American Air Filter Co.

National Labor Relations Board - Board Decisions

Sep 18, 1981

258 N.L.R.B. 49 (N.L.R.B. 1981)

AMERICAN AIR FILTER CO.
American Air Filter Company, Inc. and General
Drivers, Warehousemen & Helpers, Local
Union No. 89, affiliated with the International
Brotherhood of Teamsters, Chauffeurs, Ware-
housemen & Helpers of America. Case 9-CA-
15228-1
September 18, 1981
DECISION AND ORDER
BY MEMBERS FANNING, JENKINS, AND
ZIMMERMAN
On April 30, 1981, Administrative Law Judge
Arline Pacht issued the attached Decision in this
proceeding. Thereafter, the Respondent filed ex-
ceptions and a supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and brief
and has decided to affirm the rulings, findings,'
and conclusions of the Administrative Law Judge
and to adopt her recommended Order. 2
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board adopts as its Order the recommended
Order of the Administrative Law Judge and
hereby orders that the Respondent, American Air
Filter Company, Inc., Louisville, Kentucky, its of-
ficers, agents, successors, and assigns, shall take the
action set forth in the said recommended Order,
except that the attached notice is substituted for
that of the Administrative Law Judge.
i The Respondent has excepted to certain credibility findings made by
the Administrative Law Judge. It is the Board's established policy not to
overrule an administrative law judge's resolutions with respect to credi-
bility unless the clear preponderance of all of the relevant evidence con-
vinces us that the resolutions are incorrect. Standard Dry Wall Products.
Inc., 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have
carefully examined the record and find no basis for reversing her find-
ings.
2 In accordance with his dissent in Olympic Medical Corporation, 250
NLRB 146 (1980), Member Jenkins would award interest on the backpay
due based on the formula set forth therein.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
the National Labor Relations Board found that we
have violated the National Labor Relations Act, as
amended, and has ordered us to post this notice.
The Act gives employees the following rights:
To engage in self-organization
To form, join, or assist any union
To bargain collectively through repre-
sentatives of their own choice
To engage in activities together for the
purpose of collective bargaining or other
mutual aid or protection
To refrain from the exercise of any or all
such activities.
WE WILL NOT refuse to bargain collectively
with General Drivers, Warehousemen & Help-
ers, Local Union No. 89, affiliated with the In-
ternational Brotherhood of Teamsters, Chauf-
feurs, Warehousemen & Helpers of America,
as the exclusive bargaining representative of
the employees set forth below by contracting
out the work of those employees or otherwise
changing their wages, hours, and other terms
and conditions of employment without first
bargaining with the above-named labor organi-
zation. The appropriate unit is:
All truckdrivers employed by us in the
transportation of our products; but exclud-
ing all office clerical employees, dispatchers,
all other employees and all professional em-
ployees, guards and supervisors as defined in
the Act.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce employees in
the exercise of the rights guaranteed to them
under Section 7 of the Act.
WE WILL give employees Ed Bradley, Ed
McMahan, and the estate of Luke Bunch, who
were displaced by our termination of the con-
tract with Transport Associates, Inc., backpay
with interest.
WE WILL bargain collectively with General
Drivers, Warehousemen & Helpers Local
Union No. 89, as the exclusive representative
of the employees in the unit described above
with respect to wages, hours, and other terms
and conditions of employment.
AMERICAN AIR FILTER COMPANY,
INC.
After a hearing at which all sides had an opportu-
nity to present evidence and state their positions,
258 NLRB No. 10
49
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
DECISION
STATEMIEN T 01 THIt CASE
ARlINE PACHIr, Administrative Law Judge: This case
was heard before me in Louisville, Kentucky, on January
21 and 22, 1981. The charge was filed on April 23, 1980,
by General Drivers, Warehousemen & Helpers, Local
Union 89, affiliated with the International Brotherhood
of Teamsters, Chauffeurs, Warehousemen & Helpers of
America (hereinafter called the Union or Local 89). The
complaint issued on June 5, 1980, alleging that American
Air Filter Company, Inc. (hereinafter called AAF or Re-
spondent),' violated Section 8(a)(l) and (5) of the Na-
tional Labor Relations Act, as amended. Respondent
filed a timely answer on June 12, 1980, denying the com-
mission of any unfair labor practices.
The parties were given opportunity at the hearing to
introduce evidence, examine and cross-examine wit-
nesses, and argue orally. After considering the entire
record and briefs filed by the General Counsel, the
Union, and Respondent, I make the following:
FINDINGS OF FACT
I. JURISDICTION
Respondent is a Delaware corporation engaged in the
manufacture and sale of air filters at its Louisville, Ken-
tucky, plant. During the past 12 months, a representative
period, Respondent purchased and received at its Louis-
ville facility products, goods, and materials valued in
excess of $50,000 directly from points outside the State
of Kentucky. The General Counsel contends, the Re-
spondent concedes, and I find, therefore, that Respond-
ent is an employer engaged in conduct affecting com-
merce within the meaning of Section 2(2), (6), and (7) of
the Act.
The Union is a labor organization within the meaning
of Section 2(5) of the Act.
11. ISSUES
The issues presented for resolution in this case are: (1)
whether American Air Filter is a joint employer of driv-
ers whose services are supplied by Transport Associates,
Inc., and (2) if AAF is a joint employer, whether it has a
duty to bargain with the Union over the decision to re-
place those drivers with other drivers and the effects of
such an action.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. AAF's Relationship With Transport
Since 1973, AAF has leased drivers from Transport
Associates, Inc. (hereinafter Transport), an agency in the
business of staffing the transportation operations of other
companies. The terms of AAF's arrangement with
Transport were defined in a series of 1-year contracts,
the latest of which was renewed in 1978. It imposed
I In 1978 Respondent was purchased by the Allis-Chalmers Corpora-
tion. On January 1, 1981, it was liquidated into the present corporation as
an operating division and called Replacement Filter Division, Fiber Glass
Group, American Air Filter Co., Inc.
upon the lessor, Transport, the duty to furnish bonded,
qualified drivers on a cost-plus basis; that is, a sum paid
by AAF which reflected the mileage and hourly rates
earned by each driver, contributions to their employee
benefit programs, and a premium for Transport's over-
head.
The contract specifically reserved to AAF the right to
refuse or reject drivers referred to it, to dispatch the
drivers, direct the loading and unloading of the product,
select the routes, direct the drivers as to pickups and de-
liveries, and "exercise exclusive supervision and control
over the entire operation of vehicles and drivers." Addi-
tionally, the Respondent was obliged to pay other costs
including tolls, weighing expenses, motels, telephone
bills, and other justifiable road expenses, and to maintain
insurance policies on vehicles provided for the drivers.2
Respondent also agreed to pay increased wages during
the term of the contract if the cause for such increases
were beyond Transport's control, with the proviso that
in such an event, Respondent could terminate the con-
tract on 90 days' notice. Pay raises were negotiated be-
tween AAF and Transport at the time the contract was
renewed, although one driver succeeded in negotiating a
separate and higher rate of pay with AAF which was ac-
cepted by Transport.
As a practical matter, Transport's role was that of an
employment or personnel service. It gave applicants road
tests, had them fill out application forms, and then re-
ferred them to clients. It provided no supervision after
the drivers were so referred and, in fact, had no further
contact with its employees other than processing and
mailing their weekly paychecks.
In accordance with AAF's needs, three drivers were
assigned to Respondent on an exclusive basis: Ed Brad-
ley began working for AAF in 1973 while two other
drivers Ed McMahan and Luke Bunch were added in
1978. Once the drivers were referred to AAF and met
with its approval, Respondent's traffic manager, Roger
Roalofs, was solely in charge of supervising their day-to-
day operations. Roalofs issued the drivers their weekly
schedules and required them to report to him on a daily
basis. Each driver was obliged to keep a log and trip re-
ports on forms provided to them by Respondent and
submit them to Roalofs who maintained the documents
in compliance with Federal regulations. If a driver was
involved in an accident, received a fine or was delayed
and had to stay overnight in a motel, Respondent com-
pensated him for his expenditures. The drivers reported
their absences to Roalofs and scheduled vacations with
him. The trucks they drove bore AAF's name; they were
given gasoline credit cards with AAF as the payee and
keys to Respondent's parking lot. Employee handbooks
were prepared by Transport, but were distributed to
them by Roalofs. Moreover, Roalofs frequently issued
memos to the drivers instructing them on such topics as
the proper maintenance of their vehicles or warning
them against permitting unauthorized passengers in their
vehicles.
2 Respondent leased the trucks from a separate and independent firm.
50
AMERICAN AIR FII.TER CO.
B. AAFs Role in Collective Bargaining
On January 30, 1979, pursuant to an agreement which
designated only Transport as the employer, the Board's
Regional Director certified Local 89 as the collective-
bargaining representative for the unit comprised of "All
truck drivers employed by the Employer in the transpor-
tation of American Air Filter products." When collective
bargaining commenced some 12 months later, only three
meetings were necessary before Transport and the union
representatives reached agreement.
The first bargaining session on December 10 was at-
tended by the Union's business agent, Glen Tomes, com-
mitteeman McMahan, and Rod Marshall, operations
manager for Transport. Roalofs was not present, but his
views were represented by Marshall on several occa-
sions. Tomes related that at this first meeting, after he
proposed a basic draft contract similar to those which
had been negotiated for other units of Transport's driv-
ers, Marshall insisted that the seniority and dispatch pro-
visions in the agreement be revised to reflect the proce-
dures utilized at AAF. In addition, when a question
arose with respect to preserving McMahan's special rate
of pay, Marshall stated that he would have to consult
with Roalofs and obtain his verification. Further, when-
ever Marshall commented that Roalofs was not receptive
to retroactive pay increases, Tomes asked that he partici-
pate directly in the negotiations.
At the next meeting on December 20, Marshall stated
that Roalofs had approved the special pay rate for
McMahan, and was agreeable to a pay schedule based on
17 or 18 cents per mile, an increase of 2 or 3 cents over
the current rate. The union negotiators, believing it tacti-
cally necessary to do so, demanded a greater increase
than Roalofs was willing to pay. When this demand was
made, a heated discussion ensued, and again Tomes told
Marshall that Roalofs should be at the bargaining table if
his authorization was needed.
At the third meeting on January 14, Marshall revealed
that he had Roalofs' concurrence with respect to the
agreement reached with the Union on wage increases. 3
Charles Spond, assistant to the union president, who
attended only this final meeting, also testified that Mar-
shall indicated he had AAF's approval for the increased
costs negotiated in the contract and that there would be
no problems. At the conclusion of the meeting, the par-
ties initialed those portions of the contract which deviat-
ed from the original draft to signify that agreement had
been reached.
3 Respondent argues incorrectly that Tomes' testimony bearing on
what Roalofs discussed with Marshall is inadmissible hearsay. Since
Transport is cited in the complaint as a party in interest, Marshall's state-
ments are received as admissions of a party opponent. See Fed R. Evid..,
Rule 801(dX2XA). Testimony as to what Roalofs allegedly said to Mar-
shall is also admissible to establish the source of the Union's belief that
Respondent was involved in negotiations, not to prove the truth of the
matters asserted therein. Even if portions of Tomes' testimony about
Roalofs' statements to Marshall were to fall within the rule against hear-
say, such statements are not necessarily inadmissible in Board proceed-
ings. United Rubber, Cork, Linoleum and Plastic Workers of America.
Local 878 (Goodyear Tire d Rubber Company), 255 NLRB 251 (1981).
This permissive approach is particularly warranted here where the out-
of-court declarant Roalofs testified at the hearing.
Transport President William Tatter's view of Respond-
ent's role in the negotiations differs sharply from that of
the union agents. Both in his testimony at the hearing
and in a statement provided to the Board, Tatter main-
tained that the collective-bargaining agreement was
never subject to AAF's approval and that this fact as
well as Transport's exclusive role as employer was made
perfectly clear to the Union throughout the negotiations.
However, Roalofs' testimony regarding his conversa-
tions with Marshall during the weeks in which collective
bargaining was taking place, tends to corroborate Tomes'
testimony rather than Tatter's.4 Roalofs stated that Mar-
shall advised him late in 1979 that negotiations were
going forward. He, in turn, informed his immediate su-
pervisor to the same effect. Moreover, Roalofs acknowl-
edged that Transport officials continued to discuss var-
ious portions of the agreement with him as negotiations
progressed. In particular, Roalofs recalled that they dis-
cussed preservation of a special wage rate for one if not
all three of the drivers. He further remembered telling
Marshall that he hoped the contract would not entail re-
visions in AAF's current dispatch procedures. However,
he had no recollection one way or the other of telling
Marshall he could live with a 17- or 18-cent mileage rate.
C. Events After Collective Bargaining
The contract concluded by the parties on January 14
was ratified by the unit employees on January 19, and
submitted in final form for execution to Transport Asso-
ciates on January 23, 1980.
However, Tatter testified that, in late January 1980, he
and Marshall met with Roalofs to review various provi-
sions in the collective-bargaining agreement which had
economic consequences for Respondent. According to
Tatter, Roalofs expressed some dismay as to the in-
creased costs resulting from the agreement but gave no
indication that Respondent intended to terminate the
contract. Tatter left that meeting assuming there would
be further discussions with Roalofs. Instead, sometime in
February, Roalofs advised Tatter by telephone, followed
by a confirming letter on February 19, that Respondent
was invoking its right to cancel the contract. In a re-
sponse dated April 15, Tatter agreed to an expiration
date of April 19, and asked Roalofs to have the drivers
report back to Transport's offices on their final date of
employment.
Neither Respondent nor Transport advised the Union
prior to that date that the contract definitely was to be
terminated. Rather, early in February, Tomes called
Transport to find out why a signed agreement had not
been returned to him. According to Tomes' affidavit,
Marshall advised him that Transport needed AAF's ap-
proval before it could execute the agreement but that he
still did not see any problems. In subsequent conversa-
tions in February, Tomes learned from Marshall and
Tatter that AAF was opposing the retroactive pay provi-
4 Tatter did not attend the bargaining sessions and therefore cannot re-
liably state what was said there. Tomes was not only present but kept
notes which he brought to the hearing. Moreover, portions of his testi-
mony ere confirmed by Spond and Roalofs I therefore credit his ac-
count of he bargaining meetings
51
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
sions and was unwilling to renew its lease contract with
Transport. Tatter assured Tomes he would contact him
in the event the situation altered.
However, Tomes heard nothing further from Trans-
port and, therefore, on March 18, filed a charge with the
Board alleging that it was refusing to recognize and im-
plement the labor agreement. After investigation, the Re-
gional Director concluded that Transport was not obli-
gated to sign the collective-bargaining agreement with-
out AAF's approval and therefore determined that no
complaint should issue.5
Not until April 19 did the Union learn that Respond-
ent had formally terminated its contract with Transport.
On that date, Roalofs advised the drivers that AAF
would no longer be requiring their services. The Union
filed the charge in the instant case 4 days later. When
the drivers reported back to Transport, they were ad-
vised that there was no other work available for them
and that they should apply for unemployment compensa-
tion.
By letter of July 18, 1980, to the manager of labor re-
lations for the Allis-Chalmers Corporation, Tomes wrote:
"As heretofore requested through Transport Associates,
Incorporated, we are again requesting to meet for pur-
poses of negotiating the terms and conditions of a Bar-
gaining Agreement for the truck drivers as certified Jan-
uary 30, 1979." Respondent responded swiftly on July
23, denying that it had any duty to bargain and rejecting
the Union's request. It also advised the Union that it was
leasing the services of one driver from an agency other
than Transport.
IV. DISCUSSION
A. American Air Filter is a Joint Employer
An employer is defined in Section 2(2) as "any person
acting as an agent of an employer, directly or indirectly
. ." who exercises control over the employee's work-
ing conditions. A joint employer is one who shares that
control with another employer as established by objec-
tive evidence. See Harold A. Boire, Regional Director v.
Greyhound Corporation, 376 U.S. 473, 481 (1964); Floyd
Epperson and United Dairy Farmers, Inc., 202 NLRB 23
(1973), enfd. 491 F.2d 1390 (6th Cir. 1974). The facts ad-
duced in this case prove beyond doubt that AAF and
Transport were joint employers.
It is true that Transport initially hired the drivers, re-
ferred them to clients, sent them their paychecks, and in-
cluded them in its benefit programs. However, beyond
that, Transport was completely divorced from the daily
supervision of the drivers once they were assigned to
AAF. At that point, AAF alone assumed control of the
employees' daily working conditions. AAF had the con-
tractual right to reject employees recommended to it.
Consequently, it had the right to approve the drivers as
well. Although the drivers were technically on Trans-
port's payroll, they were, in reality paid by AAF. The
men worked full time for AAF; the number of days and
hours they worked each week were dictated by AAF's
The Union's appeal of this determination and a petition to amend the
certification to designate American Air Filter as an employer were with-
drawn on May 20, 1980.
delivery schedule. The only supervisor to whom they re-
ported, Roger Roalofs, was an AAF employee. The trip
sheets and logs which the drivers kept were those which
AAF was required to maintain. When AAF terminated
its contract with Transport, the drivers found themselves
without work. In effect, AAF had fired them.
In sum, it was AAF, not Transport, which had the
most consistent contact and control over the day-to-day
incidents of the drivers' employment relationship. Since
"control of the essential elements of labor relations is a
prerequisite to the existence of a joint employer relation-
ship" (S. S. Kresge Co. K-Mart Division v. N.L.R.B., 416
F.2d 1225, 1230 (6th Cir. 1969)), it follows that such a
relationship existed between AAF and Transport. See
U.S. Pipe & Foundry Company and Winfrey Enterprises,
Inc., 247 NLRB 139 (1980); Sinclair and Valentine Co.,
Inc., a Division of Wheelabrator-Frye. Inc., 238 NLRB 754
(1978); Syufy Enterprises, a Limited Partnership, 220
NLRB 738 (1975); Mobil Oil Corporation, 219 NLRB 511
(1975).
Respondent admits that it controlled the drivers' func-
tions as if it were their employer, but nevertheless argues
it was not a joint employer because it exercised such
control solely to retain a private carrier status in compli-
ance with Interstate Commerce Commission standards as
set out in Personnel Service, Inc., 110 M.C.C. 695 (1969).
This argument does not aid Respondent's position. To
the contrary, the obligations imposed by the ICC upon
an employer which seeks the economic advantages of
private carrier status are entirely consistent with the
duties imposed on a joint employer under the National
Labor Relations Act.
Respondent further argues that the certification of
Transport as the employer of drivers who drove AAF
products bars litigation of its status as a joint employer in
this proceeding.
I find Respondent's argument unpersuasive for it mis-
perceives the nature of representation hearings and the
certification process. These proceedings are intended
principally to determine the interests of the employees in
being represented by the designated union, the scope of
the appropriate unit, and the employees included therein.
See American Cable & Radio Corp. v. Douds, 111 F.Supp.
482, 485 (D.C.N.Y. 1953). Indeed, the very cases which
Respondent cites as authority for the proposition that de-
terminations in prior representation proceedings bar reli-
tigation of the same issues under a theory of res judicata
deal with questions affecting the employees in the bar-
gaining unit, and not the employer. See, e.g., Joint Coun-
cil of Teamsters No. 42, etc. (Irvine-Santa Fe Company),
248 NLRB 808 (1980) (Board refused to relitigate ques-
tion of employee status of independent contractors); Mis-
souri Pacific Employees Hospital Association et al., 251
NLRB 1547 206 (1980) (Board refused to clarify bargain-
ing unit to include employee classifications which existed
prior to but were omitted from the unit certification and
the collective-bargaining agreement). In representation
proceedings, the Board's role may be most aptly likened
to that of the neutral investigator. See N.L.R.B. v.
Fresh'nd-Aire Company, Division of Cory Corporation, 226
F.2d 737, 740-741 (7th Cir. 1955). However, the Board's
52
AMERICAN AIR FILTER CO.
interests are altogether different when it acts as a pros-
ecutor whose duty it is to protect against potential viola-
tions of the Act. This is not to say that an employer has
no interest in the representation hearings, but such pro-
ceedings are merely administrative and are not final dis-
positions of the substantive rights of the parties. Thus,
Board precedent establishes that questions affecting a
joint employer's status in an unfair labor practice pro-
ceeding are treated as separate and distinct from such de-
terminations in representation hearings. For example, in
U.S. Pipe & Foundry Company and Winfrey Enterprises,
Inc., supra, U.S. Pipe first contracted in 1966 for the
services of truckdrivers with a company, the successor
to which was Winfrey Enterprises. That same year, the
union was certified as the authorized representative for
all truckdrivers employed by Winfrey and thereafter en-
tered into successive collective-bargaining agreements
with that firm. In late 1975, the union filed two petitions
naming U.S. Pipe and Winfrey as employers of the driv-
ers working exclusively for U.S. Pipe. The cases were
consolidated for hearing after which the Board decided
that no question existed concerning representation since
Winfrey continued to recognize the union as the employ-
ees' representative. United States Pipe and Foundry Com-
pany-Soil Pipe Division, 223 NLRB 1443 (1976). Never-
theless, a complaint issued in 1977 charging U.S. Pipe
with a failure to bargain with the union over its termina-
tion of the contract with Winfrey. The Board ruled that
the respondents were joint employers, but, because U.S.
Pipe had given the union adequate notice that it would
be terminating the unit employees and had bargained
about the matter, no violation of the Act was found. Im-
plicit in the Board's decision is the assumption that U.S.
Pipe had a duty to bargain with the union even though it
was not certified as an employer at a time when its status
as a joint employer was known. In Royal Typewriter
Company, et al., 209 NLRB 1006 (1974), affd. 533 F.2d
1030 (8th Cir. 1976), the Board held that the company,
an unincorporated division of Litton Business Systems,
and Litton Industries, were a single employer obligated
to bargain with a union which some years earlier had
been certified as the bargaining representative for a unit
of employees at Royal Typewriter only. The Board and
the court expressly rejected Litton's claim that it was
denied due process by being joined as a party late in the
proceedings. See also N.L.R.B. v. Long Lake Lumber
Company and F. D. Robinson, 138 F.2d 363 (9th Cir.
1943).
The significant question, then, should not be whether
it is unfair to litigate a respondent's status as a joint em-
ployer when it was not certified initially as an employer,
but whether its rights are unjustly affected during the
unfair labor practice proceeding. The Board's approach
in the cases discussed above is equally applicable to the
case at bar: an employer, such as AAF, is in no way pre-
judiced simply because it was not named an employer or
failed to participate in the representation hearing where
it had ample opportunity to and did, in fact, litigate fully
the question of its joint employer status in the unfair
labor practice proceeding. See Royal Typewriter, supra at
1011, fn. 12. To find otherwise would elevate form over
substance.
B. AAF Has a Duty To Bargain
Having found that AAF was a joint employer, it fol-
lows that its bargaining duty was no less than that of
Transport. See Mobil Oil, supra at 516; Ref-Chem Compa-
ny and El Paso Products Co., Individually and as Co-Em-
ployers, 169 NLRB 376, 380 (1968), enforcement denied
on other grounds 418 F.2d 127 (5th Cir. 1969).
Respondent contends, however, that, because the
Union failed to notify it of its duty to bargain until some
3 months after the contract with Transport was terminat-
ed, its due-process right to notice was violated so that no
bargaining duty may be imposed on it. In support of this
position, Respondent cites Alaska Roughnecks and
Drillers Association v. N.L.R.B., 555 F.2d 732 (9th Cir.
1977), cert. denied 434 U.S. 1069 (1978), a decision
which it regards as squarely on point.
In that case, Mobil, which operated an offshore oil
drilling platform in Alaska, contracted in 1973 with
Santa Fe to perform its drilling and production oper-
ations. The evidence showed that Mobil exercised some
supervision over Santa Fe's employees at the site. When
the union petitioned for an election later in 1973 for a
unit of employees assigned to the Mobil platform, only
Santa Fe was designated as the employer. Immediately
after the union won the election, Santa Fe notified Mobil
of an increase in payments in anticipation of higher labor
costs that would result from collective-bargaining negoti-
ations. Mobil rejected the increase, and, on June 14,
1974, notified Santa Fe that it was terminating the con-
tract a month later. Santa Fe notified the union of
Mobil's termination, whereupon the union wrote to
Mobil requesting bargaining. The Board held that Mobil
was a joint employer and had a duty to bargain with the
union as to the decision to replace unit employees and
the effects of that decision. The court of appeals denied
enforcement of the Board's Order, finding that the extent
of Mobil's control over the Santa Fe employees was not
dispositive of the bargaining question. Rather, the court
reasoned that the Board's rules governing representation
proceedings required that notice shall be given to the
employer. The union's failure to give Mobil notice of
and an opportunity to challenge its purported employer
status at the representation hearing was, in the court's
view, a denial of due process. Moreover, since no bar-
gaining demand was ever made upon it, Mobil was enti-
tled to assume that Santa Fe was the exclusive employer,
absolving it of any duty to notify the union of its deci-
sion to terminate the contract.
Respondent's reliance on the court of appeals' decision
is misplaced, for critical distinctions exist between the
facts in the present matter and those in Alaska Rough-
necks Association. 6
6 Even were there no distinctions between these cases, and with all
due deference to the Ninth Circuit. I would not regard Alaska Rough-
necks Association. supra, controlling here for I am bound by the Board's
construction of the Act even though it may be at variance with the views
of the court of appeals. See Drivers. Chauffeurs and Helpers Local 639.
etc. (Dstrirr Ditrtbutors. Inc.). 119 NLRB 845, 850 (1958): .Nova Logging
Company. 119 NLRB 1573 (1958); Insurance Agents' International Union.
A.4FL-CIO (The Prudential Insurance Co.), 119 NLRB 768 (1957). reversed
260 F.2d 736 (D.C. Cir. 1958), affd. 361 US. 477 (1960).
53
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Unlike Mobil, which terminated its contract with
Santa Fe before negotiations commenced, and was found
to have played no overt or covert role in these negotia-
tions,7 AAF was involved in collective bargaining in a
manner which led the parties to believe that the Compa-
ny was acquiescing in its role as an affected joint em-
ployer. Roalofs acknowledged discussing provisions in
the agreement with Transport officials throughout the
period of time that negotiations were taking place. Thus,
Roalofs conveyed to Transport AAF's position on dis-
patch procedures, preservation of wage rates, increased
wages, and retroactive increases. It is apparent that Roa-
lofs commented on these matters with the expectation
that Marshall would represent AAF at the bargaining
table and attempt to incorporate its positions into the
agreement. His independent testimony provides compel-
ling proof that AAF was participating, albeit indirectly,
in the negotiations.
Transport's president, Tatter, took the position that
AAF had no legitimate role in the negotiations. Howev-
er, since he did not attend any of the bargaining sessions,
his subjective view of what the parties' arm's-length rela-
tionship should have been cannot prevail over accounts
of what actually occurred. Thus, Tatter may have had
no knowledge that Tomes asked Marshall on numerous
occasions to seek Roalofs' attendance at the meetings.
Through such requests to Transport, the Union did make
a bargaining demand on Respondent for it is well estab-
lished that the knowledge and conduct of one employer
is imputed to the joint employer as well. See, e.g., United
States Pipe and Foundry, supra. Ref-Chem Company, supra
at 380. Tatter also may have been unaware of Marshall's
consultations with Roalofs. Therefore, whether Roalofs
appeared personally at the sessions is immaterial, for he
clearly was relying on Transport to represent AAF's
best interests. Respondent's posture during the negotia-
tions was nothing less than that of an interested and in-
volved party.
When Marshall transmitted Roalofs' positions to the
members of the Union's negotiating team, they had every
reason to believe that Transport was acting as a spokes-
man for Respondent and that it was committed to collec-
tive bargaining. Roalofs' testimony shows that the
Union's belief was correct. There was, then, no need for
the Union to make a specific and separate bargaining
demand on AAF. Transport, too, apparently assumed
that AAF had concurred in the agreement for it is un-
likely that Marshall would have initialed the draft on
January 14 absent AAF's approval.
In contrast to Mobil Oil, AAF participated in collec-
tive bargaining and attempted to obtain the most favora-
ble terms possible. Only at the conclusion of the collec-
tive-bargaining process, when it determined that the
terms were disadvantageous did it sever its ties with
Transport. In these circumstances, Respondent's status as
a joint employer and its duty to bargain with the Union
is not contingent on the technical niceties of pleading in
representation hearings, nor on whether or not it is satis-
fied with the final terms of a labor contract. Rather, an
7 Mobil Oil Corp., supra at 515. The Ninth Circuit suggested that its
result might have been different had Mobil intervened in Santa Fe's labor
dispute. See Alaska Roughnecks Asociation, supra at 736-737.
employer such as AAF has a mandatory obligation to
bargain when it subcontracts out of the plant "work pre-
viously performed by employees in the bargaining unit,
which the employees were capable of continuing to per-
form." Fibreboard Paper Products Corp. v. N.L.R.B., 379
U.S. 203, 210-211 (1964). Moreover, a company must
give prior notice to the employees' representative suffi-
ciently in advance of actual implementation of its deci-
sion to replace the workers to allow reasonable scope for
bargaining. Sun-Maid Growers of California, 239 NLRB
346 (1978), affd. 618 F.2d 56 (9th Cir. 1980). According-
ly, by contracting out work previously performed by the
drivers, without notifying or bargaining with Local 89
about that decision or about the effects of replacing the
men with other employees, Respondent violated Section
8(a)(1) and (5) of the Act. See Sun-Maid Growers of Cali-
fornia, supra; Mobil Oil Corp., supra.
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in and affecting
commerce within the meaning of Section 2(2), (6), and
(7) of the Act.
2. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
3. The employees in the bargaining unit described in
the certification of representative in Case 9-RC-12725 as
"All truck drivers employed by the Employer in the
transportation of American Air Filter products, but ex-
cluding all office clerical employees, dispatchers, all
other employees and professional employees," constitute
a unit appropriate for collective bargaining within the
meaning of Section 9(b) of the Act.
4. Respondent and Transport Associates, Inc., are joint
employers of the employees in the above-described unit.
5. The Union at all material times has been the exclu-
sive collective-bargaining representative of the employ-
ees in the above unit within the meaning of Section 9(a)
of the Act.
6. By terminating its contract with Transport Asso-
ciates, Inc., and thereby displacing the employees in the
above unit, without permitting the Union to bargain over
the underlying decision or its effects on those employees
as found herein, Respondent engaged in unfair labor
practices within the meaning of Section 8(a)(5) and (1) of
the Act.
7. The aforesaid unfair labor practices affect commerce
within the meaning of Section 2(6) and (7) of the Act.
THE REMEDY
Having found that Respondent, American Air Filter,
has engaged in an unfair labor practice, I shall recom-
mend that it be ordered to cease and desist therefrom
and that it take certain affirmative actions to effectuate
the policies and purposes of the Act.
In Mobil Oil Corp., supra at 512, the Board observed
that the employer's contract with Santa Fe gave it the
privilege of cancellation upon notice so that neither the
contract termination nor the actual displacement of unit
employees occasioned thereby was alleged as a violation
of the Act. The Board concluded, therefore, that the
reinstitution of that contract and reinstatement of the em-
54
AMERICAN AIR FILTER CO.
ployees would be inappropriate. The same reasoning is
applicable here and the same result is warranted. Ac-
cordingly, as in Mobil Oil, Respondent shall be required
to bargain with the Union concerning the decision and
effects of displacing unit employees Bradley, McMahan,
and Bunch, 8 and to make these employees whole for any
losses suffered. Backpay shall be computed in accord-
ance with F W. Woolworth Company, 90 NLRB 289
(1950), and Florida Steel Corporation, 231 NLRB 651
(1977),9 from April 19, 1980, until the occurrence of the
earliest of the following conditions: "(1) the date Re-
spondent bargains to agreement with the Union on those
subjects pertaining to the decision and effects of the dis-
placement of unit employees; (2) a bona fide impasse in
bargaining; (3) the failure of the Union to request bar-
gaining within 5 days of Respondent's notice of its desire
to bargain with the Union; or (4) the subsequent failure
of the Union to bargain in good faith." Compare Mobil
Oil Corp., supra at 512 with Sun-Maid Growers of Cahlifor-
nia, supra at 355 (restoration of the verbal agreement
with the subcontractor and reinstatement of the dis-
placed employees ordered where Sun-Maid had not en-
tered into a subsequent contract with another employer
and no economic hardship could be foreseen thereby).
Upon the foregoing findings of fact, conclusions of
law, and the entire record, and pursuant to Section 10(c)
of the Act, I hereby issue the following recommended:
ORDER'
The Respondent, American Air Filter Company, Inc.,
Louisville, Kentucky, its officers, agents, successors, and
assigns, shall:
1. Cease and desist from:
(a) Refusing to bargain collectively with General
Drivers, Warehousemen & Helpers, Local Union No. 89,
affiliated with the International Brotherhood of Team-
sters, Chauffeurs, Warehousemen & Helpers of America,
as the exclusive bargaining representative of the employ-
R Subsequent to his termination with Respondent, Bunch died in an
automotive accident. Consequently, Respondent's backpay obligation to
Bunch runs from April 19, 1980, to the date of his death and shall be paid
to his estate. See Biscayne Television Corporation., 137 NLRB 430 (1962).
9 See also Isis Plumbing d Heating Co., 138 NLRB 716 (1962).
to In the event no exceptions are filed as provided by Sec. 102.46 of
the Rules and Regulations of the National Labor Relations Board, the
findings, conclusions, and recommended Order herein shall, as provided
in Sec. 102.48 of the Rules and Regulations, be adopted by the Board and
become its findings, conclusions, and Order, and all objections thereto
shall be deemed waived for all purposes.
ees in the bargaining unit set forth in paragraph 3 of the
Conclusions of Law above, and from contracting out the
work of those employees or otherwise changing their
wages, hours, and other terms and conditions of employ-
ment without first bargaining with the above labor orga-
nization.
(b) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of the
rights under Section 7 of the Act.
2. Take the following affirmative action which will ef-
fectuate the policies of the Act:
(a) Make whole those employees displaced by its ter-
mination of the contract with Transport Associates, Inc.,
for any loss of pay and other benefits suffered by them
commencing on April 19, 1980, until such time as one of
the conditions outlined above in the section entitled
"The Remedy" is met.
(b) Bargain collectively with Local Union 89 as the
exclusive representative of the employees in the afore-
mentioned unit with respect to wages, hours, and other
terms and conditions of employment.
(c) Preserve and, upon request, make available to the
Board or its agents, for examination and copying, all
payroll records, social security payment records, time-
cards, personnel records and reports, and all other re-
cords necessary to analyze the amount of backpay due
under the terms of this Order.
(d) Post at its office in Louisville, Kentucky, copies of
the attached notice marked "Appendix."'' Copies of this
notice, on forms provided by the Regional Director for
Region 9, after being duly signed by Respondent's au-
thorized representative, shall be posted by it immediately
upon receipt thereof, and be maintained by it for 60 con-
secutive days thereafter, in conspicuous places, including
all places where notices to employees are customarily
posted. Reasonable steps shall be taken by Respondent to
insure that said notices are not altered, defaced, or cov-
ered by any other material.
(e) Notify the Regional Director for Region 9, in writ-
ing, within 20 days from the date of this Order, what
steps Respondent has taken to comply herewith.
II In the event that this Order is enforced by a Judgment of a United
States Court of Appeals, the words in the notice reading "Posted by
Order of the National Labor Relations Board" shall read "Posted Pursu-
ant to a Judgment of the United States Court of Appeals Enforcing an
Order of the National Labor Relations Board "
55