Jackson Engineering Co.

National Labor Relations Board - Board Decisions

Dec 28, 1982

265 N.L.R.B. 1688 (N.L.R.B. 1982)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Jackson Engineering Co. and Industrial Union of
Marine and Shipbuilding Workers of America,
AFL-CIO and Local 17, Industrial Union of
Marine and Shipbuilding Workers of America,
AFL-CIO and Local 1814, International Long-
shoremen's Association, AFL-CIO, Party to the
Contract
Local 1814, International Longshoremen's Associ-
ation, AFL-CIO and Industrial Union of
Marine and Shipbuilding Workers of America,
AFL-CIO and Local 17, Industrial Union of
Marine and Shipbuilding Workers of America,
AFL-CIO and Jackson Engineering Co., Party
to the Contract. Cases 29-CA-7498 and 29-
CB-3966
December 28, 1982
DECISION AND ORDER
BY MEMBERS JENKINS, ZIMMERMAN, AND
HUNTER
On May 27, 1982, Administrative Law Judge
Steven B. Fish issued the attached Decision in this
proceeding. Thereafter, Respondent Employer, Re-
spondent Union, and the General Counsel filed ex-
ceptions and supporting briefs, and Respondent
Employer and Respondent Union filed answering
briefs to the General Counsel's exceptions.
The Board has considered the record' and the
attached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, find-
ings,2 and conclusions of the Administrative Law
Judge, as modified herein.
The Administrative Law Judge found that,
during the period from early 1976 until July 1979,
Respondent Employer's president, Seregos, made
concealed payments totaling approximately $67,700
to Respondent Union's executive vice president,
Anastasio, with the full knowledge and approval of
Respondent Union's president, Scotto. These pay-
ments, which were made in cash at Respondent
Union's office, represented a 10-percent kickback
Although none of the parties have objected thereto, we note that the
official transcript of proceedings for the October 1980 hearing dates is
confusing and duplicative, and, in some instances, contains patently erro-
neous transcriptions of testimony and arguments of counsel. However,
we carefully have reviewed the entire record and find that these errors
do not raise any material issues of fact concerning the issues before us. In
this regard, we note that the basic facts essentially are undisputed insofar
as they relate to the concealed payments which gave rise to the instant
8(aXl) and (2) and 8(bXl)(XA) charges, and that the transcription errors
primarily relate to the Midwest Piping doctrine allegations contained in
the complaint. See fn. 2, infra.
2 No exceptions were filed to the Administrative Law Judge's dismiss-
al of that portion of the complaint which alleges violations of the stand-
ards set forth in Midwest Piping and Supply Co, Inc., 63 NLRB 1060
(1945). We note, however, that the Midwest Piping doctrine recently was
modified and redefined by the Board. See RCA Del Caribe. Inc., 262
NLRB 963 (1982) (Chairman Van de Water and Member Jenkins dissent-
ing separately), and Abraham Grossman d/b/a Bruckner Nursing Home,
262 NLRB 955 (1982) (Member Jenkins concurring in the result).
265 NLRB No. 175
from all business referred to Respondent Employer
by Respondent Union. The Administrative Law
Judge found, and we agree, that by such conduct
Respondent Employer violated Section 8(a)(2) and
(1) of the Act and Respondent Union violated Sec-
tion 8(b)(1)(A) of the Act. To remedy these viola-
tions, the Administrative Law Judge recommended
that a cease-and-desist order issue, finding that set-
ting aside the contract executed on September 13,
1979, was not warranted. We find merit to the
General Counsel's exceptions to this latter finding.
The Administrative Law Judge found that the
relationship between Respondents had its genesis in
mid-1975 when Seregos approached Respondent
Union and informed Anastasio that he (Seregos)
was interested in unionizing his shop. Thereafter, in
mid-July 1975, Seregos told Anastasio that Re-
spondent Employer would become a union shop.
On this same occasion, Seregos agreed to Anasta-
sio's proposal that Respondent Employer kick back
10 percent of the proceeds of any business obtained
for it through Anastasio's efforts. On July 11, 1975,
Seregos, pursuant to Anastasio's instructions, wrote
a letter to Prudential Lines, which stated that Re-
spondent Employer was a complete union plant af-
filiated with the International Longshoremen's As-
sociation (ILA) and that its employees were ILA
members. In late September 1975, after a majority
of employees executed authorization cards for the
ILA, Seregos executed a memorandum of under-
standing with the ILA and began to check off dues
and forward them to the ILA. Thereafter, in the
fall of 1975, Seregos signed an industrywide collec-
tive-bargaining agreement with the ILA effective
from November 3, 1975, to November 3, 1978. In
early 1976, Seregos began making concealed pay-
ments to Anastasio pursuant to their kickback
agreement. These payments totaled $15,000 in
1976; $16,000 in 1977; $28,700 in 1978; and $8,000
in 1979. The last such payment amounted to $4,000
and was tendered to Anastasio on July 5, 1979.3
Meanwhile, during the period that these payments
were made, Respondents executed a renewal col-
lective-bargaining agreement carrying effective
dates of November 3, 1978, to November 2, 1981.
In late June or early July 1979, however, following
Respondent Employer's purchase of the Staten
Island shipyard facility from Brewer Drydock
Company, Respondents commenced negotiations
concerning modifications to their collective-bar-
gaining agreement. These negotiations culminated
in an agreement reached on September 5, which in-
cluded, inter alia, reductions of wage rates for most
employees and reductions in company contribu-
I This payment assertedly was for Scotto's "legal defense fund."
1688
JACKSON ENGINEERING CO.
tions to employees' pension and hospitalization
plans.
Thus, it is apparent from the foregoing that at or
about the same time Respondents were negotiating
midterm contract modifications granting Respond-
ent Employer economic concessions, concealed
payments involving large sums of money were
changing hands. We find that these concurrent ac-
tions operated to taint and undermine the bargain-
ing relationship between Respondents and the con-
tract which was negotiated by them while the pay-
ments were being made. Our conclusion in this
regard is not affected by the fact that Anastasio,
Scotto, and Seregos personally did not engage in
the negotiations which led to the modified con-
tract. Although those individuals may not personal-
ly have participated, they were, at all material
times, Respondent Union's executive vice president
and president and Respondent Employer's presi-
dent, respectively. Under these circumstances, we
do not regard their divorce from the actual negoti-
ations to be determinative of this issue.
In sum, we find that in order fully to effectuate
the purposes and policies of the Act, and to assure
an adequate remedy for Respondents' serious unfair
labor practices, the appropriate remedy in this pro-
ceeding is that sought by the General Counsel. Ac-
cordingly, we shall order that: (1) Respondent Em-
ployer withdraw and withhold all recognition from
Respondent Union as the collective-bargaining rep-
resentative of Respondent Employer's employees,
unless and until said labor organization has been
duly certified by the National Labor Relations
Board as the exclusive representative of such em-
ployees; (2) Respondent Employer and Respondent
Union cease giving effect to the September 1979
collective-bargaining agreement, or to any modifi-
cation, extension, supplement, or renewal thereof,
unless and until Respondent Union shall have been
certified by the Board; and (3) Respondent Em-
ployer and Respondent Union, jointly and several-
ly, reimburse all present and former employees of
Respondent Employer, except those who joined or
signed authorization cards for Respondent Union
prior to the effective date of the September 1979
collective-bargaining agreement, for moneys paid
by or withheld from them on or after said effective
date for initiation fees, dues, or other obligations of
membership in Respondent Union,4 with interest
thereon computed in the manner provided in Flor-
ida Steel Corporation, 231 NLRB 651 (1977) (see,
generally, Isis Plumbing & Heating Co., 138 NLRB
716 (1962)). Nothing in our Order, however, shall
be deemed to require Respondent Employer to
vary or abandon those wage, hour, seniority, or
Unit Train Coal Sales Inc., 234 NLRB 1265 (1978).
other substantive features of its relations with em-
ployees established in the performance of the afore-
mentioned collective-bargaining agreement, or to
prejudice the assertion by the employees of any
rights they may have thereunder.5
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board hereby orders that:
A. Respondent Employer, Jackson Engineering
Co., Staten Island, New York, its officers, agents,
successors, and assigns, shall:
1. Cease and desist from:
(a) Entering into, carrying out, or maintaining
arrangements with Local 1814, International Long-
shoremen's Association, AFL-CIO, whereby it
makes payments to Local 1814 based upon the per-
centage of business referred to it by Local 1814, or
otherwise contributing financial or other support to
Local 1814.
(b) Recognizing Local 1814, International Long-
shoremen's Association, AFL-CIO, or any succes-
sor thereto, as the representative of any of its em-
ployees for the purposes of dealing with it concern-
ing grievances, labor disputes, wages, rates of pay,
hours of employment, or other terms and condi-
tions of employment, unless and until said Union,
or its successor, shall have been certified by the
National Labor Relations Board.
(c) Performing or giving effect to its contract of
September 1979 with Local 1814, International
Longshoremen's Association, AFL-CIO, or to any
modification, extension, supplement, or renewal
thereof; to any dues-checkoff cards executed pursu-
ant thereto; or to any other contract, agreement, or
understanding entered into with said Union, or its
successor, relating to grievances, labor disputes,
wages, rates of pay, hours of employment, or other
terms and conditions of employment, unless and
until said Union, or its successor, shall have been
certified by the National Labor Relations Board.
(d) In any like or related manner interfering
with, restraining, or coercing its employees in the
exercise of the rights guaranteed them under Sec-
tion 7 of the Act.
2. Take the following affirmative action designed
to effectuate the policies of the Act:
(a) Withdraw and withhold all recognition from
Local 1814, International Longshoremen's Associ-
ation, AFL-CIO, as the representative of any of its
employees for the purpose of dealing with it con-
cerning grievances, labor disputes, wages, rates of
pay, hours of employment, or other terms and con-
" Sweater Bee by Banff, Ltd., 197 NLRB 805 (1972).
1689
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ditions of employment, unless and until said Union
shall have been certified by the National Labor Re-
lations Board.
(b) Jointly and severally with Respondent Local
1814, International Longshoremen's Association,
AFL-CIO, reimburse all of its present and former
iemployees, except those who joined or signed au-
thorization cards for said Union prior to the effec-
tive date of the September 1979 collective-bargain-
ing agreement, for moneys paid by or withheld
from them on or after said effective date for initi-
ation fees, dues, or other obligations of membership
in said Union, with interest thereon computed in
the manner set forth in this Decision and Order.
(c) Preserve and, upon request, make available to
the Board or its agents, for examination and copy-
ing, all payroll records, social security payment
records, timecards, personnel records and reports,
and all other records necessary to analyze the
amount of backpay due under the terms of this
Order.
(d) Post at its places of business in Staten Island,
New York, and Hoboken, New Jersey, copies of
the attached notice marked "Appendix A."" Copies
of said notice, on forms provided by the Regional
Director for Region 29, after being duly signed by
Respondent Employer's authorized representative,
shall be posted by Respondent Employer immedi-
ately upon receipt thereof, and be maintained by it
for 60 consecutive days thereafter, in conspicuous
places, including all places where notices to em-
ployees are customarily posted. Reasonable steps
shall be taken by Respondent Employer to ensure
that said notices are not altered, defaced, or cov-
ered by any other material.
(e) Post at the same places and under the same
conditions as set forth in paragraph (d) above, as
they are forwarded by the Regional Director,
copies of Respondent Union's notice marked "Ap-
pendix B."
(f) Mail signed copies of the attached notice
marked "Appendix A" to the Regional Director
for posting at Respondent Union's offices and
meeting halls.
(g) Notify the Regional Director for Region 29,
in writing, within 20 days from the date of this
Order, what steps Respondent Employer has taken
to comply herewith.
B. Respondent Union, Local 1814, International
Longshoremen's Association, AFL-CIO, Brooklyn,
New York, its officers, agents, and representatives,
shall:
6 In the event that 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 Pursu-
ant to a Judgment of the United States Court of Appeals Enforcing an
Order of the National Labor Relations Board."
1. Cease and desist from:
(a) Entering into, carrying out, or maintaining
arrangements with Jackson- Engineering Co.
whereby it receives payments from Jackson based
upon the percentage of business referred by it to
Jackson, or otherwise receiving or accepting finan-
cial or other support and assistance from Jackson.
(b) Performing or giving effect to its contract of
September 1979 with Jackson Engineering Co., or
to any modification, extension, supplement, or re-
newal thereof; to any dues-checkoff cards executed
pursuant thereto; or to any other contract, agree-
ment, or understanding entered into with said Em-
ployer, or its successor, relating to grievances,
labor disputes, wages, rates of pay, hours of em-
ployment, or other terms and conditions of em-
ployment, unless and until it shall have been certi-
fied by the National Labor Relations Board.
(c) Acting or purporting to act as the collective-
bargaining representative of any employees of
Jackson Engineering Co. for the purpose of dealing
with said Employer concerning wages, rates of
pay, hours of employment, or other terms and con-
ditions of employment, unless and until it shall
have been certified by the National Labor Rela-
tions Board.
(d) In any like or related manner restraining or
coercing employees in the exercise of the rights
guaranteed them under Section 7 of the Act.
2. Take the following affirmative action designed
to effectuate the policies of the Act:
(a) Jointly and severally with Respondent Jack-
son Engineering Co. reimburse all of said Employ-
er's present and former employees, except those
who joined or signed authorization cards for Re-
spondent Union prior to the effective date of the
September 1979 collective-bargaining agreement,
for moneys paid by or withheld from them on or
after said effective date for initiation fees, dues, or
other obligations of membership in Respondent
Union, with interest computed in the manner set
forth in this Decision and Order.
(b) Post at its business offices and meeting halls
copies of the attached notice marked "Appendix
B."7 Copies of said notice, on forms provided by
the Regional Director for Region 29, after being
duly signed by Respondent Union's authorized rep-
resentative, shall be posted by Respondent Union
immediately upon receipt thereof, and be main-
tained by it for 60 consecutive days thereafter, in
conspicuous places, including all places where no-
tices to members are customarily posted. Reason-
able steps shall be taken by Respondent Union to
7 See fn. 6, supra
1690
JACKSON ENGINEERING CO.
ensure that said notices are not altered, defaced, or
covered by any other material.
(c) Post at the same places and under the same
conditions as set forth in paragraph (b) above, as
they are forwarded by the Regional Director,
copies of Respondent Employer's notice marked
"Appendix A."
(d) Mail signed copies of the attached notice
marked "Appendix B" to the Regional Director for
posting at Respondent Employer's place of busi-
ness.
(e) Notify the Regional Director for Region 29,
in writing, within 20 days from the date of this
Order, what steps Respondent Union has taken to
comply herewith.
IT IS FURTHER ORDERED that the complaint alle-
gations not specifically found herein be, and they
hereby are, dismissed.
APPENDIX A
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a hearing at which all sides had an opportu-
nity to present evidence and state their positions,
the National Labor Relations Board found that we
have violated the National Labor Relations Act, as
amended, and has ordered us to post this notice.
The Act gives employees the following rights:
To engage in self-organization
To form, join, or assist any union
To bargain collectively through repre-
sentatives of their own choice
To engage in activities together for the
purpose of collective bargaining or other
mutual aid or protection
To refrain from the exercise of any or all
such activities.
WE WILL NOT enter into, carry out, or
maintain arrangements with Local 1814, Inter-
national Longshoremen's Association, AFL-
CIO, whereby we make payments to Local
1814 based upon the percentage of business re-
ferred to us by Local 1814, or otherwise con-
tribute financial or other assistance or support
to Local 1814.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce our employ-
ees in the exercise of the rights guaranteed
them under Section 7 of the Act.
WE WILL cease performing or giving effect
to our contract with Local 1814, International
Longshoremen's Association, AFL-CIO, or to
any modification, extension, supplement, or re-
newal thereof; to any dues-checkoff cards ex-
ecuted pursuant thereto; or to any other con-
tract, agreement, or understanding entered into
with said Union, or its successor, relating to
grievances, labor disputes, wages, rates of pay,
hours of employment, or other terms and con-
ditions of employment, unless and until said
Union, or its successor, shall have been certi-
fied as our employees' exclusive collective-bar-
gaining representative by the National Labor
Relations Board.
WE WILL cease recognizing Local 1814, In-
ternational Longshoremen's Association,
AFL-CIO, and WE WILL withdraw and with-
hold recognition from that Union, as our em-
ployees' representative for collective-bargain-
ing purposes, until such time as that Union is
certified as our employees' exclusive collec-
tive-bargaining representative by the National
Labor Relations Board.
WE WILL, jointly and severally with Local
1814, International Longshoremen's Associ-
ation, AFL-CIO, reimburse all of our present
and former employees, except those who
joined or signed authorization cards for said
Union prior to the effective date of the Sep-
tember 1979 collective-bargaining agreement,
for moneys paid by or withheld from them on
or after that effective date for initiation fees,
dues, or other obligations of membership in
said Union with interest.
JACKSON ENGINEERING CO.
APPENDIX B
NOTICE To MEMBERS
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a hearing at which all sides had an opportu-
nity to present evidence and state their positions,
the National Labor Relations Board found that we
have violated the National Labor Relations Act, as
amended, and has ordered us to post this notice.
The Act gives employees the following rights:
To engage in self-organization
To form, join, or assist any union
To bargain collectively through repre-
sentatives of their own choice
To engage in activities together for the
purpose of collective bargaining or other
mutual aid or protection
1691
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
To refrain from the exercise of any or all
such activities.
WE WILL NOT enter into, carry out, or
maintain arrangements with Jackson Engineer-
ing Co. whereby we receive payments from
Jackson based upon the percentage of business
referred by us to Jackson, or otherwise receive
or accept financial or other support and assist-
ance from Jackson.
WE WILL NOT act or claim to act as the col-
lective-bargaining representative of any em-
ployees of Jackson Engineering Co. for the
purpose of dealing with said Employer con-
cerning wages, rates of pay, hours of employ-
ment, or other terms and conditions of em-
ployment, unless and until we have been certi-
fied by the National Labor Relations Board.
WE WILL NOT in any like or related manner
restrain or coerce employees in the exercise of
the rights guaranteed them under Section 7 of
the Act.
WE WILL NOT perform or give any effect to
our contract with Jackson Engineering Co., or
to any modification, extension, supplement, or
renewal thereof; to any dues-checkoff cards
executed pursuant thereto; or to any other
contract, agreement, or understanding entered
into with said Employer, or its successor, re-
lating to grievances, labor disputes, wages,
rates of pay, hours of employment, or other
terms and conditions of employment, unless
and until we have been certified by the Na-
tional Labor Relations Board.
WE WILL, jointly and severally with Jack-
son Engineering Co., reimburse all present and
former employees of Jackson Engineering Co.,
except those who joined or signed authoriza-
tion cards for us prior to the effective date of
the September 1979 collective-bargaining
agreement, for moneys paid by or withheld
from them on or after that effective date for
initiation fees, dues, or other obligations of
membership in Local 1814, with interest.
LOCAL 1814, INTERNATIONAL LONG-
SHOREMEN'S ASSOCIATION, AFL-CIO
DECISION
STATEMENT OF CASE
STEVEN B. FISH, Administrative Law Judge: Pursuant
to charges and amended charges filed by Industrial
Union of Marine and Shipbuilding Workers of America,
AFL-CIO, and Local 17, Industrial Union of Marine
and Shipbuilding Workers of America, herein called
Charging Parties or IUMSWA, the General Counsel of
the National Labor Relations Board by the Regional Di-
rector for Region 29 issued an order consolidating cases,
consolidated complaint and notice of hearing on May 30,
1980, and a consolidated amended complaint on October
7, 1980. The complaint, as amended, alleges that Jackson
Engineering Co., herein called Respondent Employer or
Jackson, violated Section 8(a)(1), (2), and (3) of the Act
and that Local 1814, International Longshoremen's Asso-
ciation, AFL-CIO, herein referred to as Respondent
Union or ILA, violated Section 8(b)(1)(A) and (2) of the
Act, by inter alia, on September 13, 1979,' executing and
thereafter maintaining and enforcing a collective-bargain-
ing agreement with respect to Jackson's employees, con-
taining a union-security clause, notwithstanding the fact
that a real question concerning the representation of said
employees had been raised and was pending by virtue of
requests for recognition made by IUMSWA. The com-
plaint also alleges that Jackson violated Section 8(aXl)
and (2) and ILA violated Section 8(bXIXA) of the Act,
by virtue of an arrangement in existence from 1975 to
1979 whereby Jackson made concealed payments to An-
thony Scotto and Anthony Anastasio, president and ex-
ecutive vice president of the ILA, respectively, in
amounts equal to 10 percent of the additional volume of
business resulting from referrals to Jackson by the ILA.
A hearing on the issues encompassed by said com-
plaint was heard before me in Brooklyn and New York,
New York, on October 27, 28, and 29, 1980, and on June
3 and 4, 1981.2
Briefs which have been received from the General
Counsel, Respondent Company, and Respondent Union
have been carefully considered, and I might add were all
excellently prepared and most helpful in assisting my de-
liberations herein.
Upon the entire record, including my observation of
the demeanor of the witnesses, I make the following:
FINDINGS OF FACT
1. JURISDICTION
Respondent Employer, a New Jersey corporation, is
engaged in the business of performing maritime ship
maintenance, building, and repair services and related
services, with places of business at 1418 Willow Avenue
in Hoboken, New Jersey, herein called the Hoboken fa-
cility, at 2945 Richmond Terrace in Staten Island, New
York, herein called the Staten Island facility, and various
other places of business in New York and New Jersey.
Annually, Respondent Employer, in the course of its
Unless otherwise indicated, all dates hereinafter referred to are in
1979.
' Although not appearing at the hearing, counsel for the Charging Par-
ties submitted a motion to the Chief Administrative Law Judge, which
was referred to me for disposition, requesting withdrawal of the charges
herein. Said request had previously been denied by the Regional Director
for Region 29, by letter dated October 1, 1980, except for the portion of
the charge in Case 29-CB-3966 insofar as it relates to the International
Longshoremen's Association, AFL-CIO, which had been named a re-
spondent in the original complaint issued on May 30, 1980. The amended
complaint issued on October 7, 1980, pursuant to the Regional Director's
approval of the partial withdrawal, removed the International as a re-
spondent herein. I deferred ruling on the motion of Charging Parties to
withdraw the remaining portions of the charge pending my hearing the
record testimony and consideration of the parties' briefs on this issue.
1692
JACKSON ENGINEERING CO.
business operations, performed services in excess of
$50,000 for various steamship companies, including
United States Lines and Prudential Lines, each of which
companies annually derives gross revenues in excess of
50,000 from the transportation of goods and passengers
among the several States of the United States and to for-
eign countries. Respondent admit and I find that Jackson
is an employer engaged in commerce within the meaning
of Section 2(2), (6), and (7) of the Act.
It is also admitted and I so find that Charging Parties
and the ILA are, and have been at all times material
herein, labor organizations within the meaning of Section
2(5) of the Act.
1. FACTS
A. Recognition of ILA by Jackson and Arrangement
for Payments to ILA Officers by Jackson
Respondent Employer began its operations in 1948.
Prior to 1975 its employees were not represented by any
labor organization. Nicholas Seregos, herein called Sere-
gos, became president of Jackson on or about August
1971, when it had sales of less than $500,000 per year.
In mid-1975, Seregos noticed that when he would go
around soliciting for business, particularly on U.S. flag-
ships, he would be told that unless he was a union shop
his firm could not obtain the work on the piers. Sonny
Montella, an acquaintance of Seregos, suggested to him
that he contact Anthony Anastasio, an officer of the
ILA. 3 Seregos then telephoned Anastasio at the ILA's
office and informed Anastasio of his being referred by
Montella to Anastasio. Seregos added that he was look-
ing for some business and was interested in unionizing
the shop. A meeting was arranged for and held either at
Respondent Employer's Hoboken shop or Respondent
Union's Brooklyn office. Seregos repeated that he was
looking for work and wanted to unionize his shop. Anas-
tasio responded that he wished to meet the employees at
the shop and see if they would be willing to sign up. An-
astasio then met with Jackson's employees. The record
does not disclose what, if anything, Anastasio said to the
employees at that time.
Seregos next met with Anastasio sometime prior to
July 11, 1975. At this meeting Anastasio offered to
obtain some business for Jackson, for a consideration of
10 percent of the proceeds of any business obtained
through his efforts. Anastasio made it clear to Seregos
that he would not help Seregos get any business unless
Jackson became a union shop. Seregos agreed to the ar-
rangement and agreed that his firm would become a
union shop.
On or about July 11, 1975, Seregos met again with
Anastasio, this time in the ILA's office. At this meeting
Anastasio instructed Seregos to write a letter to Pruden-
tial Lines, a U.S. flagship company, attention John
s At that time Anastasio was secretary-treaurer of Local 1277, ILA.
In March 1978, Local 1277, as well as other locals of the International,
merged into Local 1814, ILA, Respondent Union herein. All parties con-
cede that Respondent Union is the successor to Local 1277. As secretary-
treasurer, Anastasio was responsible for the administration of contracts
for the ILA in the ship repair industry. He continued exercising that re-
sponsibility after the merger when he became executive vice president.
the number-two position in the merged organization.
Marano. Anastasio told Seregos that he could help him
obtain business from this firm. Pursuant to Anastasio's
instructions Seregos wrote a letter dated July 11, 1975,
to Marano of Prudential stating that Jackson is a com-
plete union plant affiliated with the ILA, and that its em-
ployees are ILA members.
On September 15, 1975, the ILA obtained authoriza-
tion cards from Jackson's employees and in late Septem-
ber Jackson, by Seregos, signed a memorandum of un-
derstanding with the ILA, apparently agreeing to recog-
nition. Thereafter, pursuant to checkoff authorizations
executed by Jackson's employees, it began to checkoff
dues and forward them to the ILA. 4
Sometime in the fall of 1975, Seregos met with Anasta-
sio and Anthony Scotto, president of the ILA, at the
ILA's office. Seregos indicated that he was looking for
more work. Scotto replied that he could help Seregos
obtain the United States Shipping Lines account. The
conversation then drifted to how Seregos was going to
come up with the 10-percent commission arrangement on
this business. Scotto indicated that he was concerned
about how Seregos was going to get the money and sug-
gested that he would assist Seregos in setting up a for-
eign corporation to help him in this regard. Seregos re-
plied that it would not be necessary.
The parties than signed a collective-bargaining agree-
ment effective November 3, 1975, to November 3, 1978.
This contract was the industry contract, known as the
"blue book," and was signed by Seregos, Anastasio, and
Scotto.
At some point in the early fall of 1975, Seregos re-
ceived a phone call from a Mr. Bauer, assistant to the di-
rector at U.S. Lines, notifying Jackson to start work on
one of their ships. Jackson began receiving business from
Prudential Lines in or about September 1975.
At some time in late 1975, after Jackson began receiv-
ing business from Prudential and U.S. Lines, Seregos dis-
cussed with Anastasio the method of payment of the 10-
percent commission. Anastastio informed Seregos that
payments were to be made in cash, and Seregos agreed.
In early 1976 Seregos began his payments to Anasta-
sio, which were made in cash at the ILA's office with no
one else present. Pursuant to the arrangement made, Ser-
egos paid Anastasio $15,000 during the course of 1976
covering 10 percent of the business obtained by Jackson
from Prudential and U.S. Lines. During the year 1977,
Seregos paid to Anastasio $5,000 on June 2, S1,000 on
October 6, S5,000 on November 17, and $5,000 on De-
cember 19. All of these payments, representing 10 per-
cent of business Jackson obtained from U.S. Lines and
Prudential, were also made to Anastasio by Seregos at
the ILA office.
In 1978, Jackson lost the Prudential account. Seregos
complained to Anastasio about it and asked if there was
anything he could do to reinstate the business. The
4 The memorandum of understanding signed by Jackson was not intro-
duced into the record, nor does the record reveal its terms. However, the
record tends to suggest, and I so find, that the memorandum of under-
standing in addition to providing for recognition of ILA also called for
Jackson to be bound by the terms of the ILA's industry contract, includ-
ing dues-checkoff provisions, which was about to expire.
1693
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
record does not reflect Anastasio's response, but the busi-
ness was not thereafter restored.
During the year 1978, payments were made in the
same fashion, but only covering Jackson's business from
U.S. Lines. Seregos gave Anastasio, pursuant to their ar-
rangement, $5,000 on February 28, $5,000 on March 23,
$5,000 on April 10, $5,000 on May 15, $3,700 on July 3,
and $5,000 on November 15.
During this period of time Seregos met with Anastasio
on various union matters, as Anastasio was directly re-
sponsible for the administration of the collective-bargain-
ing agreement with Jackson.
In early May 1979, at Anastasio's office, Anastasio
asked Seregos if there was any money due "against the
work." Seregos responded why now in view of the in-
vestigation. Anastasio replied that it was all right.5
On May 8, 1979, Seregos paid Anastasio $4,000, again
at the ILA's office.
Shortly thereafter, by telephone, Anastasio asked Sere-
gos if he could make a contribution for the purpose of
helping Scotto pay his attorney's fees. Seregos replied
that it was rather difficult at that time to come up with
any money. Anastasio asked him to try, and informed
Seregos that they were having an affair at a hotel and
were asking others in the industry to contribute to pay
Scotto's attorney's fees. Subsequently, Seregos obtained
$4,000 in cash and gave it to Anastasio at the ILA office
on July 5, 1979.
During the period between 1975 and 1979 Jackson's
business as well as its number of employees and ILA
members grew substantially.
On November 3, 1978, Jackson and the ILA entered
into a renewal of the prior contract, with a number of
changes included therein, running from November 3,
1978, to November 2, 1981. This contract was executed
by Anastasio and Joseph Collazzo for the ILA and by
Seregos on behalf of Jackson. 6
In January 1979, an indictment was handed down in
the Southern District of New York by the grand jury
pertaining to the receipt of certain payments by Anasta-
sio and Scotto from certain employers under contract to
ILA, not including Jackson.
On July 31, 1979, a superseding indictment was filed
adding additional counts of such conduct by Anastasio
and Scotto, including payments made by Seregos to An-
astasio from 1977-79. Scotto was not indicted for any
dealings with Seregos or Jackson.
Shortly after the filing of the superseding indictment,
the ILA, upon recommendation of its attorney, immedi-
ately removed Anastasio from participation in any deal-
ings or negotiations with Jackson. The ILA also insisted
upon and Jackson agreed that Seregos be removed from
any dealings or negotiations with the ILA.
Anastasio was permitted by the ILA to remain as its
executive vice president and Scotto was allowed to
remain as president.
5 The "investigation" referred to by Seregos was apparently the crimi-
nal investigation which culminated in eventual indictments and convic-
tions of Anastastio and Scotto, discussed more fully infra.
6 This contract as well as the prior contract was negotiated and signed
by 11 employers in the industry, including Jackson.
Scotto and Anastasio were tried in Federal court in
New York on multiple counts of receiving unlawful
labor payments in violation of Section 302 of the Taft-
Hartley Act, 29 U.S.C. § 186(b), as well as conspiring to
participate in the affairs of the ILA through a pattern of
racketeering activity, and for failure to report and pay
Federal income taxes on the unlawful amounts obtained
from such activities.
After an 8-week trial, both Scotto and Anastasio were
convicted in January 1980 of 43 counts under the indict-
ment, and the jury was unable to reach a verdict on 17
other counts included therein. 7 Anastasio was convicted
of receiving unlawful payments from Seregos and Jack-
son for a period from February 28, 1978, to July 5, 1979.
Scotto, as noted, was not indicted for nor convicted of
the receipt of any payments from Seregos or Jackson.
Anastasio was sentenced to 2 years in prison, 5 years'
probation, and a $5,000 fine. Scotto was sentenced to 5
years in prison, with 5 years' probation, and $75,000 in
fines.
The sentencing occurred in February 1980, and it also
included an order by the trial court judge that Anastasio
and Scotto forfeit their union offices. The convictions
were appealed to the Second Circuit Court of Appeals.
On September 2, 1980, a three-judge panel unanimously
affirmed the convictions of Anastasio and Scotto. The
court in its decision found as follows: "Nicholas Seregos
of Jackson Engineering Co., Inc. an ILA-affiliated
marine engineering company doing general ship repair,
paid Anastasio a 10 percent commission on business ob-
tained for his company with Scotto's and Anastasio's as-
sistance from Prudential Lines, Inc. and United States
Lines."
Anastasio and Scotto subsequently petitioned the cir-
cuit en banc for a rehearing. At some point undisclosed
by this record, such request was denied.
Meanwhile, shortly after the conviction, an action was
brought by Scotto and Anastasio in the New York State
Supreme Court for a declaratory judgment that the term
"conviction" under the New York and New Jersey Wa-
terfront Compact means after all appeals are exhausted.8
The Waterfront Commission moved for judgment in its
favor claiming that "conviction" under the statute ap-
plies to the date of sentencing. The Supreme Court ruled
in favor of the Waterfront Commission in September
1980, and directed that Anastasio and Scotto be removed
from office. Upon application, the Appellate Division
stayed the order of the Court, pending an expedited
appeal from the court's judgment. Said appeal was filed,
and in late October 1980 the Appellate Division unani-
mously affirmed the decision of the Supreme Court. The
record does not disclose whether any appeal was filed
from this decision to the New York State Court of Ap-
peals.
7 Seregos testified for the prosecution under a grant of immunity. An-
astasio did not take the witness stand. Scotto did testify and denied
knowledge of any 10-percent commission arrangement with Seregos
* Under the Waterfront Company Act, the waterfront Commission
was established to regulate and control the affairs of longshoremen and
labor organizations representing such workers in New York and New
Jersey. The Act provides that, upon conviction of a crime, any officer of
such a labor organization must be removed.
1694
JACKSON ENGINEERING CO.
The record does disclose however that the ILA per-
mitted Anastasio and Scotto to remain as officers of the
ILA until the exhaustion of their appeals from these var-
ious proceedings. New elections were conducted by the
ILA in May 1981, and new individuals were elected to
fill the positions previously held by Scotto and Anasta-
sio.
Portions of the testimony given by Seregos in the Fed-
eral court trial were stipulated into evidence by the par-
ties and form the basis for my findings set forth above
with respect to Seregos' dealings with Anastasio and
Scotto. The portions of his testimony included in this
record are sketchy and somewhat unclear in certain
areas, and my findings set forth herein are based on what
I perceive to be a fair reading of such testimony.
The parties are in substantial agreement as to the
above facts with the exception of one area. Respondents
assert that the record establishes that the unlawful ar-
rangement between Seregos and Anastasio was entered
into after the ILA organized Jackson's employees and
after the memorandum of understanding and/or contract
was executed by the parties in September and November
1975. Although Seregos' testimony is particularly uncer-
tain on this subject, I am persuaded that my findings, set
forth above, accurately reflect his testimony and a rea-
sonable conclusion as to the true facts.
Respondent Union points to Seregos' testimony that
Anastasio, after having been approached by Seregos
about his company becoming a union shop, insisted upon
speaking to Jackson's employees to see if they wished to
sign up. Such a meeting did occur according to Seregos,
and Respondent Union argues that this meeting must
have been in September when the authorization and
checkoff cards were executed by Jackson employees.
Thus, it is argued, since Seregos testified that the ar-
rangement for payments was made after Anastasio met
with his employees, that perforce the arrangement was
not made until the contract or at least the memorandum
of understanding was signed.
I do not agree with his analysis of Seregos' testimony
however, and believe that the General Counsel's position
that the arrangement was agreed to prior to the execu-
tion of the memorandum and contract more accurately
reflects Seregos' testimony as well as the record evi-
dence. I note that with respect to the meeting held by
Anastasio with Jackson employees after his initial con-
versation with Seregos that there is no record testimony
as to what was said therein, and in fact Seregos indicated
that no materials were distributed by Anastasio to his
employees at that time. More significantly, Seregos sent
a letter to Prudential dated July 11, 1975, which was re-
ceived by Prudential on July 15,9 asserting that Jackson
was an ILA shop and requesting business. This letter was
sent pursuant to the instructions of Anastasio, and was
sent 2 months prior to the execution of any contract
memorandum. Since Anastasio made it clear to Seregos
Although Seregos in direct testimony was unsure of when he mailed
the letter to Prudential and suggested the possibility that the letter may
have been backdated, when confronted on cross-examination by the origi-
nal letter with a Prudential date stamp reading July 15, he recalled that it
was sent in July and that he had orally agreed to recognize the Union
prior to sending such letter.
that he would not refer Jackson any business unless it
became an ILA shop, I find that he would not have sug-
gested a letter to Prudential unless he had a commitment
from Seregos to become a union shop.
Therefore, I am convinced that Seregos and Anastasio
entered into their agreement for the 10-percent commis-
sion payment for business referred in July, at least 2
months before any memorandum contract was executed
or any authorization cards obtained. At the same time as
noted, I find that Seregos orally agreed with Anastasio
that he would become an ILA shop.
B. Jackson's Acquisition of the Staten Island Facility
Jackson has been and is engaged in the business of
major shop repairs, overhauls, and renovations, both at
its own and leased locations, as well as at sites where
vessels are docked and berthed. Jackson owned and op-
erated a machine shop in Hoboken, New Jersey, and
leased facilities at Columbia Street and Pier 12 on the
Brooklyn, New York, waterfront, alongside of which
were berthed vessels worked upon by its employees.
Jackson's employees also would travel to make ship re-
pairs upon vessels tied up at other ports along the coast.
This type of operation that Jackson was engaged in
was known in the industry as a pierside operation, as
contrasted with drydock work' ° operations, which re-
pairs ships at their own facilities or shipyards.
In both types of ship repair operations, the fluctuation
in employee complements is quite substantial with em-
ployment frequently sporadic depending upon what jobs
are obtained by the employers at any particular time. Re-
spondent in early spring of 1979 employed some 140 em-
ployees in the bargaining unit. During the months of
June through September 1979, Respondent employed be-
tween 40 and 76 employees at various times.
Sometime in the winter of 1978, Jackson began negoti-
ations with Brewer Drydock Co., herein called Brewer,
for the purchase of a drydock facility operated by
Brewer at Richmond Terrace in Staten Island, New
York, right across the bay from Jackson's Brooklyn facil-
ities. Jackson was interested in purchasing this facility,
primarily because it would then be able to perform what
is known as "bottomside" work, which can only be done
with a drydock. Since many jobs in the industry require
a company to bid on both "bottomside" and "topside"
jobs (called combination jobs), Jackson hoped to expand
its business by purchasing a facility which included a
drydock. In addition, Jackson's facilities at the Brooklyn
pier were rented on a month-to-month basis and were
subject to cancellation at any time. The negotitations
with Brewer continued on and off throughout the first
4-5 months of 1979. Sometime in April or May, Jackson
reached tentative agreement with Brewer for the pur-
chase of the yard, with a few details and fine points to
be narrowed down. Sometime in May, Seregos and
Milton Horowitz, vice president of Jackson, spoke to
Anastasio and Joseph Collazzo of the ILA. They in-
formed the union officials that they were going to buy a
10 A drydock is like an elevator which lifts a ship out of the water so
that work can be performed on portions of the ship which would normal-
ly be below the waterline.
1695
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
shipyard and wanted to negotiate a modification of the
parties' existing agreement. One of the ILA officials re-
plied that there was nothing to talk about until Jackson
actually purchased the new facility.
n early June the agreement was consummated and the
closing held with a purchase price of $2,400,000 for the
Staten Island facility of Brewer with Jackson to take
over the premises on June 5.
C. Jackson Rehabilitates the Staten Island Facility
and IUMSWA Asserts Its Claims
Brewer's employees at the Staten Island shipyard had
been represented for collective bargaining by IUMSWA
since a Board certification on July 25, 1975. The last col-
lective-bargaining agreement between Brewer and
IUMSWA ran from September 27, 1978, to August 31,
1981. The contract contains a clause which reads that the
agreement shall be binding upon Brewer and its succes-
sors and assigns.
Throughout the spring months, Brewer wound down
its operations and gradually laid off its work force. By
June 5 all of Brewer's employees had been laid off.
On may 29, IUMSWA wrote a letter to Brewer indi-
cating its knowledge of a pending sale, requested the
name of the potential buyer, and requested that Brewer
notify the buyer that IUMSWA intended to enforce its
succesor clause in the contract and asserted its right as
exclusive bargaining agent for the work locations as cer-
tified by the National Labor Relations Board in accord-
ance with the recognition clause of the contract. The
record does not disclose whether this letter was ever for-
warded to Jackson, nor whether Brewer ever notified
Jackson officials of IUMSWA's claims.
However, during the next several months (between
June and September) various officials of IUMSWA met
and/or spoke on the phone with various officials of Jack-
son and asserted IUMSWA's "jurisdictional" bargaining
rights at the Staten Island facility and/or rights under
the successor and assigns clause of its contract with
Brewer. Additionally, the IUMSWA officials requested
that Jackson hire the former employees who were now
out of work.
At no time did any IUMSWA ever make any claim
that it represented any of Jackson's employees.
Indeed, during this period of time between June and
early September, Jackson was not engaged in any ship
repair activities at the Staten Island yard. During these
months, Jackson was engaged in rehabilitating the facili-
ty to make it ready to accommodate Jackson's ship
repair operations. This consisted of repairing, changing,
and renovating the facility, plus constructing housing
and meal facilities for naval personnel, to be used while
naval vessels were being refitted.
Vincent Klusmyer, Jackson's general manager at the
Staten Island facility, was in charge of the rehabilitation
and to that end he employed a number of outside sub-
contractors to perform this work. In addition, Water-
front Marine, an affiliate of Jackson, controlled by Sere-
gos, employed 10-12 individuals to maintain and guard
the shipyard. These individuals were all formerly em-
ployed by Brewer. All but one of these individuals had
been previously employed by Brewer in supervisory or
nonunit positions, such as dock master, assistant dock
master, maintenance foreman, and estimator. One em-
ployee, J. Boschi, who had been an electrician at
Brewer, was performing electrical maintenance tasks
during the summer months while the yard was being re-
habilitated.
During this period of time there was no ship repair
work being performed at the Staten Island facility. Jack-
son continued its business at the Brooklyn piers as well
as its Hoboken machine shop with an employee comple-
ment fluctuating between 40 and 76.
D. Modification of the Existing Jackson ILA Contract
In late June or early July, and through the summer
months, ILA and Jackson representatives met to discuss
modification of the existing contract. 1
Jackson requested that its existing contract be modified
in view of its purchase of the Staten Island facility. Jack-
son argued that the ability to bid on combination jobs
would result in more regularity of employment of work
for its employees, thereby making up for any loss in con-
tractual benefits. In addition, rates for shipyard firms are
traditionally lower in the industry than for pierside oper-
ations, and Jackson, to be competitive with its competi-
tion, needed lower labor costs. Moreover, the costs of
maintaining a shipyard are considerably higher than of a
pierside operation. The ILA agreed to discuss such a
modification but only if it was convinced that more reg-
ularity of employment would ensue.
To this end the parties reviewed and compared the
contracts of various shipyards, including the contract be-
tween IUMSWA and Brewer. The contracts of the ship-
yard firms were lower with respect to wages and bene-
fits than the existing contract between ILA and Jackson.
After a number of bargaining sessions, with numerous
proposals being presented by both sides, an agreement
was reached, on or about September 5. The agreement
was then prepared by ILA representatives and executed
by the parties on September 13, retroactive to September
5.
The agreement modified the recognition clause to in-
clude the Staten Island facility. 2 Recognizing the fact
that some employees of Jackson would still be perform-
ing some work outside the Staten Island facility at var-
ious piers, even with the acquisition of the new yard, the
parties ageed that the 25 most senior employees who
would be most likely to perform such work1 3 would re-
ceive no reduction in their wages or benefits.
With respect to the remaining employees, the parties
agreed that in view of the expected increase in regularity
of employment for them they would receive slight re-
ductions in wages, pension, and hospitalization contribu-
" Present for Jackson were Klusmyer, Horowitz, and its attorney,
Martin Seham. For the ILA its attorneys Howard Schulman and Robert
Bogucki, business agent Collazzo, and various employee committee mem-
bers attended these bargaining sessions.
'2 The prior agreement makes no specific mention of any facilities of
the employers involved. It merely provides for recognition of various
classifications of employees "employed by the employer."
1s These more experienced employees were capable of working with-
out supervision, so were therefore more apt to be assigned to outside
piers where there were no Jackson supervisors present.
1696
JACKSON ENGINEERING CO.
tions. Other benefits such as holidays, sick days, and jury
duty were not modified for any employees.' 4
During the course of these sessions, Jackson informed
the ILA that it intended to give preference in employ-
ment at the Staten Island facility to employees currently
employed at Hoboken and at the Brooklyn piers as well
as to employees on layoff status from these facilities.'5
There was no discussion of the jurisdictional and
successorship clause asserted by IUMSWA during any of
these sessions. As noted the IUMSWA contract with
Brewer was referred to constantly during these meetings.
There is no question that Jackson never had any doubt
that it would recognize the ILA as the representative of
its employees at the Staten Island facility, as it believed
that it was obligated to do.' 6
E. Jackson Begins Ship Repair Operations at the
Staten Island Facility
On September 5, 1979, Jackson began ship repair oper-
ations at the Staten Island yard. In its first week of such
operations, Jackson employed 51 bargaining unit employ-
ees. Of these employees, 48 were transferred over from
its Brooklyn or Hoboken facilities. '
Jackson also employed two individuals who were for-
merly employed by Brewer,' 8 and one individual who
was neither a former Brewer employee nor a Jackson
transferee.
Jackson also employed 10-11 former Brewer supervi-
sors and nonunit personnel into various supervisory posi-
tions at the Staten Island yard.
During its next week of operation, the payroll period
ending September 16, 1979, Jackson employed 55 em-
ployees, 46 preexisting Jackson employees, 2 former
Brewer employees, 19 and 7 employees from neither
group.
On or about September 20, Jackson acquired a new
contract to repair a vessel called the Waterford. This job
required a deadline to be met, and necessitated the hiring
of a substantial number of additional employees. In this
connection, Jackson, after exhausting its list of laid-off
14 The modification also changed the duration of the prior agreement,
as the agreement as modified runs from September 5. 1979, to September
4, 1982, with reopening provided for 30-60 days prior to September 5,
1980, and September 5, 1981. The modified contract also contained a
union-security clause as did the prior agreement.
"6 In this connection, Jackson maintained a file of 300-400 W-4 forms,
consisting of names and addresses of its employees who have worked for
Jackson in past years, which it uses whenever it needs to hire additional
employees.
Is When asked if he informed the ILA that IUMSWA had asserted
any claims with respect to the facility, Horowitz responded, "No sir. I
felt we had a union already. We had a union."
1" As noted, Jackson closed down its operations at the Brooklyn piers,
where it had previously rented facilities from the Port Authority. It con-
tinued to operate its Hoboken machine shop while continuing to operate
the Staten Island yard. The record is not clear as to how many of the
Hoboken employees were transferred over to Staten Isalnd, although it
does appear that the bulk of the employees who were sent to Staten
Island were formerly employed at the Brooklyn piers.
'" One of these individuals was J. Boschi, an electrician, who had been
employed by Waterfront Marine during the rehabilitation period from
June through September. He performed essentially the same work (elec-
trical maintenance functions) during the rehabilitation period as he did
after ship repair operations began on September 5. The other former
Brewer employee, E. Gamboa, was employed as a crane operator.
i" Again Boschi and Gamboa.
Jackson employees, hired most of these additional em-
ployees from a group of some 500 employment applica-
tions and resumes that it had on file. These applications
and resumes resulted from newspaper advertisements
Jackson had placed in various newspapers, as well as
from word of mouth sources. Included in these applica-
tions and resumes in Jackson's files at that time were 100
applications from former Brewer bargaining unit employ-
ees.
By October 25, 1979, by which time Jackson was uti-
lizing drydocks at the Staten Island facility, it employed
151 bargaining unit employees. Included among these
employees were 49 employees who had been in the Jack-
son ILA bargaining unit, 23 former Brewer employees,
who had been included in the IUMSWA unit, and 79
employees from neither category of employees.
Prior to its acquisition of the shipyard, the number of
"regular" or "steady"2 0 employees in the Jackson bar-
gaining unit fluctuated between 50 and 70 employees. As
of June 1981, the number of such regular employees fluc-
tuated from 100 to 135.21
Of the four contractual job classifications included in
the parties' modified contract, employees were hired by
Jackson in each classification when the yard opened on
September 5.
Prior to its acquisition of the Staten Island yard, Jack-
son employed employees who performed work requiring
14 of the 16 trade skills that were eventually to be re-
quired when it became fully operational. The two new
skills were dockhand and crane operator. 22
On the payroll weeks ending September 9 and 16,
Jackson employed one crane operator and no dockhands.
On the week ending October 25, Jackson employed three
crane operators and three dockhands.2 3
With the exception of the dockhand and crane opera-
tor functions, the work performed by Jackson's employ-
ees before and after the acquisition of the shipyard was
essentially identical. The only meaningful difference be-
tween the two operations is the use of the drydock,
which as noted requires use of dockhands to lift the
vessel out of the water, and enables Jackson to now per-
form bottomside work. However, the actual ship repair
work performed by Jackson employees on bottomside
work is no different from that performed on topside
work. The skills required are the same, and no additional
training is required to enable an employee who is able to
perform topside work to perform bottomside work. Jack-
son's employees work interchangeably on "top" and
"bottom" work, there being no such thing as a topside or
bottomside crew. Shipyards (Brewer prior to September
2o A "regular" or "steady" employee is defined as an employee who
works 4-5 days a week for two-thirds of a year.
" The above findings are derived from the credited testimony of Mi-
chael Porta, Jr., a Local 1814 delegate, who testified as to these figures
based upon his observations in servicing the shop, consisting of visits on
the average of twice a week from the time the shipyard opened until the
date of his testimony, herein on June 4, 1981.
22 Dockhands were not needed at Jackson's prior operations, since it
did not operate a drydock. Crane operators had been utilized previously
by Jackson, but were supplied by the lessor of the crane that Jackson had
rented.
's Two of the three dockhands hired by Jackson were former Brewer
employees from the IUMSWA bargaining unit.
1697
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and Jackson after September) and pierside operations
(Jackson prior to September) perform the same work and
hire from the same source of workers, and shipyard or
pierside experience is equally significant in terms of
hiring qualifications for hire in either type of operation.
As noted above, the primary reason motivating Jack-
son to purchase the Staten Island yard from Brewer was
the fact that the yard included a drydock which enabled
Jackson to bid on combination (top and bottom) jobs.
Since its commencement of operations at the shipyard,
about 30 percent of Jackson's business includes such
combination bids. Of such jobs acquired as a result of
combination bids, 30 percent of such work includes bot-
tomside repairs. Thus, bottomside work comprises ap-
proximately 9 percent of the work being performed by
Jackson employees, since its acquisition of the shipyard
and its use of the drydock.
F. IUMSWA Files ULP and Article XX Charges
On September 28, 1979, IUMSWA filed unfair labor
practice charges against Jackson and the ILA alleging in
addition to the 8(a)(2) and (b)(l), (A), and (2) Midwest
Piping allegations contained in the instant complaint, that
Jackson violated Section 8(aXS) of the Act by refusing to
recognize IUMSWA as the successor to Brewer's bar-
gaining obligation, and Section 8(a) (3) of the Act by dis-
criminatorily refusing to hire former Brewer employees
because of their IUMSWA membership, and that ILA
violated Section 8(b)(l),(A), and (2) by causing Jackson
to refuse to hire such employees.
On December 14, the Regional Director for Region 29
dismissed the 8(aXS) portions of the charges in a letter
reading as follows:
Gentlemen:
The above-captioned case charging a violation
under Section 8 of the National Labor Relations
Act, as amended, has been carefully investigated
and considered.
The investigation did not establish that Jackson En-
gineering Co., hereinafter referred to as Jackson,
violated Section 8(aX5) of the Act by refusing to
recognize and bargain with Industrial Union of
Marine and Shipbuilding Workers of America,
Local 17, hereinafter referred to as Local 17, as the
collective-bargaining agent of its employees em-
ployed at the former Brewer Dry Dock Company,
hereinafter referred to as Brewer, facility at 2945
Richmond Terrace, Staten Island. Rather the evi-
dence disclosed that in June 1979, Jackson pur-
chased that facility from Brewer to replace and sup-
plant Jackson's former ship repair facility located in
Brooklyn, New York, and that in September 1979,
after performing certain maintenance and make-
ready work on the facility, Jackson closed its
Brooklyn facility, relocating to the former Brewer
yard in Staten Island, and taking with it its work
force from the Brooklyn facility.
Prior to transferring title to the Staten Island facili-
ty to Jackson, Brewer laid off or terminated all of
its production and maintenance employees, such
employees having been represented for collective
bargaining purposes by Local 17.
While the investigation disclosed that Jackson con-
tinues to use the facility for the same purpose which
Brewer operated it; the repair and maintenance of
ships and other vessels; that Jackson (as did
Brewer) classifies all of its production and mainte-
nance employees in a single unit; that there was not
a significant hiatus in the operation of the Rich-
mond Terrace Shipyard; and that Jackson has hired
some of the employees formerly employed by
Brewer since it commenced operations at the ship-
yard, nevertheless, it does not appear that Jackson
has purchased any of the goodwill of Brewer or as-
sumed any of its liabilities or other assets, or that a
majority of Jackson's present complement of em-
ployees at the Richmond Terrace facility are former
Brewer employees.
In these circumstances, the evidence is insufficient
to establish that Jackson is a successor to Brewer
and was therefore under an obligation to continue
to recognize and bargain with you as the collective
bargaining representative of the employees em-
ployed at the Richmond Terrace shipyard. I am
therefore refusing to issue a complaint on the allega-
tion of your charge which alleges that Jackson vio-
lated Section 8(aXS) of the Act. Other allegations of
your charge are being processed further.
The Regional Director also refused to issue complaint
with respect to the 8(aX3) and 8(bX1),(A), and (2) allega-
tions pertaining to Jackson's refusal to hire employees
because of their IUMSWA membership.2 4
IUMSWA appealed the Regional Director's partial re-
fusal to issue complaint with respect to the 8(aX5)
successorship allegations. On February 11, 1980, the
Acting Director of Appeals upheld the Regional Direc-
tor's refusal to issue complaint on these allegations,
agreeing with the Regional Director that Jackson was
not a successor to Brewer's collective-bargaining obliga-
tion to IUMSWA.
On October 5, 1979, IUMSWA filed charges under ar-
ticle XX of the AFL-CIO constitution complaining that
ILA has violated sections 2 and 3 of such article by al-
legedly failing to respect an established collective-bar-
gaining relationship and work relationship maintained by
IUMSWA at the Richmond Terrace shipyard.
On October 12, 1979, ILA filed similar charges against
IUMSWA, alleging additionally that IUMSWA violated
section 20 of article 20 by resorting to the NLRB to de-
termine the dispute. A hearing was subsequently held on
February 6, 1980, on the matter before Impartial Umpire
D. Q. Mills.2a
At this hearing representatives of IUMSWA and ILA,
as well as their respective attorneys, participated, called
witnesses, and were given the opportunity to and did
" The record does not reflect whether these portions of the charges
were withdrawn or dismissed.
2" A hearing has been held on November 8. 1979, before Umpire
Kleeb. However, Kleeb passed away prior to rendering his decision and
a new hearing was conducted.
1698
JACKSON ENGINEERING CO.
present arguments and positions. On February 20, 1980,
Impartial Umpire Mills issued his decision, referred to as
"Determination." He found that ILA had not violated
either section 2 or 3 of article XX, since the standards
under article XX for the survival of IUMSWA's collec-
tive-bargaining agreement relationship have not been
met, and that ILA had not by exercise of collusion or
economic pressure-sought to obtain work for its mem-
bers as to which another affiliate has an established work
relationship.
The Umpire also found that IUMSWA had violated
sections 2 and 20 of article XX by interfering with ILA's
established collective-bargaining relationship as to the
employees in dispute, in its efforts to represent these em-
ployees and resorting to the NLRB to determine the dis-
pute.
IUMSWA subsequently filed an appeal from Umpire
Mills' determination, which was heard before a subcom-
mittee of the AFL-CIO executive council. By letter
dated May 21, 1980, from Lane Kirkland, president of
the AFL-CIO, the appeal was disallowed and the deter-
mination of the Impartial Umpire was ordered to go into
full force and effect.
On June 3, 1980, Michael Brodie, Esq., attorney for
Charging Party, wrote a letter to the Regional Director
for Region 29, referring to the above-described determi-
nation and disallowance of IUMSWA's appeal. The
letter then stated, "pursuant to the enclosed documents
and as a result of their issuance, my client hereby re-
quests that the charges and amended charges in the
above proceedings be withdrawn."2 6
On October 1, 1980, Regional Director Kaynard sent a
letter to Brodie, denying his request to withdraw, except
as noted with respect to the charges against the Interna-
tional of the ILA. Regional Director Kaynard's letter is
set forth below:
Dear Mr. Brodie:
Your letter requesting withdrawal of the unfair
labor practice charges in the above-captioned cases
has been carefully considered. For the reasons
stated below, you are hereby advised that your re-
quest to withdraw the charge in Case No. 29-CA-
7498 is denied, and that your request to withdraw
the charge in Case No. 29-CB-3966 is approved
only insofar as it relates to the International Long-
shoremen's Association, AFL-CIO, but is denied in-
sofar as it relates to Local 1814, International Long-
shoremen's Association, AFL-CIO.
As you know, the investigation of these charges dis-
closed evidence of serious violations of the National
Labor Relations Act by Jackson Engineering Co.
and by Local 1814, AFL-CIO, including concealed
payments made by Jackson to Anthony Scotto and
Anthony Anastasio, the president and executive
vice president of Local 1814, ILA, AFL-CIO, re-
spectively, commencing in 1975 pursuant to an un-
lawful arrangement between Jackson and Local
1814, all of which are alleged in the Consolidated
Complaint which I issued in these cases on May 30,
'6 The above proceedings refer to the instant charge and complaint.
1980. Although you advise that an Impartial
Umpire has determined that your clients, the charg-
ing parties in these cases, Industrial Union of
Marine and Shipbuilding Workers of America,
AFL-CIO, and Local 17, Industrial Union of
Marine and Shipbuilding Workers of America,
AFL-CIO violated Article XX of the AFL-CIO
Constitution by resorting to the Board's processes
to resolve your dispute with Jackson and Local
1814, ILA, and that the Executive Council of the
AFL-CIO has upheld this ruling by the Impartial
Umpire and has directed you to request withdrawal
of these charges, I have nevertheless concluded that
there exists an overriding of public interests to be
served by the continued processing of these cases
insofar as they relate to the unfair labor practices
which were engaged in by Jackson Engineering Co.
and Local 1814, ILA, AFL-CIO, as alleged in the
Consolidated Complaint issued on May 30, 1980. I
do not believe, therefore, that it would effectuate
the policies of the National Labor Relations Act to
approve your request to withdraw the charges
against these Respondents in these cases. Accord-
ingly, that request is hereby denied.
On the other hand, upon reconsideration of the alle-
gations of the Consolidated Complaint insofar as
they relate to International Longshoremen's Associ-
ation, AFL-CIO, I have concluded that the investi-
gation has disclosed no evidence that this Respond-
ent has engaged in any of the unlawful conduct al-
leged in the Consolidated Complaint issued on May
30, 1980. Your request to withdraw the charge in
Case No. 29-CB-3966 insofar as it related to the In-
ternational Longshoremen's Association, AFL-CIO
is therefore hereby approved.
As noted above, IUMSWA's attorney renewed to the
Chief Administrative Law Judge its request to withdraw,
which was in turn referred to me for disposition.
As a result of the article XX proceeding set forth
above, Local 17 of IUMSWA was dissolved and became
defunct.2 7
Ill. ANALYSIS
A. The Article XX Proceedings and IUMSWA's
Request To Withdraw
Respondents contend that the instant complaint should
be dismissed based on the fact that the article XX pro-
ceeding, wherein IUMSWA fully participated, resolved
any possible question concerning representation of Jack-
son's employees at the Staten Island yard. Moreover,
they urge that IUMSWA's withdrawal request, based on
said article XX proceeding, should be approved, thereby
also mandating the dismissal of the instant complaint.
The General Counsel argues that the Board enforces
public and not private rights, and that particular ques-
tions concerning representation rights should be deferred
"I Brewer was the only employer with whom Local 17 of IUMSWA
had a collective-bargaining agreement or relationship.
1699
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to other tribunals. Thus, it is contended that no effect
should be given to the article XX proceeding insofar as
it attempts to resolve the alleged question concerning
representation herein, or as a predicate for the approval
of IUMSWA's request to withdraw the charges and con-
sequent dismissal of the complaint herein.
The instant complaint contains essentially two separate
and distinct allegations, which in my judgment require
separate consideration for the purposes of assessing these
contentions.
Dealing first with the allegations of concealed pay-
ments, the complaint alleges that on various dates be-
tween 1975 and 1979, Jackson, by Seregos, made such
payments to Anastasio and Scotto as agents of ILA, in
violation of Sections 8(aXl) and (2) and 8(bXIXA) of the
Act. It is clear that these allegations were not brought
up, considered, or dealt with during the article XX pro-
ceeding. Thus, no basis exists for deferring or dismissing
this aspect of the complaint based on the article XX de-
cision.
However, IUMSWA has, as a result of such proceed-
ing, requested withdrawal of the charges it has filed, said
charges of course forming the predicate for the instant
complaint. Although the Regional Director has denied
the Charging Parties' request to withdraw, an administra-
tive law judge has the discretionary authority to approve
such requests made before him, even where the General
Counsel objects.2a Thus, it becomes necessary for me to
determine whether the public interest and the purposes
and policies of the Act would be served or vindicated by
approval of the withdrawal request herein.
Respondents argue that, since Anastasio and Scotto
have both been convicted criminally, sentenced, and re-
moved from union office, no useful purpose would be
served by continuing this phase of the litigation, and that
a cease-and-desist order would be duplicative, superflu-
ous, and wasteful of agency sources. They also point out
that Anastasio, Scotto, and Seregos were immediately re-
moved from any dealings and negotiations between Jack-
son and the ILA immediately upon the superseding in-
dictments being issued.
The Regional Director, in his letter denying the re-
quest to withdraw the charges, characterized the con-
cealed payments herein as "serious" violations of the Act
and concluded that there "exists an overriding public in-
terest to be served" by the continued processing of these
charges. I agree. I do not subscribe to Respondents' con-
tentions that the criminal convictions of Anastasio and
Scotto, and their subsequent removal from union
office,9' obviate the need for any further proceedings
herein.
The criminal proceedings did not resolve nor did it
purport to decide the issue under consideration herein,
i.e., whether the ILA and/or Jackson are responsible for
the conduct of its officers of making and receiving con-
cealed payments pursuant to an unlawful arrangement
Alberici-Fnrln-Colnon, 226 NLRB 1315, 1316 (1976); Local 63&
United Awiatbrbon of Journeymen and Apprentices of the Plumbing and Pf-
pef7ttlu Industry of the United States and Canada, AFL-CIO (Roland
Tompkins inc.), 158 NLRB 1747, 1750 (1966).
so I note in this connection that the record does not establish whether
Serelos has been removed a an officer of Jackson.
over a 4- to 5-year period. It seems to me that the em-
ployees of Jackson and the membership of the ILA are
entitled to a clear and unequivocal statement by the post-
ing of a notice, signed by its representatives, that Jackson
and the ILA do not, and will not, countenance such be-
havior on the part of its officers and agents.3 0
Therefore, I conclude that the public interest and the
purposes of the Act will not be served by approval of
the withdrawal request with respect to the concealed
payments allegations in the complaint herein, and I shall
deny IUMSWA's request to do so.
The other portion of the complaint herein, the Midwest
Piping3 ' allegations, dealing with Jackson's signing a
modification of its contract with the ILA extending cov-
erage of its employees at the Staten Island yard, presents
a more troublesome issue insofar as it relates to the with-
drawal request.32
The Midwest Piping allegations herein are based on the
alleged existence of a real question concerning represen-
tation, by virtue of certain claims made by IUMSWA
prior to the execution of the September 1979 modifica-
tion contract by ILA and Jackson covering the latter's
employees at the Staten Island yard. As pointed out,
quite persuasively by Respondents, IUMSWA has now
sought to withdraw its charges herein, thereby eliminat-
ing any current question concerning representation, real
or otherwise, for these employees. Even more signifi-
cantly, Local 17 of IUMSWA has been dissolved and is
now defunct. Thus, any election that might be ordered as
a result of an 8(a)(2) finding herein would not include
IUMSWA and employees would not be able to choose
between IUMSWA or ILA as their representative.
Therefore it is questionable whether this phase of the liti-
gation should be persuaded further, particularly in an
area such as Midwest Piping where the Board had been
rebuffed consistently in its approach by numerous circuit
court of appeals.33
Although the Second Circuit Court of Appeals has ap-
proved the Board's Midwest Piping approach,34 it has re-
'0 In this connection, the action of the ILA and Jackson, of removing
Seregos, Anasasio, and Scotto from any dealings with each other with
respect to matters involving collective bargaining, falls far short of giving
such assurances to its employees and/or its members. I note that the ILA
continued to permit Anastasio and Scotto to remain as officers of the
Union, even after they were convicted of accepting such payments, as
well as other criminal conduct, notwithstanding orders of two lower
courts to remove them, until finally all appeals were exhausted.
"M Midwest Ppng d Suppy Co.. Inc., 63 NLRB 1060 (1945).
s" The contention that the art. XX decision itself must be deferred to,
since IUMSWA fully participated therein, is clearly without merit. Al-
though the issue of the representation of Jackson's employees at the
Staten Island yard was considered and decided, NLRB standards, poli-
cies, considerations, and precedents, in neither the unfair labor practice
nor the representation case ares, were evaluted nor considered in the art.
XX proceeding. The Board has exclusive jurisdiction to resolve questions
of representation, and will not defer to private resolutions such as an art.
XX proceeding of such questions. Weather Vane Outwear Coporation.,
Inc, 233 NRLB 414 (1977); AnheuseBusch w Inc., 246 NLRB 29 (1979).
s" PlawkooL Inc. et aL v. N.LR.B., 477 F.2d 66 (7th Cir. 1973);
N.L.R.B. v. Peter ParL Inc, 467 F.2d 700 (9th Cir. 1972); Modine Mfg.
Ca v. N.LRB., 453 F.2d 292 (8th Cir. 1971); American Bread Company
v. N.LR.., 411 F.2d 147 (6th Cir. 1969); N.LR.B. v. Air Master Corpo-
ration. ec aL, 339 F.2d 553 (3d Cir. 1964).
3" Hudson Berlind Crp, 494 F.2d 1200 (2d Cir. 1974); N.LR.B. v.
Midtown Seerice Ca. Inc., et aL, 425 F.2d 665 (2d Cir. 1970).
1100
JACKSON ENGINEERING CO.
cently expressed some reservations on whether it intends
to continue to do so. Thus, in American Can Company v.
N.L.R.B., 535 F.2d 180, 186 (2d Cir. 1976), the court,
while enforcing the Board's order,3 5 took pains to point
out that it was not endorsing the Board's approach in
these cases. The court quoted the 7th Circuit's summary
in Playskool, supra, of the difference between the ap-
proach of the Board and the courts on this issue as fol-
lows:
The Board looks first to the support held by the mi-
nority union and finds a "question concerning rep-
resentation" if the claim of that union is "not clear-
ly unsupportable"; the courts look first to the sup-
port held by the majority union and find that no
"question concerning representation" exists if that
union has the validly-obtained support of an em-
ployee majority and the rival union is thus shown
to be "no genuine contender." 477 F.2d at 70 n.3.
After noting that courts have rejected the Board's
view that Midwest Piping applies even where one union
has shown that it represents a majority in the contested
unit, the court found that this was not the case in Ameri-
can Can, where there was no showing of majority sup-
port for the recognized unit among the disputed employ-
ees. Thus, the court found that the circuit court cases
cited above, which rejected the Board approach, were
not controlling. However, in American Can at 186, fn. 7,
the Second Circuit opinion states:
We of course, express no view as to the correct-
ness of those cases, nor do we imply any approval
of the Board's practice of adhering to its position
after it has been rejected by several courts of ap-
peals.
Thus, the Second Circuit's current view of Midwest
Piping is certainly open to question, and since this case
clearly falls into the area of cases where courts have re-
jected the Board approach,3 6 this is but another reason
why serious consideration should be given to the approv-
al of the withdrawal request with respect to this portion
of the complaint.
Moreover, I note that the Regional Director's letter
denying IUMSWA's request to withdraw its charges
makes no specific reference to the Midwest Piping allega-
tions. It is true as pointed out by the General Counsel
that the letter states that the charges disclosed evidence
of serious violations including the concealed payments,
and that therefore it could be argued that the Midwest
Piping allegations are encompassed by such a description.
However, in the absence of any discussion of the issue, I
cannot determine whether the Regional Director consid-
ered the Midwest Piping violations to be "serious" viola-
tions, in and of themselves, sufficient to justify denial of
the withdrawal request, even absent the presence of any
other alleged violations. It is more likely, in view of the
emphasis placed in the letter on the concealed payments
s' 218 NLRB 102 (1975).
aa It is undisputed that at the time the September 1979 modification
contract was signed, the ILA represented an overwhelming majority of
employees employed at the Staten Island plant.
issue, that the Regional Director felt that, since the Mid-
west Piping violations were allegedly committed by the
same parties who were involved in the concealed pay-
ments, the entire matter should be litigated fully.
Counsel for the General Counsel seems to suggest that
the Midwest Piping allegations are sufficiently serious vio-
lations in and of themselves to warrant denial of the
withdrawal request, but also argues that the concealed
payments establish a specific proclivity by Jackson to
deal with the ILA, which sheds light on the Midwest
Piping allegations as well.
Although the arguments in favor of granting the with-
drawal request as to the Midwest Piping aspects of this
case are quite compelling, after careful consideration and
balancing of all the relevant factors and positions, I am
constrained to conclude that the withdrawal request
should not be granted as to this portion of the complaint
either, and that the purposes and policies of the Act and
the public interest would best be served by a determina-
tion on the merits of the entire complaint herein.
Initially it must be noted that the Board in representa-
tion cases, although having a policy of accommodating
efforts being made to resolve disputes between unions
under no-raid agreements,3 7 has frequently found it nec-
essary to refuse to approve withdrawal requests filed
pursuant to such no-raid proceedings. In Cadmium &
Nickel Plating Division of Great Lakes Industries, Inc.,38
the Board refused to permit withdrawal of a petition,
which was requested due to an order from the AFL-
CIO based on their no-raid pact provisions. The Board
characterized this withdrawal request as not being volun-
tary, but due to the compulsion exerted under and aris-
ing from the no-raid pact. Thus, the Board found that to
allow withdrawal of the petition under these circum-
stances,
. . .would be to permit a private resolution of the
question concerning representation in a manner con-
trary to the policies of the Act and would impinge
upon the Board's exclusive jurisdiction and authori-
ty to resolve such questions of representation. lId.
at 354.]
As noted above, the Board has consistently adhered to
this view. See Anheuser-Busch, supra,' Weather Vane,
supra.
It would seem to follow that permitting a withdrawal
compelled by an article XX proceeding, in an unfair
labor practice case as here, would be even more contrary
to the policies of the Act, since if the allegations are sus-
tained by the evidence, Respondents will have been
found to have unilaterally abrogated to themselves the
Board's function of resolving a question concerning rep-
resentation.
Moreover, while IUMSWA's defunctness renders the
outcome of any election that might be eventually or-
dered herein probably a foregone conclusion, the remedy
ordered however would still be meaningful. The com-
plaint alleges 8(aX3) and 8(bX2) violations based on the
" Mock Trucks Inc., 209 NLRB 1003 (1974); N.L.R.B. Field Manual,
sec. 11050.
S8 124 NLRB 353 (1959).
1701
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
existence of a union-security clause in the contract. Thus,
assuming a violation were to be found herein, a substan-
tial number of employees would be entitled to a refund
of dues they paid pursuant to this clause. Accordingly,
approval of the withdrawal of the charge insofar as its
relates to the Midwest Piping allegations could result in
deprivation of moneys due to a large number of employ-
ees for a substantial period of time.39
Finally, there is the question of the possible connection
between the unlawful payments and the Midwest Piping
allegations.
I note that, although the complaint alleges no connec-
tion between these events, it is of course obvious that the
same parties who entered into the concealed payments
arrangment entered into the contract which is alleged to
be unlawful.4 0
Moreover, the complaint alleges that the final payment
made by Jackson to the ILA was made in July 1975, at
the same time that the parties were negotiating the con-
tract alleged herein to have been unlawfully executed.
These circumstances suggest at least an arguable connec-
tion between the two aspects of this litigation, and is but
another reason for me to conclude, which I do, that the
public interest and the purposes and policies of the Act
would best be served by a full determination on the
merits of all allegations in the instant complaint. There-
fore I shall deny in full the request of IUMSWA to with-
draw its charges and I shall proceed to dispose of the
complaint on the merits.
B. The Concealed Payments
The evidence is undisputed that, at various times be-
tween early 1976 and mid-1979, Seregos made concealed
payments in cash to Anastasio of amounts of money
comprising 10 percent of the business referred to Jackson
by Anastasio and/or Scotto.4 1
Respondent Employer raises Section 10(b) of the Act
as an affirmative defense to this allegation of the com-
plaint, claiming that any payments made prior to 6
months before the filing of the charges herein are time
barred. However, it is well settled that the period of
39 Respondent Union argues, with respect to this issue, that this would
not be a hardship to employees and in fact payment of their dues would
be a windfall to the employees, since they were obtaining adequate repre-
sentation from ILA for this period of time. They also point out that the
ILA contract contained higher wages and benefits than the Brewer's con-
tract with IUMSWA. However, in any 8(aX2) case where the employees
have obtained representation and benefits from the unlawful contract, the
Board routinely grants a refund of dues to those employees who were
not previously members of the assisted union, on the grounds that their
membership was automatically deemed to be coerced by virtue of the
union-security clause in the contract.
40 The fact that different individuals of Jackson or ILA were involved
in the two aspects of the case is not determinative, although the issue of
agency is of course crucial to a determination of the merits. However, for
purposes of assessing the withdrawal request, the complaint allegations
must be deemed proved, and therefore an assumption that the same par-
ties were involved in both aspects of the charge is appropriate.
"4 These sums, totaling $63,750, represented business referred to Jack-
son from U.S. Lines and Prudential Lines. In addition, the record re-
vealed that Seregos in July 1979 gave $4,000 to Anastasio for the purpose
of assisting Scotto's defense fund. The record does not establish whether
this payment constituted a percentage of any business referred to Jack-
son. In fact, the record appears to indicate the contrary, since Anastasio
was apparently asking at that time a number of employers in the industry
to contribute to Scotto's defense fund.
limitations prescribed by Section 10(b) does not begin to
run on alleged unfair labor practices, until the person ad-
versely affected is put on notice of the act constituting
it.42
The payments herein were clearly concealed and came
to light only through Seregos' testimony at the criminal
proceedings which occurred within the 10(b) period.
Thus, the concealment of the conduct of these unlawful
payments prevented the timely filing of a charge, and the
10(b) period is therefore tolled, until the conduct was
discovered by virtue of the criminal action. Thus, Sec-
tion 10(b) does not preclude the finding of any violations
herein.
With respect to the merits of this allegation, the parties
do not disagree that such payments, if made by Jackson
to "a labor organization," constitute violations of Sec-
tions 8(aXI) and (2), and 8(bX)(1)(XA) of the Act, even
though such conduct may also involve criminal viola-
tions under other sections of other Federal laws, Sweater
Bee By Banff, Ltd., 197 NLRB 805 (1972).
The key issue, that is in substantial dispute herein, is
the question of whether the payments were made to a
"labor organization," or put another way, whether Anas-
tasio and Scotto were agents of the ILA with respect to
this conduct. The starting point for discussion of the lia-
bility of unions for conduct of its officials is the much
cited Board case of International Longshoremen's and
Warehousemen's Union C.I.O (Sunset Line & Twine Com-
pany), 79 NLRB 1487 (1948). All parties have cited var-
ious portions of this opinion to support their respective
positions as to the responsibility of the ILA for the re-
ceipt of these payments by its officials from Jackson.
The Board observes therein that the Act does not reg-
ulate individuals acting in a private capacity, but that
only employees or labor organizations or their agents
can commit unfair labor practices. Therefore, the ques-
tion is whether the conduct of the individuals can prop-
erly be imputed to the Union, for,
. . .unless the record justifies that imputation, there
was no violation of the Act in this case. In deter-
mining whether or not the evidence does afford a
basis for holding the Unions responsible for the epi-
sodes in question, the Board has a clear statutory
mandate to apply the "ordinary law of agency." [Id.
at 150.]
The Board then set forth those fundamental rules of
the law of agency which are to control decisions on the
issue of union responsibility for the conduct of its offi-
cials:
1. The burden of proof is on the party asserting
an agency relationship, both as to the existence of
the relationship and as to the nature and extent of
the agent's authority. In this case, for example, it
was incumbent upon the General Counsel to prove,
4 Don Burgess Construction Corporation d/b/a Burgess Construction and
Donald Burgess and Verlon Hendrix db/la V d B Builders, 227 NLRB 765
(1977); Wisconsin River Valley District Council of the United Brotherhood of
Carpenters and Joiners, AFL-CIO (Skippy Enterprises. Inc.), 211 NLRB
227 (1974).
1702
JACKSON ENGINEERING CO.
not only that the acts of restraint and coercion al-
leged in the complaint were committed, but also
that those acts were committed by agents of the Re-
spondent Unions, acting in their representative ca-
pacity. The Respondents' failure to introduce evi-
dence negating the imputations in the complaint did
not relieve the General Counsel of that burden.
2. Agency is a contractual relationship, deriving
from the mutual consent of principal and agent that
the agent shall act for the principal. But the princi-
pal's consent, technically called authorization or
ratification, may be manifested by conduct, some-
times even passive acquiescence as well as by
words. Authority to act as agent in a given manner
will be implied whenever the conduct of the princi-
pal is such as to show that he actually intended to
confer that authority.
3. A principal may be responsible for the act of
his agent within the scope of the agent's general au-
thority, or the "scope of his employment" if the
agent is a servant, even though the principal has not
specifically authorized or indeed may have specifi-
cally forbidden the act in question. It is enough if
the principal actually empowered the agent to rep-
resent him in the general area within which the
agent acted. 4 4
44 Restatement Agency, Secs. 219, 228-237. This is the effect
of Section 2(13) of the Act, which provides,
In determining whether any person is acting as an agent of
another person so as to make such other person responsible for
his acts, the question of whether the specific acts performed were
actually authorized or subsequently ratified shall not be control-
ling. (Emphasis supplied. Id. at 1508, 1509.]
The Board, in Sunset Line and Twine, supra, in finding
acts of violence related to picketing to be attributable to
the union, found that the absence of proof of specific au-
thorization or ratification to be immaterial, so long as
there was evidence that the agent was on that occasion
acting within the scope of his general authority to direct
the strike and picketing. The union was responsible for
wrongful acts which were performed in furtherance of
the same purposes and were of the same general charac-
ter as or incidental to the picketing.
The instant case presents a rather unique and unprec-
edented application of the principles of agency set forth
in Sunset Line and Twine, supra. There is no question that
Anastasio's authority extended to organizing employees,
securing recognition, and executing and administering
collective-bargaining agreements with employers. The
record is devoid of any evidence that he was authorized
to obtain additional business for employers and to enter
into arrangements for payments from said employers for
such referrals. Respondents argue that no interest of the
ILA is served or furthered by the payments herein, and
that the actions of Anastasio were "simply a personal ad-
venture or frolic," and not attributable to the Union. 43
4S Lyon v. Carey, 533 F.2d 649 (D.C. Cir. 1976); International Distribut-
ing Corporation v. American District Telegraph Company, 569 F.2d 136
(D.C. Cir. 1977); Brennen State Bank v. Hartford Accident & Indemnity
Ca, 427 F.2d 425 (7th Cir. 1970).
As pointed out by Respondents, there is no evidence
that the ILA received any of the moneys paid by Jack-
son to Anastasio, nor any evidence that the ILA re-
ceived any other tangible benefit from such payments.
However, the record does establish that the arrange-
ment between Anastasio and Seregos for these payments
and the job referrals is not so easily divorced from Anas-
tasio's position and responsibilities with the ILA. The un-
lawful arrangement was intimately connected to and
arose out of Jackson's decision to recognize and sign a
collective-bargaining agreement with the ILA for the
representation of Jackson's employees.4 4
During the period of years wherein business was re-
ferred to Jackson by Anastasio and Scotto, the number
of unit employees as well as Jackson's gross revenues in-
creased substantially. The record does not establish that
this increase in employees and business was solely or
even primarily attributable to the above-described refer-
rals of business, but there is no question that these refer-
rals were quite significant in enhancing Jackson's success.
Such a turn of events cannot help but to have furthered
the interests of the ILA. It is not clear from the record
whether the firms who performed the work for U.S.
Lines and Prudential previous to Jackson being retained
were ILA-represented companies. Thus, it is not certain
that the referrals herein resulted in any additional jobs
for ILA members. Nevertheless it is in my judgment rea-
sonable to conclude, which I do, that increases in busi-
ness for Jackson, thereby advancing and improving the
viability of said company, have a tendency to produce
additional work opportunities (such as overtime, less
time on layoff, more regularity of employment) for ILA
members, more moneys to be paid into ILA funds, and
generally are supportive of the interests of the Union.
Moreover, the arrangement herein was carried out
over a period of time of some 4 years, with all payments
being made at the ILA's office, while Anastasio was ac-
tively involved in administering the collective-bargaining
agreement then in existence between Jackson and the
ILA. This is hardly conduct which one could character-
ize as an "individual frolic" or a "personal adventure."
Additionally, I note that Anastasio during this period
of time was the second high ranking official of the ILA.
Scotto, the ILA president and the highest ranking offi-
cial of the Union, I find to have participated in or at the
very least condoned the unlawful activity of Anastasio.
Thus, the record reveals that Scotto in the fall of 1975 at
the ILA office, in the presence of Anastasio, replied to
Seregos' request for work by offering to help him obtain
the U.S. Lines' account, discussed the commission ar-
rangement, and suggested that Seregos use a foreign cor-
poration to facilitate the payments. Shortly thereafter
44 It is true that Seregos made the initial contact with Anaatasio con-
cerning representation of Jackson's employees, and that Seregos may
very well have agreed to sign a contract with the ILA without any
agreement for referrals. Indeed the record reveals that Seregos believed
that his firm's becoming affiliated with the ILA would in and of itself
produce more business for his Company. Nevertheless, the record estab-
lishes that the unlawful arrangement and the recognition were concur.
rently agreed to. and that Anastasio made it clear to Seregos that he
would not refer any business to him unless he became and remained an
ILA shop.
1703
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Seregos received a call from a U.S. Lines official notify-
ing him to start work on a U.S. Lines vessel. Subsequent-
ly, work was performed by Jackson for U.S. Lines, and
Seregos paid Anastasio 10 percent of the gross business
on such work. These circumstances are sufficient to es-
tablish Scotto's participation in and at the very least con-
donation and approval of the arrangement entered into
between Anastasio and Seregos.4 5
Accordingly, we have a situation where the two high-
est ranking officials of the ILA have participated in the
scheme of referrals coupled with unlawful payments. It
is hard to imagine what more should be required to es-
tablish union responsibility for this conduct. Is it neces-
sary for all the Union's officers to have condoned the ac-
tivity? Or must the executive board approve it? Or per-
haps the union membership must vote to approve this
conduct. In short, to carry Respondent's arguments to its
logical extension, this kind of conduct can never be at-
tributed to the Union, since the receipt of bribes or kick-
backs is not in furtherance of any union's purposes. I do
not believe that the law as to agency is so restrictive. As
the Supreme Court has observed in a case involving
kickbacks and the agency status of employer representa-
tives:
The Court of Claims, in holding that the Act
does not authorize government cancellation because
of kickbacks, relied heavily on its finding that none
of the officers of Acme were aware of kickbacks.
But as previously stated those of Acme's employees
and agents who did know were in the upper echelon of
its managers. One of the guilty employees was the
general manager of one of the company's chief
plants and the son of Acme's president, and the two
other kickback receivers were in charge of oper-
ations, sales, and government contracts. They were
the kind of company personnel for whose conduct a
corporation is generally held responsible. Cf. Gleason
v. Seaboard Air Line R. Co., 278 U.S. 349. Since
Acme selected those agents to carry on its business in
obtaining and performing government contracts, there
is no obvious reason why their conduct in that field
should not be considered as Acme's conduct, particu-
larly where it touches the all-important subject of kick-
backs [Emphasis supplied. United States v. Acme
Process Equipment Co., 385 U.S. 138, 147 (1966).]46
Accordingly, based on the above factors and analysis,
I conclude that the evidence warrants the finding which
14 It is irrelevant that Scotto was not indicted criminally for his con-
duct involving Jackson and Seregos. The standard of proof necessary in
criminal proceedings is quite different from the quantum of evidence nec-
essary to establish a violation of the National Labor Relations Act. More-
over, I need not and do not find that Scotto actually received any of the
payments from Seregos, as was apparently the charge in the indictments.
I need only find, which I do, that Scotto was aware of, condoned, and
approved Anastasio's activities in this regard.
4' I would note that all the cases cited by Respondents (e.g., see fn.
43) involve low level employees, such as deliverymen and repairmen, and
deal with one-time activities such as rape, assault, or a theft. On the other
hand the instant case involves, as noted, a longtime continuing relation-
ship encompassing conduct by the two highest ranking officials of the
Union, which took place at the ILA's offices. To characterize such activ-
ities as "frolics" or "personal adventures" of Anastasio and Scotto is
hardly an apt description of the circumstances herein.
I make that Anastasio and Scotto were acting as agents
of the ILA in their participation in the arrangements for
the receipt of concealed payments from Seregos acting
on behalf of Jackson.4 7
Therefore by such conduct, Respondent Employer and
Respondent Union have violated Sections 8(a)() and (2)
and 8(b)(1)(A) of the Act, respectively, and I so find.
C. The Alleged Midwest Piping Violations
The complaint alleges that Respondents on or about
September 13, 1979, executed a contract recognizing
ILA as the representative of Jackson's employees at the
Staten Island facility, containing a union-security clause,
notwithstanding the fact that a real question concerning
representation of said employees had been raised and was
pending by virtue of requests for recognition made by
IUMSWA.
In support of this contention, the General Counsel
argues that Jackson's purchase of the Staten Island yard
for $2.5 million, by which it acquired a facility including
drydocks and cranes, enabled it to bid on combination
jobs, and resulted in a large increase in business as well
as the hiring of substantially more employees. Therefore,
the General Counsel contends that these actions consti-
tute substantial changes in Jackson's operations, resulting
in essentially a new operation, which are sufficient -to
raise a question concerning representation of its employ-
ees, when coupled with IUMSWA's representational
claims. In this regard, the General Counsel points to
IUMSWA's historical interest in representing the em-
ployees at the Staten Island yard, the employment by
Jackson of only former Brewer employees during the
period immediately after its purchase of the yard, and its
employment of 23 former Brewer employees, by October
25, 1979, when it was fully staffed.
Respondents, on the other hand, contend that the ac-
quisition of the Staten Island yard by Jackson should be
characterized as a relocation of its Brooklyn facilities,
which did not result in a substantial change in the nature
of its operations. Therefore, the contract which it execut-
ed in September 1979, modifying the existing collective-
bargaining agreement between the parties, constitutes a
bar to any petition being filed, and therefore precludes
the existence of a question concerning representation at
that time. Alternatively, Respondents argue that, even if
the contract is not considered as a bar, IUMSWA's al-
leged claims for representation are insufficient to create a
real question concerning the representation of the em-
ployees involved herein.
While the issue is not free from doubt, I am convinced
that Respondents' analysis of the facts and the applicable
precedents is more persuasive, and find that no question
concerning the representation of Jackson's employees ex-
isted when the parties executed their agreement in Sep-
tember 1979.
In Shea Chemical Corporation,48 the Board made it
clear that the Midwest Piping doctrine does not apply in
47 There is no dispute from any of the parties, as well there should not
be, that Seregos was acting as an agent of Jackson in connection with his
actions herein.
44 121 NLRB 1027, 1028 (1958).
1704
JACKSON ENGINEERING CO.
situations where, because of contract bar or other estab-
lished reasons, the rival claim does not raise a real repre-
sentation question.
The Board in General Extrusion Company, Inc.,49 and
Deluxe Metal Furniture Company,50 codified, expanded,
and explicated its rules dealing with contract bar issues,
several of which have significance in the evaluation of
the facts herein.
The Board has consistently applied contract bar rules
and principles, including those set forth in General Extru-
sion, supra, in unfair labor practice cases involving viola-
tions of Section 8(a)(2), 5 ' as well as Section 8(a)(5) 52 of
the Act.
Thus, it becomes necessary to determine whether, as
alleged by Respondents, their 1978-81 contract, as modi-
fied in 1979, constituted a bar to any representation claim
that may have arisen by virtue of IUMSWA's demands.
The actual modification of substantive provisions of a
contract by the parties during its term, whether or not
the contract contains a modification clause, will not
remove the contract as a bar, absent actual termination
of the contract. 53 The General Counsel does not contest
the fact that the parties' actions in 1979, of negotiating
new terms and conditions of employment for some of its
employees at the Staten Island facility, constitute a modi-
fication of their 1978-81 contract.54
I also find that the record overwhelmingly supports
such a conclusion. It is clear that the parties intended the
1979 agreement to be a modification of the existing "blue
book" agreement, which remained in effect as to 25 em-
ployees who were considered to be Jackson's "basic out-
side crew." Thus, the 1978-81 agreement was not termi-
nated in 1979, but merely modified, and these modifica-
tions did not remove the contract as a bar. 55
In General Extrusion, supra, the Board, as noted, re-
vised and clarified certain aspects of its contract bar
policy, particularly with regard to changed circum-
49 121 NLRB 1165 (1958).
so 121 NLRB 995 (1958).
5' Clark Equipment Company, 234 NLRB 935, 940 (1978); Milton Kline
and Jacob Kline a Co-Partnership. d/b/a Klein's Golden Manor, 214 NLRB
807 (1974); American Beef Packers Inc., 218 NLRB 634 (1970); Hayes
Coal Co., Inc., 197 NLRB 1162 (1972).
s2 Marine Optical. Inc., 255 NLRB 1241 (1981); Westwood Import Com-
pony. Inc., 251 NLRB 1213 (1980); Lammert Industries, a division of Corn-
ponetrol, Inc., a subsidiary of l-T-E Imperial Corporation, 229 NLRB 895
(1977).
53 Deluxe Metal, supra
6' Indeed, the General Counsel stipulated into the record the findings
of the art. XX decision that the 1979 agreement was a modification of the
then existing collective-bargaining agreement. Moreover, the General
Counsel, in his brief, refers to the parties' action in September 1979 as a
modification of the prior agreement.
55 It is of course true that the modifications also encompassed the
changing of the expiration date of the old contract, thus constituting a
premature extension of the 1978-81 contract. However, the Board does
not prohibit premature extensions, but only subjects such extensions to
the condition that if a petition is filed during the open period, calculated
from the expiration date of the old contract, the premature extension will
not be a bar. H. L Klion. Inc., 148 NLRB 656 (1964). Thus, a representa-
tion claim could have been raised 60-90 days prior to the expiration date
of the 1978-81 contract. However, IUMSWA's claims were made in the
spring of 1979, at a time when any petition filed would have been un-
timely with respect to such agreement. Cf. Western Electric Co.. Incorpo-
rated, 94 NLRB 54 (1951).
stances within the contract term. The Board observed
therein in relevant part:
Thus, we shall adhere to the rule that a contract
does not bar an election if changes have occurred in
the nature as distinguished from the size of the op-
erations between the execution of the contract and
the filing of the petition, involving (1) a merger of
two or more operations resulting in creation of an
entirely new operation with major personnel
changes; or (2) resumption of operations at either
the same or a new location, after an indefinite
period of closing, with new employees. However, a
mere relocation of operations accompanied by a
transfer of a considerable proportion of the employ-
ees to another plant, without an accompanying
change in the character of the jobs and the func-
tions of the employees in the contract unit, does not
remove a contract as a bar. [121 NLRB at 1167-
68.]56
What is in dispute however, and what constitutes the
determinative issue herein, is whether the actions taken
by Jackson should be characterized as having changed
the nature of the operations, involving a merger of two
or more operations resulting in creation of an entirely
new operation with major personnel changes, as alleged
by the General Counsel, or "a mere relocation of oper-
ations accompanied by a transfer of a considerable pro-
portion of the employees to another plant, without an ac-
companying change in the character of the jobs and the
functions of the employees in the contract unit," as al-
leged by Respondents.
I am persuaded that the record establishes that Jack-
son's purchase of the Brewer facility, and its consequent
effect on its operations, should be characterized as a
"mere relocation,"57 under the General Extrusion stand-
ards.
An examination of the factors deemed controlling by
the Board in General Extrusion, supra, on this issue, i.e.,
whether there is a change in the character of the jobs
and the functions of the employees in the contract unit,
reveals that the contract is a bar to any representation
claim asserted by IUMSWA. Thus Jackson, notwith-
standing the acquisition, is still engaged in the same busi-
" The Board in General Extrusion, supra, also set forth criteria to be
utilized in expanding unit situations, requiring that a contract will be a
bar only if at least 30 percent of the employees employed at the time of
the hearing had been employed at the time the contract was executed,
and 50 percent of the job classifications in existence at the time of the
hearing were in existence at the time the contract was executed. This
aspect of General Extrusion is not in issue herein, as the General Counsel
concedes and the record discloses that this criteria was met, and that
Jackson employed a representative complement of employees at the time
the parties modified their contract and applied it to the Staten Island fa-
cility.
a7 I note in this connection that par. I l(e) of the complaint alleges that
Jackson terminated its operations at Brooklyn, and relocated, said oper-
ations at the Staten Island facility, transferring all or most of its employ-
ees employed in Brooklyn who were represented by ILA. Similarly, the
Regional Director in his dismissal letter with respect to IUMSWA's
8(aX5) charge found that Jackson purchased the facility from Brewer to
replace and supplant its Brooklyn facility, and that in September 1979
Jackson closed its Brooklyn facility and relocated to the former Brewer
yard in Staten Island, taking with it its work force from Brooklyn.
1705
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ness performing essentially the same work, and is still op-
erating its Hoboken machine shop, and performing pier-
side repairs at other companies' piers.
Most significantly, the employees at the new facility
employ essentially the same skills and perform the same
functions as they did at Jackson's Brooklyn facilities. See
Marion Power Shovel Company, Inc., 230 NLRB 576
(1977); Electrospace Corporation of Puerto Rico, 189
NLRB 572 (1971).
It is true as pointed out by the General Counsel that
Jackson's new facility which cost S2.4 million now con-
tains a drydock, which permits Jackson to bid on combi-
nation type jobs. Though the addition of the drydock has
resulted in increases in the amount of work obtained by
Jackson, the new work involved, bottomside work, com-
prises less than 10 percent of Jackson's business. More-
over, the dry dock has resulted in only two new classifi-
cations, that of dock hands and crane operators, which
have been performed by less than 5 percent of Jackson's
work force.
Of the remaining jobs and skills, there is no difference
in craft complexity from Jackson's prior operations.
Thus, bottomside and topside work require identical
skills, training, and ability. There is no such thing as a
bottomside or topside crew, and employees work inter-
changeably on repairs of both sides of the vessel.
It is apparent that the changes in Jackson's operations
as a result of the purchase of the Staten Island facility
were not of the magnitude contemplated by the General
Extrusion rule.56 I find, therefore, that Jackson's oper-
ations have remained substantially the same, following its
relocation to Staten Island, since the move has not
caused changes in the character of the jobs or the func-
tions of its employees. Marine Optical, supra; Westwood
Import, supra; Pepsi Cola, supra; W. T Grant Company,
197 NLRB 955 (1972)." 9
The General Counsel places considerable reliance
upon Hudson Berlind Corporatione° in support of his po-
sition herein. While this case does contain some similari-
ties to the facts at hand, I find that upon close examina-
tion there are several significant distinguishing factors
which lead me to conclude that it is not dispositive of
the issues before me.
In Hudson Berlind the respondent purchased two
warehouses from different employers, one located at
Floral Park and the other in Brooklyn. These ware-
houses were represented by different unions with differ-
ent collective-bargaining agreements. Respondent from
the outset of the purchase intended to merge both ware-
houses into a larger facility in Hicksville, Long Island,
some 40 miles from Brooklyn.
While both prior collective-bargaining agreements
were still in existence, respondent decided that he would
deal with the union representing the Brooklyn ware-
house (Local 222) for the new Hicksville location since
s Pepsi-Cola General Bottlers Inc. 173 NLRB 815 (1968).
69 There can be no dispute herein concerning the requirement in Gen-
eral Extrusion of the transfer of a considerable proportion of the employ-
ees to the relocated plant, since the complaint alleges and the record re-
veals that almost all of Jackson's employees relocated from Brooklyn to
Staten Island.
0o 203 NLRB 421 (1973), enfd. 494 F.2d 1200 (2d Cir. 1974).
the Brooklyn warehouse employed three times as many
employees as the Floral Park warehouse. Therefore re-
spondent signed a contract with Local 222 covering the
Hicksville location before any employees were hired at
that location. Subsequently, a majority of employees
who eventually transferred to the Hicksville location
came from the Local 222 represented Brooklyn ware-
house. The Administrative Law Judge on these facts, ap-
plying the General Extrusion criteria, found the Hicks-
ville operation to be a relocation of the Brooklyn ware-
house, since a considerable proportion of employees
were transferred and the jobs and functions were not
changed. Thus, he found the contract with Local 222 to
be a bar to any claims of the other union.
The Board reversed the Administrative Law Judge
and found a violation of Section 8(aX2), concluding that
the newly established Hicksville facility was a new oper-
ation resulting from the closing of two warehouses and
the establishing of an entirely new facility. The Board
further found that:
[the above facts represented] "a type of vice Mid-
west Piping was designed to prevent: the unilateral
selection by an employer between conflicting repre-
sentational claims of two or more unions, which
thereby deprived the employees involved of their
rights to have the question determined by the
Board's processes, insuring their own freedom of se-
lection." [Id. at 423.]
While these findings and the Board's language, set
forth above, on their face seem somewhat applicable to
the instant matter, a careful analysis of the facts and the
Board's opinion reveal several significant distinguishing
factors. Most importantly, in Hudson Berlind, Respond-
ent combined and merged operations of two warehouses,
each represented by different incumbent unions. As the
Board found, "the newly established Hicksville facility
was no more a part of or an accretion to the Brooklyn
operation than to the Floral Park warehouse." Id. at 422.
The Board was not impressed by the fact that a majority
of the new facility was staffed by Local 222 employees,
since at the time the contract was executed, neither
union had "a conclusive or clearly predominant posi-
tion." Id. at 422. Thus, contrary to the instant case, re-
spondent in Hudson Berlind was faced with conflicting
claims of two unions currently representing the employ-
ees to be transferred. Therefore, the Board found that
the contract executed between Local 222 and respondent
therein could not be a bar to any claims of the union rep-
resenting the employees at the Floral Park plant. Addi-
tionally, also contrary to the instant case, the contract
executed by the parties was found to be a prehire con-
tract, since no employees had been hired at Hicksville at
the time the contract was signed."'
"' As noted, the contract herein was executed in September, after 95
percent of the employees hired were ILA membern transferred from
Jackson's other facilities. Contrary to the General Counsel, I do not be-
lieve that the increase in the number of regular employees hired after it
began operations is sufficient to change the characterization of Jackson's
move from a relocation to a new operation. See Marion Pwr, nsan
Lutheran Homes and Hospital. Inc. d/b/oa Fairmw Care Center, 233
NLRB 1025 (1977).
1706
JACKSON ENGINEERING CO.
Accordingly, I find that Hudson Berlind does not alter
my conclusion that Jackson's move to Staten Island from
its Brooklyn facilities constitutes a mere relocation of
these facilities,6 accompanied by the transfer of a con-
siderable proportion of employees, without an accompa-
nying change in the character of the jobs and the func-
tions of the employees in the unit, and that the parties'
1978-81 contract, as modified in 1979, constitutes a bar
to any representational claim IUMSWA may have
raised.
Turning to the issue of IUMSWA's claims, I conclude
in agreement with Respondents that, even assuming that
no contract bar were to be found herein, the claims
raised by IUMSWA in the instant case do not rise to the
level of a "real question concerning representation" of
Jackson's employees at the Staten Island facility.
In this connection, it is necessary to determine wheth-
er IUMSWA's claims are "clearly unsupportable and
lacking in substance."6 3 In my judgment IUMSWA's
claims can and should be so characterized. It must be
noted that IUMSWA at no time made any claim or as-
sertion to Jackson that it represented any of Jackson's
employees. It never attempted to organize or solicit any
authorization cards from Jackson's employees nor to
present any evidence to Jackson of any support that it
might have among Jackson's employees. 64 On the con-
trary, IUMSWA began to assert its alleged contractual
and territorial rights with respect to the shipyard before
Jackson began performing ship repair work, before it
employed any bargaining unit employees to perform ship
repair work, and before IUMSWA knew whether Jack-
son would be employing any former IUMSWA mem-
bers. Thus, IUMSWA's claims herein were not based on
the desires of any of Jackson's employees for representa-
tion by IUMSWA, but solely based upon the fact that it
had been certified to represent employees of Brewer at
the shipyard and that it had a successorship clause in its
contract with Brewer. These kinds of claims, which are
independent of and often contrary to the representational
desires of the employees of the new employer, should
not be held sufficient to create a colorable claim of rep-
resentation. There is no such concept in Board law that a
contracting union has a continuous right to recognition
on the basis of location, regardless of the desires of the
particular employees involved. 65
The General Counsel places considerable emphasis
upon the fact that from June through September, while
Jackson was engaged in cleaning up and preparing the
facility for its operations, the only employees employed
by it were former Brewer workers. However, the evi-
dence discloses that, during this period, Jackson (through
*' The fact that Jackson's employees were transferred from two prior
locations, into the one Staten Island facility, does not change the charac-
terization of the move as a relocation, where the General Extrusion crite-
ria have been met. See The Arrow Company. A Division of Cluett, Peabody
& Co.. Inc., 147 NLRB 829 (1964).
I' Playskoot Inc, a Division of Milton Bradley Company, 195 NLRB
560 (1972), enforcement denied 477 F.2d 66 (7th Cir. 1973).
"4 Cf. Hudson Berlind. upra, where the Board relied, in part, in finding
the presence of a real question concerning representation upon the fact
that the minority union was able to obtain a sufficient showing of interest
from employees of the employer to support a representation petition.
6S Fraser & Johnston Company, 189 NLRB 142, 150 (1971). See also
Schreiber Trucking Company, 148 NLRB 697, 703 (1964).
Waterford Marine, its parent) employed only one former
Brewer bargaining unit employee. The remaining former
Brewer workers employed by Jackson were employed in
supervisory or other nonbargaining unit positions while
working for Brewer, thus affording no basis for any as-
sumption or presumption that these individuals preferred
IUMSWA as their collective- bargaining representative,
and providing no support for any representational claims
of IUMSWA. Moreover, the Board, in assessing 8(aX2)
cases, looks to a period of time when employees are en-
gaged in regular production work, and not as here when
employees are primarily engaged in cleaning up and pre-
paring the premises.66
Therefore, I conclude that, between June and Septem-
ber, Jackson was not functioning as a production enter-
prise, and the employees were not part of a normal and
functioning appropriate collective-bargaining unit. Allied
Products Corporation and its subsidiary, Kraus Manufactur-
ing & Equipment Co., Inc., 220 NLRB 732 (1975). Thus,
the fact that Jackson employed one former Brewer bar-
gaining unit employee to perform electrical maintenance
work, during this period of time, even where that indi-
vidual was eventually hired by Jackson after normal op-
erations commenced, is insufficient to create a colorable
claim by IUMSWA to the representation of Jackson's
employees.
The General Counsel also relies on IUMSWA's his-
torical interest in representation of employees at the
Staten Island shipyard, as creating a real question con-
cerning representation, citing Hudson River Aggregates,
Inc., 246 NLRB 192 (1979), in support thereof. As I have
already noted above, I do not believe that IUMSWA's
"territorial claims," based on its prior recognition or con-
tract with a prior employer, have any significance in as-
sessing this issue, absent evidence of employee support
for IUMSWA from Jackson employees. Hudson River,
supra, is not to the contrary. There the Board found an
employer to be a successor employer and in violation of
Section 8(a)(5) of the Act because, among other factors,
it actually hired a majority of the alleged predecessor's
employees. The case does not stand for the proposition
apparently advanced by the General Counsel that an un-
substantiated and invalid successorship claim 67 creates a
real question concerning representation.
The complaint alleges a violation to have occurred in
September when Respondents executed their modified
collective-bargaining agreement extending recognition to
the ILA. At this time, Jackson employed two bargaining
unit employees who had been members of the Brewer
bargaining unit represented by IUMSWA. The record
does not reveal whether these employees were employed
by Brewer at the time Brewer closed down its operations
in May. The record does reveal a gradual winding down
of Brewer's operations and layoffs of employees through-
out 1979. Thus, it is conceivable that either of these em-
ployees may have had some interim employment be-
e6 Lianco Container Corporation, 173 NLRB 1444. 1448 (1969); Young
& Greenwalt Co., 157 NLRB 408 (1966); Fruehauf Trailer Company, 162
NLRB 195 (1966).
"7 I note that the Regional Director dismissed IUMSWA's 8(aX5)
charges based on a successorship theory.
1707
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tween the time they were terminated by Brewer and em-
ployed by Jackson.6 8 It is thus uncertain whether any
presumption of support for IUMSWA as their bargaining
representative with respect to Jackson can be made.
However, I need not decide this issue, as I conclude that,
even if it is assumed that these two employees of Jack-
son, in September, can be deemed to have designated
IUMSWA to represent them with respect to their Jack-
son employment, by virtue of their prior inclusion in the
IUMSWA bargaining unit, that in a bargaining unit of 51
on September 5, when operations commenced and out of
55 on September 13, the date the modification was ex-
ecuted, their presence is insufficient to create a real ques-
tion concerning representation.6 9
I note that in each of the cases cited in the preceding
footnote, where the Board found no real question con-
cerning representation to be present, the unions involved
presented claims of significantly greater substance, par-
ticularly in terms of employee support with respect to
the employer involved, than the claims asserted by
IUMSWA herein.
The General Counsel also relies upon the fact that, by
October 25, Jackson had hired 23 employees who had
been formerly employed in the Brewer's unit represented
by IUMSWA. He argues that such a hiring could reason-
ably have been anticipated by the parties, as evidenced
by the fact that they agreed to a reduction in contract
benefits for a portion of the bargaining unit in contem-
plation of increased work opportunities for employees by
virtue of the shipyard's facilities. The General Counsel
cites American Can Company, 218 NLRB 102 (1975),
enfd. 535 F.2d 180 (2d Cir. 1976), in support of his con-
tention that these circumstances are sufficient to create a
real question concerning representation of Jackson's em-
ployees. I do not agree with the General Counsel's anal-
ysis nor his reliance upon American Can, supra, as au-
thority for his position.
In American Can, the employer for some 30 years op-
erated a plant in Jersey City, New Jersey, wherein it had
recognized the Steelworkers Union for its production
and maintenance employees and the Amalgamated Lith-
ographers Union (ALA) for a unit limited to lithographic
employees. The employer announced plans to shut down
the plant and move to another plant, and invited applica-
tions for transfer to the new plant. The ALA advised the
employer that a majority of the lithographic employees
desired to move to the new plant and to be represented
by the ALA at such plant. The employer indicated that
it preferred a single unit at the new plant and refused to
recognize the ALA at the new facility.
When the new plant opened, lithographic work was
still being performed at the Jersey City plant, but with
the expectation that all such work would be transferred
to the new facility. The employer signed a collective-
bargaining agreement with the Steelworkers, for a unit
6$ This is less likely in the case of Boschi, who was employed by Jack-
son as of June in connection with the cleaning up and maintaining the
facility.
69 Dillon's Companies Inc., 237 NLRB 759 (1978); Robert Hall Gentilly
Road Corporation, d/b/a Robert Hall Clothes etc., 207 NLRB 692 (1973);
The Boy's Markets. Inc.. and Food Employers Council, Inc., 156 NLRB 105
(1965).
including the lithographic employees, and then offered to
transfer five ALA represented employees to the new
plant on condition that they join the Steelworkers pursu-
ant to the union- security clause of the contract.
In these circumstances, the Administrative Law Judge
found no 8(a)(2) violation, reasoning that since the em-
ployer had no obligation to recognize the ALA at the
new plant, ALA did not have a colorable claim to repre-
sentation sufficient to raise a real question concerning
representation.
The Board reversed, finding that the Administrative
Law Judge confused the existence of a question concern-
ing representation with its resolution, and thereby misap-
plied the doctrine of Midwest Piping. The General Coun-
sel cites this language approvingly, in effect arguing that
the dismissal of IUMSWA's successorship 8(a)(5) claims
does not preclude the existence of a real question con-
cerning representation. That is of course quite correct,
and I do not quarrel with such a conclusion. However, it
is still necessary for the IUMSWA to raise a claim that
"is not clearly unsupportable and lacking in substance,"
and this in my judgment, it has failed to do.
The Board in American Can, on the basis of the ALA's
long history of bargaining for lithographic employees in
a separate unit at the old plant, the transfer of lithogra-
phic equipment and work to the new plant, the expected
offer of employment to some of the lithographic employ-
ees, together with the ALA's repeated claim to represent
these employees, found that a real substantial question
concerning representation of these employees was cre-
ated.
It is obvious that these facts are far different in signifi-
cant aspects from the case at bar. Thus, unlike the ALA
in American Can, IUMSWA herein had no history, long
or otherwise, of collective bargaining in a unit of Jack-
son's employees. The Board, in American Can, relied
heavily on this fact in finding that the employer unilater-
ally resolved a substantial representation question, i.e.,
the unit issue of separate representation for lithographic
employees, based in part on a history of such representa-
tion in such a unit. No unit or other representation case
issue has been presented by IUMSWA's claims which
are resolvable by the Board's representational process-
es.7 0
I note in this connection that the Second Circuit in en-
forcing the Board's order in American Can, as set forth
infra, made it clear that it was not endorsing the Board's
practice of adhering to its approach to Midwest Piping,
where such position has been rejected by several courts
of appeals. The court enforced the Board's order howev-
er, primarily on the basis of ALA's bargaining history in
a unit restricted to lithographers with American Can.
70 The only history of bargaining revealed in the instant record insofar
as IUMSWA is concerned relates to the Brewer unit. Even if it can be
assumed, which the record does not establish, that IUMSWA's demands
can be construed as a demand for recognition by Jackson for a unit con-
fined to former Brewer employees previously represented by IUMSWA,
such a demand would not raise a colorable claim. Such a unit, clearly
based solely on the extent of organization, is an inappropriate unit for
collective bargaining, and therefore a claim for such a unit cannot create
a real question concerning representation. William Penn Broadcasting
Company, 93 NLRB 1104 (1951).
1708
JACKSON ENGINEERING CO.
Thus, the court emphasized that the Board might have
determined that a separate lithography unit was appro-
priate and have given the lithographers a choice between
the ALA and Steelworkers. It distinguished the various
court of appeals cases which refused to enforce Board
orders in Midwest Piping cases, on the grounds that there
was no showing in American Can that the Steelworkers
represented a majority of employees in the contested unit
i.e., a unit confined to lithographers, where in fact no
lithographers had even been hired at the time the con-
tract was executed. 535 F.2d at 186, 187.
Here there is no question as to the majority status of
ILA in any conceivable appropriate unit, 71 and there is
no history of IUMSWA bargaining for any unit of Jack-
son employees.
Moreover, the General Counsel's assumption that all
these 23 employees would all be deemed to support
IUMSWA in bargaining with Jackson is quite dubious.
Thus, 21 of these 23 employees were not part of the
original crew of Jackson employees hired at the ship-
yard, they were all hired after the modification contract
was executed. These 21 employees were employed by
Brewer in the IUMSWA unit, but such employment ter-
minated by May at the latest. 72 Therefore, it is quite
conceivable that some or all of these employees may
have had interim employment with another employer be-
tween their layoffs from Brewer and their hire at Jack-
son. Thus, I find it difficult to presume in these circum-
stances that employees hired by Jackson on October 25,
a minimum of 6 months after their terminations from
Brewer, would still be deemed to support IUMSWA as
their collective-bargaining agent with Jackson. Such a
presumption, even if if could be made, is outweighed, re-
butted, or at least neutralized by a more well-established
presumption applicable to such employees. That is the
well-settled principle that newly hired employees in the
collective-bargaining unit are presumed to support the in-
cumbent union (the ILA herein) in the same proportion
as did Jackson's preexisting employees. 73 Therefore, I
find, if anything, that these 21 former Brewer employees
would be deemed to support ILA rather than IUMSWA
or at worst might be deemed to support neither union. In
no event does this record support a finding that they
I The General Counsel makes the rather puzzling argument that Jack-
son's recognition of the ILA At a time when no ILA members were em-
ployed in the yard establishes an 8(aX2) violation. This contention is not
encompassed by any allegation in the complaint, which alleges only the
execution of a contract in September as a violation of the Act, and only
because of the existence of a question concerning representation. The
complaint makes no reference to the recognition in June or otherwise as
a violation, nor does it make any reference to a lack of majority status of
ILA at any time. Thus, 1 find Respondents not to have been on notice of
this contention of the General Counsel and the issue was not fully litigat-
ed. In any event, since I have found the Staten Island facility to be a
relocation of the Brooklyn facilities, it is immaterial that no employees
were hired for that facility at the time the parties commenced bargaining
for a modification of their existing contract. See Pepsi Cola Bottlers supra:
Western Freight Association, et at, 172 NLRB 303 (1968).
"s As noted above, the record reveals a gradual layoff of Brewer's em-
ployees, so that it may be that some or all of these employees were termi-
nated by Brewer some months prior to May.
8 Marine Optical. supra; Mass. Machine & Stamping Inc., 231 NLRB
801 (1977); Liammert Industries, 229 NLRB 895 (1977), enfd. 578 F.2d
1223 (7th Cir. 1978).
have designated IUMSWA to represent them in bargain-
ing with Jackson.
Assuming, arguendo, that these 23 employees are pre-
sumed to be IUMSWA supporters in connection with
their employment at Jackson, I find that their employ-
ment by Jackson by October 25 is still insufficient to
create a colorable claim on the part of IUMSWA. Con-
trary to American Can and Hudson Berlind, supra, 21 of
these 23 employees, at the time that operations began at
the shipyard, had no reasonable expectation of being
hired by October 25 or at any other specific time. Jack-
son had assured the ILA and committed itself to hire all
its bargaining unit employees from its other facilities
who wished to transfer, and to additionally offer jobs to
those employees on layoff status.74 Jackson had received
some 500 applications for employment from outside
sources, including 100 from former Brewer unit employ-
ees, which it intended to utilize and in fact did turn to,
only after being unable to staff its facility from its own
employees. Moreover, although Jackson did anticipate an
expansion of work as a result of the opening of the new
facility, it could not and did not in September know nor
have reason to believe that such an expansion would
have occurred by October 25, or any other particular
date. In fact, the hiring of these additional employees
was necessitated primarily because Jackson acquired one
particular job which required expedited handling and the
hiring of a large number of employees.
Since the General Counsel concedes and the record
supports the fact that Jackson employed a representative
complement of employees when it commenced oper-
ations and executed its modification of the contract, and
a substantial majority of employees at the facility consist-
ed of preexisting Jackson employees, represented by the
ILA, any subsequent expansion of business even if antici-
pated by Jackson at the time the facility opened is imma-
terial. As the Board has held, "a determination of prema-
ture recognition cannot be predicated . . . on a possibil-
ity that future conditions may warrant an increase in per-
sonnel, or on the basis of an increase in personnel subse-
quent to the granting of recognition." Hayes Coal, supra
at 1163.
The correct test is the General Extrusion criteria,
which has concededly been met herein, and Jackson's ex-
pectation at the time of its purchase that future business
conditions would permit it to increase its work force
does not require a different result, even though that ex-
pectation was realized.7 5
The General Counsel's position herein, when examined
carefully, runs contrary to the well-established principle
that, assuming a representative complement is employed,
employees are entitled to a determination of representa-
tional rights at the time operations commence.76 Thus,
the General Counsel would urge that on the basis of
IUMSWA's demands, based on its invalid notions of ter-
"4 Jackson had 300-400 W-2 forms from such employees which it used
to staff its operations, and which it promised to and did exhaust before
hiring from other sources.
I' Hayes Coal supra: Lutheran Homes. supra
7" Lutheran Homes. supra; Lammert Industries. supra, Marine Optical,
supra
1709
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ritorial jurisdiction and an unsupported successorship
claim that Jackson should have refused to recognize and
bargain with the incumbent ILA who represented a sub-
stantial majority of the employees at the shipyard, be-
cause of a possibility that Jackson might at some unfore-
seen future time hire employees who when employed by
Brewer months before their potential hiring at Jackson
were represented by IUMSWA, and might therefore
wish to have IUMSWA represent them in collective bar-
gaining with Jackson. Such a speculative defense by
Jackson to a refusal-to-bargain charge would hardly be
accepted by the Board, and should not be given any
more credence when characterized by the General
Counsel as creating a real question concerning represen-
tation under Midwest Piping.
Accordingly, I find that none of the factors cited by
the General Counsel or otherwise appearing in the
record, either singly or collectively, are sufficient to raise
a colorable claim of representation on the part of
IUMSWA.
The General Counsel, during the course of the hearing
herein, contended that Jackson's unlawful payments to
the ILA demonstrated "a proclivity to deal with the
ILA," and was relevant to the Midwest Piping issue. No
case authority or other argument was presented to sup-
port this assertion, and the General Counsel's brief makes
no mention of this contention, suggesting perhaps an
abandonment of such a position. However, since it has
been raised and not formally abandoned, I deem it appro-
priate to consider such a contention.
Preliminarily, I know of no theory of Board law
which relies upon a "proclivity to deal with a labor or-
ganization" to establish a violation of the Act. There is
nothing unlawful about an employer wishing to continue
to deal with an incumbent union when it relocates its
plant, and I do not believe that the payment arrange-
ment, as found above, although unlawful, is sufficient in
and of itself to taint and invalidate the entire bargaining
relationship between the parties. Thus, the evidence re-
veals no connection between the payments and the deci-
sion to recognize the ILA at the Staten Isalnd facility
nor the decision to modify the existing contract between
the parties. I note that the prior contracts between the
parties were industrywide agreements, and the modifica-
tion bargaining was conducted without the participation
of any of the individuals involved in the payment
scheme. Such bargaining was conducted with the partici-
pation of and ratified by unit employees, and consisted of
numerous bona fide negotiating sessions with many
heated and spirited discussions as well as the normal give
and take of good-faith bargaining. Although the modifi-
cation resulted in some reductions in benefits for some
employees, such reductions were agreed to in exchange
for the promise of increased employment opportunities
and decasualization of work, which in fact has resulted
from Jackson's move to the new facility. In addition, the
contract, even as modified, contained higher benefits
than the Brewer's contract, which was typical of pierside
operations. Moreover, the parties pursuant to the reopen-
ing clauses in the agreement have subsequently bargained
and raised the contractual benefits substantially for the
unit employees. I find that the record indicates that, not-
withstanding the existence of the unlawful payment ar-
rangements, the employees of Jackson have received, at
all times material herein, vigorous and effective represen-
tation from the ILA.
In my judgment, it would be inequitable, unwarranted,
and unjustified to set aside this bargaining relationship
solely on the basis of the unlawful payment arrange-
ments.
Accordingly, I find that the existence of the unlawful
arrangements herein have not been shown to have affect-
ed the parties' actions in agreeing to modify their con-
tract and to extend it to the Staten Island facility, and I
do not deem it appropriate nor proper to draw such an
inference. 7 7
I therefore find that Respondents have not violated the
Act with respect to their activities in extending their
contract to the shipyard, as alleged in the complaint, and
I shall recommend dismissal of these allegations.
CONCLUSIONS OF LAW
1. The Respondent Employer, Jackson, is an employer
engaged in commerce within the meaning of Section 2(6)
and (7) of the Act.
2. The Respondent Union, ILA, is a labor organization
within the meaning of Section 2(5) of the Act.
3. Respondents by entering into and carrying out an
arrangement whereby Jackson made payments to the
ILA based on a percentage of business referred to Jack-
son by the ILA violated Sections 8(a)(1) and (2) and
8(b)(l)(A) of the Act.
4. Respondents did not violate the Act in connection
with their execution of an agreement in September 1979
covering employees at the Staten Island facility.
[Recommended Order omitted from publication.]
77 Although I consider the parties' participation in the unlawful pay-
ment scheme to constitute serious violations of the Act, I believe that a
cease-and-desist order would be an appropriate remedy for these viola-
tions, and the setting aside of their contract based on this conduct is not
warranted. Cf. Sweater Bee. supra, where unlawful payments to a union
were but one of the factors relied upon by the Board to rebut the pre-
sumption of majority status of the union, and to set aside an existing col-
lective-bargaining relationship.
1710