interest in certain barges to Respond-
ent TNT. Whether payment would be by check or wire
transfer would be at Respondents TNT and
Hydrolines’ option. Further, the downpayment would
be paid by ‘‘TNT and/or Hydrolines,’’ and the bill of
418 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
11 The agreement also provided that Respondents TNT and/or
Hydrolines intended to consider hiring employees of Direct Line.
12 Documents introduced into evidence by the Respondents indi-
cate that on May 8, 1989, Maureen E. Hamelin was acting secretary
of Hydrolines, and acting assistant secretary of TNT Hydrolines, Inc.
13 As noted, the Union sent its bargaining demand to Respondent
TNT’s president, Bruyere. Bruyere, however, did not respond. Rath-
er, Arwood responded, and did so on behalf of both Respondents.
14 Arwood testified that when Respondent TNT was first formed
he owned 75 percent of it. In 1986 or 1987, however, TNT Limited
bought his share of Respondent TNT. Whether there is common
ownership between the Respondents is determined by Arwood’s rela-
tionship with TNT Limited. Arwood is the sole owner of Respondent
Hydrolines and he testified that in 1977 he merged a number of his
businesses with TNT Limited ‘‘becoming a partner with them and
a number of existing and new businesses . . . .’’ As we do not
know the particulars of Arwood’s relationship with TNT Limited,
however, we decline to infer, as the General Counsel suggests, that
Arwood has a considerable ownership interest in TNT Limited.
sale should be delivered to TNT and/or Hydrolines.11
Thus, although the sale was to Respondent TNT, both
of the Respondents assumed contractual obligations re-
garding the barges.
These facts suggest an absence of an arm’s-length
relationship between the Respondents. The Respond-
ents argue, relying on testimony given by Arwood,
‘‘that while there are business agreements between [the
Respondents], they are best characterized as arm’s
length contractual relationships clearly spelled out in
documents between the two parties.’’ There are, how-
ever, no documents in the record which show such
contractual relationships between the Respondents. We
therefore find that there is a strong interrelation of op-
erations between the Respondents.
We also find that the Respondents share common,
although not identical, management. Minutes of a
meeting of the board of directors of Respondent TNT
dated May 8, 1989, show that the directors were John
R. Arwood, Tibor Sallay, and J. Ross Cribb. Arwood
signed the minutes as chairman. As noted earlier,
Arwood is chairman of the corporation as well as
chairman of the board of directors of Respondent TNT.
Arwood is also the chairman, chief executive officer,
and owner of Respondent Hydrolines.12
As chief executive officer of Respondent
Hydrolines, Arwood makes the major decisions for that
corporation and ‘‘employs’’ its personnel. Thomas
Bruyere is president and chief operating officer of Re-
spondent TNT and describes himself as the person re-
sponsible for all the operational aspects of Respondent
TNT. Arwood, however, as chief executive officer of
Respondent TNT, is responsible for Respondent TNT’s
profit and loss, reporting Respondent TNT’s activities
to its parent corporation, and for ‘‘employment’’ of its
personnel. Arwood signed the April 14, 1989 agree-
ment with Direct Line, as well as other documents, on
behalf of Respondent TNT—as he also did on behalf
of Respondent Hydrolines. Arwood is the sole manager
of Respondent Hydrolines and is extensively involved
with the management of Respondent TNT as its chief
executive, chairman of the corporation, and chairman
of the board of directors. Thus, although other persons
may be involved in the management of Respondent
TNT, we find that Arwood’s exclusive management of
Respondent Hydrolines and his extensive involvement
in the management of Respondent TNT establishes sig-
nificant common management between the Respond-
ents.
The Respondents argue that they cannot have cen-
tralized control of their labor force because Respondent
TNT has no labor force. Respondent TNT charters
boats for its passenger services from Respondent
Hydrolines, and these charters include the crews as
well as the boats. The president of Respondent TNT,
Bruyere, however, screened prospective employees be-
fore Respondent Hydrolines made a hiring decision be-
cause these employees performed duties essential to
Respondent TNT’s business. Also the Respondents
admit in their brief that Bruyere ‘‘exert[ed] some influ-
ence’’ over Respondent Hydrolines’ labor force to the
extent that it was necessary to guard the interests of
Respondent TNT. Arwood, as chief executive officer
of Hydrolines, ‘‘employ[s]’’ its personnel. Although
Arwood testified that Bruyere is the person primarily
responsible for hiring, firing, and maintaining Re-
spondent TNT’s personnel, he also admitted that he,
Arwood, as chief executive of Respondent TNT, is re-
sponsible for the employment of Respondent TNT’s
personnel.13 Further, the April 14, 1989 agreement
with Direct Line contains the following: ‘‘TNT and/or
Hydrolines intends to consider hiring employees of Di-
rect Line to engage in the waterborne transportation
services contemplated by this agreement.’’ Direct Line
agreed to provide information to ‘‘TNT and
Hydrolines’’ regarding employees. In regard to this
key factor we find that the Respondents have central-
ized control over labor relations and the labor force.
We find that the Respondents also have common fi-
nancial control.14 As chief executive officer of Re-
spondent Hydrolines, Arwood decides which assets the
corporation purchases, and how those assets will be
deployed, and borrows money on the corporation’s be-
half. As chief executive officer of Respondent TNT,
Arwood is responsible for its profit and loss. Also, as
noted earlier, the agreement between Direct Line, and
Hydrolines and TNT, dated April 14, 1989, was signed
for both Respondents by Arwood. Checks drawn on
Respondent TNT’s account were cosigned by Arwood
and another individual. Further, both of the Respond-
ents assumed contractual obligations regarding the sale
of barges from Direct Line to Respondent TNT. We
therefore find that Arwood exerted financial control
over both of the Respondents.
419HYDROLINES, INC.
15 In Operating Engineers Local 627 v. NLRB, 518 F.2d 1040,
1045–1046, affd. in relevant part sub nom. South Prairie Construc-
tion v. Operating Engineers Local 627, 425 U.S. 800 (1976), the
court, in setting forth factors determinative of single-employer status,
stated that interrelations of operations, common management, and
centralized control of labor relations between two employers, wheth-
er or not present at the top level of management are ‘‘‘controlling’
indicia of the actual exercise of the power of common ownership or
financial control; and that the standard for evaluating such exercise
of power is whether, as a matter of substance, there is the ‘arm’s
length relationship found among unintegrated companies.’’’
16 In Mr. Clean of Nevada, 288 NLRB 895 (1988), single-em-
ployer status was found, despite separate ownership, based on a sin-
gle individual’s control over management, labor relations, and fi-
nances of both businesses. In Mr. Clean one individual owned (his
spouse was the only other stockholder) and operated one clothing
cleaning business; that individual also hired, fired, set terms of em-
ployment for employees, signed checks, ordered supplies and some-
times signed legal documents, for another clothing cleaning business,
which was a sole proprietorship belonging to another individual. De-
spite the absence of common ownership, the Board in Mr. Clean
found that the two companies constituted a single employer.
17 See Il Progresso Italo Americano Publishing Co., 299 NLRB
270 (1990). In Il Progresso, a finding of single-employer status was
strongly supported by the fact that one individual played a ‘‘critical
role’’ in two companies. Likewise here, Arwood’s critical role in
both companies provides substantial evidence of single-employer sta-
tus.
18 See Consolidated Dress Carriers, 259 NLRB 627, 633 (1981),
enfd. in relevant part 693 F.2d 277 (9th Cir. 1982).
19 Arwood’s response to the Union’s bargaining demand in essence
denied that Respondent TNT employed any former Direct Line em-
ployees, denied that Respondent Hydrolines was a successor to Di-
rect Line, and stated that Respondent Hydrolines did not recognize
the Union as its employees’ bargaining representative.
20 The record shows that the Union received information that the
catamaran would make the Highland run. We note also that the bar-
gaining demand referred to both the boats and routes purchased from
Direct Line and that all employees were trained to work on all the
vessels.
21 284 NLRB 1232, 1282 (1987).
22 251 NLRB 1435, 1450 (1980), modified in other respects 652
F.2d 263 (2d Cir. 1981).
Based on the above, we find an interrelation of op-
erations, common management, and centralized control
of labor relations. Although common ownership was
not established, the General Counsel established that
there was common financial control of both Respond-
ents.15 Businesses that, at least nominally, are owned
by different individuals may constitute a single em-
ployer.16
In this case the Respondents operate as ‘‘a single in-
tegrated enterprise.’’ Arwood is the moving force of
both Respondents—controlling the management, labor
relations, and finances of each one. The direct control
which Arwood, Respondent Hydroline’s sole owner,
exercises over both of the Respondents is extensive
and ‘‘establishes the lack of the arm’s-length relation-
ship found among unintegrated companies.’’17
Other facts also suggest the absence of an arm’s-
length relationship between the Respondents. Thus, the
Respondents share an address and phone number. In
the contract with Direct Line regarding the sale of the
barges, certain obligations, including the downpay-
ment, were assumed by both of the Respondents al-
though transfer of interest in the barges was to be only
to Respondent TNT. Finally, we note that when Re-
spondent Hydrolines became a privately owned cor-
poration owned by Arwood, Respondent Hydrolines
was able to purchase the hydrofoil and charter it to a
subsidiary of TNT Limited. We note that Arwood, in
1984, took the idea of a waterborne passenger service
to TNT Limited and that TNT Limited formed Re-
spondent Hydrolines with the intent of operating such
a service. Although Arwood testified that TNT Limited
became uncertain whether it wanted to proceed with
the venture, Arwood also stated his understanding that
Federal law prohibited a foreign-held corporation from
owning vessels used in commerce within this country.
Ownership of Respondent Hydrolines was transferred
to Arwood and then Respondent Hydrolines purchased
the hydrofoil. Respondent Hydrolines, after it pur-
chased the hydrofoil, changed its intent from running
a passenger service to chartering vessels to others.
TNT Limited’s renewed interest in providing passenger
service occurred after Respondent Hydrolines, an
American-owned company, acquired a vessel that it
was willing to charter. The creation of a company to
supply equipment and labor to other companies is an
important factor in determining whether those compa-
nies constitute an integrated operation.18
Thus, based on all the above, we find here an ab-
sence of the ‘‘arm’s length relationship found among
unintegrated companies’’ and therefore we find the Re-
spondents to be a single employer.
III. SUFFICIENCY OF THE BARGAINING DEMAND
The complaint alleges that since May 19, 1989,
‘‘Respondent has failed and refused to recognize and
bargain with the Union as the exclusive collective-bar-
gaining representative of the unit.’’ The unit is de-
scribed in the complaint as ‘‘[a]ll full-time and regular
part-time crew members employed by Respondent on
its vessels including captains, engineers, deckhands
and assistant deckhands . . . .’’
The judge found that the Union’s May 10, 1989 let-
ter demanding recognition was for a unit limited to
‘‘those crew members who were formerly in Direct
Line’s employ.’’19 The judge found that the Union was
aware that the crewmembers of the Respondents’ cata-
maran had not been in Direct Line’s employ and that
the Union had never sought to represent these employ-
ees although they were within the unit alleged to be
appropriate in the complaint.20 The judge concluded,
citing EDP Medical Computer Systems21 and Chester
Valley, Inc.,22 that ‘‘because the unit alleged as appro-
priate in the complaint deviated substantially from the
unit in which the Union demanded recognition, no
proper demand for recognition was made by the
420 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
23 192 NLRB 207, 208 (1971), enfd. sub nom. NLRB v. Cofer, 637
F.2d 1309 (9th Cir. 1981).
24 See also Trucking Water Air Corp., 276 NLRB 1401, 1407
(1985); Yolo Transport, 286 NLRB 1087 fn. 2 (1987).
25 As indicated we agree with the General Counsel that the Re-
spondents are successors of Direct Line. See discussion infra.
26 Here for example, because of changes in job duties, there were
issues of whether certain former Direct Line employees were bar-
gaining unit employees when they were employed by the Respond-
ent. See fn. 30 infra.
27 The Board, with the approval of the Supreme Court, has pre-
viously recognized some of the unique problems a union faces when
making a bargaining demand to a successor employer. Thus, in Fall
River Dyeing Corp. v. NLRB, 482 U.S. 27, 52–53 (1987), the Court
held that the ‘‘continuing demand’’ rule is reasonable. The Court
reasoned that the rule ‘‘places a minimal burden on the successor
and makes sense . . . .’’ The Court noted that this was true
‘‘[b]ecause the union has no established relationship with the suc-
cessor and because it is unaware of the successor’s plans for its op-
erations and hiring, it is likely that, in many cases, a union bar-
gaining demand will be premature.’’ The Court noted, by contrast,
that in the initial recognition context the union ‘‘is in the best posi-
tion to have access to the relevant information—whether the union
has the majority support of the employees.’’ Id. at 53 fn. 19.
28 The issue of whether the crew of the catamaran was part of the
unit is a question of unit inclusion or exclusion rather than one of
unit scope.
29 We find that any doubt that the Respondents had regarding the
bargaining unit that the Union had sought to represent was removed
when the complaint issued setting forth the unit alleged to be appro-
priate. See East Texas Steel Casting Co., 191 NLRB 113 (1971),
enfd. 457 F.2d 879 (5th Cir. 1972); see also Santa Barbara Humane
Society, 302 NLRB 833 fn. 1 (1991) (any doubt regarding the iden-
tity of the union—i.e., as a successor union to the certified bar-
gaining representative—demanding bargaining was removed by the
issuance of the complaint). See also Trucking Water Air Corp., 276
NLRB 1401, 1407 (1985).
Union.’’ The General Counsel has excepted to the
judge’s conclusion, and we find merit in his exception.
The judge, in finding that the Union demanded rec-
ognition in a unit comprising only those crewmembers
who were formerly employed by Direct Line, relied on
the following language in the Union’s letter to the Re-
spondents:
As you may know, we are the collective bar-
gaining representatives of the bargaining unit em-
ployees employed by (Direct Line) including
those who work on the boats and routes, that your
company has recently purchased from Direct Line.
Under federal labor law, we continue to be the
collective bargaining representative of your
former Direct Line employees and your company
is required to recognize us as such and bargain
with us over the terms of a contract.
We note, at the outset of our analysis that, as stated
in Al Landers Dump Truck:23
The Board and the courts have repeatedly held
that a valid request to bargain need not be made
in any particular form, or in haec verba, so long
as the request clearly indicates a desire to nego-
tiate and bargain on behalf of the employees in
the appropriate unit concerning wages, hours, and
other terms and conditions of employment.24
In EDP Medical Computers and Chester Valley,
Inc., the cases cited by the judge, the unions requested
bargaining, based on card majorities, in clearly defined
bargaining units that ‘‘differed substantially’’ (by ex-
cluding job classifications or plant locations) from the
bargaining units alleged in the complaints and found
appropriate.
A bargaining demand in a successorship situation is
made in a different context, however, from demanding
initial bargaining based on a card majority.25 When a
union demands bargaining based on a card majority,
the union is aware of which group of employees it has
been organizing and wishes to represent; the employer
may not. On the other hand, in a successorship situa-
tion, the union, by making a bargaining demand, is at-
tempting to preserve its status as the bargaining rep-
resentative of an already defined unit, or that portion
of the unit which has been conveyed or preserved. The
successor, however, may add employees. It may add,
eliminate, or change job classifications. It may have
plans to expand or change its operations.26 The union
may be unaware, or at least uncertain, as to the succes-
sor’s plans for its hiring and operations. Therefore, the
union’s bargaining demand may be made before it is
clear which of the successor’s employees belong in the
unit, and the union cannot be expected or required to
take all possible contingencies into account in making
its demand to bargain.27
Here, the statements contained in the bargaining de-
mand set forth the basis of the Union’s bargaining de-
mand, i.e., that the Union continued to be the bar-
gaining representative of the former Direct Line em-
ployees. Further, the Union enclosed with its bar-
gaining demand a copy of the Union’s contract with
Direct Line, which included a bargaining unit descrip-
tion like the one in the complaint and which set forth
the unit job classifications. Under these circumstances,
any fair reading of the Union’s demand letter requires
the conclusion that the Union sought to represent the
Respondents’ employees—not just the former Direct
Line employees apart from other employees.28 At the
very least, the Union’s demand shifted the burden to
the Respondents to contact the Union and seek clari-
fication of the bargaining demand.29
In the circumstances here, the Union’s demand rea-
sonably informed the Respondents that the Union con-
sidered the Respondents to be a successor to Direct
Line and that the Union sought to represent the Re-
spondents’ employees. Thus, we find that the Union
made a proper and legally sufficient demand for rec-
ognition and bargaining in an appropriate unit.
421HYDROLINES, INC.
30 The judge found that, as of the date of the Union’s bargaining
demand, the Respondents employed 12 unit employees, 7 of whom
had been unit employees at Direct Line. The General Counsel
excepts to the judge’s finding that Gary Dunzelman was a supervisor
when he was employed by Direct Line. We find no merit in this ex-
ception. The judge concluded, and we agree, that Dunzelman was a
supervisor and not part of the bargaining unit at Direct Line but that
Dunzelman became a nonsupervisory employee and thus part of the
bargaining unit for the Respondents. Thus, the judge did not count
Dunzelman as part of the union majority in the Union’s efforts to
represent the Respondents’ employees.
The Respondents except to the judge’s conclusion that Brian
Haines and Jimmy Haines should be excluded from the bargaining
unit as nonvessel employees. We find this exception to be without
merit as there is insufficient evidence that either of the Haines per-
form unit work on a regular basis. The judge found that Judy Prish
was not a member of the bargaining unit at the time the bargaining
demand was made. The Respondents except to this finding. We find
this exception to be without merit as the judge made a credibility
resolution that Prish did not apply for employment until after the
Union had made its bargaining demand. The Respondents except to
the judge’s finding that Lyndon Kibler, who had not been employed
by Direct Line, is a supervisor and should be excluded from the bar-
gaining unit. Kibler is a ‘‘senior captain’’ and the record indicates
that he possesses indicia of supervisory status. Assuming for the
sake of argument that Kibler is part of the bargaining unit, we note
that the bargaining unit on the date that the bargaining demand was
made nonetheless consisted of a majority of former Direct Line bar-
gaining unit employees. We therefore find it unnecessary to pass on
the exception.
31 Arwood testified that the intent was ‘‘to man up to 14 people
at watergoing jobs.’’ At the time that the bargaining demand was
made there were 13 individuals employed on vessels, at least 12 of
whom were bargaining unit members. We therefore find that at the
time that the bargaining demand was made the Respondent had hired
a substantial and representative complement of which a majority had
been employed in the bargaining unit by the predecessor.
32 Direct Line retained, however, the right to continue to provide
the existing waterborne commuter transportation service between Ba-
yonne, New Jersey, and New York City as well as the ‘‘Pan Am
Shuttle.’’
IV. SUCCESSORSHIP
The judge concluded that the Respondents are not a
successor to Direct Line. The General Counsel has ex-
cepted. We find merit in that exception.
An employer, generally, succeeds to the collective-
bargaining obligation of a predecessor if a majority of
its employees, consisting of a ‘‘substantial and rep-
resentative complement,’’ in an appropriate bargaining
unit are former employees of the predecessor and if the
similarities between the two operations manifest a
‘‘‘substantial continuity’ between the enterprises.’’ Fall
River Dyeing Corp. v. NLRB, 482 U.S. 27, 41–43
(1987), citing, inter alia, NLRB v. Burns Security Serv-
ices, 406 U.S. 272, 280 fn. 4 (1972).
The Supreme Court in Fall River, supra at 43, sum-
marized the factors relevant to determining continuity
as follows:
[W]hether the business of both employers is es-
sentially the same; whether the employees of the
new company are doing the same jobs in the same
working conditions under the same supervisors;
and whether the new entity has the same produc-
tion process, produces the same products and has
basically the same body of customers.
These factors are assessed primarily from the per-
spective of the employees, that is, ‘‘whether ‘those em-
ployees who have been retained will . . . view their
job situations as essentially unaltered.’’’ Id., quoting
Golden State Bottling Co. v. NLRB, 414 U.S. 168, 184
(1973). Further, although each factor must be analyzed
separately, they must not be viewed in isolation and,
ultimately, it is the totality of the circumstances which
is determinative. See Fall River, supra.
Here, the Union, as found above, made a proper de-
mand for bargaining on May 10, 1989. At that time the
Respondents had no more than 13 employees30 in the
bargaining unit. A majority, seven, had been in the
bargaining unit at Direct Line.31
Having found that the unit at the critical times con-
sisted of a majority of former Direct Line employees,
we address continuity in the employing enterprise.
Prior to its negotiations with the Respondents, Direct
Line operated a passenger service from Highlands,
New Jersey, to Pier 11 in New York City; from
Keyport, New Jersey, to Pier 11 in New York City;
from Bayonne, New Jersey, to New York City; and a
shuttle between the Pan Am Airlines terminal in
LaGuardia and two ports on the East River. In its
April 14, 1989 agreement with the Respondents, Direct
Line agreed that it would cease providing waterborne
transportation services within the New York City met-
ropolitan area and all points along the coastline of
New Jersey. It gave the Respondents ‘‘the exclusive
right as between [Direct Line and the Respondents] to
provide such waterborne commuter, excursion and
other transportation within the Service Area . . . .’’32
This agreement also provided that Respondent
Hydrolines would enter into one or more bare-boat
charter agreements with Direct Line, would charter
certain surplus vessels, and that Respondent TNT
would purchase certain barges from Direct Line. The
agreement stated that ‘‘TNT and/or Hydrolines intends
to consider hiring employees of Direct Line to engage
in the water transportation services contemplated by
this agreement.’’ Direct Line agreed to provide the Re-
spondents TNT and Hydrolines with information re-
garding employees.
The Respondents and Direct Line entered into an
‘‘Interim Operating Agreement’’ on April 14, 1989,
which provided, inter alia, that, until the closing or
May 22, 1989, whichever occurred earlier, Direct Line
would provide service between Keyport and Highlands,
New Jersey, and New York City. All profits and losses
would be considered those of the Respondents. Thus,
during the transition there was no interruption of serv-
ice.
422 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
33 At the time the hearing in this case was held the hydrofoil had
not been put into service but was used as a backup vessel.
34 Arwood testified that at the time of the hearing Respondents had
added a stop at 69th Street, Brooklyn, New York, to the service pro-
vided from Keyport, New Jersey, to Pier 11.
35 Direct Line agreed to ‘‘use its best efforts to sell or otherwise
dispose of’’ these vessels during that 12-month period, and could re-
call these vessels at anytime.
36 Whether assets are leased or purchased is not ‘‘of great signifi-
cance’’ in determining successorship obligations under the Act. See
Band-Age, Inc., 217 NLRB 449 (1975), enfd. 534 F.2d 1 (1st Cir.
1976).
37 In the judge’s decision he inadvertently stated the value of the
catamaran as in excess of $12 million.
38 See Miami Industrial Trucks, 221 NLRB 1223, 1224 (1975).
39 The union had been the bargaining representative of a single
unit of employees at the predecessor’s manufacturing plant and two
granite quarries. The new employer acquired only the manufacturing
plant.
40 For example, in Boston-Needham Industrial Cleaning Co., 216
NLRB 26 (1975), enfd. 526 F.2d 74 (1st Cir. 1975), the Board found
successorship where the respondent obtained the cleaning contract
which the predecessor had performed at an RCA facility. In finding
successorship the Board noted that the size and organizational struc-
ture of the respondent was comparable to the predecessor, the con-
trol of personnel was retained by RCA, and that the single location
unit was an appropriate unit.
According to Arwood, at the time the Respondents
began to negotiate with Direct Line, Respondent
Hydrolines already owned a new catamaran and a hy-
drofoil.33 Arwood described the catamaran as ‘‘a luxu-
rious accommodation’’ and the vessels chartered from
Direct Line as originally having been built to service
the offshore-drilling industry. The passenger capacity
on the catamaran is 265; the highest capacity of any
of the vessels chartered from Direct Line is 149. The
catamaran is also faster than the vessels chartered from
Direct Line. The catamaran is used more often for
charters and excursions than the vessels chartered from
Direct Line.
The Respondents have two crews of four employees
each for the catamaran and one crew of three employ-
ees for each of the other two vessels. Arwood testified
that the catamaran is required, by the U.S. Coast
Guard, to be operated under total radar control, which
requires the captain to have a radar license. This was
not a requirement at Direct Line. The crews, including
the crew of the catamaran, were all cross-trained, but
the record does not reflect the amount of training re-
quired. According to Arwood, he hired former Direct
Line employees for the positions that they had rep-
resented to him that they had occupied at Direct Line.
The Respondents operate the catamaran and a vessel
chartered from Direct Line on the Highlands to Pier 11
run. Another vessel chartered from Direct Line pro-
vides commuter service between Keyport and Pier
11.34
The two vessels referred to above were chartered
from Direct Line by the Respondents for a period of
16 months for each vessel, with the option to renew
for an additional 6 months. The Respondents agreed to
charter four surplus vessels for a 12-month term from
Direct Line35 and also purchased support barges from
Direct Line.
The Respondents also were assigned leases which
Direct Line had for certain physical facilities. These
leases included part of one floor of a building, space
at pierside, certain riparian rights and vessel docking
space at Port Monmouth, New Jersey, and a lease and
permission to operate within the town of Keyport, New
Jersey. Also, Direct Line assigned its excursion char-
ters, beginning May 1, 1989, to the Respondents. Thus,
through sales, charters, assignments, and the no-com-
petition agreement, the Respondents operate with a
substantial amount of assets acquired from Direct
Line.36
The facts here, under the totality of the cir-
cumstances criteria approved in Fall River, supra,
point to continuity in the employing industry. The
judge, without discussing the relevant factors set forth
in Fall River, concluded that the Respondents were not
a successor to Direct Line based on the following:
(1) The Respondents were already committed to pro-
viding passenger service on the same routes as Direct
Line before negotiating with Direct Line; (2) the cata-
maran, valued in excess of $2 million37 ‘‘offered an
entirely new commuting concept’’; and (3) the cata-
maran and its crew were not ‘‘a mere appendage to a
fleet consisting of just the vessels leased from Direct
Line, and to a Union crew of just seven former Direct
Line employees.’’
An employer, however, may take over only a part
of the operations of the predecessor and still be
deemed a successor employer. Also, successorship is
not precluded because the entire bargaining unit is not
transferred to the new employer.38
In regard to continuity, Stewart Granite Enterprises,
255 NLRB 569, 573 (1981), is informative. In Stewart
the Board held that the new employer’s ‘‘acquisition of
the [predecessor’s manufacturing plant but not its gran-
ite quarries] did not result in the inappropriate ‘frag-
mentation’ of a previously homogeneous grouping of
employees.’’39 Instead, the acquisition resulted in a
separation of the plant workers from the ‘‘functionally
and geographically distant’’ employees working in the
quarries. The Board concluded in Stewart that the new
employer was a successor employer.
Here the predecessor bargaining unit was a more ho-
mogeneous group of employees than the bargaining
unit involved in Stewart. The Board, however, has
found successorship even though the alleged successor
took over a part of the predecessor’s operations, and
thereby divided a bargaining unit that had consisted of
a very homogeneous group of employees.40
423HYDROLINES, INC.
41 The predecessor had owned a motel and hotel, three restaurants,
two lounges, two gift shops, two warehouses, a bait store, an apart-
ment complex, a bar, and attraction park and boats. The predecessor
sold the attraction park and boats and the hotel to two other parties;
the predecessor sold a restaurant, lounge, bar, warehouse, and gift
shop to the alleged successor, and retained its other assets.
42 Id. at 1519–1520, as quoted from Stewart Granite, supra.
43 In Nova the predecessor was a statewide cleaning operation
which had a contract with Mechanics National Bank. The alleged
successor successfully solicited a janitorial contract for part of the
bank’s facilities. The predecessor had a total of 300 employees state-
wide, and had used about 11 or 12 of these employees to take care
of that part of the bank’s janitorial operations which were taken over
by the alleged successor. The alleged successor had a total com-
plement of 36 employees and used 10 of these employees at the
bank’s facilities. Eight of the 10 had been employed by the prede-
cessor. The Board found that there had not been a ‘‘substantial con-
tinuity in the employing enterprise’’ and that the new employer was
not a successor.
The holding in Nova, however, must be limited to the facts of that
case. In Nova, as we do here, the Board examined the totality of
the circumstances. Certain factors, including particularly that the
‘‘successor’’ unit requested by the union was only a very small part
of the predecessor’s unit and that a third company had taken over
a large part of the predecessor’s work convinced the Board that there
was not a substantial continuity in the employing industry.
44 In Boston-Needham, supra, on facts similar but somewhat dif-
ferent from those in Nova (the predecessor in Nova was the same
as the one in Boston-Needham), the Board, based on all the cir-
cumstances, found no substantial change in the employing industry.
As noted by the court in Boston-Needham, in commenting on the
distinctions the Board drew between that case and Nova ‘‘this is a
field [successorship] where intricate line drawing must be done.’’
Boston-Needham, 526 F.2d 74, 77 (1st Cir. 1975).
45 Although Janet Mihm was the only managerial or supervisory
personnel of the Respondents who had formerly been employed by
Direct Line, this is not of overriding importance because other fac-
tors persuade us of the continuity of the employing industry. See
Boston-Needham, supra at 27.
In another case relevant here, Louis Pappas’ Res-
taurant, 275 NLRB 1519 (1985), the Board found
successorship where the respondent acquired a portion
of the predecessor’s operation.41 The union sought rec-
ognition in a unit of all employees of the alleged suc-
cessor.
The Board noted in Louis Pappas,42
that successorship obligations are not defeated by
the mere fact that only a portion of a former
union-represented operation is subject to the sale
or transfer to a new owner, so long as the em-
ployees in the conveyed portion constitute a sepa-
rate appropriate unit, and they comprise a major-
ity of the unit under the new operation. [Citations
omitted.]
The Board found that the requested unit was appro-
priate as the restaurant, warehouse, bar, and gift shop
conveyed to the successor were located close to one
another and all the employees working at those facili-
ties performed functions directly related to the res-
taurant operation. In finding successorship, the Board
noted that the alleged successor was engaged in the
sale of food, gifts, and liquors, as was its predecessor.
This case is more analogous to Stewart and Louis
Pappas than to Nova Services Co., 213 NLRB 95
(1974),43 relied on by the judge in finding no
successorship. Here, as in the former cases, the Re-
spondents took over a significant portion of the prede-
cessor’s operation and continued to operate the ac-
quired portion in a manner similar to that of the prede-
cessor.44 Further, the unit sought by the Union con-
stitutes a separate appropriate unit.
The totality of the circumstances persuades us that
the Respondents are a successor to Direct Line.45 Con-
trary to the judge, we find that the Respondents’ oper-
ation is substantially similar to that of the predecessor.
The successor provides the same services and the bar-
gaining unit members perform the same duties and
functions as they did under the predecessor. The Re-
spondents and Direct Line engage in the business of
waterborne passenger services, which include com-
muter, charter, and excursion services. Direct Line
agreed not to compete with the Respondents on certain
commuter routes that Direct Line had served, and the
Respondents were assigned excursion contracts from
Direct Line. There was no hiatus between Direct
Line’s discontinuing the operation and the Respond-
ents’ commencing the operation. Particularly from the
point of view of the unit employees—i.e., the point of
view that Fall River emphasizes—there is a substantial
continuity in the employing industry. The Respondents
are providing the same type of service on the same
routes, to the same body of customers as Direct Line.
Further, two of the three primary vessels used by the
Respondents were used by Direct Line, the Respond-
ents’ facilities were used by Direct Line, and most of
the bargaining unit employees were hired and worked
in the same job classifications, for the Respondents as
they had for Direct Line. The Respondents’ use of a
catamaran—a vessel of considerably higher speed than
the vessels used by Direct Line—does not alter the
basic nature of the operation, i.e., one of supplying wa-
terborne passenger service. These facts demonstrate a
substantial continuity between the Respondents and Di-
rect Line. We therefore find that the Respondents are
a successor to Direct Line.
Accordingly, as we have found that the Respondents
constitute a single employer, the Union made a proper
demand for bargaining, and the Respondents are a suc-
cessor to Direct Line, we find that the Respondents, in
failing to recognize and bargain with the Union, vio-
lated Section 8(a)(5) and (1) of the Act.
CONCLUSIONS OF LAW
1. Hydrolines, Inc. and TNT Hydrolines, Inc. con-
stitute a single employer.
2. Local 333, United Marine Division, International
Longshoremen’s Association, AFL–CIO has been and
424 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
46 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
National 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.’’
is the exclusive representative of all employees in the
appropriate unit for purposes of collective bargaining
within the meaning of Section 9(a) of the Act.
3. The following employees constitute a unit that is
appropriate for collective bargaining within the mean-
ing of Section 9(b) of the Act.
All full-time and regular part-time crew members
employed by the Employer on its vessels includ-
ing captains, engineers, deck hands, and assistant
deckhands, excluding all yard personnel, office
clerical employees, professional employees,
guards and supervisors as defined in the Act.
4. Respondents Hydrolines, Inc. and TNT
Hydrolines, Inc. are successors of Direct Line.
5. The Union made a valid bargaining demand on
May 10, 1989.
6. By failing and refusing to recognize and bargain
collectively with the Union as the exclusive representa-
tive of the Respondents’ employees in the appropriate
unit since May 19, 1989, the Respondents have en-
gaged in and are engaging in unfair labor practices
within the meaning of Section 8(a)(5) and (1) of the
Act.
7. The Respondents’ unfair labor practices affect
commerce within the meaning of Section 2(6) and (7)
of the Act.
REMEDY
Having found that the Respondents have violated
Section 8(a)(5) and (1) of the Act by failing and refus-
ing to bargain with the Union, we shall order them to
cease and desist, to bargain on request with the Union,
and, if an understanding is reached, to embody the un-
derstanding in a signed agreement. Because the Re-
spondents’ employees are on-vessel employees who
would not be likely to see a notice posted at the Re-
spondents’ facility, we shall require the Respondents to
mail copies of the notice to all current unit employees
as well as former unit employees employed at the time
of the unfair labor practices.
ORDER
The National Labor Relations Board orders that the
Respondents, Hydrolines, Inc. and TNT Hydrolines,
Inc., Wayne, New Jersey, their officers, agents, succes-
sors, and assigns, shall
1. Cease and desist from
(a) Refusing to recognize and bargain with Local
333, United Marine Division, International Longshore-
men’s Association, AFL–CIO as the exclusive bar-
gaining representative of the employees in the bar-
gaining unit described below.
(b) In any like or related manner interfering with,
restraining, or coercing employees in the exercise of
the rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Recognize and, on request, bargain with the
Union as the exclusive representative of the employees
in the following appropriate unit concerning terms and
conditions of employment, and, if an understanding is
reached, embody the understanding in a signed agree-
ment:
All full-time and regular part-time crew members
employed by the Employer on its vessels includ-
ing captains, engineers, deckhands and assistant
deckhands, excluding all yard personnel, office
clerical employees, professional employees,
guards and supervisors as defined in the Act.
(b) Post at its facility in Wayne, New Jersey, and
mail to all current unit employees and former unit em-
ployees employed at the time of the unfair labor prac-
tices (i.e., at their last known address) copies of the at-
tached notice marked ‘‘Appendix.’’46 Copies of the
notice, on forms provided by the Regional Director for
Region 22 after being signed by the Respondents’ au-
thorized representative, shall be posted by the Re-
spondents immediately upon receipt and maintained for
60 consecutive days in conspicuous places including
all places where notices to employees are customarily
posted. Reasonable steps shall be taken by the Re-
spondents to ensure that the notices are not altered, de-
faced, or covered by any other material.
(c) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondents have taken to comply.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we
violated the National Labor Relations Act and has or-
dered us to post and abide by this notice.
WE WILL NOT refuse to bargain with Local 333,
United Marine Division, International Longshoremen’s
Association, AFL–CIO as the exclusive representative
of the employees in the bargaining unit.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the
rights guaranteed you by Section 7 of the Act.
425HYDROLINES, INC.
WE WILL, on request, bargain with the Union and
put in writing and sign any agreement reached on
terms and conditions of employment for our employees
in the bargaining unit:
All full-time and regular part-time crew members
employed by the Employer on its vessels includ-
ing captains, engineers, deckhands and assistant
deckhands, excluding all yard personnel, office
clerical employees, professional employees,
guards and supervisors as defined in the Act.
HYDROLINES, INC. AND TNT
HYDROLINES, INC.
Gary A. Carlson, Esq., for the General Counsel.
Timothy I. Duffy, Esq. and Michael S. Stein, Esq. (McElroy,
Deutsch & Mulvaney), of Morristown, New Jersey, for
Hydrolines, Inc. and TNT Hydrolines, Inc.
DECISION
STATEMENT OF THE CASE
JAMES F. MORTON, Administrative Law Judge. In broad
terms, the complaint alleges that Hydrolines, Inc. and TNT
Hydrolines, Inc., as a single employer, is the successor to
part of the business it bought from a company which is still
operating and that they failed to bargain collectively with the
Union which represented the employees of the company
which sold that part of its business. The detailed allegations
of the complaint, and the responses thereto in the answer,
present the following questions:
1. Whether Hydrolines, Inc. (Hydrolines) and TNT
Hydrolines, Inc. (TNT) operate as a single business enter-
prise and constitute a single employer within the meaning of
Section 2(2) of the National Labor Relations Act (Act).
2. Whether the alleged single enterprise (Hydrolines-TNT)
is the successor to Harbor Commuter Service, Inc. and Har-
bor Commuter Holdings, Inc. (collectively Direct Line).
3. Whether the Union demanded recognition as exclusive
collective-bargaining representative for the employees in the
unit described below in paragraph 4.
4. Whether a majority of the employees in the unit de-
scribed below had been unit employees at Direct Line rep-
resented by the Union:
All full-time and regular part-time crew members em-
ployed by Hydrolines-TNT on its vessels including cap-
tains, engineers, deckhands and assistant deckhands but
excluding all yard personnel, office clerical employees,
professional employees and supervisors as defined in
the Act.
5. Whether Hydrolines-TNT violated Section 8(a)(1) and
(5) of the Act by having refused to answer the Union’s re-
quest for recognition as bargaining representative in the unit
described above.
The hearing was held in Newark, New Jersey, on Decem-
ber 18, 19, and 21, 1989. On the entire record, including my
observation of the demeanor of the witnesses, and after due
consideration of the briefs filed by the General Counsel and
by Hydrolines-TNT, I make the following
FINDINGS OF FACT
I. COMMERCE AND LABOR ORGANIZATION
Hydrolines, a corporation with its office in Wayne, New
Jersey, is engaged in the business of owning, operating, and
chartering vessels and of providing waterborne commuter
and charter services. Its direct out-of-state purchases exceed
$50,000 annually.
TNT has its office at the same location in Wayne, New
Jersey, as Hydrolines and is engaged in the business of pro-
viding commuter ferry service. It derives in excess of
$50,000 annually from its operations in transporting pas-
sengers from New Jersey to New York.
The Union is a labor organization within the meaning of
Section 2(5) of the Act.
II. THE ALLEGED UNFAIR LABOR PRACTICE
A. Background
1. Direct Line’s operations
On March 8, 1989, the Board issued a Decision and Cer-
tification of Representative in Case 22–RC–9976, certifying
the Union as the exclusive collective-bargaining representa-
tive of all employees employed on the vessels of Harbor
Commuter Service, Inc., d/b/a Direct Line. The unit includes
captains, engineers, deckhands and assistant deckhands and
excluded all yard personnel, office clerical employees, pro-
fessional employees, guards and supervisors as defined in the
Act. In its decision, the Board had overruled Direct Line’s
objection to the conduct of the election held on September
16, 1988, in which 26 employees had voted for representa-
tion by the Union, 5 against, with 2 challenged ballots.
Direct Line operates ferry services for people commuting
between various points in New Jersey and locations in New
York City. The Union and Direct Line signed a collective-
bargaining agreement effective April 10, 1989, to April 10,
1992.
2. How Hydroline and TNT were formed and operated
In 1976, John Arwood was responsible for developing new
business for an Australian-based company, TNT Limited
(Limited). In 1986, Limited formed the company, referred to
as Hydrolines. Arwood took over ownership of Hydrolines in
1987. In February 1988, Limited formed the company
(TNT), and appointed Arwood as its chairman. TNT, as a
subsidiary of a foreign corporation, is barred by law from
owning vessels operating on U.S. waterways. In 1988,
Hydrolines contracted, for a sum in excess of $12 million to
have a catamaran built and delivered. The catamaran is a
high-speed vessel suitable for use by commuters.
The catamaran was delivered to Hydrolines in February
1989. Hydrolines commenced the process of obtaining per-
mits and making other arrangements necessary for it to oper-
ate a ferry commuter service, with this high-speed vessel, be-
tween New York City and points along the New Jersey
shore. It hired several crewmembers and began trial runs,
without passengers. The Union’s general organizer, James
Morrissey, testified that he knew of these trial runs at the
time he was negotiating a contract with Direct Line.
426 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 Arwood testified that other records which he examined disclosed
different dates for Prish. Those other records were not produced. I
am unable to rely on his recollection as to the contents of these other
records.
2 Neither side would include Janet Mimh, the daughter of Direct
Line’s owner and who is ‘‘base manager,’’ having been employed
by Hydrolines in mid-April.
B. The Transfer of Certain Assets of Direct Line
While Hydrolines was preparing to set up its commuter
service, Direct Line was actually providing ferry commuter
service to New York City from various points in New Jersey,
including the shore area.
In March 1989 (about the time the Union was certified as
noted above), the president of Direct Line, Walter Mihm,
met with Arwood. Mihm indicated that Direct Line would
not be able to compete, on some of its routes, with the high-
speed service to be offered by Hydrolines and proposed sell-
ing some of Direct Lines’s surplus vessels to Hydrolines.
Hydrolines and TNT both entered into negotiations with Di-
rect Line which led ultimately to the transfer of certain assets
to them by Direct Line, pursuant to an agreement dated April
14, 1989. Direct Line thereby chartered six vessels to
Hydrolines, agreed that it would not operate a ferry service
from Keyport or Highlands, New Jersey, to pier 11, New
York City, leased office and maintenance facilities at
Belford, New Jersey, to TNT and sold barges to TNT. TNT
agreed to honor Direct Line tickets; TNT and Hydrolines fur-
ther stated in the April 14 agreement that they intended to
consider hiring Direct Line’s employees to perform work en-
compassed by the agreement.
Hydrolines and TNT also entered into an interim operating
agreement with Direct Line to cover operations during the
period of time between April 14, the date of the agreement,
and its closing date, May 8, 1989. TNT issued a press re-
lease, announcing that it will ‘‘continue to provide [Direct
Line’s] all-water commutation service between the New Jer-
sey bayshore and lower Manhattan.’’ During the transition
period, between April 14 and May 8, TNT operated the serv-
ice, using crews employed by Direct Line.
C. Direct Line’s Operations
Direct Line has continued to provide ferry commuter serv-
ice from other locations in New Jersey to New York City.
D. The Unit
Prior to May 8, TNT’s president, Thomas Bruyere, and
Arwood interviewed applicants seeking jobs as crew-
members. The following 10 individuals, who had worked for
Direct Line, each in the capacity as listed alongside his re-
spective name, were hired by Hydrolines:
Russell Adams engineer
Gary Dunzelman port captain
Daniel Florio engineer
Brian Haines mechanic
Jimmy Haines mechanic
Redden Koch captain
Martin Plage captain
John Ralph deckhand
Brendan Pryor deckhand
Harold Smith deckhand
Hydrolines already had, by mid-April, five other crew-
members in its employ. As noted above, the catamaran was,
prior to May 8, conducting trial runs and, presumably, these
five were its crew then. The names and job classifications of
these five are:
Martin Grzeszack engineer
Lyndon Kibler service captain
Mark Marcellus captain
John Metzler deckhand
Lester Starnes deckhand
Another individual, Judy Prish, applied on May 17, 1989,
according to her application form, for a job as bartender.
Other personnel documents show that she began working as
a salaried ‘‘bartender-deckhand’’ on May 22.1
Of the 16 individuals named above, General Counsel con-
tends that 4 should be excluded from the unit and that 8 of
the remaining 12 are employees who came from the Direct
Line unit. Hydrolines asserts that all 16 should be included
and that only 7 came from the Direct Line unit.2 The unit
placement of each of the individuals in dispute is discussed
next.
1. Gary Dunzelman
Hydrolines contends that he was a supervisor within the
meaning of the Act when he worked for Direct Line and thus
was not an employee in the Direct Line unit when he inter-
viewed for and was hired as a unit employee by Hydrolines.
General Counsel contends that Dunzelman should be in-
cluded as one of the eight Direct Line employees who com-
prise the majority of the unit described above.
Dunzelman had been employed by Direct Line as its port
captain. In that capacity, he scheduled the assignments, the
vacation periods, and holidays of the crewmembers. He
worked in the Direct Line office until late 1988 when he also
took over the responsibilities of a captain aboard one of Di-
rect Line’s vessels. He was responsible for the hiring and fir-
ing of employees and received $200 a week more than vessel
captains and also fully paid medical benefits to compensate
him for his duties as port captain—duties he performed until
his employment with Direct Line ended, when he joined
Hydrolines.
General Counsel placed in evidence a card signed by
Dunzelman in August 1988 in which he applied for member-
ship in the Union. General Counsel offered the testimony of
the Union’s general organizer. He related that he and the
owner of Direct Line had agreed, after the Union won the
election referred to above, to include Dunzelman in the Di-
rect Line unit.
Dunzelman testified that he signed the union card because
he believed that the Union would seek his ouster as port cap-
tain. He did not vote in the Board-conducted election noted
above. Dunzelman testified that he had been given to under-
stand that he was ineligible as part of Direct Line’s manage-
ment.
The evidence is clear that, while in Direct Line’s employ,
Dunzelman was a supervisor as defined in the Act and not
427HYDROLINES, INC.
3 Counsel for TNT-Hydrolines argues that as she applied before
Arwood’s reply of May 19 to the Union’s demand either (discussed
elsewhere in this decision), she should be included. I find no merit
in that contention.
properly part of the unit. Any agreement by Direct Line to
include him nonetheless obviously cannot change the essen-
tial fact, that he was a supervisor who later became a non-
supervisory employee of Hydrolines. General Counsel still
would include him among the eight represented by the Union
based on his having signed a union card. That card obviously
was to be effective whenever he was employed as a unit em-
ployee of Direct Line—a circumstance that never eventuated
as he was always a supervisor there. More significantly, Gen-
eral Counsel’s case is not premised on a bad-faith refusal to
recognize a card majority but on the consequences of the
Board’s successorship doctrine. On that point, the simple fact
is that Dunzelman was a supervisor, not in the Direct Line
unit; he is a unit employee of Hydrolines. I shall then ex-
clude him from the number of Direct Line unit employees
hired in the Hydrolines unit.
2. Brian Haines and Jimmy Haines
They had worked for Direct Line as mechanics and were
excluded, as yard personnel, from the certified unit. They are
working in substantially the same capacity for Hydrolines,
except that on occasion they go above vessels while enroute
to service them. Notations on Hydrolines’ payroll register
disclose that they are ‘‘nonvessel’’ employees.
They were not unit employees at Direct Line and are prop-
erly excludable from the Hydroline unit as nonvessel em-
ployees.
3. Lyndon Kibler
He was never in Direct Line’s employ. Hydrolines would
include him in its own unit whereas General Counsel would
exclude him as a supervisor.
Kibler was hired by Hydrolines as a ‘‘senior captain’’ to
whom all crew members report. He has authority to approve
a crewmember’s request to take a day off from work. He
sees to it that all boats are manned to meet the scheduled
sailings and to fill crew vacancies as needed. In general, his
duties include the coordination of the work of, and the super-
vision of, employees on board Hydrolines’ vessels.
Kibler possesses at least one of the indicia of supervisory
status as set forth in Section 2(11) of the Act and is thus a
supervisor. I shall therefore exclude him from the
Hydrolines’ unit.
4. Judy Prish
She applied to Hydrolines for a bartender position aboard
one of its vessels on May 17. As noted below, this was a
week after the Union demanded recognition of May 10. As
she was not employed as of May 10, I shall exclude her.3
E. Summary
Of the 12 unit employees as of the date of the Union’s
recognition demand, 7 had been unit employees at Direct
Line.
F. The Union’s Demand
On May 10, 1989, the Union wrote to Thomas Bruyere,
TNT’s president, as follows:
As you may know, we are the collective bargaining
representative of the bargaining unit employees em-
ployed by (Direct Line), including those who work on
the boats and routes, that your company has recently
purchased from Direct Line.
Under federal labor law, we continue to be the col-
lective bargaining representative of your former Direct
Line employees and your Company is required to rec-
ognize us as such and bargain with us over the terms
of a contract.
Please contact me as soon as possible to schedule a
negotiating meeting, so that you may have an idea of
what we desire in a contract. We have enclosed a copy
of (the Union’s) contract with Direct Line.
Arwood, on behalf of Hydrolines, wrote to the Union on
May 19, as follows:
Mr. Bruyere of (TNT) has forwarded your letter
dated May 10 to my attention. (TNT) is not an em-
ployer of any employees formerly in the Direct Line
bargaining unit.
Your letter of May 10 indicates that you continue to
be the collective bargaining unit for former Direct Line
employees now employed by our company. All employ-
ees of this company, including any who formerly
worked for Direct Line, have been employed as a result
of their direct application to this company for employ-
ment. We have not agreed with Direct Line to employ,
nor have we in fact employed, all of the employees per-
forming all of the work that you indicate is covered by
your Collective Bargaining Agreement. We did not pur-
chase (Direct Line), nor a majority of its assets.
Hydrolines does not recognize (the Union), as the
bargaining representative of our employees.
G. Analysis
The complaint alleges that TNT-Hydrolines, since May 19,
1989, failed and refused to bargain collectively with the
Union, in violation of Section 8(a)(1) and (5) of the Act, as
the exclusive collective-bargaining representative of the unit
comprised of all full-time and regular part-time crew-
members. The reference to May 19 obviously is to Arwood’s
letter of that date. A careful reading of that letter and also
of the Union’s demand letter of May 10 discloses that TNT-
Hydrolines rejected the Union’s demand for recognition in a
unit comprised only of those crewmembers who were for-
merly in Direct Line’s employ. Although the Union was
aware, when it was negotiating with Direct Line, that the cat-
amaran was on trial runs with crewmembers who obviously
were not in the Direct Line unit, the Union never sought to
represent those non-Direct Line employees.
To use the language employed by Judge Fish in EDP
Medical Computer Systems, 284 NLRB 1232, 1282 (1987),
because the unit alleged as appropriate in the complaint devi-
ated substantially from the unit in which the Union de-
manded recognition, no proper demand for recognition was
made by the Union. Accordingly, I am compelled to dismiss
428 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
the complaint. See Chester Valley, Inc., 251 NLRB 1435,
1450 (1980).
In view of the above, it is unnecessary to decide the other
issues posed by the pleadings. In the event the Board were
to determine, however, that the Union made a proper de-
mand, the Board may also wish to have before it then the
following findings.
1. The single-employer issue
TNT-Hydrolines obviously functions as an integrated busi-
ness enterprise. Hydrolines leases or owns the vessels and
hires the crews; TNT operates the vessels and directs the
crews. Bruyere, the president of TNT, screened applicants for
Hydrolines. The history of Hydrolines is enmeshed with the
operations of TNT’s parent, Limited.
In view of the integrated operations, common manage-
ment, common control of labor relations, and the totality of
the evidence, I find that TNT-Hydrolines operates as, and is,
a single employer and together constitute an employer within
the meaning of Section 2(2) of the Act. See Professional Eye
Care, 289 NLRB 738 (1988).
Counsel for TNT and for Hydrolines has argued that they
cannot be a single employer as they are two separate cor-
porate entities with separate owners and books of accounts.
For corporate, for tax, for maritime, and perhaps for other
purposes all that is true. For purposes of the Act, however,
they comprise a single employer.
2. The successor issue
Seven of the 12 employees had been in the Direct Line
unit represented by the Union and those employees are en-
gaged in providing ferry commuter services between points
which had been served by Direct Line. However, the very
reason Direct Line sold that part of its business demonstrates
that TNT-Hydrolines is not its successor. TNT-Hydrolines
was readying its catamaran to compete with Direct Line. The
sale of some of Direct Lines vessels to Hydrolines and Direct
Line’s abandonment of the route that TNT-Hydrolines al-
ready had committed itself to use resulted in an amalgam of
part of Direct Lines operations with those of TNT-
Hydrolines, and under separate immediate supervision. TNT-
Hydrolines’ use, prior to the sale, of a catamaran valued at
in excess of $2 million the catamaran’s speed that offered an
entirely new commuting concept and its crew supervised by
Kiebler, cannot be said to be matters that constitute a mere
appendage to a fleet consisting of just the vessels leased
from Direct Line, and to a union crew of just seven former
Direct Line employees. Cf. Nova Services Co., 213 NLRB
95 (1974).
I thus find that TNT-Hydrolines was not the successor to
part of Direct Line’s operations.
CONCLUSIONS OF LAW
1. TNT-Hydrolines is an employer within the meaning of
Section 2(2), (6), and (7) of the Act.
2. The Union is a labor organization within the meaning
of Section 2(5) of the Act.
3. TNT-Hydrolines did not violate Section 8(a)(1) and (5)
of the Act by its refusal to honor the Union’s request for rec-
ognition as exclusive collective-bargaining agreement of
those crewmembers who had formerly been employed by Di-
rect Line.
[Recommended Order for dismissal omitted from publica-
tion.]