The Alexander Milburn Co.

National Labor Relations Board - Board Decisions

Jul 30, 1947

78 N.L.R.B. 747 (N.L.R.B. 1947)

In the Matter of THE ALEXANDER MILBURN COMPANY and UNITE'
ELECTRICAL , RADIO & MACHINE WORKERS OF AMERICA, C. I. O.
Case No. 5-C-1564
Messrs. Earle K. Shawe and Sidney J. Barban, for the Board.
Mr. Jacob Blum, of Baltimore , Md., appearing specially , for the
Respondent.
Messrs. William F. Howe and John E . Ritzert, of Washington, D.C.,
appearing specially, for The Black Manufacturing Company.
Mr. Jack Myers , of Baltimore , Md., and Mrs . Ruth Roemer, of
Washington , D. C., for the Union.
SUPPLEMENTAL DECISION
AND
AMENDED ORDER
July 30, 1947
On March 28, 1947, Trial Examiner Irving Rogosin issued his Sup-
plemental Intermediate Report in the above-entitled proceeding, find-
ing that The Black Manufacturing Company, Baltimore, Maryland,
herein called the Black Company, was, and had been since February 1,
1945, the successor of the Respondent, and responsible for remedying
the unfair labor practices engaged in by the Respondent, and that,
by failing to remedy such unfair labor practices, the Black Company
had engaged in unfair labor practices, within the meaning of Section
8 (1), (3), and (5) of the Act. He therefore recommended that the
Respondent and the Black Company cease and desist from their unfair
labor practices and take certain affirmative action, as set forth in the
copy of the Supplemental Intermediate Report attached hereto.
Thereafter, the Respondent and the Black Company filed exceptions
to the Supplemental Intermediate Report, and the Black Company
I In our or;ginal Decision and Order herein, issued June 18, 1945 ( 62 N. L. R. B. 482),
we found that the Respondent , The Alexander Milburn Company , had engaged in unfair
labor practices, within the meaning of Section 8 ( 1), (3), and ( 5) of the National Labor
Relations Act, and directed that it and its officers , agents, successors , and assigns cease
and desist therefrom and'take certain affirmative action designed to effectuate the policies
of the Act The provisions of Section 8 (1), (3), and ( 5) of the Act , insofar as material
herein , are continued in Section 8 (a) (1), (3 ), and (5 ) of the Act as amended by the
Labor Management Relations Act, 1947.
78 N. L. R B , No 87.
747
748 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
filed a brief in support of its exceptions. On January 29, 1948, oral
argument was heard by the Board in Washington, D. C. The Black
Company and the Union participated. The Respondent did not
appear.
The Board has reviewed the rulings made by the Trial Examiner at
the reopened hearing, and finds that no prejudicial error was coin-
mitted. The 'rulings are hereby affirmed. The Board has considered
the Supplemental Intermediate Report, the exceptions and brief, and
the entire record in the case, and hereby adopts the findings, conclu-
sions, and recommendations of the Trial Examiner with the excep-
tions, additions, and modifications noted below.
1. We agree with the Trial Examiner's findings that the Black
Company is a successor to the Respondent and, as such, responsible for
remedying its unfair labor practices.
The record shows, as the Trial Examiner has found, that the Black
Company, on or about February 1, 1945, acquired the business and
assets of the Respondent. Since that time, the Black Company has
occupied the plant under a lease from the Respondent, and has con-
tinued to manufacture, under patent licenses acquired from the Re-
spondent, products which the Respondent formerly manufactured.
The Black Company undertook to complete all unfulfilled contracts
of the Respondent. It retained all the Respondent's employees, and
otherwise has operated the business without any outward evidence of
change in personnel or supervision, except that Alexander Jenkins,
the Respondent's president and general manager, was succeeded by
S. Duncan Black, Jr., president of the Black Company, and the
authority of William Graham, the plant manager, was somewhat
curtailed.
Further, the Trial Examiner has found, and we agree, that the
Black Company acquired the business with knowledge of the existence
of this unfair labor practice proceeding pending against the Respond-
ent.2 Nevertheless, the Black Company continued, from the time of
its acquisition of the business until the reopened hearing in this case, to
S The Black Company excepts to the Trial Examiner's finding that it had knowledge of the
Respondent 's unfair labor practices , on the ground that he erred in crediting the testimony
of Jacob Blum , the Respondent 's attorney , as against that of Enos Stockbridge , the attorney.
who represented the Black Company in its negotiations with the Respondent , as to a con-
versation between them in January 1945 As we have previously stated, however, it is an
established principle of this Board that a Trial Examiner 's credibility findings are entitled
to great weight because, in resolving conflicting testimony , he is in a position to observe
the demeanor of the witnesses on the stand ; we are therefore reluctant to disturb such find-
ings unless they clearly appear to be unreasonable . Matter of Robbins Tire & Rubber Co.,
69 N. L. R. B 440. In this case , we find no reason to reverse the Trial Examiner 's finding.
Furthermore , Stockbridge 's own testimony shows that Blum informed him, in answer to his
inquiry , that a question of the Union 's representative status was pending before the Board
we are of the opinion that this information was sufficient to put him on notice of the
pending proceeding.
THE ALEXANDER MILBURN COMPANY 749
operate the business without discernible change in labor policy. Thus
the Black Company has effectively substituted itself not only as suc-
cessor in the Respondent's business enterprise, but also as beneficiary
of the Respondent's unremedied unfair labor practices. The coercive
effects of such unfair labor practices must be presumed to have con-
tinued, in the absence of evidence that some steps have been taken to
mitigate the restraint thus imposed upon the employees in the exercise
of their right to organize and bargain collectively under the Act.
Under these circumstances, we are convinced that, in order to restore
to the employees the free exercise of their statutory rights and to
effectuate the purposes of the Act, the Black Company must be held
to have assumed the obligation of remedying these unfair labor
practices.3
We find that the Black Company is a successor to the Respondent
within the meaning of our Order of June 18, 1945, and that it is
responsible, jointly and severally with the Respondent, for taking the
remedial action described therein.4
In excepting to the Trial Examiner's findings, however, the Black
Company contends, inter alia, that under the decision of the Supreme
Court in Regal Knitwear Corn panty v. N. L. R. B.,' our Order of June
18, 1945, cannot reach the Black Company. We find no merit in this
contention.
It is true that in the Regal Knitwear case, the Supreme Court held
that the inclusion of the term "successors and assigns" in a Board or-
der, although permissible, may not enlarge the scope of the order
beyond that defined by Rule 65 of the Federal Rules of Procedure,
which provides, in part, that "Every order granting an injunction
and every restraining order .. . is binding only upon the parties to
the action, their officers, agents, servants, employees, and attorneys,
and upon those persons in active concert or participation with them
who receive actual notice of the order by personal service or otherwise."
In that case, however, the Court had no specific facts regarding suc-
cessorship before it, and did not attempt to define the kinds of succes-
sors that might be reached under the terms of the rule. We do not,
therefore, interpret the decision as implying that a successor such
as that involved herein, which, with knowledge of the commission of
unfair labor practices, takes over the entire business, personnel, and
labor relations of its predecessor, is not responsible for taking the
3 See Matter of National Garment Company , 69 N. L. R B 1208, enf 'd 166 F . ( 2d) 233;
cert. denied June 14 , 1948 - - r
4 For discussion of a related problem under the Selective Training and Service Act of
1940, as amended, see Interpretative Bulletin and Legal Guide of the U. S. Department of
Labor ( January 1948), pp. 61-63.
5 324 U. S. 9.
750 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
necessary measures to mitigate the effect of such unfair labor prac-
tices and restore to its employees the free exercise of their rights
guaranteed by the Act.
Furthermore, although the liability of successors under our orders
has not been conclusively determined except where the successor Qp-
erates merely as a "disguised continuance" or alter ego of an employer
found to have engaged in unfair labor practices,' the courts have
indicated that under some circumstances good faith successors may
also be reached. Thus, in the case of LeToumneau Company of Geor-
gia v. N. L. R. B.,' decided since the Regal Knitwear decision, the
Circuit Court of Appeals for the Fifth-Circuit, in discussing the
effect of a decree enforcing a Board order, said :
A decree of injunction, like other personal judgments, binds
parties and their privies, and only these. This Company's offi-
cers, agents and successors, though not parties to this case per-
sonally, are privies of the Company. All that is necessary here-
after to bind any of them is to notify them of the injunction... .
As to assigns, they may or may not be bound by such an injunction.
If the assignment be of the Company's whole plant and business,
it is probable the assignee would be bound as a successor.8
Consideration of the public interest involved in effectuating the
policies of the Act clearly supports this view, and we interpret Rule
65 accordingly.
In the case before us, there is no showing that the Black Company
is, in any sense, an alter ego or disguised continuance of the Respond-
ent, or that it participated with the Respondent in the commission
of the Respondent's unfair labor practices. It is plain, however, that,
insofar as the employees are concerned, the transfer of the Respond-
ent's business to the Black Company made no real difference. They
performed the same work after as before the transfer, in the same
place, under the same terns and conditions of employment, and under
the direction and control of the same supervisors. The.unfair labor
practices which had been committed by the Respondent remained with-
out remedy. Under these circumstances, the employees had no reason
to believe that the labor policies of the successor were other than those
6 Southport Petroleum Co. v. N. L R. B., 315 U. S. 100.
7150 F (2d) 1012.
'See, also , Southport Petroleum Co. v. N. L. R. B, 315 U S 100; N. L. R B. v. Arthur J
Cotten and Abe J. Colman, co-partners d/b/a Kiddie Kover Manufacturing Company, 105
F (2d) 179 (C. C A 6) , Bethlehem Steel Company v N. L R B, 120 F. (2d) 641 (App.
D C ) ; N. L. R. B. v. Weirton Steel Co., 135 F. ( 2d) 494 (C. C. A 3 ). See also, Walling
Administrator S. Reuter, 321 U. S. 671 ; and Interstate Commerce Commission v. Western
N. Y & P R Co, 82 Fed 192 (Cir. Ct. W. D. Pa. 1897).
THE ALEXANDER MILBURN COMPANY 751
of the predecessor.9 Indeed, the record shows that when the Union,
with which the Respondent had unlawfully refused to bargain, re-
quested a bargaining conference with the Black Company, the Black
Company ignored the request. We are convinced that in these circum-
stances the coercive effects of the Respondent's unfair labor practices
can only be dissipated by requiring the Black Company, as well as
the Respondent, to take appropriate steps to remedy such unfair labor
practices.
2. The Trial Examiner has also found that the Black Company, by
failing to remedy the unfair labor practices of the Respondent, has
itself engaged in unfair labor practices, within the meaning of the
Act. The record shows, however, that this issue was not raised either
in the formal papers in the case or at any stage of the proceeding
prior to the issuance of the Intermediate Report. For procedural
reasons, therefore, we shall reverse the Trial Examiner's finding on
this point, without deciding, on the merits, whether the failure of a
successor employer to remedy unfair labor practices of its predecessor
may, per se, constitute a violation of the Act.
3. The Black Company contends that it has been denied due process
of law by reason of the fact that it was given no notice, in the form
of a statutory complaint or otherwise, that it was being charged with
violating the Act. We find no merit in this contention.
As discussed above, our conclusion that the Black Company is re-
sponsible for remedying the unfair labor practices of the Respondent
is not predicated on any finding that the Black Company has itself
violated the Act, but on its successorship to the Respondent; and the
record shows that it had ample notice that the Board, in reopening
the record after the issuance of its Decision and Order of June 18,
1945, was proceeding on this theory. Thus, the Board's Order Re-
opening Record, which was duly served upon the Black Company,
stated, in part, that the purpose of the supplemental hearing was to
receive evidence on :
1. The relationship between The Alexander Milburn Company
and the Black Manufacturing Company.
4. The responsibilities of the respective Companies for remedy-
ing the unfair labor practices found in the Board's Decision and
Order of June 18, 1945.
' See N L. R B v. Blair Quarrves , 152 F. ( 2d) 25 (C C. A 4), in which the Court, in
speaking of the effect of a bona fide lease, said :
It is obvious that the employees would be likely to interpret the subsequent actions
of Blair as a continuation of former policies, since notwithstanding the execution of
the lease , the personnel of the management and supervisory employees was substan-
tially the same. The change of ownership did not erase the memory of past
transactions.
752 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
And the reply of counsel for the Board to the Black Company's motion
for due notice, furnished during the course of the subsequent hearing,
stated that:
It is the contention of Counsel for the Board that the Black
Company is an agent, successor or assign of The Alexander
Milburn Company within the meaning of the Decision and Order
of the Board entered in this matter ...
and that :
It is the further contention of Counsel for the Board that since
Black Manufacturing Company has taken over from The Alex-
ander Milburn Company the employing enterprise in which the
unfair labor practices were committed- and has thereby put it
beyond the power of The Alexander Milburn Company to take
in full the affirmative action required to remedy the unfair labor
practices; and since it has thereby substituted itself for The
Alexander Milburn Company as both the beneficiary of the un-
remedied unfair labor practices and the instrumentality capable
of taking the requisite remedial action, the Board's order should
specifically name Black Manufacturing Company as an agency
required to take the requisite remedial action prescribed in para-
graph (2) of the Board's Order.
In view of these circumstances, and the fact that it had full oppor-
tunity at the hearing to present evidence on the question of successor-
ship, the Black Company cannot validly claim that it was denied due
notice and a fair hearing.
4. Having found that the Respondent and its successor, the Black
Company, are jointly and severally responsible for remedying the
unfair labor practices found in our Decision and Order of June 18,
1945, we shall amend our Order to require them, jointly and severally,
to cease and desist from such practices and to take the affirmative
action set forth therein.
It appears, however, that the Union has not complied with the
provisions of Section 9 (f), (g), and (h) of the Act, as amended, which
provisions are now in effect. We shall, therefore, in accordance with
the decision of the Board in Matter of Marshall and Bruce Company,10
and for the reasons stated therein, modify our Order that the Respond-
ent and the Black Company, upon request, bargain collectively with
the Union as the exclusive representative of the employees in the
appropriate unit, and shall condition our Order, in part, upon com-
'0 75 N . L. R. B. 90.
THE ALEXANDER MILBURN COMPANY 753
pliance by the Union with that section of the amended Act within
30 days- from the date of our Amended Order herein"
AMENDED ORDER
Upon the entire record in the case, and pursuant to Section 10
(c) of the National Labor Relations Act, as amended, the National
Labor Relations Board hereby orders that the Respondent, The Alex-
ander Milburn Company, Baltimore, Maryland, and its successor,
The Black Manufacturing Company, Baltimore, Maryland, jointly
and severally, and their officers, agents, successors, and assigns, shall :
1. Cease and desist from :
(a) Discouraging membership in United Electrical, Radio & Ma-
chine Workers of America, affiliated with the Congress of Industrial
Organizations, or in any other labor organization of their employees,
by discharging, suspending, transferring to inferior positions, or re-
fusing to reinstate any of their employees, or in any other manner
discriminating in regard to their hire or tenure of employment, or
any term or condition of their employment;
(b) Refusing to bargain collectively, in respect to rates of pay,
wages, hours of employment, and other conditions of employment,
with United Electrical, Radio & Machine Workers of America, affili-
ated with the Congress of Industrial Organizations, if and when said
labor organization shall have complied, within thirty (30) days from
the date of this Order, with Section 9 (f), (g), and (h) of the Act as
amended, as the exclusive bargaining representative of all their pro-
duction and maintenance employees, excluding all general office em-
ployees, foremen, and executives;
(c) In any other manner interfering with, restraining, or coercing
their employees in the exercise of the right to self-organization, to
form labor organizations, to join or assist United Electrical, Radio 8
Machine Workers of America, affiliated with the Congress of Indus-
trial Organizations, or any other labor organization, to bargain col-
lectively through representatives of their own choosing, and to engage
in other concerted activities for the purpose of collective bargaining
or other mutual aid or protection, as guaranteed in Section 7 of the
Act, as amended.
2. Take the following affirmative action, which the Board finds will
effectuate the policies of the Act, as amended :
(a) Offer William Collins immediate and full reinstatement to the
position held by him immediately prior to his induction into the Army
"As to what constitutes compliance in this respect, see Matter of Northern Virginia
Broadcasters, Inc, 75 N. L. R. B. 11.
754 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
on November 4, 1942, or to a substantially equivalent position, without
prejudice to his seniority and other rights and privileges;
(b) Make whole William Collins for any loss of pay he may have
suffered by reason of the failure or refusal by the Respondent, the
Alexander Milburn Company, or its successor, The Black Manufac-
turing Company, following the issuance of our Order of June 18, 1945,
to offer him reinstatement in accordance with paragraph 2 (a) of said
Order, by payment to him of a sum of money equal to the amount which
he normally would have earned as wages, had he been reinstated,
during the period from five (5) days after the. date of said Order to
the date on which he is offered such reinstatement, less his net earnings
during such period;
(c) Offer Albert Kash immediate and full reinstatement to the
position held by him prior to November 17, 1942, the date of his dis-
criminatory suspension, or to a substantially equivalent position,
without prejudice to his seniority and other rights and privileges;
(d) Make whole Albert Kash for any loss of pay he may have suf-
fered by reason of the discrimination against him, by payment to him
of a sum of money equal to the amount which he normally would
have earned as wages during the periods from November 17 to De-
cember 2, 1942, and from December 3, 1942, to the date of the offer of
reinstatement, less his net earnings during said periods ;
(e) Make whole Ernest Burns and O. E. Biles for any loss of pay
they may have suffered by reason of the Respondent's discrimination
against them, by payment to each of them of a sum of money equal
to the amount which he normally would have earned as wages during
the period from the date of the respondent's discrimination against
him to the date on which he obtained the employment held by him at
the time of the original hearing herein, less his net earnings during
said period, and less any amounts already paid him by the Respondent
as reimbursement for the loss of pay suffered by him by reason of the
Respondent's discrimination against him;
(f) Upon request, and upon compliance by United Electrical, Radio
& Machine Workers of America, affiliated with the Congress of Indus-
trial Organizations, with the filing requirements of the Act, as
amended, in the manner set forth above, bargain collectively, in respect
to rates of pay, wages, hours of employment, and other conditions of
employment, with United Electrical, Radio & Machine Workers of
America, affiliated with the Congress of Industrial Organizations, as
the exclusive representative of all their production and maintenance
employees, excluding all general office employees, foremen, and
executives;
THE ALEXANDER MILBURN COMPANY 755
(g) Post at the plant of The Black Manufacturing Company, at
Baltimore, Maryland, copies of the notice attached hereto, marked
"Appendix A." 12 Copies of said notice, to be furnished by the Re-
gional Director for the Fifth Region, shall, after being duly signed by
representatives of the Respondent and The Black Manufacturing Com-
pany, respectively, be posted by them immediately upon receipt thereof,
and maintained by them for sixty (60) consecutive days thereafter, in
conspicuous places, including all places where notices to employees are
customarily posted. Reasonable steps shall be taken by the Re-
spondent and the Black Company to insure that said notices are not
altered, defaced, or covered by any other material ;
(h) Notify the Regional Director for the Fifth Region in writing,
within ten (10) days from the date of this Order, what steps the Re-
spondent, The Alexander Milburn Company, and its successor, The
Black Manufacturing Company, have taken to comply herewith.
MEMBER GRAY took no part in the consideration of the above Decision
and Order.
MEMBER MURDOCK, dissenting :
Granting that the Board might have the legal power to issue its
order directing the Black Company, as a successor to The Alexander
Milburn Company, to remedy unfair labor practices committed by the
latter company, I cannot agree with the wisdom of the exercise of such
power under the circumstances of this case. I readily concede that
the order under the majority decision is one which "will effectuate the
policies of the Act." But the question is whether in going so far to
effectuate the policies of the Act which we administer, we do harm to
other public policies involved in the desirability of permitting persons
to buy and sell property without subjection to undue restrictions and
hazards. In Southern S. S. Co. v. N. L. R. B., 316 U. S. 31, the Supreme
Court cautioned the Board against placing such "excessive emphasis"
on effectuating the policies of its own Act as to ignore other important
considerations of public policy. Although such emphasis by the ma-
jority in the instant case may be within legal bounds, I am constrained
in the exercise of my discretion, not to go so far.
APPENDIX A
NOTICE TO ALL EMPLOYEES
Pursuant to a Supplemental Decision and Amended Order of the
National Labor Relations Board, and in order to effectuate the policies
12 In the event that this Order is enforced by decree of a Circuit Court of Appeals, there
shall be inserted, before the words, "A Supplemental Decision and Amended Order," the
words. "A Decree of the United States Circuit Court of Appeals Enforcing."
756 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
of the National Labor Relations Act, as amended , we hereby notify
our employees that :
WE WILL NOT in any manner interfere with, restrain , or coerce
our employees in the exercise of their right to self -organization,
to form labor organizations , to join or assist United Electrical,
Radio & Machine Workers of America, affiliated with the Congress
of Industrial Organizations , or any other labor organization, to
bargain collectively through representatives of their own choos-
ing, and to engage in concerted activities for the purpose of col-
lective bargaining or other mutual aid or protection.
WE WILL OFFER to Albert Kash immediate and full reinstatement
to the position held by him prior to November 17 , 1942, or to a
substantially equivalent position , without prejudice to any senior-
ity or other rights and privileges previously enjoyed by him, and
make him whole for any loss of pay suffered as a result of the
various acts of discrimination against him.
WE WILL OFFER to William Collins immediate and full rein-
statement to the position held by him immediately prior to
November 4, 1942, or to a substantially equivalent position, with-
out prejudice to any seniority or other rights and privileges pre-
viously enjoyed by him, and will make him whole for any loss of
pay suffered as a result of our failure to reinstate him in accord-
ance with the Order of the National Labor Relations Board
issued June 18, 1945.
WE WILL BARGAIN collectively upon request with the above-
named Union as the exclusive bargaining representative of all
employees in the bargaining unit described herein with respect
to rates of pay, hours of employment , or other conditions of em-
ployment , and if an understanding is reached , embody such under-
standing in a signed agreement ; provided said labor organization
complies within thirty (30) days from the date of the aforesaid
Amended Order of the Board, with Section 9 (f), (g), and (h) of
the National Labor Relations Act, as amended . The bargaining
unit is: all production and maintenance employees , excluding all
general office employees , foremen, and executives.
All our employees are free to become or remain members of the
above-named Union or any other labor organization . We will not
discriminate in regard to hire or tenure of employment or any term
THE ALEXANDER MILBURN COMPANY 757
or condition of employment against any employee because of member-
ship in or activity on behalf of any such labor organization.
THE ALEXANDER MILBURN COMPANY,
Employer.
------------------- ------------------------
(Representative ) ( Title)
THE BLACK MANUFACTURING COMPANY,
Successor to Employer.
By -------------------------------------------
(Representative ) (Title)
Dated ------------------------
This notice must remain posted for 60 days from the date hereof,
and must not be altered, defaced, or covered by any other material.
SUPPLEMENTAL INTERMEDIATE REPORT
Messrs. Earle K. Sham and Sidney J. Barban, for the Board.
Mr. Jacob Mimi, of Baltimore, Md, appearing specially, for the respondent.
Messrs William F. Howe and John E. Ritzert, of Washington, D. C., appearing
specially, for The Black Manufacturing Company.
Mr Jack Myers, for the Union.
STATEMENT OF THE CASE
Upon charges duly filed by United Electrical, Radio & Machine Workers of
America, affiliated with the Congress of Industrial Organizations, herein called
the Union, the National Labor Relations Board, herein called the Board, by
its Regional Director for the Fifth Region (Baltimore, Maryland), issued its
complaint dated May 30, 1944, against The Alexander Milburn Company, Balti-
more, Maryland, herein called the respondent, alleging that the respondent had
engaged in and was engaging in unfair labor practices affecting commerce, within
the meaning of Section 8 (1), (3), and (5) and Section 2 (6) and (7) of the
National Labor Relations Act, 49 Stat. 449, herein called the Act. Copies of
the complaint, together with Notice of Hearing thereon, were duly served upon
the respondent and the Union.
Thereafter, the respondent filed its answer, in which it admitted certain alle-
gations of the complaint but denied that it had engaged in the alleged unfair
labor practices.
Pursuant to Notice of Hearing duly served upon the respondent and the Union,
a hearing was held in Baltimore, Mara land, on sundry dates between June 19
and 30, 1944, inclusive, before Walter Wilbur, the Trial Examiner duly designated
by the Chief Trial Examiner. The Board and the respondent were rep_esented by
counsel, and the Union by a representative. Full opportunity to be heard, to
examine and cross-examine witnesses, and to introduce evidence bearing upon
the issues was afforded all parties. At the close of the hearing, counsel for the
Board and for the respondent argued orally before the Trial Examiner.
Thereafter, on August 21, 1944, the Trial Examiner issued In,,, Intermediate
Report, copies of uuhich were duly served upon the respondent and the Union,
in which he found that the respondent had engaged in, and was engaging in,
798767-49--ol 78-49
758 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
unfair labor practices affecting commerce, within the meaning of Section 8 (1),
(3), and (5) and Section 2 (6) and (7) of the Act, and recommended that it
cease and desist therefrom and take certain affirmative action designed to effec-
tuate the policies of the Act. Exceptions to the Intermediate Report were there-
after filed by the respondent, the Union, and counsel for the Board.
Upon request of the parties and pursuant to notice, a hearing was duly held
before the Board in Washington, D. C., on December 14, 1944, for the purpose
of oral argument. The respondent and the Union were represented by counsel
and participated in the hearing.
On June 18, 1945, the Board issued its Decision and Order,' in which it found
that the respondent had engaged in and was engaging in unfair labor practices
affecting commerce, within the meaning of Section 8 (1), (3), and (5) of the Act,
and recommended that it cease and desist therefrom and take certain affirmative
action designed to effectuate the policies of the Act?
It having been represented to the Board, when the matter was on before it for
oral argument, that the respondent had, since the issuance of the Intermediate
Report, sold or otherwise transferred its business and assets to The Black Manu-
facturing Company, Baltimore, Maryland, herein called the Black Company,
the Board, on July 26, 1946, issued an Order Reopening Record for the purpose
of receiving evidence respecting: (1) The relationship between the respondent
and the Black Company; (2) the relationship between the business conducted
by the respondent and the business conducted by the Black Company; (3) the
full circumstances of the sale or other transfer of the business and/or physical
assets from the respondent to the Black Company, including any knowledge or
notice of the Black Company concerning the unfair labor practices or the pro-
ceedings herein; (4) the responsibilities of the respective companies for remedy-
ing the unfair labor practices found in the Board's Decision and Order ; and
remanded the proceeding to the Regional Director for the purpose of conducting
a further hearing.
Copies of the Board's Order Reopening Record, together with Notice of
Further Hearing to be held on October 15, 1946, were duly served upon the
respondent, the Black Company, and the Union, on August 30, 1946.
On October 10, 1946, the Black Company moved to vacate the Order Reopening
Record on various grounds considered hereinafter. The Board, on October 16,
1946, denied the motion without prejudice to the right of the Black Company to
reassert its contentions at the hearing.il
Pursuant to the aforesaid notice, a hearing was held in Baltimore, Maryland,
on October 15, 16, and 20, 1946, before Irving Rogosin, the Trial Examiner duly
designated by the Chief Trial Examiner. The Board was represented by counsel ;
the respondent and the Black Company, respectively, by counsel appearing
' 62 N L It. B. 482
a In addition to ordering the respondent to cease and desist from discouraging member-
ship in the Union, or in any other labor organization of its employees, by discriminating
in regard to their hire or tenure of employment; from refusing to bargain collectively with
the Union as the exclusive representative of all its production and maintenance employees ;
and from in any other manner inteifering with, restraining, or coercing its employees, the
Board ordered the respondent to offer reinstatement to William Collins and Albert Kash,
and to make whole the said Collins and Kash, as well as Ernest Burns and 0 E Biles, for
any loss of pay they may have suffered by reason of the respondent's discrimination against
them , and, upon request, to bargain collectively with the Union as the exclusive representa-
tive of all its production and maintenance employees, with the usual exclusions
'- The motion was renewed at the hearing before the undersigned, and was similarly
denied.
THE ALEXANDER MILBURN COMPANY 759
specially for the purpose of contesting the Board's jurisdiction, both with respect
to the reopening of the record, jurisdiction over the Black Company, and the
,Board's authority to determine the latter's legal responsibility for remedying
the unfair labor practices of the respondent. The Union appeared by one of its
representatives. All parties participated in the hearing, and were afforded full
opportunity to be heard, to examine and cross-examine witnesses, and to introduce
evidence bearing upon the issues framed by the Order Reopening Record. At the
commencement of the hearing, counsel for the Black Company moved to dis-
miss the proceedings upon various grounds considered hereinafter. Counsel for
the respondent joined in the motion to dismiss upon the ground that the Board
was without authority to reopen the record after the issuance of a "final order,"
and upon the further ground of laches. The motions were denied with leave to
renew prior to the close of the hearing. The motions were subsequently renewed,
and similarly denied. Ruling on the motions to dismiss, upon the grounds stated,
as well as upon the merits, made prior to the close of the hearing was reserved-
They are disposed of hereinafter. After the commencement of the hearing, coun-
sel for the Board, at the request of the counsel for the Black Company, furnished
certain particulars orally upon the record.
On October 22, while the hearing was in adjournment, counsel for the Black
Company filed and served upon counsel for the Board a "Motion for Due Notice,"
seeking to elicit the section or sections of the Act upon which the Board relied
for asserting jurisdiction over the Black Company; the authority of the Board
to inquire into and determine the legal responsibility of the said Black Company
for remedying the unfair labor practices found by the Board to have been com-
mitted by the respondent ; and the Board's jurisdiction over the subject matter
of the proceedings as set forth in the Order Reopening Record. Written reply,
setting forth the grounds relied upon, was made by counsel for the Board on
October 29. All parties were afforded an opportunity to argue orally upon the
record, and to file proposed findings and briefs All declined to argue. No pro-
posed findings have been filed, but counsel for the Black Company, and for the
Board, filed briefs with the undersigned on November 27 and 29, 1946, respectively.
Upon the record thus made, and from his observation of the witnesses, the
undersigned makes the following :
FINDINGS OF FACT
1. THE BUSINESS OF THE BLACK COMPANY
The Black Manufacturing Company, a Maryland corporation with its office
and place of business in Baltimore, Maryland, is engaged in the manufacture
and distribution of oxy-acetylene welding and cutting equipment, gas regulators
and appurtenances, and paint spray equipment During the fiscal year beginning
September 30, 1945, the said Company purchased raw materials valued in excess
of $100,000, of which approximately 50 percent in value was shipped to its plant
from points outside the State of Maryland. During the same period, the said
Company shipped, from its plant to points outside the State of Maryland, finished
products valued in excess of $100,000. The Company concedes that it is engaged
in commerce within the meaning of the Act.
II.'THE TRANSFER OF THE RESPONDENT'S BUSINESS
In about mid-December 1944, the respondent entered negotiations with S.
Duncan Black, Jr , for the proposed transfer of the respondent's business. These
760 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
negotiations culminated in an agreement executed on December 30, 1944, by
the terms of which the respondent granted the said Black, upon an agreed
royalty basis, an exclusive license to manufacture and sell in the United
States, its territories , possessions , and foreign countties, products theretofore
manufactured by the respondent, as well as such additional products as might
be covered by patents or applications therefor owned or subsequently acquired
by the respondent. With respect to certain patents, after the payment of the
agreed royalty for a specified term, the licensee was to become entitled to
assignments of the several patents; as to other patents, the licenses granted
were for the life of the patents and any extensions, renewals or reissues thereof.
The respondent also assigned to Black the right to use its trademarks or symbols
in connection with the sale or advertisement of the respondent's products.
As part of the undertaking, Black was granted the right to use, without
,charge, all jigs, tools and fixtures used in the manufacture of the respondent's
products as long as the stipulated royalties were paid, upon the completion of
which this equipment was to become the sole property.of Black. Further pro-
vision was made for the sale and purchase at an agreed price and terms of the
"acceptable" inventory of the respondent, consisting of raw materials, finished
goods, or goods in process of manufacture. The agreement further provided
for a lease by the respondent to the said Black, of the plant premises then
occupied by the respondent in connection with its manufacturing operations,
for a term of 5 years from February 15, 1945, at a stipulated monthly rental,
with an option on the part of the lessee to terminate upon 60 days' written
notice. On the same day, the respondent executed a memorandum of sale to
the said Black of machinery and equipment owned by the respondent for a
specified sum.
Among other provisions, the agreement provided for the organization by
Black of a corporation, which might include "Alexander Milburn" in its name,
to succeed to the rights and obligations of Black, the respondent agreeing, upon
the consummation of the agreement, to change its corporate name by eliminating
"Alexander Milburn" therefrom. Covenants by the respondent not to compete
with the business of Black, and to procure a similar commitment from Alexander
F. Jenkins , the president and general manager of the respondent, were included
in the agree^ nt. Warranties as to the validity of the patents covered in the
agreement , piTovision for compliance with the Sales in Bulk Act were also
embodied in the agreement. Finally, an option was granted Black to terminate
the agreement by February 15, 1945, in the event he elected to do so as a result
of an investigation which he agreed to undertake in connection with "the status
of the several patents and applications therefor, the volume of business of the
[respondent], its manufacturing methods, et cetera."
The Black Manufacturing Company was incorporated under the laws of
the State of Maryland on January 20, 1945, by Black and others, and thereupon,
the said Company adopted a resolution accepting the benefits and assuming the
liabilities arising out of the agreement executed on December 30, and assigned
by Black to the newly organized corporation.
On January 31, 1945, the Black Company notified the respondent that it had
incorporated and succeeded to the rights and obligations of Black under the
agreement of December 30, as provided therein, and informed the respondent
of its decision to consummate the agreement, subject to certain modifications
not here material Approval of the agreement as modified was acknowledged
by the respondent, and by Alexander F. Jenkins, the respondent's president, in
his individual capacity.
THE ALEXANDER MILBURN COMPANY 761
Thereafter, since February 1, 1945, the effective date of the agreements, the
Black Company has been engaging in manufacturing operations at the premises
formerly occupied by the respondent under patent licenses acquired from it,
utilizing equipment purchased , and in premises leased, from the respondent.
Products manufactured by the Black Company have been similar to those pre-
viously manufactured by the respondent, except for carbide lights which the
Black Company does not manufacture. Since February 1, 1945, the Black Com-
pany has been engaging more extensively in the manufacture of paint spray
equipment, which, at the time of the hearing, comprised 90 percent of its pro-
duction. As contemplated by the agreements, the Black Company also under-
took to complete certain unfulfilled production contracts of the respondent.
With the acquisition on February 1 by the Black Company of the business
enterprise formerly conducted by the respondent, William L. Lawrence, who
had theretofore been a vice president and director of the respondent, became
vice president and director of the Black Company in charge of sales; and Mary
Maguire, who, prior to that date, had been, and for a short time thereafter
continued as, secretary of the respondent, was employed in a similar capacity by
the Black Company Neither, however, has owned any stock in the Black
Company or possessed any authority in the determination or execution of its
labor policies. The latter's duties have been confined to routine stenographic and
secretarial functions, and she has held no office as director. William Tiemann,
a former bookkeeper of the respondent, became treasurer and head bookkeeper,
and Edward Inanely, a former employee of the respondent, became vice president
and purchasing agent of the Black Company. Neither, however, possesses any
authority or voice in establishing labor relations policies. Otherwise, no officer,
director or stockholder of the respondent has owned stock, been associated
with, or had any authority in the operations of the Black Company except to the
limited extent granted in the agreement of sale.' Conversely, no officer, director
or stockholder of the Black Company has owned stock in, or been associated with,
the respondent.'
With the commencement of operations b} the Black Company, the respondent
ceased manufacturing operations, and the Black Company continued opel ation
of the business enterprise without interruption, assuming the personnel of its
predecessor, including its supervisors, except that Jenkins, the respondent's presi-
dent and general manager, was succeeded by Black, and the authority of William
Graham, the respondent's plant superintendent, was curtailed. Otherwise, the
3 Under the terms of the agreement of December 30, it was provided that in the event of
default in the payment of the license fee for a period of 2 months, the respondent was
granted the right to have a representative on the Board of Directors of the Black Company
during such time as it remained in default
4 The sole stockholders of the Black Company are :
S Duncan Black, Jr
S Duncan Black, Sr.
Anna R Black
The officers and directors of the Black Company on February 1, 1945, were :,
S Duncan Black, Jr , president
William L Lawrence, vice president
William Tiemann , treasurer
Mary Maguire, secretary
S. Duncan Black, Jr
S Duncan Black, Sr.
William L Lawrence , directors
On May 28, 1945 , Lawrence was succeeded as director by Delmar Haney, and, late In 1946,
as vice president , by Kanely . These officers have remained the same since.
762 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Black Company continued in its employ the same production and maintenance
employees at the same wages, hours, and working conditions According to
Black, however, after he assumed control of the business enterprise, he exercised
direct supervision of the 110 employees of all types. He testified that he there-
after no longer regarded the former supervisory employees of the respondent
as ,possessing attributes of supervisors, but regarded them as working foremen,
possessing "responsibility, but no authority." Except for former Plant Super-
intendent Graham, whose authority to hire, discharge, promote, demote, or other-
wise effect the status of employees Black testified he withdrew, no instructions
were issued to any other former supervisors, nor were the employees notified of
this action.' On the contrary, the only official notice to the employees announced
that no change in personnel or supervision was Contemplated!
Of approximately 80 production and maintenance employees in the respond-
ent's employ on its last current pay roll pi for to February 1, 1045, each of whom
the Black Company continued in its employ when it acquired the business enter-
prise, approximately 29 were in the employ of the Black Company at the time
of the hearing.
In the conduct of its business, the Black Company utilizes on its stationery in
the form of a trademark beneath its letterhead the name "Milburn" in block
letters, over which appears the word, "Pioneers," in smaller block letters, paral-
lelled, in letters of the same size, by the words "Since 1907," under the name. At
the foot of the letterhead appears the legend, "Builders of Alexander Milburn
Gas Cutting, Welding and Spray Gun Apparatus." The legend, "Alexander Mil-
burn Company Baltimore," is forged into all products manufactured by the Black
Company under patent licenses from the respondent.
In December 1944, Black retained as counsel, to represent him in the transac-
tion with the respondent, Enos S. Stockbridge, a member of the Baltimore bar
since 1910. Stockbridge thereafter represented him in the negotiations and, upon
the incorporation of the Black Company, acted as its counsel as well. In January
1945, Stockbridge communicated with Jacob Blum, counsel for the respondent
in these proceedings, to ascertain "whether the plant was organized. In other
words, whether the employees were members of the union "' According to Stock-
I At the time of the instant hearing, Graham, who was still in the employ of the Black
Company , held the position of personnel manager and chief inspector.
6 The notice , dated and distributed among the employees on February 1, 1945, follows :
To ALL EMPLOYEES
As of today, February 1, 1945, The Black Manufacturing Company is taking over
all manufacturing activities formerly carried on by The Alexander Milburn Company.
No change in personnel or supervision is anticipated , and all activities will be
carried on as previously.
Your cooperation, especiall3 during the change-over period and in helping with the
inventory , will be appreciated.
THE BLACK MANUFACTURING COMPANY,
(s) S. Duncan Black, Jr.,
S DUNCAN BLACK, Jr,
President and General Manager.
7 Although Stockbridge testified that he first communicated with Blum in January or
Februar3, it is apparent from his testimony that this occurred between the date of the
agreement of sale, December 30, 1944, and the date the agreement was consummated,
on January 31, 1945 According to Stockbridge, he had previously made inquiry regarding
this matter of John O'Shea, of counsel for the respondent, who had appeared with Blum
in the original unfair labor practice proceeding. O'Shea informed him that he was not
fain liar with labor matters, but stated that he knew that there had been a "proceeding
before the Board to determine whether or not the [respondent] had to recognize the union,"
and referred Stockbridge to Blum.
11
THE ALEXANDER MILBURN COMPANY 763
•
bridge, Blum informed him that the respondent had no collective bargaining rela-
tions with any union, although the question concerning representation was still
pending before the Board, but that in his-opinion the question would be "decided
in favor of the [respondent ]" Stockbridge testified further that he recognized the
necessity for making such inquiry, and that, although his inquiry was limited to
whether there was a union in the plant, he had assumed "that it would elicit what-
ever pertinent information there was with respect to the labor situation." He
further testified that due to his lack of experience in labor matters, he did not
pursue the inquiry. According to him, however, he was at no time apprised
directly or indirectly by anyone representing the respondent of the existence of any
unfair labor practice proceedings until he received a copy of the Board's Decision
and Order from Blum soon after its issuance.8 Stockbridge thereupon retained
William F Howe, of present counsel in this proceeding, because of his more ex-
tensive experience in labor relations matters.
According to Blum, however, whose testimony Stockbridge did not rebut, and
which the undersigned credits, Blum informed Stockbridge that "the Trial Exam-
iner had dismissed a large portion of the case, and that the balance of the case,
including that feature on collective bargaining, was pending before the Board on
exceptions by both the union and [the respondent], and at that time . . had
already been argued before the Board, but [that the respondent] had not yet re-
ceived a decision, and that in [Blum's] opinion no court would sustain the Board
on an order to bargain . . ., on the facts of this case." Blum admitted at the
hearing that in a discussion with counsel for the Board early in February 1945
he had informed him that Stockbridge had communicated with him, a fact which
Blum later confirmed in writing to Board counsel a
In addition to the copy of the Board's Decision and Order transmitted by Blum
to Stockbridge, the Union, on July 11, 1945, wrote to the respondent and the Black
Company requesting compliance with the Decision and Order and seeking a con-
ference in order to negotiate a collective bargaining agreement. A copy of the
Board's Decision and Order was also submitted by the Union under separate cover
to the Black Company. The communications went unanswered.
It is apparent from the foregoing that, although Stockbridge may have been
unversed in labor relations matters, he was an attorney of very considerable
experience. The agreements which were drafted attest to the skill and acumen
with which he represented the interests of his client. Thus, for example, apart
8 On July 26, 1945, following the issuance of the Board's Decision and Order, in response
to a communication by counsel for the Board, Stockbridge asserted substantially the same
position , and stated , in part,
No intimation was given of the existence of a proceeding foi improper labor prac-
tices and both Mr Black and I assumed that the inquiry we made would have elicited
information about such a proceeding if it had been pending. The fist intimation
that Mr. Black or I received was when Mr Blum sent to my office a copy of the Board's
opinion and order.
u Following Board counsel ' s discussion with Blum , the former wrote Blum requesting
confirmation of the statement alleged to have been made by Blum , "that the purchaser of
these operations had knowledge of the pendency of [the proceedings ] befoie the Board "
Blum replied in part,
I want further to emphatically deny that at any time I told you orally that the
purchaser of these operations knew of the pendency of the above-entitled matter before
the Board. For the purpose of setting the record straight, I informed you that
an attoiney by the name of Enos S Stockbridge had called inc and informed me that
his client, a Mr. Black, had purchased the business, and that he, Mr Stockbridge,
wanted to know what the situation would be in the event of an adverse decision against
the Milburn Company. [Emphasis added.]
764 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
from warranties regarding the validity of patent rights which were required of
the respondent, express opportunity was afforded the purchaser to investigate
vital matters concerning the business of the respondent. Further provision was
made for compliance with the Sales and Bulk Act to the extent that might be
required by counsel for the purchaser It must be reasonably assumed that the
prospective purchaser of a continuing business would utilize such an investigation
to ascertain whether any litigation, including that touching upon labor matters,
was outstanding before consummating the transaction As a matter of fact,
despite Stockbridge's professed unfamiliarity with the subject of labor relations,
he was sufficiently cognizant of its implications to undertake to ascertain whether
there was a union in the plant, expecting, according to him, that his inquiry "would
elicit whatever pertinent information there was with respect to the labor situa-
tion." According to the credited testimony of counsel for the respondent, it is
clear that, although he may have been somewhat less than candid in his dis-
closures, such facts as lie divulged to Stockbridge were sufficient to apprise him
of the pendency of an adversary proceeding against the respondent. The informa-
tion that a "Trial Examiner had dismissed a large portion of the case, and that
the balance of the case, including the feature on collective bargaining was pending
before the Board on exceptions," could hardly have failed to impress upon an
attorney of Stockbridge's evident experience the risk involved in any contem-
plated purchase, of the business and assets of the respondent while litigation was
pending Indeed, according to Blum, Stockbridge solicited his opinion as to the
effect upon the purchaser of "all adverse decision against the Milburn Company "
It can only be concluded that the Black Company, through its counsel, either
relied upon the gratuitous opinion expressed to him by respondent's counsel that a
court would not sustain the Board in its decision, or that it elected to assume the
risk of consummating the sale under circumstances which, at the very least,
imposed upon it the duty of making further inquiry regarding the nature and
status of the outstanding proceedings
In any event, the undersigned concludes and finds, upon the basis of the fore-
going, and the record thus made, that the Black Company acquired the business
enterprise of the respondent with knowledge of pending proceedings, and that,
when it elected to consummate the transaction in the face of that knowledge, it
did so at its peril.
The issues ; contentions ; conclusions
The basic issue presented here-whether a transferee of the assets of an
employer found to have engaged in unfair labor practices may be held subject
to an order of the Board, where the transferee has not been named as a party
to the original complaint or joined or substituted as a party-has not yet been
conclusively determined. Such cases as have been decided are not'determinative
of this issue. It has, however, been intimated by way of dicta, that under some
circumstances a successor as well as the original corporation may be liable under
the terms of .a Board order even in the case of a bona fide transfer 10 It has even
been suggested in some quarters that an order of the Board might impose liability
as "a legitimate business risk upon a transferee without notice of the order
until after transfer" or that "Board orders might be considered as servitudes
binding upon the corporate assets of the employing industry and following them
into new hands.""
10 See Southport Petroleum Co. v. N. L R B., 315 U. S. 100.
11 See 55 Harvard Law Review 1048, and cases there cited.
THE ALEXANDER MILBURN COMPANY 765
In general, there are three types of cases involving the application of the
"successors and assigns" provision now generally included in Board orders.12
These are: (1) the bad faith successor and assign, i e, where an employer to
avoid complying with a Board order resorts to the subterfuge of transferring or
reorganizing his business, while continuing as the actual owner of the business ;
(2) the alter ego-where an employer reorganizes his business or forms a new
corporation and continues the operation of the business through the same persons
who formerly conducted the business ; or, similarly, where after death, bank-
ruptcy, or receivership, the business is continued by an executor, administrator,
or other legal representative of the former employer; and (3) the bona jade
successor and assign-where an employer transfers or assigns his business by
sale or lease to one who, with or without knowledge of the Board's order, acquires
and continues to operate the business enterprise with no connection with the
former employer. To these should be added a fourth category-the successor
or assign who acquires and operates a continuing business of an employer found
to have engaged in unfair labor practices under circumstances which charge it
with actual notice of outstanding unfair labor practices against its predecessor
at the time of the transfer, or under circumstances sufficient to put the transferee
upon inquiry as to the existence of outstanding unfair labor practices against its
transferror.
With respect to the first two classes of cases, it is settled that Board orders are
binding upon successors and assigns operating as an alter ego of the employer
or as "merely a disguised continuance of the old employer"" It has been held
that orders of the Board are in the nature of injunctions, the cease and desist
provisions restraining the performance of certain acts and the affirmative pro-
visions requiring the performance of other acts 14 Therefore, just as "an in-
junctive decree may bind not only the parties defendant but also those who are
represented by them or are subject to their control or in privity with them "" So,
too, orders of the Board may bind persons who have not been named as parties
to the proceeding if they have notice of such proceedings.30
It is clear, therefore, that one who acts in privity or collusion with an offending
employer for the purpose of avoiding compliance with a Board order may be held
with the employer in contempt of the court's decree enforcing the order.12 And,
as has already been indicated, if the change has been in name only, or in ap-
parent, rather than actual, control of the employer, the order of the Board may
be enforced against the disguised employer or alter ego, even though it may be
operating as a distinct legal entity.18 "It could be only the blindness of formalism
12 The propriety of including this provision has been settled, although the Supreme Court
has indicated that the phase creates no duties or liabilities which do not exist in the
absence of such terminology Regal Knitwear Co v. N L R. B, 324 U. S 9.
1S Southport Petroleum Co v N. L R B , 315 U S 100, 106
14 N. L R B v. Cotten, 105 F. (2d) 179, 183 (C C A 6) , N L R. B v Bachelder, 125
F. (2d) 387, 388 (C C. A 7).
" International Brotherhood v. Keystone Freight Lines, 123 F. (2d) 326, 329 (C C A.
10) , In re Lennon, 166 U S. 548.
16 Cf. Bethlehem Steel Co v N. L R B, 120 F (2d) 641, 651 (App D C
N. L. R. B. v. Hopwood Rettnning Co, 104 F (2d) 302 (C C A 2). Note that,
although in the original petition for enforcement the Court refused to enforce the Board's
order against the successor and assign because the "formalities were not followed as
requited ," it declared that the respondent might "be requned to secure the cooperation of
its agent" (successor) in complying with the -order, and upon contempt proceedings
subsequently initiated entered a decree enforcing the older against the original employer
as well as the successor.
18 Southport Petroleum Co. v. N. L R. B., supra, 106.
766 DECISIONS OF NATIONAL LABOR. RELATIONS BOARD
that would suggest separately instituted proceedings against the predecessor and
the successor." 19
Turning to the effect of the "successors and assigns " provision in the third
class-the bona fide successor and assign-there is authority for the proposition
that an administrative order may be enforced against a bona fide successor and
assign with notice of the order even in the absence of the inclusion of the "succes-
sors and assigns " provision . In an analogous situation involving an order of the
Interstate Commerce Commission , where , following issuance of an order against
certain railroad companies which had transferred ownership , operation and
control of the railroads to successors , the Circuit Court, in enforcing the order of
the Commission against the successors who had been joined with the original
owners in the petition for enforcement , stated :
Each of these two new companies sets up as a ground of demurrer to the
petition that it was not a party to the proceedings before the interstate
commerce commission and that no order or requirement against or of it
has been made by the commission . The order here sought to be enforced
was made against the old railroad companies to which the [ new railroads]
have since been successors . The question then is , are these succeeding com-
panies to be regarded as strangers to that order ? We cannot think so. It
would indeed be lamentable if a lawful order against unjust discrimination
by a railroad company, made by the interstate commerce commission after
a protracted investigation , could be nullified by the subsequent reorganiza-
tion of the company , or transfer of its railroad and franchises to another
corporation It is a settled principle that the purchaser of property in liti-
gation, pendente lite, is bound by the judgment or decree in the suit . . And
the rule is said to be founded upon great public policy , for otherwise aliena-
tions made during a suit might defeat its whole purpose, and there would
be no end to litigation . . This principle is applicable here . . This
proceeding is for the enforcement of a public duty which is inseparable
from the ownership of the railroad . No injustice is done to these new
companies by joining them as defendants here, for they are entitled to be
heard against the enforcement of the order of the commission , and the
court is to proceed and determine "in such manner as to do justice in the
premises." 20
A similar view was expressed in a case involving proceedings before the Board :
An employer cannot be permited by reorganization or transfer , to nullify
the Board 's order and make it necessary to start new proceedings against
the new owner of the business 21
19N L R B v . Baldwin Locomotive Works , 128 F ( 2d) 39 , 43 (C C . A 3) See also
Bethlehem Steel Co v N L R B ., 120 F ( 2d) 641, 650-651 (App. D C .) of Bethlehem
Shipbuilding Corp . v N L. R B, 114 F (2d) 930, 933 , 942 (C C A. 1 ) ; Union Drawn
Steel Co v N. L R. B ., 109 F ( 2d) 587 ( C C. A. 3 ) ; DeBardeleben v. N. L. R. B, 135 F.
i2d) 13 (C C A 5) ; N L R B v Adel Clay Products Co, 134 F (2d) 342 (C. C A. 8) ;
G. & C Merriam Co v Sealfeeld, 190 Fed 927 (C C A 6) The Seventh Circuit Court of
Appeals which , prior to the Supreme Court decision in Regal Knitwear v N. L R B.,
supra, regularly eliminated the "successors and assigns " phrase from Board orders , recog-
nized that successors and assigns in the above classes are bound by Board orders More-
over , according to this Court, successors and assigns in the above categories would be
bound by a Board order even in the absence of the phrase See N. L. R. B v . Bachelder,
125 F (2d) 387, 388 (C. C. A 7).
20lnterstate Commerce Commission v. Western N. Y. and P. R. Co., 82 Fed . 192, 194
( Cir Ct W D Pa. 1897).
21 Bethlehem Steel Company v. N. L. R. B., 120 F. (2d) 641, 650-651 (App. D C.).
THE ALEXANDER MILBURN COMPANY 767
Although the principle enunciated has been invoked by courts of equity in the
protection of private rights,22 it is especially applicable where the effectuation of
a public policy rather than a private right is involved. Thus, as was stated by
the Court in N. L. R. B. v. Colten, 105 F. (2d) 179, 182 (C. C. A. 6), where it was
contended that change in ownership resulting from the death of one of the
co-partners deprived the Board of the right to proceed:
This contention, however, ignores the essential nature of regulatory stat-
utes of the class here considered, and the scope and purpose of adminis-
trative orders made in exercise of powers conferred by such legislation.
They are to implement a public, social or economic policy not primarily
concerned with private rights, and through remedies not only unknown to
the common law, but often in derogation of it.
... It is the employing industry that is sought to be regulated and brought
within the corrective and remedial provisions of the Act in the interest of
industrial peace ... It needs no demonstration that the strife which is
sought to be averted is no less an object of legislative solicitude when con-
tract, death, or operation of law brings about change of ownership in the
employing agency 23 [Emphasis added.]
In an analogous situation involving an injunction against violations of the
Fair Labor Standards Act, the Supreme Court held :
Not only is such an injunction enforcible by contempt proceedings against
the corporation, its agents and officers and those individuals associated
with it in the conduct of its business, Wclson v United States, 221 U. S. 361,
376-377; cf. In i e Lennon, 166 U. S 548, but it may also, in appropriate
circumstances, be enforced against those to whom the business may have
been transferred, whether as a means of evading the judgment or for other
reasons. .. Southport Petroleum Co. v. Labor Board, 315 U. S. 100, 106-107.
And see, to like effect, Labor Board v. Hopwood Retinning Co., 104 F 2d 302,
304-305; Interstate Commerce Comm'n v. Western New York & P. R. Co.,
82 F. 192, 194-195 . . . Labor Boai d v. Cotten, 105 F. 2d 179, 183; Union
Drawn Steel Co. v. Labor Board, 109 F. 2d 587, 589, 594-595 And these
principles may be applied in fuller measure in furtherance of the public
interest, which here the petitioner represents, than if only private interests
were involved. See Virginian Ry. Co. v. System Federation, 300 U. S. 515,
552, and cases cited.24 [Emphasis supplied.]
Thus, where, in answer to the Board's petition for enforcement, the respondent
alleged that it had, subsequent to the Board's order, dissolved and ceased to
exist except for the purposes of prosecuting and defending suits, urging that the
court's decree should not run against its successors and assigns, the Court, re-
jecting the contention, stated :
... we see good reason under the circumstances why the order should,
as is customary, run against the Company's successors and assigns. It is
22 See, e g, United Gilpin Corp v. Wilmore, 100 Col 453, 68 P. 2d 34, where the Court
said,
The history of this litigation leading to the injunctive order clearly discloses the
intent to enjoin the doing of a thing, more directly than the restraint of that thing
being done by any pai ticular party In effect, it is a restriction or restraint running
with future operations of the property involved.
23 See also N. L It. B. v Adel Clay_Products Co, 134 F. (2d) 342 (C C. A. 8).
24 Walling , Administrator v. Reuter, 321 U. S. 671, 674.
768 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
not suggested that the property has been liquidated or that the business
does not continue as an operating unit. Under these conditions the Board
may well find that it will effectuate the policies of the Act for the new owners
of a continuing manufacturing establishment to rectify the unfair labor
practices of former owners of the establishment."
Inasmuch as "it is the employing industry that is sought to be regulated and
brought within the corrective and remedial provisions of the Act in the interest
of industrial peace," 23 the rights of aggrieved employees under the Act ought
not to be defeated by the substitution of a new employer in the employing enter-
prise. And where an employer is under a duty to deal with the bargaining
representative of his employees, the successor to that business is equally obligated
to deal with such representative."
In our opinion, it successor company, which takes over it going business
with knowledge of the existence of unremedied unfair labor practices of its
predecessor, and continues to operate the business without any discernible
change of existing labor policy, is obligated to remedy such unfair labor
practices.28
And this is so even though the original employer has no control over or respon-
sibility for the successor 29
In the light of the principles which have been enunciated, the insistence of
counsel for the Black Company upon regarding this proceeding as an action
in personam insofar as it is concerned, is inapposite. This contention fails to
take account of the basic concept of the Act as vindicating a public policy rather
than private interests. Counsel, basing their position upon a line of authority
holding that a tribunal may not "make a binding adjudication of the rights in
personain of parties not brought before it by due process of law," `0 contend that
the Board may not adjudicate the rights and liabilities of a party over whom
it has not obtained personal jurisdiction.31 It is further contended that the
Board's authority to remedy unfair labor practices is limited by Section 10 of
the Act to determine whether Section 8 has been violated and to issue a remedial
order thereon.
It is further argued that the issuance and service of a complaint, based upon
a charge, and setting forth with reasonable particularity the nature of the unfair
25 N L R B. v Weirton Steel Co, 135 F. (2d) 494, 498-499 (C C A 3)
26 N L R B v Cotten, supra
21 See N. L R. B v Blair Quarries, 152 F (2d) 25 (C C A 4) ; Matter of National Bag
Company, 65 N L R B. 1078, Matter of National Garment Company, 69 N. L R B 1208;
Matter of Pacific Mantfolding Book Co , 64 N L R B 1257.
28 Matter of National Garment Company, supra.
21 "A decree of injunction, like other personal judgments, binds parties and their privies,
and only these. This Company's officers, agents and successors, though not parties to this
case personally, are privies of the Company All that is necessary hereafter to bind any
of them is to notify them of the injunction . . . As to assigns, they may or may not be
bound by such an injunction It the assignment be of the Company's whole plant and busi-
ness, it is probable the assignee would be bound as a successor " LeTourneau v. N L. R. B.,
150 F (2d) 1012 (C. C. A. 5).
30 National Licorice Company v N L R B , 309 U S. 350, 362, citing Pennoyer v Neff,
95 U S 714 and Riverside & Dan River Cotton Mills v Menefee, 237 U S. 189 See also
California Lumbermen's Council v. Federal Trade Commission, 115 F (2d) 178 (C C. A 9),
construing Section 5 of the Federal Trade Commission Act.
31 Citing The Press Company, Incorporated v N. L R B , 118 F (2d) 937 (App D C
N. L R. B. v. Hopwood Retinning Company, 98 F (2d) 97 (C C A 2) ; N L R B. v.
Timken Silent Automatic Co, 114 F. (2d) 449 (C. C. A. 2).
THE ALEXANDER MILBURN COMPANY 769
labor practices charged, accompanied by notice of hearing, are indispensable
requirements to obtaining jurisdiction against the Black Company. These con-
tentions ignore the principle that there is implicit in the broad administrative
powers vested by Congress in the Board authority not only to make such orders as
are reasonably necessary to carry out the policies of the Act but to direct such
orders as may be necessary in order to make such orders fully effective."
As has already been indicated, there is warrant for the proposition that an
administrative order may be enforced against a good faith successor and assign
who has notice of the order, even in the absence of mention of successors and
assigns in the order 33 In the Southport Petroleum case, cited supra, the Court
stated that the provision relating to successors and assigns in Board orders will
in such cases "be the basis-and the indispensable basis-of liability" on the
part of persons who acquire the business enterprise.
Counsel for the Black Company further argue that the Board may not now
proceed against it inasmuch as it has not issued a complaint or amended complaint
against it prior to the issuance of an order based upon a complaint.
The Board does not contend that the Black Company has itself engaged in
any unfair labor practices, except insofar as its failure to remedy the unfair labor
practices of its predecessor constitutes a violation of the Act. Whatever responsi-
bility attaches to it arises out of operation of law from its relationship to
the respondent and the circumstances surrounding the transfer of the business
enterprise. Under these circumstances it would be idle tor the Board to issue
a complaint, or amended complaint, against the Black Company The require-
ment of due process does not entail providing a successor with an opportunity
to defend against unfair labor practices committed by its predecessor prior to
a transfer of the business enterprise involved If this were so, there would,
as the Court has said, be "no end to litigation " The contention of the Black
Company that it has been denied the opportunity of defending "against the Board's
contention that unfair labor practices were in fact committed" is therefore found
to be without merit.
Its contention that the Board's authority is limited to the provisions of Sections
8 and 10, insofar as its right to discover the facts regarding the transfer of the
respondent's business, is, in view of what has been said respecting the broad
administrative powers implicit in the grant by Congress, untenable. Contrary
to its contention, the Black Company has been afforded a full and fair hearing,
the right to present evidence, a reasonable opportunity to know the Board's
contention respecting the ground for its liability, and to meet the issues presented
in the instant proceedings.
No particular form of procedure is required to constitute due process of law
in an administrative hearing, but its requirement ninst be measured in the light
and purpose of such hearing." The requirements imposed by the constitutional
guarantee of due process are not technical, nor is any particular form of pro-
cedure necessary, and the guarantee does not require a hearing at the initial
stage or any particular point or at more than one point in an administrative
32 "The Board asserts a public right vested in it as a public body, charged in the public
interest with the duty of preventing unfair labor practices " National Licorice Co v.
N L R B., 309 U. S 350, 364 See also J I Case Co v N L R B., 321 U S 332, 337;
Virginian Railway Co v System Federation No 40, 300 U S 177, 193, Walling v. Renter
Co, 321 U. S. 671, 674-675.
33 See I C C V. Western N Y and P. R Co , supra.
34 N L R B i Prettyman, 117 F (2d) 786 (C C A. 6)
770 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
proceeding so long as the required hearing is held before the final order becomes
eifective.ai As the Court pointed out in I. C. C. v. Western N. Y and P. R., supra,
No injustice is done to these new companies by joining them as defendants
here, for they are entitled to be heard against the enforcement of the order
of the commission, and the court is to proceed and determine "in such manner
as to do justice in the premises."
Finally, counsel contend that the attempt by the Board to adjudicate the
responsibility of the Black Company for remedying the unfair labor practices
committed by the respondent constitutes a usurpation of judicial powers con-
trary to Article III of the Constitution. In effect, the argument runs somewhat
as follows. Inasmuch as orders of the Board are not self-enforcing, it is con-
tended, the appropriate procedure would have been for the Board to petition
the circuit court for enforcement of its order against the respondent. The Board
could then apprise the court of the transfer of the respondent's business, leaving
it for the court to remand the case to the Board for the taking of evidence regard-
ing the change of ownership, whereupon the Court could enter an appropriate
decree. While such a course was doubtless open to the Board, there is nothing
in the Act requiring it to resort to this procedure so long as the Board retains
jurisdiction by withholding filing of the transcript in court. On the contrary,
not only is the Board empowered under Section 10 (d) to reopen the record,'
but it has been indicated by the Supreme Court that it is more desirable that such
modifications in its orders as may be required be made by the Board while it
retains jurisdiction and before the transcript has-been filed with- the court" In
view of this, it is clear that the Board was not only within its right in reopening
the record, but that it was pursuing the preferable course in perfecting the record
and modifying its order to conform to evidence to be adduced prior to applying to
the court for enforcement. Certainly, the Black Company cannot claim to have
been prejudiced by this procedure, since the question of enforcement of the
Board's order will ultimately be one for the court, and the Black Company will
he entitled to be heard in respect to enforcement of the Board's order.
The contention of counsel for the Black Company that the Board should be
required to exhaust its remedies against the respondent before proceeding
against it requires no further comment than to observe that the effectnution of
the remedial purposes of the Act is peculiarly within the province of the Board.
Whatever may be said for counsel's proposition as a matter of strict equitable
principles has no valid application here. Since it is obvious that the respondent
teas been rendered incapable of fully redressing its unfair labor practices by the
alienation of its business to one who, it has been found, acquired the business
with notice of the existing proceedings, and since it is consequently required
that the Black Company remedy this incapacity, the purposes of the Act will
best be effectuated by a determination of the responsibilities of both parties in
one proceeding.
3a Inland Empire District Council, Lumber and Sawmill Workers Union v. Millis, 321L
U S. 697 See also, Morgan v. U. 8, 307 U S. 183.
36 Section 10 (d) provides:
Until a transcript of the record in a case shall have been filed in a court, as herein-
after provided, the Board may at any time, upon reasonable notice and in such manner
as it shall deem proper, modify or set aside, in whole or in part, any finding or order
made or issued by it.
37 Eagle-Picher Mining & Smelting Co. v. N L. R. B , 325 U S 335 "Questions of con-
struction had better be ironed out before enforcement orders issue than upon contempt pro-
ceedings " J. I. Case v N. L. R. B.-. 321 U. S 332, 341.
THE ALEXANDER MILBURN COMPANY 771
The contention of the respondent that the Board lacked authority to reopen
the record after the issuance of its Decision and Order is clearly without merit in
view of the express authority granted in Section 10 (d). The further contention
that this provision merely empowers the Board to modify or set aside any finding
or order made or issued by the Board, but does not afford the right to take testi-
mony as a basis for such modification is patently unsound. That the taking of
testimony in such instance was contemplated by the Act is indicated by the
decision of the Supreme Court in In Re N. L R. B, 304 U. S. 486, 492, where the
Court said,
The Board's proceedings are administrative in character. Its final action
is subject to judicial review in the manner specified in the Act. Subsection
(d) of § 10, in plain terms, invests the Board with authority, at any time
before the transcript shall have been filed in court, to modify or set aside its
order in whole or in part. The purpose of the provision obviously is to afford
an opportunity to correct errors or to consider new evidence which could
render the order inadequate or unjust " [Emphasis added.]
These contentions of the respondent are consequently rejected as without merit.
There remains to be considered the respondent's defense of laches, with respect
to the enforcement of the Board's remedy against it. Apart from the general
principle that the defense of laches may not be invoked against an administra-
tive agency charged with the duty of vindicating a public policy or governmental
function,39 the record indicates that the first intimation which the Board received
of any change or contemplated change of ownership was when the matter was on
for oral argument before it upon exceptions of the respondent and the Union to
the Intermediate Report. Toward the close of oral argument it was suggested
that a sale or transfer was contemplated, although the transcript of those proceed-
ings indicated merely that the respondent had transferred its assets to Alexander
Jenkins and his son d0 Although the record is silent as to what transpired during
the off-the-record discussion, the respondent contends that it was stated by a
member of the Board that the matter was one for enforcement.
11 See alsoN L R B v Swift & Co, 116 F (2d) 143 (C C A 8)
139 See Matter of Standard Oil Company of California , 61 N L R B 1251 , 1255, and cases
cited See also N . L R B v I .sthinoan Steamship Co, 126 F ( 2d) 598, 601 ( C. C A 2),
where the Court said, "The delay which followed [ the Board 's] order was not alone its
fault as the respondent could have avoided that by a petition to review . ' More-
over , in the instant case the Board was confronted with a change in ownership the effect
of which it seeks to determine
40 The following is an extract from the official transcript of oral argument before the
Board relating to the subject
Mr LiviNnsTON [for the Union]. . . I would just like to acid that I have
just been informed by Mr Earl Shaw, the regional attorney for the Baltimore Region
of the Boaid, that he was advised yesterday by Mi Blum that this company has sold
^its'assets, or has tiansferred its assets in one way or another I am frankly not famil-
iar with that situation I think it is incumbent upon Mr. Blum to inform the Board
of the situation so that we will not be in the same predicament that after winning this
case, as I am confident we will, we will then he in the position of finding this company
is not in existence any more, and it is some other company. I think the Board ought
to have the facts on that
(Discussion off the record
Mr LIVINGSTON I quite agree with you that procedurally you are absolutely sound.
We don't want to be in the position of getting the run-around some more . . .
Mr BI.u^r I didn't want to be in the position of attempting to conceal any facts
As Mr Livingston stated, I told Mr Shaw yesterday when I first discovered that the
control of the corporation has now been completely purchased by Mr Jenkins and his
son This is Mm Jenkins here (indicating) that the company is completely changing
or contemplating changing its entire functions now. The company will have no em-
772 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The record in the instant proceeding, however, discloses that, since the issuance
of the Board ' s Decision and Order , the Regional Office of the Board has been
attempting to obtain compliance , and has pursued its investigation of the cir-
cumstances surrounding the transfer of the assets and business of the respondent.
Such delay as has occurred is incidental to the administrative process and does
not operate to relieve the respondent or its successor of its responsibilities in
remedying the unfair labor practices.
The respondent further contends that the Regional Office failed to furnish it
with a statement of the earnings of the employees found by the Board to have
been discriminatorily discharged. Inasmuch as counsel for the respondent, in
seeking this information , suggested merely that his client "might be disposed to
dispose of the back pay features of the case ," without indicating what disposition
would be made of the remaining unfair labor practices , no unfavorable inference
may be drawn against the Board, since it was not required to accept less than
full compliance with the order in effectuating the policies of the Act
To summarize , the Board derives its authority from the broad administrative
powers vested in it by Congress to prevent and redress unfair labor practices.
Since "it is the employing industry that is sought to be regulated and brought
within the corrective and remedial provisions of the Act in the interest of in-
dustrial peace," the Board cannot be divested of this authority by the alienation
of its business by an employer found to have engaged in unfair labor practices.
Effectuation of the policies of the Act requires that one who assumes a con-
tinuing business and operates it in place of an employer found by the Board to
have engaged in unfair labor practices should be bound by an order of the Board.
Just as it is the employing industry which is sought to be regulated , so it is the
employer-employee relationship which the Act seeks to protect . In a continuing
business , the group relationship of employees and supervisory personnel is not
altered by change in ownership Despite the contention of the Black Company,
this relationship remained substantially unchanged as reflected by the announce-
ment to the employees at the time it assumed control of the business . In order
that the effects of unfair labor practices of an employer found to have engaged
in such conduct be erased , employees must be assured that supervisors of such
employer may no longer engage in such conduct . Employees who have been found
to have been discriminated against must be permitted to resume their positions
among their fellow-employees without loss of pay, not only to restore the status
quo, but to reassure the remaining employees of the right to self-organization with-
out interference or coercion on the part of the employer They must be assured
that the new employer cannot benefit from the former employer 's refusal to
bargain." Recognition of the importance of preserving and safeguarding this
employer -employee relationship regardless of change in ownership has given rise
ployees of any kind and will not manufacture anything after the reorganization is com-
plete , but all of its work will be contracted out to contractors , and that has been going
on foi some time I didn ' t want to be in the position of concealing any facts from the
Board They were not facts in the record I made those facts known to Mr Shaw,
the regional attorney of the Board in Baltimore [Emphasis added.]
At this point the hearing on oral argument was concluded
41 The Boaid has heretofore held that the certification of a bargaining representative is
binding upon a bona fide transferee of the predecessor's business, and inasmuch as the cer-
tification raises a piesuniption of the union's continuing status as majority representative
in an appiopuato unit, the presumption iti valid a gainst the tiausteiee Matter of Simmons
Engineering Co, 65 N L R B 1373 . Maltei of Notional Bap Coipany , 65 N L R B 1078,
Matter of Syncro Machine Company , Inc, 62 N. L R B 985 The determination by the
Regional Diiectoi in the instant case of majority iepicsentation based upon a consent elec-
tion is entitled to the sane eight accorded a Board cei tification
THE ALEXANDER MILBURN COMPANY 773
to the practice of protecting this relationship by providing therefor in labor agree-
ments.42
Courts have frequently gone further in affording relief in furtherance of the
public interest embodied in remedial legislation than where mere private rights
are involved. It has been suggested that Board orders might run with a con-
tinuing business as "servitudes binding upon the corporate assets of the employing
industry and following them into new hands." Certainly, a corporation which
acquires the business of an employer found to have engaged in unfair labor
practices with knowledge, or under circumstances charging it with notice of the
existence of outstanding proceedings should be subject to the order of the Board.
Notice of outstanding proceedings indicating the existence of unfair labor prac-
tices constitutes, in effect, a caveat to the prospective purchaser, of the pendency
of litigation which could affect his rights in the continuing business enterprise.
The situation is analogous to that of a purchaser of property with notice of a
hs pendens of a bill in equity against the original owner affecting title to the
business enterprise involved. It cannot be argued that such a purchaser would
not acquire ownership subject to the outcome of such litigation Nor can it be
contended that such a purchaser would not be bound thereby without first being
afforded an opportunity to defend against the litigation involving the original
owner. Here, actual notice to the prospective purchaser must be regarded as
tantamount to other forms of equitable notice.
No legal injustice has been done the successor here. Due process does not
require that such a successor be given a hearing de novo upon the issues of the
unfair labor practices committed by its predecessor, long before the transfer of the
business, after a protracted hearing affecting the public interest. If this were
required there would, in truth, be no finality'to litigation. The successor here
has been afforded a full and fair hearing, upon ample notice; the right to present
evidence; reasonable opportunity to be apprised of the Board's contention; and to
meet the issues upon which it is entitled to be heard. The method em-
ployed to afford this opportunity, namely, by reopening the record, was fair and
appropriate to the determination of the issues involved. Moreover, the successor
is still entitled to be heard against the enforcement of any order which the Board
may seek to impose. The requirements of due process have been fulfilled.
In view of the foregoing, the motions of counsel for the respondent, and for
the Black Company, to dismiss these proceedings are hereby denied.
Upon the basis of the foregoing, and upon the record thus made, the under-
signed concludes and finds that the Black Company, on or about February 1,
1945, acquired the business and assets of the respondent; and has since engaged
in manufacturing products formerly manufactured by, and under patent licenses
acquired from it utilizing equipment purchased from, and in the plant formerly
occupied by, and leased from, the respondent; that it undertook to complete
unfulfilled contracts of the respondent ; that it operated said business without any
outward evidence of change in personnel and supervision, except to the extent
already indicated; and that it acquired the business with knowledge of the
existence of outstanding unfair labor practice proceedings-in short, that the
Black Company, on and after February 1, 1945, became, in fact and in law, the
successor of the respondent. The undersigned further finds that by reason of the
foregoing facts, more fully detailed above, and upon the law appertaining thereto,
the said Black Company is responsible, with the respondent, in the manner and to
42 See Collective Baigauiing Agreements and Change of Ownership, XLVI Columbia Law
Review 276, et seq (Maich 1946), foi a discussion of such provisions and their effect upon
successors and assigns
79S767-49-vol 78 50
-774 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the extent hereinafter provided , for remedying the unfair labor practices of the
respondent.
III. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the Black Manufacturing Company set forth in Section II,
above, occurring in connection with its operations described in Section I, above,
have a close , intimate , and substantial relation to trade, traffic , and commerce
among the several States, and tend to lead to labor disputes burdening and ob-
structing commerce and the free flow of commerce.
IV. THE REMEDY
It has been found that the Black Company is the successor of the business
enterprise formerly conducted by the respondent , and, as such , responsible for
remedying the unfair labor practices committed by the respondent to the
extent hereinafter indicated . Although there has been no allegation or showing
that the Black Company has itself engaged in any unfair labor practices since
acquiring the respondent 's business , the record discloses that it has failed to
remedy the unfair labor practices of its predecessor . It will, therefore, be
recommended that the Black Company cease and desist therefrom . It will also
be recommended that it take certain affirmative action which the undersigned
deems necessary to effectuate the purposes of the Act.
The record discloses that the respondent ceased manufacturing operations
on or about January 31 , 1945 ; that it has not since engaged in such operations ;
and that there appears to be no , prospect ^df, +ts resuming such operations 93 So
far as the record discloses , however, the respondent corporation has not been
dissolved , is still in existence , and is apparently collecting rent from the Black
Company upon the plant buildings occupied by it, and royalties upon the
patents and patent applications upon which it has granted the Black Company
exclusive licenses . It is apparent , therefore , that the respondent is not in a
position to comply with that portion of the Board 's order requiring it to offer
reinstatement to the employees found to have been discriminatorily discharged,
or to bargain coilectively .,.with the Union as the .representative of the employees
in the appropriate unit. No purpose can, therefore , be served by requiring it
to take affirmative action in either of these respects . It will, however, be
recommended that the respondent make the said employees whole in the
manner required in the Board's Decision and Order for any loss of pay sus-
tained as a result of the respondent 's discrimination , as hereinafter modified.
Since the Board, for reasons stated in its Decision and Order , did not require
the respondent to reinstate employees Ernest Burns and 0 E Biles, or to give
them back pay for the period subsequent to the date on which they obtained
new employment prior to the original hearing, no modification of the order is
required as to them. With respect to William Collins and Albert Kash,-however,
to whom the respondent was ordered to offer reinstatement with back pay
ns required in the said Order, and since the respondent has not complied there-
with, it will be recommended that the respondent be required to make them
whole for any loss of pay they may have suffered by reason of the respondent's
discrimination . As to Kash , it will be recommended that the respondent make
na Under the terms of the agreement between the respondent and the Black Company, as
modified, the respondent agreed not to compete , directly or indirectly , with the business of
the Black Company for a period of 20 years from February 1, 1945 , and further agreed to
piocure a similar commitment from Alexander F. Jenkins.
THE ALEXANDER MILBURN COMPANY 775
him whole for any loss of pay he may have suffered by reason of the respondent's
discrimination, by payment to him of a sum of money equal to the amount which
he normally would have earned as wages during the periods from November 17,
1942, the date of his suspension, to December 2, 1942, the date on which he
was reemployed by the respondent, and from December 3, 1942, the date of
his final discharge, to the date of the transfer of its business by the respondent
to the Black Company on January 31, 1945, less his net earnings during such
periods. Since the Board, however, awarded William Collins back pay merely
during the period from five (5) days after the date of its Order to the date on
which lie was offered reinstatement in accordance with the said Order, less his
net earnings; and, since the respondent was no longer engaged in the business
involved in these proceedings at the time the Order was issued, it will not be
recommended that the respondent make him whole for any loss of pay during
said period. It will, however, be recommended that the Black Company offer
the said Collins and Kash immediate and full reinstatement to their former or
substantially equivalent positions, a and make the said Kash whole for any loss
of pay he may have sustained from the date of the transfer of its business by
the respondent to the Black Company to the date of the offer of reinstatement
by the said Black Company, less his net earnings during such period, as defined
in the Order. With respect to Collins, it will be recommended that the said
Black Company make him whole for any loss of pay he may have suffered by
payment to him of a sum of money equal to the amount which he normally
would have earned as wages, had he been reinstated, during the period from
five (5) days after the date of the Board's Order to the date on which he is
offered reinstatement by the said Black Company, less his net earnings during
such period.
Since it has been found that the determination of the bargaining representative
is binding upon the Black Company as successor to the respondent, and since the
successor, as well as the respondent, has refused to bargain collectively with the
Union," it will be recommended that the Black Company, upon request, bargain
collectively with the Union.
44 In accordance with the Board's consistent interpretation of the term , the expression,
"former or substantially equivalent positidl ," is intended to mean "former position wherever
possible, but it such position is no longer in existence, then to a substantially equivalent
position " See Matter of The Chase National Bank of the City of New York, San Juan,
Puerto Rico Branch, 65 N. L R B 827.
a' It will be recalled that the Union made a demand for collective bargaining on July 11,
1945 upon both the respondent and the Black Company following the issuance of the
Board's Decision and Older , and that the demand was ignored . Although it was not specifi-
cally contended by Board counsel at the hearing that this constituted a "fresh" refusal to
bargain by the Black Company, these facts , in the circumstances, afford a basis for so finding.
However, in view of the finding regarding its obligation to bargain upon other grounds, it is
unnecessary to predicate the finding upon the former grounds The undersigned is cognizant
of the fact that, as stipulated by the.parties, there were, immediately prior to February 1,
1945, approximately 80 production and maintenance employees on the respondent's pay roll,
and that there were, at the time of the instant hearing, "approximately 29 of said employees
i emaining in the employ of the Black Company " Apart from the fact that the issue of the
appropriateness of the unit or majority of the Union was not raised at the hearing before
the undersigned , any claim of defection in majority while the respondent ' s unfair labor
practices remained unremedied by it or its successor would not relieve them of the duty to
bargain See Mattel of Karp Metal Products Co , Inc, 51 N L R. B 621. Matter of Wilson
J Co , Inc, 67 N L R B 662 ; Matter of Cheney California Lumber Company, 62 N L R. B.
1208, Matter of Manes Equipment Company, 62 N. L it. B 1460, Matter of John S Doane
Company, 63 N L R B 1403 See Franks Bros Co v N L R B, 321 U S 702. See also
-Matte ) of Consolidated Machine Tool Corporation , 67 N L R B 737 ; N L. R. B v Appa-
lachian Electric Power Co., 140 F (2d) 217 (C C A 4) ; N L R B. v Century Oxford
_ lfg Corp., 140 F (2d) 541 (C C A. 2), cert den. 324 U S 714
776 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Upon the basis of the foregoing findings of fact and upon the entire record in
the case, the undersigned makes, in addition to those heretofore made by the
Board in its Decision and Order, the following:
CONCLUSIONS OF LAW
1. The Black Manufacturing Company is, and has been, since February 1, 1945,
the successor of the respondent.
2. The Black Manufacturing Company is, and has been, since February 1, 1945,
responsible for remedying the unfair labor practices engaged in by the respondent
3. By failing to remedy the aforesaid unfair labor practices, the said Black
Manufacturing Company has engaged in unfair labor practices within the mean-
ing of Section 8 (1), (3), and (5) and Section 2 (6) and (7) of the Act.
4. United Electrical, Radio & Machine Workers of America, affiliated with the
Congress of Industrial-Organizations, was, at all times material herein, and it
is now, the exclusive representative of all the employees in the unit found by
the Board,'in its Decision and Order, to have been appropriate, for the purposes
of collective bargaining, within the meaning of Section 9 (a) of the Act.
RECOMMENDATIONS
Upon the basis of the foregoing findings of fact and conclusions of law, the
undersigned hereby recommends that the respondent, The Alexander Milburn
Company, Baltimore, Maryland, and its officers and agents :
1. Cease and desist from.
(a) In any manner interfering with, restraining , or coercing its former em-
ployees in the exercise of the right to self-organization, to form labor organi-
zations, to join or assist United Electrical, Radio & Machine Workers of America,
affiliated with the Congress of Industrial Organizations, or any other labor organi-
zation, to bargain collectively through representatives of their own choosing,
and to engage in concerted activities for the purpose of collective bargaining or
other mutual aid or protection, as guaranteed in Section 7 of the Act.
2. Take the following affirmative action, which the undersigned finds will
effectuate the policies of the Act :
(a) Make whole Albert Kash for any loss of pay he may have suffered by
reason of the respondent's discrimination against him by payment to him of a
sum of money equal to the amount he normally would have earned as wages
during the periods from November 17 to December 2, 1942, and from December 3,
1942, to the date of the transfer of the respondent' s business to the said Black
Manufacturing Company on January 31, 1945, less his net earnings during said
periods ;
(b) Make whole Ernest Burns and O. E. Biles for any loss of pay they may
have suffered by reason of the respondent's discrimination against them, by
payment to each of them of a sum of money equal to the amount he normally
would have earned as wages from the (late of the respondent's discrimination
against him to the date on which he obtained the employment held by him at the
time of the original hearing, less his net earnings during said period, and less
any amounts already paid him by the respondent as reimbursement for the
loss of pay suffered by him by reason of the respondent's discrimination against
him.
THE ALEXANDER MILBURN COMPANY 777
The undersigned further recommends that the said Black Manufacturing
Company, Baltimore, Maryland, and its officers, agents, successors and assigns :
1. Cease and desist from :
(a) Interfering with, restraining, or coercing its employees in the exercise of
the right to self-organization, to form labor organizations, to join or assist United
Electrical, Radio & Machine Workers of America, affiliated with the Congress of
Industrial Organizations, or any other labor organization, to bargain collectively
through representatives of their own choosing, and to engage in concerted activi-
ties for the purpose of collective bargaining or other mutual aid or protection,
as guaranteed in Section 7 of the Act;
(b) Discouraging membership in United Electrical, Radio & Machine Workers
of America, affiliated with the Congress of Industrial Organizations, or in any
other labor organization of its employees, by discriminatorily discharging em-
ployees, or by discriminating in any other manner in regard to their hire or tenure
of employment or any term or condition of employment ;
(c) Refusing to bargain collectively. in respect to rates of pay, wages, hours of
employment, and other conditions of employment, with United Electrical, Radio &
Machine Workers of America, affiliated with the Congress of Industrial Organiza-
tions, as the exclusive representative of all its production and maintenance em-
ployees, excluding all general office employees, foremen, and executives
2. Take the following affirmative action, which the undersigned finds will
effectuate the policies of the Act :
(a) Offer William Collins immediate and full reinstatement to the position
held by him immediately prior to his induction into the Army on November 4,
1942, or to a substantially equivalent position, without prejudice to his seniority
and other rights and privileges ;
(b) Make whole William Collins for any loss of pay he may have suffered
by reason of the respondent's discrimination against him, by payment to him of
a sum of money equal to the amount he normally would have earned as wages
during the period from five (5) days after the date of the Board's Decision
and Order, to the date of the offer of reinstatement by the said Black Manufactur-
ing Company, less his net earnings during said period;
(c) Offer Albert Kash immediate and full reinstatement to the position held
by him prior to November 17, 1942, the date of his discriminatory suspension, or
to a substantially equivalent position, without prejudice to his seniority and
other rights and privileges ;
(d) Make whole Albert Kash for any loss of pay he may have suffered
by reason of the respondent's discrimination against him, by payment to him of
a sum of money equal to the amount lie normally would have earned as wages
during the period from February 1, 1945, the date on which the said Black
Manufacturing Company commenced operation of the business acquired from
the respondent, to the date of the offer of reinstatement by the said Black Manu-
facturing Company, less his net earnings during said period;
(e) Upon request, bargain collectively, in respect to rates of pay, wages, hours
of employment, and other conditions of employment, with United Electrical, Radio
& Machine Workers of America, affiliated with the Congress of Industrial Organi-
zations, as the exclusive representative of all its production and maintenance em-
ployees, excluding all general office employees, foremen, and executives, and
if an understanding is reached, embody such understanding in a signed agreement.
It is further recommended that the said respondent, The Alexander Milburn
Company, Baltimore, Maryland, its officers and agents, and the said Black
778 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Manufacturing Company, Baltimore, Maryland, and its officers, agents, successors,
and assigns :
(a) Post at the plant at Baltimore, Maryland, copies of.the notices attached
hereto, marked "Appendix A" and "Appendix B," respectively. It is further
recommended that the Black Manufacturing Company be required to permit
the respondent to post the notice marked "Appendix A" at the said plant.
Copies of said notices, to be furnished by the Regional Director for the Fifth
Region, shall, after being duly signed by the representative of the respondent,
and of the Black Manufacturing Company, respectively, be posted by them
immediately upon receipt thereof, and maintained by them for sixty (60) con-
secutive days thereafter, in conspicuous places where notices to employees are
customarily posted. Reasonable steps shall be taken by the respondent and
the Black Manufacturing Company to insure that said notices are not altered,
defaced, or covered by any other material ;
(b) Notify the Regional Director for the Fifth Region in writing, within ten
(10) days from the date of the receipt of this Intermediate Report, what steps
the respondent and the said Black Manufacturing Company have taken to comply
herewith.
It is further recommended that unless on or before ten (10) days from the
receipt of this Intermediate Report, the respondent and the said Black Company
notify said Regional Director in writing that they will comply with the foregoing
recommendations, the National Labor Relations Board issue an order requiring
them to take the action aforesaid.
As provided in Section 203.39 of the Rules and Regulations of the National
Labor Relations Board, Series 4, effective September 11, 1946, any party or
counsel for the Board may, within fifteen (15) days from the date of service
of the order transferring the case to the Board, pursuant to Section 20338 of
said Rules and Regulations, file with the Board, Rochambeau Building. Wash-
ington 25, D. C, an original and four copies of a statement in writing setting
forth such exceptions to the Intermediate Report or to any other part of the
record or proceeding (including rulings upon all motions or objections) as he
relies upon, together with the original and four copies of a brief in support
thereof; and any party or counsel for the Board may, within the same period,
file an original and four copies of a brief in support of the Intermediate Report.
Immediately upon the filing of such statement of exceptions and/or briefs, the
party or counsel for the Board filing the same shall serve a copy thereof upon
each of the other parties and shall file a copy with the Regional Director. Proof
of service on the other parties of all papers filed with the Board shall be promptly
made as required by Section 203.65. As further provided in said Section 203 39,
should any party desire permission to argue orally before the Board, request
therefor must be made in writing to the Board within ten (10) days from the
date of service of the order transferring the case to the Board.
IRVING RoGOSIN,
Trial E.Taminer.
Dated March 28, 1947.
THE ALEXANDER MILBURN COMPANY 779
APPENDIX A
NOTICE TO ALL EMPLOYEES
Pursuant to the recommendations of a Trial Examiner of the National Labor
Relations Board, and in order to effectuate the policies of the National Labor
Relations Act, we hereby notify our former, employees that :
WE WILL NOT in any manner interfere with, restrain, or coerce our former
employees in the exercise of their right to self-organization, to form labor
organizations, to join or assist UNITED ELECTRICAL, RADIO & MACHINE WORK-
ERS OF AMERICA, affiliated with the CONGRESS OF INDUSTRIAL ORGANIZATIONS,
or any other labor organization, to bargain collectively through representa-
tives of their own choosing, and to engage in concerted activities for the
purpose of collective bargaining or other mutual aid or protection.
WE WILL make whole the employee named below for so much of his loss
of pay suffered as a result of the discrimination against him for which we
have been found responsible:
Albert Kash
WE WILL make whole the employees named below for any loss of pay
suffered as a result of the discrimination against them from the date of
the said discrimination to the date on which they obtained the employment
held by them at the time of the original hearing :
Ernest Burns
O. E. Biles
THE ALEXANDER MIL13URN COMPANY,
Former Employer.
By ---------------------------------------
(Representative ) ( Title)
Dated ------------------------
NOTE: Any of the above-named employees presently serving in the Armed
Forces of the United States will be offered full reinstatement upon application
in accordance with the Selective Service Act after discharge from the Armed
Forces.
This notice must remain posted for 60 days from the date hereof, and must
not be altered , defaced, or covered by any other material.
APPENDIX B
NOTICE TO ALL EMPLOYEES
Pursuant to the recommendations of a Trial Examiner of the National Labor
Relations Board, and in order to , effectuate the policies of the National Labor
Relations Act, we hereby notify our employees that :
WE WILL NOT interfere with, restrain, or coerce our employees in the ex-
ercise of their right to self-organization , to form labor organizations , to join
or assist UNITED ELECTRICAL, RADIO & MACHINE WORKERS OF AMERICA, affil-
iated with the CONGRESS OF INDUSTRIAL ORGANIZATIONS , or any other labor
organization, to bargain collectively through representatives of their own
choosing, and to engage in concerted activities for the purpose of collective
bargaining or other mutual aid or protection.
780 DECISIONS OF NATIONAL LABOR RELATIONS,BOARD
WE WILL OFFER to William Collins immediate and full reinstatement to
the position held by him immediately prior to November 4, 1942, or to a sub-
stantially equivalent position without prejudice to any seniority or other
rights and privileges previously enjoyed, and make him whole for so much
of his loss of pay, suffered as a result of the discrimination , for which we
have been found responsible.
WE WILL OFFER to Albert Kash immediate and full reinstatement to the
position held by him prior to November 17, 1942, or to a substantially equiv-
alent position, without prejudice to any seniority or other rights and priv-
ileges previously enjoyed by him, and make him whole for so much of his
loss of pay , suffered as a result of the various acts of discrimination against
him, for which we have been found responsible.
WE WILL BARGAIN collectively upon request with UNITED ELECTRICAL, RADIO
& MACHINE WORKERS OF AMERICA, affiliated with the CONGRESS OF INDUSTRIAL
ORGANIZATIONS , as the exclusive representative of all employees in the bar-
gaining unit described herein with respect to rates of pay , hours of employ-
ment or other conditions of employment, and, if an understanding is reached,
embody such understanding in a signed agreement . The bargaining unit is:
All production and maintenance employees , excluding all general office
employees , foremen, and executives
All our employees are free to become or remain members of the above-named
union or any other labor organization. We will not discriminate in regard to
hire or tenure of employment or any term or condition of employment against
any employee because of membership in or activity on behalf of any such labor
organization.
THE BLACK MANUFACTURING COMPANY,
Employer.
By ---- ------------------------
(Repiesentative ) ( Title)
Dated ------------------------
NOTE: Any of the above -named employees presently serving in the Armed Forces
of the United States will be offered full reinstatement upon application in accord-
ance with the Selective Service Act after discharge from the Armed Forces.
This notice must remain posted for 60 days from the date hereof, and must not
be altered , defaced, or covered by any other material.