Panco Petroleum Co.

National Labor Relations Board - Board Decisions

May 23, 1989

294 N.L.R.B. 103 (N.L.R.B. 1989)

PANCO PETROLEUM CO
Panco Petroleum Co. and Local 445, International
Brotherhood of Teamsters , Chauffeurs, Ware-
housemen and Helpers of America , AFL-CIO.
Case 2-CA-22640
May 23, 1989
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
JOHANSEN AND CRACRAFT
On November 9,- 1988, Administrative Law
Judge Raymond P. Green issued the attached deci-
sion, The General Counsel and the Charging Party
filed exceptions and supporting briefs, and the Re-
spondent filed an answering brief to the General
Counsel's and Charging Party's exceptions and sup-
porting briefs.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings, findings, I and
conclusions2 and to adopt the recommended
Order.
ORDER
The recommended Order of the administrative
law judge is adopted and the complaint is dis-
missed.
1 The General Counsel and the Charging Party have excepted to some
of the judge's credibility findings The Board's established policy is not to
overrule an administrative law judge's credibility resolutions unless the
clear preponderance of all the relevant evidence convinces us that they
are incorrect Standard Dry Wall Products, 91 NLRB 544 (1950), enfd
188 F2d 362 (3d Cir 1951) We have carefully examined the record and
find no basis for reversing the findings
In the last paragraph of his decision, the judge found that the pretrial
affidavit of Respondent dispatcher and former Gurran Oil secretary Tom
Gurran, in which Gurran stated that the Respondent told Gurran that it
sought to rid itself of the Union, could not be used as substantive evi-
dence to establish the Respondent's union animus because the affidavit
was merely hearsay The relevant portion of this affidavit is reproduced
at fn 2 of the judge's decision It is unclear, however, whether the judge
credited Gurran's denial of the accuracy of this statement in the affidavit
Under these circumstances, and even assuming that the affidavit could be
used as substantive evidence establishing the Respondent' s union animus,
we agree with the judge that the Respondent would not have hired the
former Gurran truckdrivers even in the absence of their union activities
due to the prevailing economic circumstances at the time of the takeover
Accordingly, the Respondent did not violate Sec 8(a)(3) by failing to
hire these employees
2 In sec II,C, par 4, the judge concluded that even if the Respondent
had agreed to assume the Union contract with Gurran Oil on October 6,
1986, the Respondent could not have been the employer of the Gurran
employees on that date because the prospect of selling Gurran Oil to the
Respondent was merely speculative at the time Because we affirm the
judge's finding that the Respondent never agreed to assume the Union's
contract with Gurran Oil, we find it unnecessary to pass on the judge's
conclusion based on the above assumption
103
James Wasserman, Esq., for the General Counsel
Roger Gilson, Esq. (Jackson, Lewis, Schnitzler & Krupman)
and Pete G. Albert, Esq. (Levin Weissman), for the Re-
spondent
David Kramer, Esq., for the Charging Party
DECISION
STATEMENT OF THE CASE
RAYMOND P GREEN, Administrative Law Judge This
case was heard by me in New York City on May 31,
June 1, 2, 3, and 24, 1988 The charge in this case was
filed on January 28, 1988, and was amended on February
29, 1988. The complaint, which issued on March 11,
1988, alleged as follows:
1 That Local 445 has for many years, been the duly
designated collective-bargaining representative of the
drivers and mechanics of Gurran Oil Co Inc. employed
at that company's Stony Point, New York place of busi-
ness
2 That in or about July 1986, Gurran agreed to sell its
business to the Respondent, whose correct name is
Panco Equipment Corporation
3 That on or about October 6, 1986, Panco entered
into an oral agreement with Local 445 to.
(a) Hire all the drivers and mechanics employed by
Gurran
(b) Assume the existing collective-bargaining agree-
ment between Gurran and the Union.
(c) Dovetail the seniority of its own truckdrivers and
mechanics with the seniority of Gurran's truckdrivers
and mechanics
4 That on January 15, 1988, Gurran transferred its
assets to the Respondent
5 That Respondent closed its facility located at Valley
Cottage, New York, and moved it to the newly acquired
facility of Gurran located at Stoney Point, New York.
6. That on January 15, 1988, the Respondent did not
hire the former truckdrivers of Gurran because they
were members of the Union
7 That on January 15, 1988, the Respondent, contrary
to the prior oral agreement in October 1988, refused to
recognize the Union and has refused to assume the con-
tract the Union had with Gurran
8 That by the aforesaid acts, the Respondent has vio-
lated Section 8(a)(1), (3), and (5) of the Act
FINDINGS AND CONCLUSIONS
A Jurisdiction
The parties agree and I find that the Respondent is an
employer engaged in commerce within the meaning of
Section 2(2), (6), and (7) of the Act It also is agreed and
I find that the Union is a labor organization within the
meaning of Section 2(5) of the Act
B. Operative Facts
Gurran Oil Company Inc was a family owned compa-
ny located in Stony Point, New York, and was engaged
in the wholesale distribution of heating oil to homeown-
ers and businesses As such, its business was highly sea-
294 NLRB No 9
104 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
sonal As of October 1986, Gurran employed five truck-
drivers, one mechanic, and three office clerical employ-
ees The drivers and the mechanic were represented by
the Union and the most recent collective-bargaining
agreement had a term from September 15, 1985, to Sep-
tember 15, 1988 The covered employees were James Pa-
terson, Joe Picarello, John Marsh, Ronnie Babcock, Jude
Taylor, and Larry Marguitta The union agent responsi-
ble for dealing with Gurran was James Doohry
Gurran, for some time, had been looking to sell its
business and this was known to Doohry since October
1985 According to Doohry, he got a call from Thomas
Gurran in September 1986 advising him that the Gurrans
had a good prospect in the Panebianco brothers
Panco Equipment Corporation is also a family run
business which began in 1976 and was gron by acquiring
a number of small companies Although like Gurran, it
sells home heating oil, its business is somewhat more di-
versified and less seasonal as it also sells gasoline and
motor oil products As of October 1986 Panco's main
office and place of business was at Valley Cottage, New
York. It also had facilities in Sloatsberg, Pine Island, and
Warwick, New York, and at the Panebianco's mother's
home in Yonkers, New York (Nancy Panebianco is the
company's president and is an active participant in the
business.) As of October 10, 1986, Panco employed seven
truckdrivers, one mechanic, one mechanic's helper, one
service burner mechanic, one driver salesman, two dis-
patchers, one gasoline station attendant, and three cleri-
cal employees. At its Valley Cottage facility, Panco em-
ployed four drivers, one mechanic, and one mechanic's
helper.
The reasons that Panco wanted to acquire Gurran
were. (1) to increase its oil storage capacity; (2) to gain
access to barge traffic on the Hudson River, (3) to obtain
larger office and garage space, and (4) to obtain Gurran's
existing customer list
On October 6, 1986, Doohry met with John and Nich-
olas Panebianco at a restaurant Doohry and the Pane-
bianco brothers had never met before and their only pre-
vious contact was when Doohry phoned to set up this
meeting According to Doohry, he offered them copies
of the exising contract with Gurran and they said that
they had already obtained a copy They also said that
the contract had been given to their attorney for review
and that they didn't see any problem with it Doohry
states that he asked the Panebiancos when they expected
the transfer to take place and they said it was scheduled
for December 15, 1986 According to Doohry, he asked
what they thought of the union contract and they said
that there were no problems with it on the wages and
that they would agree to it but couldn't do anything at
this time because they didn't own Gurran Oil According
to Doohry, the Panebiancos said that they planned to
close Panco's Valley Cottage facility and to consolidate
their own operations with Gurran's facility at Stony
Point. He states that when he raised the issue of integrat-
ing the seniority status of the two sets of employees that
would be merged at Stony Point, John Panebianco sug-
gested that the seniority be dovetailed starting with
Panco's most senior man.
The Panebiancos agree that they met with Doohry on
October 6 but emphatically deny entering into any agree-
ments with him They testified that Doohry asked them
to assume the existing collective-bargaining agreement
and to hire Gurran's employees. They state that they
told Doohry that it was too premature to discuss em-
ployment for Gurran's employees but that it was their
hope that there would be jobs for everyone They claim
that Doohry said that they could rewrite the union con-
tract if they wanted and Doohry concedes that he told
the Panebiancos that the contract was open to negotia-
tion, that if they had any problems, he would be willing
to sit down with them and negotiate The Panebiancos
denied that they agreed to hire Gurran's employees, that
they agreed to dovetail seniority, or that they agreed to
assume Gurran's contract with Local 445. Indeed, al-
though I believe that the Panebiancos did anticipate
hiring the hourly employees of Gurran at wage rages
comparable to the union contract. I simply do not be-
lieve that these two men would have entered into an oral
agreement at a casual luncheon meeting with someone
they did not know, to assume a collective-bargaining
agreement and to guarantee employment to a group of
employees with whom they were not familiar From my
observation, the Panebiancos by education and tempera-
ment are not the type of businessmen who would casual-
ly enter into any agreements, much less an oral agree-
ment with a man they met for the first time at lunch In
fact, the Union's contention that the Panebianco's on Oc-
tober 6 made an oral agreement to assume the existing
collective-bargaining agreementis belied by the fact that
Doohry, on December 12, 1986, sent a letter requesting a
meeting to discuss the continuation of the terms and con-
ditions of the current collective-bargaining agreement. (I
note that this letter did not refer to the oral agreement
allegedly made back on October 6.)
Between October and the scheduled transfer date in
December 1986, a number of problems began to surface.
For one thing Gurran was not forthcoming concerning
requests for financial information regarding the former's
business Also, it was discovered that there was a great
deal of oil seepage on Gurran's property which would
require an extensive cleanup
Sometime, probably in December 1986, the Pane-
bianco brothers went to Gurran's facility at Thomas
Gurran's request Based on the credible testimony of the
Panebiancos, it appears that they told Gurran's employ-
ees that negotiations for the sale were still on, but that it
did not look like they would meet the December closing
date They state that there was a discussion regarding se-
niority but that they did not tell Gurran's employees that
they had guaranteed jobs, that the Union was going to
be recognized or that the Union's contract was going to
be assumed.
Because of the oil seepage problem and because Panco
was not furnished with all the requested data from
Gurran, the transfer was put off
A year later, in December 1987, Panco was given the
financial information it had earlier requested After re-
viewing,the data, the Panebiancos decided to go ahead
with the purchase despite serious problems in Gurran's
PANCO PETROLEUM CO 105
business They decided to do so because the purchase of
the Stony Point facility would give them a tremendous
expansion of their oil storage capacity and because it
would give them access to the Hudson River barge traf-
fic which would reduce the cost of receiving oil. Ac-
cording to the Panebiancos, they discoverd after review-
ing Gurran's records, that a significant portion of Gur-
ran's business was based on contracts which resulted in
oil being sold to commercial customers at or near cost
Further, they discovered that one major account (Corn-
wall Paper) had not paid its bills for quite some time
Consequently, the Panebiancos decided to terminate a
substantial number of Gurran's commercial accounts and
to service the remaining accounts with Panco's existing
drivers by integrating deliveries into their existing routes.
The end result was that the Panebiancos decided that
there was no need at that time to employ any additional
drivers and they therefore decided not to hire Gurrna's
drivers (As of January 1988, Gurran's unionized work
force had been reduced from six for four as one of its
drivers and its mechanics had resigned in 1987 and nei-
ther had been replaced.')
On January 15, the assets of Gurran were transferred
to Panco. On that date the Panebianco brothers were at
Gurran's facility where, among other things, they asked
Gurran's drivers to fill out job applications but told them
that there was not enough work to hire them at that
time Gurran's drivers were also told that if business
picked up they would be the first ones called for em-
ployment 2
Following the transfer of assets, Panco moved its
Valley Cottage operations to Stony Point and began op-
erations there on February 1, 1988 As of January 21,
1988, Panco employed 11 truckdrivers, 1 mechanic who
was assigned to Stony Point, and it hired a mechanic's
helper for that location in February 1988. After January
15, 1988, Panco did not hire any new truckdrivers or
mechanics and was able to service all accounts with its
existing work force
C Discussion
In Fall River Dyeing Corp v. NLRB, 482 US 27
(1987), the Supreme Court held that a purchasing em-
ployer is required to recognize and bargain with a union
representing the seller's employees when there is a "sub-
stantial continuity" of operations after the sale and if a
majority of the purchaser's work force, in an appropriate
unit, consists of the precedessor's employees when the
i In late December 1987, Panco hired one new driver for its Valley
Cottage facility, albeit that person did not begin to work until January
16, 1988 The new driver, Chris Molitero, was hired to replace Joe Do-
herty who left Panco at the end of December 1987
2 Thomas Gurran, who was hired by Panco as a dispatcher, gave an
affidavit to the Board's Regional Office on February 26, 1988 This read
in part
This is the first time I learned that the Panebtancos would not rehire
our men if the Union was there I did speak to John Panebianco on
1/5/88 1 said if they wanted to get rid of the Union there
were better ways to do it, that they could let the contract run out
and not renew it John Panebianco said it was best for the business
to rid of the local or words to that effect They said the men could
come in and fill out applications The Panebiancos did not say that
there was not enough work for the men or anything to that effect
successor has reached a "substantial and representative
complement." 11
In my opinion, under circumstances most favorable to
the General Counsel, and assuming for argument's sake
that Panco had hired all four of Gurran's drivers when it
took over the latter's facility, the work force after the
takeover would have consisted of 4 Gurran's employees
in a minimum unit of 10 Panco employees Therefore,
even assuming that the smallest appropriate bargaining
unit would have been the drivers and mechanics at the
Stony Point facility, the majority of that work force,
when it reached a "substantial and representative com-
plement" would not have consisted of the predecessor's
employees 3
Notwithstanding the above, the General Counsel pos-
tulates an interesting if not persuasive theory as to why
Panco should be considered a successor having an obli-
gation to bargain with the Union He contends that on
October 6, 1986 (14 months before the actual takeover),
Panco entered into an agreement with the Union (albiet
an oral one) whereby it contracted to hire all of Gurran's
drivers and mechanics, agreed to assume the existing
contract between Gurran and the Union, and agreed to
dovetail the seniority of both sets of employees when it
merged its own operations with Gurran's operations at
the Sandy Point facility The General Counsel then
makes the contention that as of October 5, 1986, Panco
became the employer of Gurran's unionized work force
(then consisting of six employees) and from that date,
bound itself to the existing collective-bargaining agree-
ment between Gurran and the Union From this postu-
late, the General Counsel then argues that when Panco
finally took title of Gurran's facility in January 1988 and
moved its (Panco's) operations from Valley Cottage to
Stony Point, the employees who had formerly worked at
Valley Cottage simply became an "accretion" to the ex-
isting bargaining unit at Stony Point which had recog-
nized back in October 1986.
Even assuming that I were to credit Doohry's testimo-
ny in toto, I still cannot see how Panco became the em-
ployer of Gurran's employees in October 1986. Those
people continued to work solely for Gurran, were paid
by Gurran, and the prospect of the sale was still only
speculative At most, it might be argued that Panco, on
October 6, 1986, agreed that it would hire Gurran's em-
ployees when and if Panco took over Gurran's oper-
ations As such, had such an agreement been made and
carried out, this still would have meant that Panco's
work force at Stony Point after the takeover, would
have consisted of 4 Gurran drivers out of a minimum
unit of 10 employees. Thus, under the rational of Fall
River Dyeing Corp., supra, Panco would not be construed
as a successor with an obligation to recognize and bar-
gain with the Union.
Moreover, I have already concluded that no such oral
agreement was made on October 6, 1986, or at any other
time. As noted above, I do not believe that the Panebian-
3 A reasoned argument can be made that the smallest appropriate bar-
gaining unit for Panco would be all of its drivers and mechanics em-
ployed at all of its facilities in light of the integration of its operations
However, I do not have to decide that question in this case
106 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
cos at a luncheon meeting with a man they had never
met before, entered into a contract to employ the em-
ployees of another company if and when that company's
assets were purchased at a future time Nor do I con-
clude that they made an agreement to assume the collec-
tive-bargaining agreement that the Union had with
Gurran nor that they agreed to dovetail seniority in the
event that the two sets of employees were merged At
most, I conclude that the Panebiancos said that they
hoped that they could employ Gurran's workers if a sale
was made and indicated that Panco's existing wages and
benefits were comparable to those in the union contract
Accordingly, as I do not credit Doohry's version of the
October 6, 1986 transaction, the linchpin of the General
Counsel's theory is missing
I also conclude that Panco did not discriminatorily
refuse to hire the truckdrivers employed by Gurran
when it took over the latter's operations In my opinion,
the evidence shows that when the Panebiancos finally, in
December 1987, obtained Gurran's financial records,
they realized that Gurran was having substantial business
problems Despite these problems (and the problem of
cleaing up the oil seepage) the Panebiancos decided to
go ahead with the purchase, mainly in order to expand
its storage facilities and to gain access to the barge traffic
on the Hudson River. At the same time I credit their as-
sertion that they decided to pare down Gurran's business
by eliminating some of that company's commercial cus-
tomers who, in some cases were getting oil at substantial
discounts and in other cases had not paid their bills.
It is my opinion that at the time of the takeover,
Panco, having decided for legitimate economic reasons
to eliminate some of Gurran's larger customers, had no
need to hire Gurran's drivers and could and did service
the business by using its existing work force 4 To the
extent that the pretrial affidavit of Gurran asserts that
John Panebianco said something to the effect that the
was not hiring Gurran's drivers in order to get rid of the
Union, I have concluded that this affidavit, which in this
respect was not adopted by Gurran, constitutes hearsay
and may not be relied on to prove the alleged statement
by John Panebianco who denied
CONCLUSIONS OF LAW
1 Respondent, Panco Equipment Corporation, is an
employer engaged in interstate commerce within the
meaning of Section 2(2), (6), and (7) of the Act.
2. Local 445 International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of America is a
labor organization within the meaning of Section 2(5) of
the Act
3 The Respondent has not violated the Act as alleged
in the complaint
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed5
ORDER
The complaint is dismissed.
4 The fact that Panco's drivers after the takeover worked considerable
amounts of overtime is not deemed to be material The evidence shows
that during the heating oil season (winter) the truckdrivers of both Panco
and Gurran have historically worked a great deal of overtime and this
seems to be standard industry practice
5 If no exceptions are filed as provided by Sec 102 46 of the Board's
Rules and Regulations , the findings , conclusions, and recommended
Order shall, as provided in Sec 102 48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses