Container Transit

National Labor Relations Board - Board Decisions

Sep 30, 1986

281 N.L.R.B. 1039 (N.L.R.B. 1986)

CONTAINER TRANSIT
Container Transit, Inc., Foxtrot-A Division of Con-
tainer Transit, Inc., M & N Leasing Inc., Colo-
rado & Eastern , Inc., 9th Avenue Trading Co.,
Inc., Single Employer, and March Transporta-
tion, Inc., Charm Leasing, and April Sales, Inc.,
Alter Ego and/or Joint Employer and/or Suc-
cessor and Thomas Fitzpatrick and Patrick
Groncki and Gerald Richardson and Teamsters
General Local 200, affiliated with the Interna-
tional Brotherhood of Teamsters , Chauffeurs,
Warehousemen and Helpers of America
Teamsters General Local 200, affiliated with the
International Brotherhood of Teamsters , Chauf-
feurs, Warehousemen and Helpers of America
and Thomas Fitzpatrick. Cases 30-CA-6893,
30-CA-6904, 30-CA-6939, 30-CA-7235, 30-
CA-7239,1 and 30-CB-1888
30 September 1986
DECISION AND ORDER
By MEMBERS JOHANSEN, BABSON, AND
STEPHENS
On 29 September 1985 Administrative Law
Judge Stephen J. Gross issued the attached deci-
sion . The General Counsel filed exceptions and a
supporting brief. Respondent March Transporta-
tion, Inc. filed a brief in answer to the General
Counsel's exceptions.2
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings , findings,s and
i The judge inadvertently referred to Case 30 -CA-7236 instead of
Case 30-CA-7239.
I On 12 February 1986 the General Counsel filed a motion to strike
certain portions of March 's answering brief which the General Counsel
claimed constituted exceptions to the judge's decision . In view of our dis-
position of the case , and in the absence of a showing of prejudice to the
General Counsel inasmuch as an ample opportunity was given the Gener-
al Counsel to respond to matters raised by March 's brief, we deny the
General Counsel 's motion to strike.
The General Counsel has excepted to some of the judge 's credibility
findings. The Board 's established policy is not to overrule an administra-
tive law judge's credibility resolutions unless the clear preponderance of
all the relevant evidence convinces us that they are incorrect . Standard
Dry Wall Products, 91 NLRB 544 (1950), enfd . 188 F.2d 362 (3d Cit.
1951). We have carefully examined the record and find no basis for re-
versing the findings.
At fn. 30 of his decision , the judge discredited Harry Fox 's testimony
that "March" is an acronym based on the subscribers' names . Instead, the
judge inferred that the choice of the company 's name was a reflection of
the month in which it was formed . In the absence of exceptions, we
adopt pro forma these findings as to the derivation of March's name.
In sec. IV of his decision , the judge stated that Foxtrot had never been
incorporated separately from CTI, a finding not supported by the record.
The evidence shows that Foxtrot was actually incorporated in February
1982, but never operated separately from CTI. Foxtrot , as a corporate
entity, officially dissolved the following year.
1039
conclusions4 and to, adopt the recommended
Order.
ORDER
The recommended Order of the administrative
law judge is adopted and the complaint is dis-
missed.
4 We agree with the judge that March , including its related companies,
is neither a Burns nor a Golden State successor to CTI and its related
companies , but we rely only on his finding , with which we agree, that
the owner-operators and nonowner drivers working for March are not
employees of March. Thus, we find it unnecessary to consider any of the
judge 's alternative grounds for finding no successorship here.
As noted, we agree with the judge that March 's tractor lessors are in-
dependent contractors . In doing so , we find it unnecessary to rely on his
finding in sec. V,C, of his decision , that one lessor, who is also a farmer,
makes his tractors available on a part-time basis to March . In our view,
the availability of this lessor 's tractors is not clear from the record. More-
over, we find this situation is too isolated to use as a basis for a determi-
nation that March has exclusive control over its lessors' equipment.
We also agree with the judge's view , set forth in sec. V,C, of his deci-
sion, that recent Board decisions may have cast doubt on the weight to
be accorded the fact "much of the control which the carriers exert over
owner-operators and non -owner drivers is a function of Federal and State
requirements." We overrule Robbins Motor Transportation, 225 NLRB 761
(1975); Mitchell Bros. Truck Lines, 249 NLRB 476 (1980); and Rediehs
Interstate, 255 NLRB 1073 (1980), to the extent that they may indicate
that control stemming from governmental requirements is the determina-
tive factor in the assessment of independent contractor versus employee
status for these contract drivers
In sec . V,D, of his decision, the judge concluded that March would
have used independent contractors rather than employee drivers irrespec-
tive of any concerns about unionization and successorship obligations. In
this regard , it is unclear whether the General Counsel has, in fact, estab-
lished an unlawful motive for March 's use of independent contractors.
Even if such an unlawful motive existed , however , we agree with the
judge that , on the basis of this record, including uncontradicted testimo-
ny, March established nondiscriminatory , business reasons for its use of
independent contractors.
In sec . VI,A, of his decision, the judge concluded that the record failed
to show that March unlawfully discriminated against ex -CTI employees
in its driver-recruiting practices . We agree with the judge based solely on
the fact that March 's recruiting efforts were directed towards independ-
ent contractors , who are individuals not protected by the Act.
We agree with the judge that the record does not support a finding
that March violated Sec. 8 (a)(1) and (3) by not providing Freeman and
Ladwig with the names of potential tractor lessors in need of drivers.
The record shows that March's truck-finding help to other driver appli-
cants was a limited and rare occurrence and not in the context of
March's acting as an agent for the lessors for purposes of driver hiring.
Barbara Buhai, Esq. and Benjamin Mandelman, Esq., for
the General Counsel.
Donald J. Cairns, Esq. (Lindner, Honzik, Marsaclc
Hayman & Walsh S.C.), and John Orton, Esq. (Frisch,
Dudek and Slattery, Esgs.), of Milwaukee, Wisconsin,
for March Transportation, Inc.
Benjamin Waisbren, Esq. (Howard, Peterman, Eisenberg,
Soloch, Nashban S.C.), of Milwaukee, Wisconsin, for
Melvin Nashban.
Timothy G. Costello, Esq. (Goldberg, Previant & Velman
S.C.), of Milwaukee, Wisconsin, for Teamsters "Gen-
eral" Local 200.
281 NLRB No. 141
1040 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
DECISION
1. INTRODUCTION
STEPHEN J. GROSS, Administrative Law Judge. Melvin
Nashban started Container Transit, Inc. (CTI) in 1964.
Nashban was, and at all 'relevant times remained, CTI's
sole owner and chief executive officer. CTI specialized
in the interstate carriage of truckload quantities of empty
"containers"-mainly bottles and cans used by beer
brewers and soft drink bottlers. CTI's fleet of semitrailers
all reflected that speciality. Both manufacturers of empty
containers and container users found CTI's services at-
tractive, and CTI's business boomed. As Nashban put it:
"we had a really good control of the market. . . . We
were truly way ahead of our time."1
From the start CTI's employees were represented by
the Teamsters National Freight Industry Negotiating
Committee (the TNFINC) and, as the TNFINC's agent,
Teamsters "General" Local 200. (I will hereafter refer to
the Local as Local 200 and to Local 200 and the
TNFINC collectively as the Teamsters.) CTI was at all
times a party to the various National Master Freight
Agreements, as modified by area and local riders and
side agreements.
CTI's troubles began in the late 1970s. Included
among them were the high interest rates of the period;
difficulties in Nashban's personal life that affected his
managerial abilities; the deregulation of the interstate
motor carrier industry that caused an increase in the
number of competitors that CTI had to face and a de-
crease in the freight rates that CTI could charge; and a
collective-bargaining contract that provided for driver
compensation levels that were higher than the pay scales
of many of CTI's competitors.
CTI's problems continued into 1980 and 1981. Then, in
1982, Nashban ordered CTI's doors shut permanently.
Twenty-four days later a motor carrier named March
Transportation, Inc. (March) opened for business. As
will be discussed later in this decision, March resembles
CTI in many respects.
A. The General Counsel's Allegations
The General Counsel contends that CTI and several
companies affiliated with CTI massively violated Section
8(a)(1), (3), and (5) of the National Labor Relations Act
(the Act) during the period May 1981 through March
1982. The General Counsel further contends that March
(together with two related companies) is an alter ego or
disguised continuance of and successor to CTI and its af-
filiates.Accordingly, claims the General Counsel, March
should be required to remedy CTI's unfair labor prac-
tices and to satisfy the duties CTI would owe to the
Teamsters had CTI continued in business.2
1 Tr 1639.
2 The complaint alleges that March is a single employer with CTI and
various companies related to CTI. But the General Counsel has not pur-
sued that allegation.
Finally, the General Counsel claims that March has in-
dependently violated Section 8(a)(1), (3), and (5) of the
Act.3
March denies that either it or CTI or any affiliates of
either violated the Act in any respect and denies that it
has or ever had any alter ego, disquised continuance, or
successor relationship with CTI.4
For the reasons discussed in the following pages, my
conclusion is that the complaint should be dismissed in
all respects.
B. The Settlement
In July 1983 CTI and its affiliates entered into a settle-
ment stipulation that involved, among other things, with-
drawal by CTI of its answer to the complaint 'plus pay-
ment by CTI of $80,000.5 March opposed the settlement.
But the settlement was approved by the Board by Order
dated 15 September 1983. The result of that settlement is
that it has been March, not CTI, that has litigated the
question of whether CTI committed any unfair labor
practices.
The complaints herein also alleged violations of the
Act by Local 200. In July 1983 the General Counsel and
Local 200 entered into a settlement agreement disposing
of those allegations. March opposed that agreement, but
March's appeal in that respect was denied by the Board's
15 September Order.
II. IS MARCH AN ALTER EGO OR DISGUISED
CONTINUANCE OF CTI: WHY DID CTI STOP
OPERATING?
March came into being after CTI closed its doors. The
allegation that March is a disguised continuance of CTI
thus raises the question of whether the cessation of CTI's
operations occurred for legitimate reasons or, instead,
was part of a plan designed to permit CTI's principals to
evade the requirements of the Act. In other words, was
there "a bona fide discontinuance." Southport Petroleum
Co. u NLRB, 315 U.S. 100, 106 (1942).
This part of the decision will focus on whether CTI's
discontinuance was bona fide. Another question raised
by a disguised continuance allegation is, in Southport Pe-
troleum's language, whether "there was ... a true
change of ownership." (Id.) Part III-will consider wheth-
er there was such a change.
2 The charges in this proceeding were filed on 29 December 1981 'and
8 and 28 January, 2 March, and 20 July 1-982. The complaint and order
consolidating cases first issued on 3 February 1983 Amended complaints
were issued on 20 May and 26 September 1983. The hearing in this pro-
ceeding was held on various dates between 13 June 1983 and 6 February
1984.
4 March admits that the Board has jurisdiction over this matter Of the
two companies not affiliated with CTI that the General Counsel alleges
to have a single employer relationship with March, March does not con-
test the General Counsel's claim in respect to one (April Sales, Inc ), but
does deny the claim in respect to the other (Charm Leasing)
5 Nashban and two companies associated with Nashban had been
named as Respondents in this proceeding In accordance with the settle-
ment stipulation, all allegations against Nashban and those two affiliates
were dismissed with prejudice.
CONTAINER TRANSIT
A. Evidence Indicating that CTI's Cessation of
Operations was Part of Plan to Evade Obligations
Owed to Employees
Just touching on the highlights of the General Coun-
sel's case regarding the motivation behind CTI's shut-
down:
(1) In February 1982 CT]['s management asked the
Company's drivers to vote on a proposal which, if ac-
cepted, would have reduced driver wages. Prior to the
vote Nashban announced that if the drivers rejected the
proposal, "we would have to close."c The drivers did
reject the proposal, and a few weeks later CTI did close.
Not long after that, March opened for business as a non-
union motor carrier. All March's officers came directly
to March from CTI. Nashban was denominated a "con-
sultant" to March. March used CTI's operating author-
ity, used the same semitrailers CTI had been using when
it closed, did business with CTI's ex-customers, bought
from CTI's ex-vendors, and even used the same business
forms that CTI had used.
(2) There is evidence that could lead to the conclusion
that CTI closed (and March got underway) as a way of
escaping compliance with an arbitration award that re-
quired CTI to pay several hundred thousand dollars in
backpay to its employees and as a way around a strike of
CTI's employees. The arbitration award issued in mid-
1981. On 16 March 1982 Local 200 announced that
CTI's drivers would go out on strike on 19 March if
CTI failed to comply with that arbitration award. Nash-
ban and all the other officers of CTI held a series of
meetings in the days immediately following Local 200's
demand. The purpose of the meetings was to ' consider
the creation of a new, nonunion, trucking company using
CTI's operating authority. As soon as the drivers did
strike, on 19 March, CTI permanently ended its oper-
ations. As touched on above, a few weeks later March
opened for business.
(3) There is evidence that suggests that CTI's closing
and March's creation were a function of the union
animus of CTI's management. Nashban had long be-
lieved that CTI's future was hopeless because its drivers
were unionized. And everyone in' CTI's management
was convinced that a nonunion trucking company in
CTI's line of business could be far more profitable than
one in which the drivers were organized. (Fox and
Nashban were not only antiunion in general, they specifi-
cally tried to find a way to replace Local 200 with one
or more other Teamsters locals. The effort failed.) As
will be discussed later in this decision, March is not only
nonunion, its management has opted to use "independent
contractors" rather than employee drivers in part to
avoid any possibility of unionization.
(4) The record suggests that both Harry Fox (CTI's
general manager and March's chief executive officer) and
Nashban considered requirements imposed by Federal
agencies (such as the Board, the Interstate Commerce
Commission, and the Internal Revenue Service) merely
to be inconveniences to be ignored or evaded whenever
6 Tr. 1662 (witness Nashban). Nashban's recollection was that he made
such statements after ,the vote. But I think Nashban's memory was incor-
rect in that respect.
1041
feasible.7 For example, in connection with the transfer of
ICC authority from CTI to March, they submitted docu-
ments to the ICC that they knew varied from the actual
agreement between them.8 Focusing on Board matters,
Nashban demonstrated that' he was willing to take ac-
tions that he knew violated his employees' Section 7
rights. (Foremost of such actions was a pay cut that
Nashban, as CTI's chief executive, unilaterally imposed
during the term of CTI's 1979-1982scollective-bargaining
contract, reducing the wages of the members of CTI's
bargaining unit by about 10 percent.)
Notwithstanding that evidence and, indeed, consider-
able additional evidence to like effect, my conclusion is
that CTI's demise was not part of a plan to escape CTI's
labor obligations. Rather, as I add up the facts, Nashban
and the rest of CTI's management fought desperately to
keep CTI going, and CTI closed its doors solely because
of its financial collapse.
As that suggests, a look at CTI's finances is unavoid-
able. The following pages undertake'that look.
B. CTI ''' Financial History, 1981 'through 1982
1. The situation at the close of 1980
Looking at indicators such as net profits and share-
holder equity, CTI's financial status appeared sound as
1980 ended. CTI had earned a net profit in 1978, suffered
a modest net loss in 1979, and nearly broke even in 1980.
About the end of 1980 CTI's books showed that Nash-
ban's equity in CTI amounted to $779,000.' In fact, how-
ever, about the end of 1980 CTI was literally insolvent.
Its current liabilities exceeded its current assets and CTI
did not have enough cash to pay all its bills as they came
due.
2. January through May 1981
Things got worse during the first 5 months of 1981.
CTI suffered a net loss during those months of $490,000.
By May 1981 CTI was routinely overdrawing its ac-
count at its bank. (CTI was fortunate that its bank was
willing to hold checks 'for a day or so, while awaiting
additional funds from CTI, rather than returning the
checks to the payees.) After Claude Schilling (CTI's
controller at,the time) testified about that state of affairs,
he was asked: "You were kind of living on the edge
there, weren't you, Mr. Schilling?" His response: "With-
out questionpast the edge."9
3. June, July, and August 1981
CTI earned net profits in each of the summer
months-June, July, and August. A new general manag-
er, Harry Fox, took over at CTI in June, and Fox intro-
duced cost-cutting measures on his own and supported
other CTI officials in the cost reductions they had long
wanted to make but had been ,unable to because of resist-
ance from Nashban. (Many of such economy measures
7 I will hereafter refer to the Interstate Commerce Commission as "the
ICC."
8 See, e.g., Tr. 8441-8442 and the text at fn. 28, below.
Tr. 7209.
1042 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
involved declining customers' requests for service in situ-
ations in which CTI's revenue would be less than its ex-
penses associated with such service . Nashban hated re-
fusing a customer 's request under any circumstances.)
Fox and Nashban both saw those summertime profits
as evidence of a turnaround at CTI. In retrospect, that
was not the case. The summer months had always been
CTI's best period (given its business of hauling soft drink
and beer bottles and cans). Thus the profits were in part
just a seasonal anomaly. In addition, CTI's apparent
profitability reflected wage-cutting action taken by CTI
in May. Back in May Schilling had advised Nashban that
unless CTI reduced its expenses it would soon be unable
to continue operating. Nashban's response was to reduce
wages , unilaterally, about 10 percent (as noted above).
Thus the June, July, and August results reflected savings
of approximately $40,000 per month stemming from
wage payments less than the amounts required by CTI's
collective-bargaining contract.
Notwithstanding all those factors-the cost-cutting
measures, the strong seasonal levels of business, and
wage payments below contract levels-CTI remained in-
solvent on a cash flow basis even in August and "became
more and more insolvent every week."10 That meant
that creditors such as oil companies were not getting
paid, and that, in turn, meant that CTI was "having trou-
ble with getting fuel on the road; companies were cut-
ting us off." 11 It also meant that CTI had to keep cash
coming in . Any shutdown of more than a day or so
would have meant the end of CTI.
At most companies, that set of circumstances would
have been labeled catastrophy. At CTI, however, things
had previously been so bad that the summer months
seemed wonderful in comparison. As Nashban put it, at
one point during the summer he felt that there was a
"strong ray of light . . . and it looked like we were just
coming out of it. Really it looked just great."12
4. September through December 1981
CTI suffered terrible losses each month through the
rest of 1981. The Company's average daily bank balance
for September 1981 was a negative $43,165. (It is impor-
tant to recognize that CTI was not drawing against a
line of credit. Its bank balances should have been posi-
tive at all times.) That state of affairs never improved.
5. CTI Average Daily Bank Balances's
Month 1981 Amount
September Negative $43,165
October Negative $47,060
November Negative $40,457
December Negative $25,302
Throughout this period CTI's controller Schilling kept
repeating at management meetings that, due to CTI's in-
10 Tr. 1079-1080 (witness Schilling)
11 Tr. 8275 (witness Fox).
12 Tr. 1902.
13 Figures from G.C Exhs. 28 and 53
ability to pay its bills, "we can't operate another week
... another day."14 As the then head of CTI's oper-
ations testified, " it was a difficult atmosphere to proceed
under, to say the least." 115
Notwithstanding all that, Fox (CTI' s general manag-
er), always optimistic and supremely confident about his
own managerial skills, continued to believe that a turna-
round was possible. And for a variety of reasons Nash-
ban too clung to the hope that CTI could be saved, The
upshot of Fox's attitude and Nashban's was that Fox
convinced Nashban that Nashban should provide addi-
tional capital to the Company. Sometime toward the end
of the year Nashban did, loaning CTI $144,000. In spite
of that loan, CTI remained unable to pay all its bills and,
as we have seen, its bank balances remained negative.
Throughout September, October, and November
CTI's bank continued to honor CTI's checks notwith-
standing those negative balances. That changed in De-
cember. Even early in that month a few CTI checks
would bounce each day. By the end of the month the
bank was returning 5 to 10 checks per day by reason of
"not sufficient funds." (Amazingly the relationship be-
tween CTI and its bank remained amicable. CTI's man-
agement would advise its bank each day about which
checks should be given priority by the bank and which
checks should not. Checks received by the bank on any
given day that were not covered by CTI funds on that
day would be held by the bank for a day. If the next
day's deposits did not cover those checks, the bank
would return them to the payees. CTI creditors having
checks returned to them included oil companies, trailer
leasing companies, tractor owners, and, in a few cases,
employees.) In most cases CTI's management was aware
of which checks were being returned and would call the
payees to warn them of the problem and to suggest that
they redeposit the check.
CTI's net loss for 1981 turned out to be about
$500,000. About the end of the year its current liabilities
exceeded its current assets by $700,000, and CTI's net
worth was a negative $351,000.
6. January through mid-March 1982
The early months of the year had always been a diffi-
cult time for ' CTI because of low demand and bad road
conditions. The year 1982 was no' exception. To make
matters worse, some of the persons from whom CTI
leased tractors, concerned (reasonably) about CTI's sol-
vency, withdrew their tractors from CTI. Finally, CTI's
driver wage costs increased because CTI resumed paying
wage rate in accordance with its collective- bargaining
agreement (pursuant to a promise Fox had made earlier
t6 the drivers).
At Fox's insistance CTI implemented additional cost-
saving measures (some of which the General Counsel al-
leges to be unfair labor practices). But those measures
did not suffice. CTI's financial circumstances grew more
desperate.
14 Tr 6642.
1s Id.
CONTAINER TRANSIT
At that point the Company's accounts receivable
factor, National Acceptance Corporation , cut back on
the level of credit it was willing to extend to CTI. (Na-
tional Acceptance had been loaning funds to CTI based
on 80 percent of those CTI receivables that were less
than 90 days old. One witness testified that during the
January-February-March period National Acceptance re-
duced its line of credit to 60 percent of CTI's receiv-
ables . Another witness testified that National Acceptance
began basing its line of credit on receivables less than 60
days old-rather than the previous 90-day limit. Both
may have been the case .) Whether CTI's position was
hopeless prior to that action by National Acceptance, it
certainly was from that point on.
By February more than half of the checks written by
CTI were being returned to the payees . That proportion
kept growing . The General Counsel suggests that CTI
started giving rubber checks to its employees at this
point as punishment for the employees' unwillingness to
go along with a management proposal that would have
reduced the employees ' pay. That was not the case. CTI
covered its employee paychecks as long as it possibly
could . But by February 1982 CTI did not have sufficient
funds even to consistently meet its payroll.
The last weeks of February and the first weeks of
March must have been a nightmare for CTI's manage-
ment. CTI simply did not have the cash to pay bills that
had to be paid , such as insurance premiums and driver
wages . And on top of everything else, CTI' s employees
began a criminal action against the Company because of
their bouncing paychecks . (Because CTI did not have
the cash to cover paychecks , CTI's response to the
criminal action was to stop issuing paychecks altogether.
As a result CTI's drivers received no pay at all for their
last few weeks of work.)
The end, clearly , was in sight. 16
7. CTI's last 4 days
In June 1981 Local 200 had won an arbitration award
under which CTI was ordered to "make all employees
whole for failure to properly pay negotiated wage in-
creases as provided for in the contract"-i.e., for the uni-
lateral 10-percent pay cut. CTI did not honor that arbi-
tration award (CTI did not have the requisite funds), and
as of March 1982 owed more than $200,000 in backpay
pursuant to the award . On 16 March 1982 Local 200 de-
livered a strike notice to CTI stating that CTI would be
struck at 4 p .m. on Friday, 19 March, unless CTI com-
plied with the arbitration award . CTI, of course, could
not possibly afford to pay the backpay it owed , or even
a significant part of that backpay.
On Friday morning Gerald Sprague (Local 200's busi-
ness agent) made one last call to CTI. Sprague wanted to
know whether CTI was prepared to pay the backpay it
owed . Nashban told Sprague that there was "no way in
the world that I could do it." 17 That afternoon CTI's
16 Respondent's witness Fox testified that CTI was salvageable even
then . According to Fox, "the ship was ready to sail" (Tr. 449). General
Counsel's witness Schilling testified that CTI's circumstances were hope-
less. As the foregoing discussion indicates, I find Schilling 's assessment,
not Fox 's, to be reflective of the reality of CTI's position.
17 Tr. 1685.
1043
bargaining unit employees did go out on strike and
picket lines were formed in front of CTI's Milwaukee fa-
cilities . Because CTI was totally dependent on the con-
tinued flow of revenues, the strike meant that CTI had,
at most , a few days to live before collapsing under the
weight of its financial burdens . Nashban , knowing that,
chose to end CTI's operations then and there . Accord-
ingly, not more than 20 minutes after the picket signs
went up Nashban advised Local 200's representatives
that CTI "was going to go out of the trucking business
forever."18
Nashban 's statement was accurate . Effective 19 March
1982 CTI permanently ended its trucking business.
(Trucking operations continued for a few days to the
extent necessary to complete deliveries and to bring trail-
ers back to CTI's facilities. Nashban hoped to be able to
keep CTI alive as a trailer leasing company , but CTI's
financial condition was much too far gone even for that,
and CTI soon thereafter completely collapsed.)
C. Was CTI's Discontinuance Bona Fide?-
Conclusion
The question that this part of the decision has ad-
dressed is whether CTI's demise was part of a plan
whereby CTI's owner (Nashban) and/or others in CTI's
management sought to escape from CTI's labor obliga-
tions . The General Counsel claims that that was the
reason for the cessation of CTI's operations. As for
CTI's financial situation , the General Counsel 's position
is that:
I don 't think that anyone is disputing that there
were financial difficulties . . . . We just don't be-
lieve that that is the only reason that they went out
of business or that they couldn't have survived. 1 e
But my conclusion is that CTI's financial difficulties
were the only reason that CTI closed . As I add up the
evidence, in fact, it shows that CTI died despite the un-
remitting efforts of Nashban and CTI 's management to
keep the Company alive , including Nashban's infusion of
$144,000 of additional cash into CTI-money that Nash-
ban lost when CTI collapsed. The wonder is that CTI
survived as long as it did.
D. Other Considerations
1. Did Nashban have additional resources?
The record does not permit a finding about whether
Nashban had sufficient assets available from other
sources to pay the employees the amounts demanded by
Local 200 and to provide CTI with sufficient cash to
give it a chance for life (although there are some indica-
tions that Nashban 's personal finances were not in much
better shape than CTI's). But even assuming that Nash-
ban did have funds of that magnitude available to him,
that hardly suggests that it was somehow his fault that
CTI collapsed . Indeed , as Schilling had long been telling
18 Tr. 3095 (testimony of CTI driver Bartram).
19 Tr. 7165.
1044 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Nashban, any additional investment in CTI would have
been foolhardy.
2. Allegations concerning Nashban's self-dealing
If Nashban surreptitiously milked CTI, and if he did so
in order to cause CTI's demise as a way of getting out
from under labor obligations that displeased him, evi-
dence of such behavior would obviously be relevant to
the question of whether March is a disguised continu-
ance of CTI. And there is some evidence in the record
suggesting that Nashban engaged in improper self-deal-
ing with CTI. Fox, in fact, broadly implied that Nashban
covertly siphoned off $200,000 from CTI. (Nashban, on
the other hand, at one point believed that Fox and others
in CTI's management conspired to bring CTI to an end.
But he later recognized that that was not the case.)
This aspect of the case is peculiar in one main respect.
That is, if any party were to raise the argument that
Nashban covertly milked CTI dry, it should have been
the General Counsel . But the General Counsel stipulated
that they would not claim that self-dealing by Nashban
had anything to do with CTI's closing, and they have
abided by that stipulation. It was March that raised the
self-dealing issue.
As far as the import of the evidence on point: (1) that
evidence is sparse , largely because I sustained the Gener-
al Counsel's objections to efforts by March to put into
evidence matters relating to alleged improper transac-
tions between , Nashban and CTI; (2) although there is
some evidence of transactions favoring Nashban or other
Nashban-owned companies at CTI's expense, there is
also evidence indicating that, in some transactions be-
tween CTI and other Nashban companies , CTI came out
ahead; (3) there is no evidence at all to support Fox's
claim about the $200,000; (4) even assuming self-dealing
by Nashban that was costly to CTI, there is no evidence
that would suggest that Nashban engaged in such trans-
actions for the purpose of bringing CTI to an end.
Rather, as discussed earlier, it is clear that Nashban
struggled to keep CTI alive as long as possible and suf-
fered considerable personal financial loss as a result of
CTI's demise.20
III. IS MARCH AN ALTER EGO OR DISGUISED
CONTINUANCE OF CTI: WAS THERE A TRUE CHANGE
IN OWNERSHIP?
A. Melvin Nashban's Ownership and Management
Role at CTI
Nashban founded CTI, he was the sole owner of CTI's
stock, and Nashban, and only Nashban, personally guar-
anteed all loans by others to CTI.
As for CTI's management, at all times Nashban par-
ticipated and had the final say in all major managerial
decisions affecting CTI. And he had the authority to ap-
prove or disaprove any decision, major or otherwise,
20 Nashban never did seek bankruptcy protection for CTI. Rather,
CTI's creditors ultimately forced CTI into a Chapter 7 liquidation pro-
ceeding. The General Counsel contends that that circumstance is evi-
dence of Nashban's unlawful motives. I have considered that contention
but find that the inferences inherent in it are unwarranted
made by any other member of CTI' s management.
During the period of most immediate interest to us here,
June 1981 through March 1982, Harry Fox was general
manager of CTi and thus was in charge of CTI's day-to-
day operations. But any decision by Fox (who had been
hired by Nashban) could be and sometimes was counter-
manded by Nashban.
In sum, Nashban was CTI's sole owner, he kept watch
over all CTI activity, he personally made numerous man-
agerial decisions, and no other member of CTI's manage-
ment could order any action that was unacceptable to
Nashban.
B. Melvin Nashban's Ownership and Management
Role at March
The General Counsel and March sharply disagree
about the nature and_ extent of Nashban's connection
with March. In order to resolve the factual issues raised
by that disagreement, the following pages of this section
of the decision consider some of the circumstances of
March's creation and the transactions between the vari-
ous persons involved in that creation.
1. The initial expectations of March's founders
Because of Local 200's demand that CTI pay an arbi-
tration award utterly beyond CTI's ability to pay, by 17
March it was clear that CTI would cease operations as
of 19 March. As a result, 2 or 3 days before CTI closed
the members of CTI' s management began to focus on the
fact that they were soon not going to be employed by
CTI. For some the question was how to find other em-
ployment. (As the head of CTI's operations put it: "we
were all scrambling on what we were going to do for a
living.")21 For others-Harry Fox, in particular-the
question was whether there was a way of profiting from
the gap in motor carrier service that was about to be cre-
ated by CTI's demise. In Fox's words: "we knew that
the business that Container was enjoying was going to be
up for grabs. Anybody could come in and grab it, and
here was an opportunity to get in the business and see
what you can do."22
What followed among CTI 's managerial personnel (in-
cluding Nashban) was intense discussion about the possi-
bility of starting a trucking company that would focus, at
least initially, on serving the shippers that had been deal-
ing with CTI.23 A number of CTI's officials decided
that, for one reason or another, better opportunities lay
in different directions. Those who remained interested in
the possibility of forming a new trucking company were
Nashban, Fox, Rolland Draves (CTI's vice president in
charge of sales, rates, and tariffs), Martin Johnson (CTI's
chief dispatcher), Walter Rose (CTI's maintenance direc-
tor), Beverly Thomas (CTI's safety director), and Arlene
Schuller (CTI's executive secretary). Fox, Draves, John-
son, Rose, Thomas, and Schuller ultimately became the
z' Witness Thomsen at Tr. 6349-6350.
22 Tr. 8386-8387.
zs Various CTI officials had previously discussed what options might
be available to them in the event CTI collapsed (discussions one would
expect given CTI's financial situation). But none of these earlier discus-
sions led anywhere
CONTAINER TRANSIT
sole investors in and subscribers to March's stock, and I
will refer to those six persons collectively as March's
"subscribers."
It quickly became apparent that the interests of the
subscribers were to some considerable extent different
from, and antagonistic to, Nashban's. Accordingly Nash-
ban was excluded from some of the meetings attended by
the subscribers involving the creation of a new company.
The overriding concern of the subscribers was to get
the new company operating quickly; that is, within a few
weeks. One reason for the need for speed was to get rev-
enue coming in. But the principal need for speed was
that each day's delay meant that the likelihood of obtain-
ing the business of CTI's customers would be significant-
ly reduced (as those customers formed relationships with
other motor carriers).
The second principal concern of the subscribers was to
keep Nashban out of the new company-a concern they
did not hide from Nashban. For one thing the subscrib-
ers were well aware of the Board's successor and alter
ego rules, and also well aware of CTI's outstanding li-
abilities: Regarding its demise, CTI owed as much' as a
million dollars in backpay to its employees and consider-
able additional amounts in other payables. Secondly, the
subscribers did not trust Nashban and did not want to
participate with him in the partnership-like circumstances
of a small, newly organized company.
The subscribers' problem was that Nashban controlled
assets that the subscribers had to have to get into oper-
ation with the requisite speed: cash and operating author-
ity.
1. Cash. Fox and Rose had personal savings they could
use. The other four subscribers (Draves, Johnson,
Schuller, and Thomas) did not have such savings. They
did have rights to substantial sums in CTI's pension and
profit-sharing fund. And the subscribers had been ad-
vised that they had the right to immediate access to
those sums now that CTI had ceased operating. But
Nashban was the fund's administrator and the subscribers
were worried that Nashban might not release the moneys
promptly (worries, as it turned out, that proved to be
justified).
2. Motor carrier operating authority. The new company
had to have ICC operating authority to begin business.
The ICC was not reticent about granting new authority.
But it could take the ICC several months for it to grant
the subscribers' application for new authority. And delay
of that nature would have been disasterous. ' As March
Officer Draves put it: "when you stop hauling for [cus-
tomers], obviously that business is up for grabs. People
are not going to wait for you for weeks and perhaps
months to get back into business."24 A much faster way
of obtaining ICC authority was to purchase CTI's. (That
also required ICC approval. But the ICC was generally
willing to issue temporary authority almost immediately
if it were sought in conjunction with a proposed transfer
of authority.) As a practical matter, then, the subscribers
had to convince Nashban to sell CTI's operating author-
ity to them.
24 Tr. 719.
1045
Concerning intrastate authority, CTI held intra-Illinois
and intra-Indiana authority.25 The acquisition of such au-
thority would have been useful to March. But it was not
essential because the subscribers expected that nearly all
the new company's business, like CTI's, would be inter-
state.
(The new company would of, course need equipment
as well as cash and operating authority. But tractohs
were readily available. Concerning trailers, the new com-
pany would need to have access to CTI's trailers because
they were a specialized type of trailer not generally
available. It was clear, however, that Nashban and the
companies that had leased trailers to CTI would be
under considerable financial pressure to find new lessees
for the trailers. Because the new, company would need
only, a fraction of the number of trailers CTI had used,
the subscribers' assumption was that the acquisition of
trailers would not present any problems. As will be dis-
cussed below, that assumption was accurate.)
2. Negotiations between the subscribers and
Nashban
Negotiations between the subscribers and Nashban
began about March 18. CTI's collapse'meant that Nash-
ban was about to be out of the trucking business, and
Nashban very much wanted to continue participation in
that business. (Nashban had an interest in one motor car-
rier other than CTI, a company called Colorado and
Eastern, but that company was not doing well.) As for
the subscribers' plans to start a new company, Nashban
felt that it was CTI's relationship with numerous ship-
pers and CTI's employment of the subscribers that gave
the subscribers an opportunity, to form the company they
were proposing. Nashban accordingly considered the
subscribers' attempt to keep him out of the new company
to represent the worst kind of ingratitude and informed
the subscribers that unless they revised their plans, he
would do whatever he could to prevent the kind of com-
pany they were proposing from ever getting underway.
Nashban's position was that, because the new' company's
chances of success hinged on the prior existence of CTI,
he was entitled to at least a 35-percent interest in the
new company and a position with the new company that
would give him a "lifetime income." If the subscribers
refused to meet that demand, said Nashban, he would:
(1) not sell them 'CTI's operating rights; and (2) take
whatever steps might ' be necessary to prevent the sub-
scribers from gaining timely access to their shares of the
CTI pension and profit-sharing funds.
Nashban's position presented a serious problem for the
subscribers. They considered his demands to be econom-
ic blackmail and, insofar as the pension and profit-shar-
ing money was concerned, to be illegal. And, as dis-
cussed earlier, the subscribers knew that any interest by
Nashban in the new company would add.to the possibili-
ty that March would be faced with the devasting liabil-
ities that would accrue from a determination ' that March
25 CTI also held a certificate authorizing mtrastate Wisconsin business.
But that certificate became irrelevant when, about the time of March's
Creation, Wisconsin ended restrictions on entry into the mdra-Wisconsin
motor carrier business
1046 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
was an alter ego of or successor to CTI. On the other
hand, the subscribers badly needed immediate access to
the pension and profit -sharing money and to CTI 's oper-
ating rights in order to get the new company operating
promptly.
The subscribers determined to resolve the dilemma by
entering into an agreement with Nashban that purported
to give Nashban the interest in the new company that he
wanted , but that at least arguably would in fact prevent
Nashban from having any interest in the new company
at all.
3. The agreements between the subscribers and
Nashban
Nashban and the subscribers entered into their agree-
ment about 24 March . Actually four separate agreements
were involved , all interconnected . The four agreements:
(1) an agreement granting Nashban an option to acquire
March stock; (2) an "Agreement of Sale and Purchase,"
covering March 's purchase of CTI's operating authority;
(3) a consulting agreement between Nashban and March;
and (4) an agreement covering the disbursement of CTI's
profit-sharing and pension fund.
The "Stock Option Agreement." The parties agreed that
Nashban should receive an option to purchase stock
rather than the stock itself. The option is to be exercis-
able in 1988-6 years from the date of the agreement.
The subscribers ' reason for preferring to give Nashban a
stock option, rather than stock itself, will become clear
in the discussion below . Concerning Nashban 's willing-
ness to accept a stock option and the choice of the year
the option becomes exerciseable , the record suggests that
they were a function of Nashban 's massive debts (stem-
ming from CTI's collapse) and Nashban 's hope that he
could keep his rights to March stock away from the
clutches of his creditors , of Nashban's awareness of the
Board's successor and alter ego , rules, and of Nashban's
belief that certain ICC restrictions could thereby be
avoided.
The original form of the agreement specified that
Nashban was the optionee . In the final form of the agree-
ment Melvin Nashban's name nowhere appears . In fact
the identity of the optionee is not indicated at all. But
the record is amply clear that the optionee continued to
be Melvin Nashban. (One indication of that: The agree-
. ment does specify that the "agent for optionee" is one
Ned Nashban, who is Melvin Nashban 's cousin and at-
torney.) The agreement provides that March , for nomi-
nal consideration , will issue 484 shares of its common
stock to the optionee "after 6 years from the date of this
agreement." When the agreement was signed , March had
900 shares of common stock outstanding . thus if that
state of affairs continued for 6 years, Nashban would ac-
quire a 35-percent interest in March.26
Two facets of the stock option agreement are worth
mentioning here. One is a "contingency " provision.
Under that provision March's obligations under the
agreement are contingent "upon the Optionee and Con-
tainer Transit, Inc." transferring to March "good title"
26 The 900 shares plus 484 shares equals 1384 shares. Those 484 shares
is 35 percent of 1384 shares.
to all CTI's operating authority. The other aspect of the
agreement of immediate interest is that the agreement no-
where contains any antidilution provisions . Thus the
agreement does not explicitly preclude March from de-
claring stock splits or stock dividends or issuing addition-
al stock in the period prior to 1988 (any of which actions
would reduce the percentage of March stock represented
by 484 shares). Nor does the agreement provide that the
number of shares subject to the option should be in-
creased to take account of the issuance by March of ad-
ditional shares. Accordingly, unless an antidilution provi-
sion is read into the agreement by operation of applicable
state law, Nashban's rights under the stock option agree-
ment are tenuous, at best.
The "Agreement of Sale and Purchase." The agreement
(with an amendment) specified that March was to pay
$17,500 to CTI, $1000 of which was to be held in
escrow, for all CTI's operating authority ; that is, CTI's
ICC authority and its various state authorities (Illinois,
Indiana , and Wisconsin). Under the agreement March
had the right to rescind the agreement if the ICC or any
State transferred less than all CTI's authority to March
or conditioned the transfer in a manner unacceptable to
March. Alternatively, March could retain those authori-
ties that were transferred even though they were less
than complete, in which case the escrowed $1000 would
be returned to March.
The consulting agreement . The consulting agreement
between March and Nashban provides that March shall
retain Nashban as a consultant for 10 years . His compen-
sation is to be $577 per week.27 The consulting agree-
ment includes a "contingency" provision similar to the
one in the stock option agreement-"All obligations of
[March] shall be contingent on Mr . Nashban and Con-
tainer Transit , Inc. transferring to the satisfaction of the
Board of Directors of [March] good title to all [CTI] op-
erating authorities."
Some executed versions of the consulting agreement
include a "restrictive covenant" by which Nashban
agrees not to associate with any competitor of March.
But the version of the consulting agreement that March
and Nashban/CTI submitted to the ICC (in connection
with the request for the transfer of CTI's ICC authority)
apparently does not contain that provision . Nashban and
the March subscribers , it seems, `felt that although they
did want to be governed by the terms of the restrictive
covenant, including it in the papers sent to the ICC
might stand in the way of prompt ICC action.28 Al-
though no party has discussed the point, the validity of
the restrictive covenant would accordingly seem to be in
some doubt.
The retirement fund disbursement agreement. Under that
agreement Nashban agreed to "release the entire interest
of each participant in the Plan to the individual partici-
27 The agreement contains certain other compensation provisions that
so far have been inconsequential . Fox claims that even the $577-per-week
figure is meaningless because the agreement does not require March to
pay Nashban for expense incurred in his consulting work Thus, says
Fox, March could order Nashban to undertake travel for March that
would end up costing Nashban so much that Nashban would suffer a net
loss The validity of Fox's claim is unclear.
28 See fn 8, above
CONTAINER TRANSIT 1047
pants on or before April 6, 1982." (The agreement also
contains an "indemnification" provision by which Nash-
ban agrees to indemnify each March subscriber-but not
March itself-against any liabilities, including successor-
ship liabilities, arising from obligations of Nashban, CTI,
and various affiliates.)29
4. Subsequent events
March Transportation, Inc. was formally established
about 24 March 1982.20 In accordance with the agree-
ments, Nashban did promptly disburse the CTI pension
and profit-sharing fund moneys, a portion of which
became a significant part of the capital of the new com-
pany.31 And March and CTI joined in applying for
transfers of authority from CTI to March at the ICC,
and in Indiana and Illinois.
The transfer of ICC authority occurred promptly and
without incident.32 That, in turn, meant that March
could begin operating, which it did on 12 April. But al-
though things worked out well from the point of view of
March's subscribers, that was less true from Nashban's.
Subsequent events regarding the agreement providing for
transfer of authority. In October 1983 Indiana's Public
Service Commission refused to transfer CTI's authority
to March and revoked CTI's authority, on the ground
that CTI had failed to exercise the authority after 19
March 1982. Concerning the transfer of CTI's intra-Illin-
ios authority, March received some, but not all. As indi-
cated earlier, the "Sale and Purchase" agreement provid-
ed that March would pay $17,500 to Nashban subject to
the following March rights if Federal or state agencies
29 The indemnification agreement is discussed further at fns. 110 and
111 below. `
30 The most obvious reason for the choice of "March" as the name for
the new company is that the subscribers' previous employer, CTI, came
to an end in March 1982 and that the new company was formed during
that same month. But Fox, who seemed concerned that that interpreta-
tion might render March more likely to be deemed a successor to CTI,
or an alter ego of CTI, insisted that dates had nothing to do with the
name. Rather, Fox claimed, "March" is an acronym based on the sub-
scribers' names . (Martin Johnson ; Arlene Schuler; Rolland Draves; and
Walter Rose; Claude Schilling-who for at time contemplated becoming
a subscriber; and Harry Fox.) See, Tr. 8433. I do not credit Fox's testimo-
ny in that regard
31 The initial shareholdings and capital contributions of the subscribers
were as follows:
Subscriber
Capital
Contribu-
tion
Shares Outstand-ing Shares
Fox ................................... $20,000 240 26.7
Draves .............................. 20,000 240 26.7
Johnson ............................ 10,000 120 13.3
Rose .................................. 10,000 120 13.3
Thomas ............................ 10,000 120 13.3
Schuller ............................ 5,000 60 6.7
$75,000 900 100.0
All the contribution of Draves, Johnson, Thomas, and Schuler (i.e.,
$45,000) came from the CTI pension and profit-sharing fund. The per-
centage interests in March as of the close of the hearing were as follows:
Fox, 40 percent; Draves, 40 percent; and Johnson, 20 percent. Rose,
Schuler, and Thomas are still with March , but not as shareholders.
32 The ICC granted temporary authority to March on 30 March 1982.
March obtained its permanent authority on 27 July 1982.
transferred less than all CTI's operating authority: (1) re-
scission by March and return of the full $17,500, or (2)
retention by March of the authorities that were trans-
ferred plus return to March of $1000 of the $17,500.
March chose the second alternative, and the $1000 was
returned to March.
Subsequent events regarding the consulting agreement.
March has refused to provide Nashban with the compen-
sation provided for by the consulting agreement and has
not asked Nashban to perform any services under the
consulting agreement.
On 10 June 1982, March wrote to Nashban to say that
it was withholding its weekly payments to Nashban and
that it was "considering terminating the consulting ar-
rangement."33 Litigation between Nashban and March
resulted. Nashban thereafter withdrew his complaint,
without prejudice, based on an understanding with
March that:
If the authorities are granted in Illinois and Indiana,
March Transportation Inc.'s management will again
review the [consulting agreement] ... as well as its
responsibilities under the contract, and agree to ne-
gotiate a resolution of the consulting agreement in
good faith.
At the hearing in this proceeding, and on brief, March
continued to assert that, even though it has retained the
operating authority CTI transferred to March, it has no
obligations to Nashban under the consulting agreement
for a variety of reasons, including CTI's inability to
transfer all its intrastate authority to March.
Subsequent events regarding the stock option agreement.
In early July, Schuler, who had owned 60 March shares,
sold her shares back to the March, reducing to 840 the
number of outstanding March shares. But later that same
month March issued nine additional shares to each of its
shareholders for every share owned. The shareholders
did not purchase the shares. Rather, they were issued the
shares because, as officers of March, they had "devoted
substantial time and effort to the business of March
Transportation, Inc. without full compensatidn for such
time and effort."34 Five weeks later March issued fur-
ther shares to its shareholders for comparable reasons.
(March's witnesses testified, credibly, that the additional
33 R. Exh. 92. The bases for such action were specified as follows-
1. The shareholders of the company were coerced', into entering
into the Consulting contract as a condition of receiving money from
the CTI retirement plans. The principals of the company believe that
this is inconsistent with national pension policy.
2. The company believes that certam actions of yours have consti-
tuted grounds for discharge under ... the contract because you
committed acts which had the effect of harming the company.
3 The company believes that you have breached your restrictive
covenant against them by indirectly competing with the company
4. The company believes that you have, in fact, sought to hold the
company responsible for the liabilities of Container Transit, Inc., in
violation . of this Agreement
In addition, the company is withholding this payment because the
company believes that you have not in fact provided the company
with any service since the date of the agreement
34 Unanimous written consent of shareholders of March Transporta-
tion Inc., dated 23 July 1982, in G.C. Exh. 34b
1048 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
shares in fact were issued specifically to preclude Nash-
ban from having any control over March.)
The effect of those share distributions was that about
September 1982 March's shareholders (that is, the sub-
scribers less Schuler) held a total of 9000 shares. Officers
of March testified in this proceeding that March expects
to issue , still more shares for similar reasons.35 But even
if March does not do so, the exercise by Nashban of his
right to 484 shares of March would give him only 5.1
percent of the outstanding stock of the Company. (That
assumes, as touched on earlier, that under applicable
state law: (1) the issuance of the additional shares by
March was valid; and (2) the number of shares for which
Nashban is deemed to have an option will not be in-
creased by operation of law to maintain the percentage
relationship inherent in the agreement as of the time the
option agreement Was executed.)36
Other subsequent events. Once Nashban had been prom-
ised a 35-percent interest in March, he went out of his
way to cooperate with the subscribers. He made no ob-
jection, and demanded no compensation, when Draves,
Johnson, and a CTI salesman took with them to March
the customer lists they had used while at CTI. Nashban
did not object when the subscribers drew unemployment
compensation as laid-off CTI employees even though the
subscribers were working (albeit without pay) for
March. He encouraged ex-CTI customers to use
March.37 He made CTI's office furniture available to
March for whatever price March wanted to pay.38 And,
at March's request, Nashban leased some CTI trailers to
March.39
On the other hand Nashban also attempted to deal
covertly with some of March's vendors in a way that
would have profited Nashban at March's expense. (For
example Nashban convinced an insurance broker to over-
charge March for insurance coverage and to credit
Nashban with the overcharged amount. March's officers
quickly discovered, and ended, the arrangement.)
5. The relevance of state contract law
Both the General Counsel and March take the position
that the Board need not consider the actual meaning,
under applicable state law, of the various contracts dis-
35 According to a March witness, "We'll probably do so [issue addi-
tional shares to dilute Nashban's interest] again and again." Tr. 8471
ss This discussion further assumes , arguendo , that the contingency pro-
vision in the option agreement (relating to the transfer to March of all
CTI's operating authority) will not be a barrier to Nashban obtaining any
interest at all in March.
37 Fox, assuming that Nashban was making such contacts for the worst
possible motives, told Nashban to stop making such calls and advised the
customers in question that Nashban was not associated with March.
38 The subscribers determined the fair market value for the furniture,
and paid that amount to CTI.
39 March initially leased all its trailers from Nashban (either directly or
via CTI), and has continued to lease some of its trailers from companies
associated with Nashban It is not clear that Nashban's willingness to
lease trailers to March was ever predicated on the interest that Nashban
assumed that he had in March Nashban needed cash, and the trailer
leases to March provided that Moreover, March was later able to lease
some of those same trailers from another party for less than Nashban had
charged (CTI had held those trailers under a long-term lease The trail-
ers' owner subsequently ended its lease arrangement with CTI , by reason
of CTI's failure to comply with the 'terms of the lease and March was
able to lease the trailers directly from the owner )
cussed above. The parties' view is that the Board should
instead determine only the credibility of Nashban and the
March subscribers when they testified about what rights
they thought the contracts provide. The parties thus
made no attempt to show, whether applicable contract
law comports with their respective interpretations of the
contracts.
As indicated above, I found that the testimony of the
various witnesses on this subject did in fact describe their
beliefs about how the contracts should be interpreted.
Notwithstanding the parties' agreement, however, my
conclusion is that in a case such as the one at hand the
actual contractual obligations between a predecessor, the
alleged successor, and the principals of each, are rele-
vant. The Board accordingly must take into account the
possibility that if and when a court is called on to inter-
pret the contracts, the court may read them in a way
that differs substantially from the interpretation proposed
by one, or both, of the parties.
C. Conclusion- Was There a True Change in
Ownership?
There is a possibility that Nashban will end up with a
right to $577 per week from March for a period of 10
years (pursuant to the consulting contract) plus a 35-per-
cent interest in March 's common stock. But even assum-
ing that that possibility does come to pass, Nashban's in-
terest in March will be substantially different from his in-
terest in CTI. Ownership of 35 percent of a company's
stock is very different from being sole owner. And remu-
neration under consulting arrangement does not resemble
being chief executive. In this case, moreover, those dif-
ferences are heightened by the hostility of March's ex-
ecutives to Nashban.
Beyond that, unless Nashban is able to persuade a
court to impute antidilution provisions into the stock
option agreement , Nashban's stock interest in March will
not be 35 percent; rather, it will be no more than 5 per-
cent, probably much less. Finally, even Nashban's rights
under the consulting agreement have been the subject of
litigation and remain in doubt.
In sum, there has indeed been a true change in owner-
ship.
Are There Secret Agreements Between Nashban
and March That Give Nashban Ownership of or
Control Over March?
The General Counsel suggests that the agreements dis-
cussed above and the various actions taken by March
limiting (or eliminating) Nashban's interest in March are
a sham . One indication of that, argues the General Coun-
sel, is that the consideration that March claims it paid to
Nashban is far less that the fair market value of what
March received. But all the transactions described by the
parties make sense in terms of the money Nashban re-
ceived, or the interest in March that Nashban thought he
was going to get, or both. Of course it is always possible
that the testimony on point was the product of a massive
conspiracy to dupe the Board. But the greater likelihood
is that the set of transactions described above do in fact
portray Nashban's true interest in March. In reaching
CONTAINER TRANSIT
that conclusion I have taken into account such factors,is
the obvious strains in the relationship between Nashban,
on the one hand, and Fox and Johnson, on the other,
while CTI was still in operation; the inherent plausibility
of the circumstances involved in the creation of March
as described above; and the corroboration provided, by
numerous documents and the testimony of witnesses who
were not parties to the transactions between Nashban
and the March subscribers.
IV. MARCH AS AN ALTER EGO OR DISGUISED
CONTINUANCE OF CTI-CONCLUSION
CTI died despite the best efforts of Nashban and the
rest of CTI's management to keep the Company going.
That alone would preclude a finding that March is a dis-
guised continuance of CTI. March could be deemed an
alter ego of CTI, albeit not a disguised continuance, even
given CTI's natural death, but only if March were "sub-
stantially identical" to CTI in terms of "ownership, busi-
ness purpose, management, supervision, customers, oper-
ation and equipment." T. E. Elevator Corp., 268 NLRB
1461 (1984). March, however, is too different from
CTI-just focusing on ownership and managerial con-
trol-to permit a finding of substantial identity.
Taken together, CTI's bona fide discontinuance and
the differences between March and CTI in terms of own-
ership and control make it clear that the General Coun-
sel's alter ego and disguised continuance allegations must
be dismissed.
Foxtrot
In October 1981 CTI's management formed a separate
division of CTI called "Foxtrot" or "Foxtrotter." Fox-
trot's business was much the same as CTI's but its em-
ployees (all truckdrivers) were paid less than the regular
CTI drivers. (That lower pay was agreed to by Local
200, but not by the TNFINC.)
Harry Fox subsequently urged that Foxtrot be incor-
porated separately from CTI and that Nashban accord
Fox an ownership interest in Foxtrot. No such corpora.
tion was ever formed, however, and Fox never obtained
any ownership interest in Foxtrot (or in CTI).
For a time CTI's management hoped that any union
action against CTI would not also be directed against
Foxtrot. But Local 200 subsequently made it clear that
the Teamsters considered Foxtrot to be a part of CTI for
strike purposes.
The General Counsel argues that Foxtrot was the pre-
cursor of March and that the Foxtrot arrangement is evi-
dence that March is a disguised continuance of CTI. But
the argument is not a persuasive one. For one thing there
is no cause-and-effect relationship between Foxtrot and
March. March grew out of the circumstances facing Fox
and other members of CTI's management in mid-March
1982. There is no indication that March would not have
come into existence, or would have differed in appear-
ance, had there never been a Foxtrot. Second, the fact
remains that CTI was forced out of business by circum-
stances beyond its control. Foxtrot, in fact, probably
helped keep CTI alive a bit longer than otherwise would
have been the case.
V. IS MARCH A SUCCESSOR TO CTI?
A. Introduction
1049
As I have indicated in parts II, III, and IV, above, I
think that the record is reasonably clear that March is
neither a disguised continuance nor an alter ego of CTI.
That clarity disappears, however, when one turns to suc-
cessor issues . As will become evident in the discussion in
this part of this decision, of the various issues that must
be resolved in order to determine whether March is a
successor to CTI, several seem to me to be extremely
close.
If the relationship between March and CTI equates to
a "continuing business enterprise," then March is a "suc-
cessor" to. CTI.4° For present purposes that successor-
ship would have the following implications: (1) March
would be obligated to recognize and bargain with the
Teamsters as the representative of March's bargaining
unit employees; and (2) March would have to remedy
any outstanding unfair labor practices committed by
CTL (The leading case in the first respect-the duty to
bargain-is NLRB v. Burns Security Services, 406 U.S.
272 (1972). This decision will use the expression "Burns
successor" to mean successorship in that first sense. The
leading case regarding an employer's obligation to
remedy the unfair labor practices of the predecessor em-
ployer is Pepsi-Cola Bottling Co. of Sacramento (cited in
fn. 40). The decision will use the term "Pepsi-Cola suc-
cessor" to mean successorship in the second sense listed
above,)
The General Counsel claims that March is both a
Burns' and a Pepsi-Cola successor to CTI.41
B. Factors Suggesting That March is a Successor to
CTI
A variety of factors point toward March being succes-
sor to CTI.
(1) March came into being as a result of CTI's exist-
ence and subsequent collapse. No CTI, no March.
(2) CTI was a Milwaukee-based motor carrier in the
business of carrying truckload quantities of freight direct-
ly from shipper to receiver. So is March. Almost all
CTI's business was interstate. So is March's.
(3) March bought, and uses, CTI's ICC authority. In
their application to the ICC for the transfer of authority,
CTI and March virtually proclaimed March to be CTI's
successor, promising (among other things) that "MTI
40 The quote is from Pepsi-Cola Bottling Co. of Sacramento v. NLRB,
414 U.S. 168, 180 (1973); see also, e.g., id. at 184 ("when a new employer
.. has acquired substantial assets of its predecessor and continued,
without interruption or substantial change, the predecessor 's business op-
erations"), Inland Container Corp., 275 NLRB 378, 379 (1985) ("The
Board's traditional test for determining successorship status is whether
there is a substantial continuity in the identity of the employing enter-
prise"); Harbor Cartage, 269 NLRB 927 (1984) ("substantially the same
businees"); NLRB v. Boston Needham Industrial Cleaning Co., 526 F.2d
74, 77 (1st Or. 1975) (was there "a change in ownership not affecting the
essential nature of the enterprise").
41 In order to be held to be a Pepsi-Cola successor, the alleged succes-
sor must have knowledge of the acts of the predecessor alleged to be
unfair labor practices. The record shows, and March concedes , that it
had the requisite knowledge.
1050 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
[March] will offer employment to many of CTI's em-
ployees."42
(4) Much of the drivers' work at March is identical, or
nearly so, to what it was at CTI.
(5) All March's owners and officers came to March di-
rectly from CTI.
(6) As indicated in the footnote below, although
March's managerial staff differs in some respects from
CTI's, in general it is the similarities that are remarka-
ble.43
(7) All of March's office staff came to March from
CTI.
(8) In terms of customers, March was created with the
intent of filling the gap created by CTI's demise.44 Thus
March's plan was to capture the business of as many CTI
customers as possible. And in fact, during March's "first
couple of weeks" (Tr. 1286) March hauled exclusively
for shippers that CTI had served. Even months later,
most of March's business came from ex-CTI customers.
(9) Until December 1982 all March' s trailers had previ-
ously been used by CTI. As for tractors, during March's
first weeks it used only tractors that had previously been
leased to CTI. Subsequently March did lease many trac-
tors that had never been used by CTI. But at all times a
substantial number of March tractors had previously
been leased by CTI.
(10) Much of the drivers' paperwork at March is virtu-
ally identical with, the paperwork of the drivers at CTI.
In fact some of the forms March first used were CTI
forms (purchased cheaply from CTI's printer when CTI
folded) with the CTI identification removed.
42 G.C. Exh. 28, Exh. A, p. 2
43 The managers are as follows:
Name CTI Position March Position
Nashban ..................... C. E.O......................... Consultant
Fox ............................. General Manager...... C.E.O.
Thomsen .................... Head of Operations.. --
Ehlers ......................... Controller.................. --
Johnson ...................... Chief dispatcher Head of Operations
and assistant (including
operations head. dispatching)
Draves ....................... Head of sales and Executive V.P.
tariff matters; Handles sales and
Executive V.P.. tariff matters
Thomas ...................... Safety Director......... V.P. Safety
Rose ........................... Director of V.P. Purchasing
Maintenance. and Maintenance
Schuller ..................... Confidential
Secretary.
Schilling ..................... Controller; later
assistant to
controller.
44 See the text at fn. 22, above
V.P. Personnel.
Handles billing
and secretarial
work
Initially consultant
on accounting
and bookkeeping
matters; later no
connection
(11) March has often been perceived as a continuation,
under another name, of CTI. Ex-CTI drivers saw things
that way, as did ex-CTI customers and vendors.41
March officials seem to have often fostered that point of
view (in connection with such matters as sales and driver
recruiting efforts, and in order to obtain lower insurance
rates); and March certainly made no effort to avoid
being thought of that way. For example, March kept the
same numerical designations painted on its trailers that
CTI had used when the trailers were operated by CTI.
(On the other hand, March officials did try to make it
clear that Nashban was neither a March shareholder nor
a member of March's management-in order to separate
March as much as possible from Nashban's financial
woes.)
(12) As indicated above, March used many of the same
vendors that CTI did-including law firms, banks, insur-
ance agents, truck repair services, and trailer and tractor
lessors.
Notwithstanding all those factors suggesting that
March is a successor to CTI, my conclusion is that
March is not. One basis for that conclusion is that March
differs too much from CTI in such matters as size, facili-
ties used, and dispatching arrangements. Those matters
will be discussed in section G, below. The other basis for
that view is that, as discussed in the following section of
this decision, the persons who drive the tractors that
haul March's trailers are not employees of March.
C. "Independent Contractor" Versus "Employee"
Issues
All March's loads are carried in semitrailer vans in
which March has some form of longterm interest.46 As
for the tractors that haul those semitrailers , however,
March neither owns any nor hires drivers for the trac-
tors. Rather, March obtains its tractors through lease ar-
rangements and requires that the lessor provide a driver
for each tractor. The consideration that March pays to
the lessor for the use of tractor and driver: 65 percent of
the revenues that March receives for the loads hauled by
the lessor's tractor (subject to variations that will be dis-
cussed below).
About 60 percent of the lessors are owner-operators.
That is, the lessor drives the tractor himself. The other
40 percent of the tractors that March uses are driven by
persons hired by the lessors. (The pay the driver receives
when the driver is not the lessor of the truck-that is,
when the driver is not an owner-operator-will be dis-
cussed below. Owner-operators, of course, themselves re-
ceive the 65 percent, in the form of a weekly check.47
45 On an insurance carver's form that asked for the name of March's
"previous [insurance] carrier," the agent wrote "thru CTI and Home
Ins." G.C Exh 62, p 2.
46 At least some of the trailers are owned by a partnership named
"Charm Leasing " As the General Counsel contends, the record is clear
that Charm Leasing is a single employer with March
47 CTI paid its owner-operators on an altogether different basis For
one thing, CTI's owner-operators received two weekly checks, not one: a
check covering tractor rental; and a check for dnver services. For an-
other, CTI paid its owner-operators on a mileage basis (rather than a per-
cent-of-revenues basis) in respect to both tractor rental and driver serv-
Continued
CONTAINER TRANSIT 1051
March claims that all the lessors are "independent con-
tractors" and that none of the persons driving the trac-
tors used by March are employees of March . The Gener-
al Counsel , on the other hand , argues that all such driv-
ers are employees of March-whether they are owner-
operators or nonowner drivers.
1. The nature of March 's business
For reasons that will be covered below , the compensa-
tion of many of March 's drivers is closely tied to the
nature of March 's business . A brief description of that
business thus seems in order.
March is in the business of moving truckload ship-
ments from one point to another on shipper demand. It
does not operate pursuant to a fixed schedule , it does not
operate along set routes , it does not combine less-than
truckload shipments, and it does not own or use any ter-
minals.
Given the nature of March 's business , there is no such
thing as a "typical" shipment . But to give some flavor of
its business, listed below are the 12 loads March handled
on 12 May 1982 ( 1 month after it opened for business).
Ship- Consignee Name andment
No.
Shipper Name and Address Address
1 Carnation, Waupun , WS ...... Kalva Corporation,
2 RC Cola, Louisville, KY .....
Gurnee, IL
National Can Co., La
Porte, IN
3 Hedwin, LaPorte, IN.......... Barrel Acces ., Chicago, IL
4 Hoover Universal, Lenexa, Pepsi-Cola, Burnsville,
5
KS.
Boise Cascade, Whiting,
MN
Mobile Oil, Woodhaven,
6
IN.
American Can Co.,
MI
Tri State Cannery,
7
Whitehouse, OH.
Anheuser Busch, St. Louis,
Evansville, IN
Columbus Dist . Co. and
8
MO.
Dart Container, North
Anheuser Busch,
Columbus, OH
Pegler & Company,
9
Aurora, IL.
Dart Container, North
Lincoln, NB
Snyder Drug, Eagen, MN
Aurora, IL.
10 Hedwin, Baltimore , MD ...... Hedwin, LaPorte, IN
11 Firestone Tire, Des J . I. Case, Racine, WS
12
Moines, IA.
National Can Company , Fox Warehouse, Madison,
La Porte, IN. IL
March tries to arrange its business so that if it has a
load going to, say, La Porte, Indiana (shipment 2,
above), it will have a load from La Porte or its environs
ready to haul about the time the inbound shipment is un-
loaded . Sometimes March achieves that kind of back-to-
back business. (In this case, the truck that made the La
Porte delivery did then pick up a load in La Porte-load
ices Finally, CTI paid numerous additional benefits both directly to the
drivers , including owner-operators (e.g, food and lodging expenses), and
to the Union on behalf of the drivers (e g., health insurance and pension
coverage). CTI's overall remuneration of owner -operators was far more
costly than is March's.
12.) In fact , in some areas March customers generally
have a number of loads waiting to be hauled . In other
areas, the nearest outbound load may be an hour's drive
or so away . (For example, the truck that went to
Gurnee, Illinois-shipment 1-then went 50 miles to
Whiting , Indiana, for its next load-load 5 .) The trip be-
tween the destination point and the next load 's origina-
tion point is made empty-"deadheaded"-and does not
earn any revenue for March . Finally, in some areas and
on some occasions March is unable to drum up any
return business at all anywhere near the destination point
of a load. That means substantial deadheading . (Using
the 12 May shipments as an example again , the truck that
delivered a load to Lincoln , Nebraska-load 8-then
traveled empty 200 miles to Lenexa , Kansas, for its next
load.)48 Alternatively the truck could operate under a
"trip lease." (It is often possible to lease one 's truck and
driver to a shipper or another motor carrier for just one
trip-therefore the name "trip lease.") But the ICC pro-
hibits back-to-back trip leases, so as a practical matter
any trip lease by a March truck must be destined for a
locale in which March is likely to be able to obtain a
load.
2. March's rate structure
March's rates are point-to-point rates that vary by
origin and destination points, by commodity, and by
weight . (The rates are based on competitive pressures,
not on any formula .) Generally, of course, the longer the
haul and the heavier the load the more March charges
the shipper. On the other hand, on a revenue-per-mile
basis, short hauls usually pay more than long hauls.
3. March's "exclusive possession , control and use"
of the tractors it leases
ICC regulations require that a tractor owner's lease of
a tractor and driver to a motor carrier provide that the
lease give the carrier "exclusive possession , control and
use of the equipment ."49 March 's leases comply with
that requirement.
The "exclusive possession, control and use" language
does not mean that March can in fact use the truck
whenever it sees fit. Rather, March's use of a tractor is
limited to those times when the driver is able and willing
to drive. 60 In that respect although some drivers are
"runners" (drivers who push themselves to keep their
trucks moving), many others are not . Moreover some
lessors in fact make their tractors available to March
only on a part-time basis . (One tractor-owning farmer
makes his tractors available to March only when they
are not hauling his farm 's produce, notwithstanding the
purported applicability of the lease terms described
48 That load does not show up on the above listing because the move-
ment did not begin on 12 May.
49 49 CFR § 1057.12.
60 Rules issued by the Unites States Department of Transportation
limit the number of hours truckdnvers may drive , on both a daily and
weekly basis. The record in this proceeding suggests that drivers do not
always scrupulously adhere to such limits See also D. D. Wyckoff & D.
H. Maister, The Owner-Operator: Independent Trucker, p. 8 (1975), which
makes the same point.
1052 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
above.) In addition, drivers sometimes seek out trip
leases, using their tractors (and, generally, March's trail-
ers) to haul non-March shipments.
What "exclusive possession, control and use" does
mean is that March lessors are precluded from using
their tractors to haul non-March loads for compensation
absent March's assent . Thus no tractor leased to March
may be used for trip leasing without March's approval.
Although March generally gives its approval to a lessor's
trip lease request, March will in some instances refuse
such approval and instead demand that the tractor be
used for a March load. (March does so when the tractor
of the requesting lessor is the only one available to haul
a particular March load.)
4. Sixty-five percent of revenues
March is not obliged to have loads available for the
tractors at all times. And any costs associated with time
spent waiting for a load that are incurred by the lessor
are borne entirely by the lessor. Moreover as the per-
centage method of computing compensation - suggests,
lessors ordinarily receive no compensation for deadhead
mileage even though the deadheading is done in order to
get from the destination of one March load to the origin
of another March load.
As March's tractor lease form makes clear, lessors do
not necessarily receive a full 65 percent of the freight
charge paid by the shipper. Rather, "commission pay-
ments" are deducted from the amount paid by the ship-
per prior to computing the lessor's 65-percent share.
he commission referred to are those that March pays
in order to obtain the load.) March deducts that commis-
sion even when it is paid to March's own sales personnel.
5. Dispatching arrangements
In terms of the mechanics of the dispatching arrange-
ments, drivers call in when they are ready for a load
(generally the call is made on completion of unloading).
Sometimes a driver will be told that there is a specific
load that March expects him to take. But when there are
several loads available in the general area of the driver
who is calling in, the dispatcher will advise the driver of
all such loads and permit the driver to choose. If no load
is available in the area, the driver will either have to
wait for March to find some business in the area, dead-
head whatever distance may be necessary to get to an'
area in which March does have loads, or find a trip
lease . (In those situations March routinely approves a
driver's trip lease request.)511
6. Driver rejection of proffered loads
Some drivers advise March dispatchers of their unwill-
ingness to haul loads to or from particular shippers or
consignees (because of those companies' histories of slow
loading or unloading) or to haul loads to or from speci-
fied areas (because of the likelihood of congestion-
spawned delays). March's dispatchers generally honor
those requests. Drivers may, and sometimes do, reject' all
51 For additional discussion of March' s dispatching arrangements, see
sec. G, below.
loads offered to them by the dispatcher on any given oc-
casion (in the hope that a better-paying March load or
trip lease may turn up).52
At some carriers, load rejection puts the driver at the
bottom of a list of drivers waiting for loads.53 That is
not the case at March. Nonetheless for several reasons
March drivers tend to be reluctant to reject proffered
loads. For one thing, March will terminate its lease with
any lessor whose driver rejects loads more often than
March considers tolerable. For another, for many lessors
their survival as a tractor owner depends on uninterrupt-
ed cash flow-which can mean that any load is better
than being parked without one. Third, drivers fear the
consequences they think might flow from dispatcher irri-
tation. The drivers' concern is that their rejection of
proffered loads might induce March's dispatchers to later
withhold information about the availability of more prof-
itable runs or, in the words of one March driver, to
simply "let you sit."54 Although there is nothing of
record to indicate that March's dispatchers have ever in
fact responded in that way: (1) that does not, of course,
mean that such responses have never occurred, and (2)
the reality of the drivers' fears is clear.
7. Route selection and hours of work
March exercises no control over the routes used to
move a load from origin to destination. March does pro-
vide each driver with maps showing routes to many, of
the shippers and consignees March serves. (The maps
differ from the usual road map in that they show only
those routes with vertical clearances sufficiently high to
accommodate March's trailers.) But the maps are recom-
mendations only.
March ordinarily is indifferent about the time of day a
driver chooses to work. The only exception: the limita-
tions on a driver's choice of working time resulting from
shipper or consignee requirements about the time of
pickup or delivery of a load.
8. Tractor acquisition and operating costs
The purchase price of an over-the-road tractor de-
signed to haul semitrailers is between about $50,000 and
$100,000. Financing costs for such tractors typically run
about $1000 per month. March does not assist its lessor
in the purchase or financing of tractors. Expenses associ-
ated with fuel, oil, tires, and maintenance for a tractor
average about 40 cents per mile. March does not reim-
burse its lessors for any of those expenses except in
atypical, isolated instances. Other nonreimbursed ex-
penses ,include tolls and the drivers' food and lodging ex-
penses. ,
52 March's "Independent Contractors Handbook" suggests that drivers
may never reject all loads offered to them by the dispatcher. See G C.
Exh. 119, p 33. That is not in fact March's practice, Of course the hand-
book statement may nonetheless affect the willingness of some drivers to
turn down the loads they are assigned
58 See, e g., Rediehs Interstate, 255 NLRB 1073, 1076 (1980); Mitchell
Bros. Truck Lines, 249 NLRB 476, 478 (1980).
54 Tr. 5296,
CONTAINER TRANSIT 1053
9. Insurance
The ICC requires March to carry public liability and
cargo insurance . March does . On the other hand,
March's leases require the lessor to carry bobtail insur-
ance (liability insurance covering incidents occurring
when the tractor is not connected to a semitrailer). Nei-
ther March nor its insurance carrier asks for reimburse-
ment by the driver or lessor if March incurs liability to
third parties as a result of driver negligence while haul-
ing a March load.55 But if a shipper claims that its cargo
was lost or damaged in the course of carriage by March
and March pays the claim as valid , March will seek re-
imbursement for up to $500 from the lessor of the tractor
that hauled the load. March does not carry workers'
compensation insurance covering drivers and does re-
quire lessors to carry such insurance . (That March re-
quirement is a function of either state law or the de-
mands of March 's insurance carrier .) March neither car-
ries collision insurance covering its lessor 's tractors nor
requires lessors to insure their tractors against loss (and
some do not).
10. State taxes and fees
The Wisconsin "base plate" carried by each tractor
leased to March is registered in March 's name. Base
plate fees are substantial-about $1200 per year per trac-
tor. March pays the base plate fee but requires reim-
bursement of the entire amount from the lessor. (As a
matter of practice March deducts $100 per week per
tractor from the amounts that would otherwise be due
the lessor until the base plate is paid for .) March pays for
other state taxes and fees, such as road use taxes, and
does not require reimbursement from the lessor.
11. The signing on process
Federal regulations require that March inspect any
tractor it leases to determine whether the vehicle meets
various minimum standards. March does so. (March im-
poses no additional requirements of its own except re-
quirements relating to the relatively large dimensions of
its trailers-namely, maximum tractor length and maxi-
mum "fifth wheel" height .) Federal regulations also re-
quire that March test each driver's knowledge and ability
and ensure that the drivers take and pass the requisite
physical examinations at specified intervals. March gen-
erally does so.56 (March does not reimburse drivers or
lessors for any costs they incur in connection with the
physical examination requirement.)
12. Discipline
March does not maintain any personnel records cover-
ing drivers (whether or not the drivers are also lessors)
and does not have any set disciplinary system . 57 March
does terminate its relationship with lessors whose drivers
alienate March 's customers, or repeatedly refuse to take
assigned loads, or fail to make deliveries on time. (In
such cases March usually advises the driver that "we
don't have work for you any more .") In at least one case
a March official used the term "fire" in respect to a non-
owner driver, and "fire," of course, suggests an employ-
er-employee relationship . The incident , however, was an
isolated one , and the circumstances were unusual.
13. Miscellaneous compensation matters
Lessors are compensated for all March loads hauled
even if the shipper fails to pay March. In the case of trip
leases, however, although March will assist the tractor
owner in collection efforts, if the lessee does not pay it is
the tractor owner , not March, that incurs the loss.58
Loading and unloading is normally done by shippers
and consignees , not by March 's drivers. If loading or un-
loading is required , the lease provides that the lessor will
do it "at a compensation to be agreed with" March.59 In
practice March discusses the matter with the driver of
the load to be loaded or unloaded and sometimes pays
the driver directly, even if the driver is not the lessor.
The impression I got was that the amounts that March
pays for such services are often less than the driver be-
lieves fair, and that the drivers do the loading or unload-
ing for the offered compensation only because they do
not want to alienate March 's officials (for the reasons
discussed earlier in respect to dispatching and rejection
of proffered loads).
March sends Thanksgiving and Christmas presents of
$25 checks to each driver. March makes smaller gifts to
lessors who are not also drivers . March has a "bonus
program" that could yield extra income to lessors, de-
pending on "overall performance of equipment and
driver," "availability of your equipment," and "years on
lease with March Transportation." 80 But it does not
appear that lessors consider the program to be signifi-
cant.
March pays its lessors weekly. As will be more fully
discussed below , nonowner drivers are paid by the
owner of the tractor they drive and receive no compen-
sation from March (except for the occasional amounts
paid to the driver for loading or unloading work, Christ-
mas presents, etc., as touched on above). March pays no
fringe benefits whatsoever to lessors or nonowner driv-
ers, and pays no FICA or unemployment compensation
taxes on behalf of either lessors or nonowner drivers.
March routinely advances cash to drivers for road ex-
penses, emergency repairs, and the like (if the lessor has
authorized such advances). In each such case March then
reduces the lessor 's next check by the amount of the ad-
vance.
66 That practice is contrary to a lease provision by which the lessor
"agrees to reimburse and otherwise indemnify (March) for all losses and
damages . . . to third parties resulting from the operation of the equip-
ment...." G.C. Exh. 128, par. 5.
68 March often does not administer road tests to drivers its manage-
ment knows to be experienced.
57 March's "Independent Contractors Handbook" refers to driver
"personnel files" and to "disciplinary action up to and including fines or
dismissal ." G.C. Exh. 119 at 29 and 34. But those facets of the handbook
do not accurately reflect March's practices.
58 March takes 10 percent of trip lease revenues as compensation for
the use of its trailer.
sa G.C. Exh. 128, par. 10.
60 G.C. Exh. 119.
1054 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
14. The extent of March's contact with lessors and
drivers
It is commonplace for March officials to have only
one face-to-face meeting with a driver-when he first
starts driving for March. (The tests that March is re-
quired to give to each new driver means that someone
from March will always have at least that one meeting
with each driver.) Thereafter the only oral communica-
tion between March and the driver may be by telephone.
That telephone contact, on the other hand, is likely to be
frequent: daily, or almost daily, for the entire time the
driver is associated with March.
In contrast, it is not unusual for March officials never
to have any oral communication, whether in person or
by telephone, with a lessor who is not also a driver.
(Many tractor lessors provide written authorization to
the drivers of their trucks to enter into leases with motor
carriers. Thus March may have no communication with
the lessor even during the signing-on process.)
15. Uniforms, insignia, and tractor colors
March drivers do not wear uniforms. March is indif-
ferent about tractor colors. On the other hand Federal
regulations require that each tractor display the identity
of the motor carrier to which it is leased, and March ac-
cordingly places placards on the tractors it leases. (Les-
sors have no choice in the matter-they must permit the
placards to be placed on the truck.)
16. Paperwork and call-in requirements
March demands that the drivers of the tractors it
leases send to March a not insubstantial amount of paper-
work, including driver logs, trip sheets, daily mileage re-
ports, bills of lading, delivery receipts, fuel reports,
damage reports, pretrip inspection reports, daily mainte-
nance reports, and safety accident reports. Imposition of
such requirements on the driver is largely, but not entire-
ly, a function of governmental regulation.
March purports to require that each driver telephone
the March dispatcher "every morning, Monday through
Friday between 7:30 a.m. and 9:00 a.m." to advise of es-
timated time of delivery and the like.61 The requirement
is not enforced, and drivers rarely comply with it.
17. Lease term
At all relevant times ICC regulations specified that the
minimum lease term was 30 days.62 At March, however,
as a practical matter there has never been a minimum
lease term. The truck and driver stay on with March as
long as, and only as long as, both March and the lessor
are satisfied with the arrangement. Thus, some lessors
have stayed with March for only a few days. (On the
other hand, some tractors and drivers have remained
with March for many months.)
61 G.C. Exh 119, p. 25
62 49 CFR § 1057.12. In December 1984 the ICC amended its rules to
eliminate the 30-day minimum lease period requirement 49 Fed.Reg
47850 (Dec. 7, 1984)
18. Parking
The determination of where to park a tractor under
lease to March is entirely the responsibility of the lessor
(and/or the driver), not March. March tries to provide
tractors with loads that enable the drivers to get home
on a more-or-less weekly basis-that is, a driver will be
given an opportunity to haul a load that need not be de-
livered immediately and whose origin and destination
points permit a routing that is near the driver's home. In
such instances the driver is expected to find a place to
park the tractor-trailer during his stay at home (generally
near his home).
19. Fines and penalties
Generally lessors, not March, pay any fines imposed
on the operation of their tractors. That includes fines re-
sulting from exceeding state maximum weight loads. An
exception: when the overweight is due to shipper
action-as when the cargo weighs more than the shipper
said it did. In such cases March asks the shipper to pay
the fine.
20. Inspections and maintenance
March's lease agreement requires lessors to perform
whatever repairs and maintenance on their tractors may
be necessary, at the lessors' own expense.63 March's
leases always require that the tractors leased to it
"comply with all safety rules and requirements of the
several States in which said equipment may be operated
and the [U.S.] Department of Transportation." 64 But
March does not inspect the tractors after the inspection
associated with their signing on with March. Federal
regulations provide that drivers must periodically submit
reports to their carrier on the condition of their vehi-
cles-both tractor and semitrailer-and March does re-
quire its drivers to submit such reports.65
21. Are the drivers perceived to be employees of
March?
Various statements in March's "Independent Contrac-
tors Handbook" read as though March thinks of its trac-
tor drivers as its employees.66 But even in the handbook
March is careful to refer to its "Independent Contractors
and their drivers."67 And March's tractor leases are spe-
cific in stating that "in leasing and operating the equip-
ment . . . Contractor is an independent' contractor,
rather than an employee or agent of the Carrier."68
More importantly, perhaps, March's owner-operators
did seem to think of themselves as independent contrac-
tors. Thus when, in the heat of an argument, March offi-
cial Johnson told an owner-operator that "I ought to fire
63 If a tractor breaks down while hauling a load for March, March
may ask the driver of another lessor to pick up the load. In such cases
March deducts from its payment to the lessor of the broken-down vehicle
whatever amounts March has to pay the other lessor for the partial run
64 G.C. Exh. 128, par. 2
65 See G C. Exh. 119, p. 18, 20
66 See in. 56 above.
67 Opening page of G.C. Exh. 119.
68 G.C. Exh. 128 at par. 3.
CONTAINER TRANSIT 1055
you," the owner-operator responded-"I don't see how
you can fire me, I don 't work for you."69 March's man-
agement also usually seemed to think of the drivers as in-
dependent contractors or employees of independent con-
tractors . 70 (I use the term "usually" because , as just
noted, Johnson from time to time used terminology such
as "I ought to fire you" in the course of arguments with
drivers.)
The perceptions in this regard of March 's nonowner
drivers are harder to pin down . Thus according to one
driver, although he recognized that the owner of the
tractor he drove was technically his employer, it was
March's dispatcher who came to mind when he was
asked who his boss was.
22. Relative economic power: March versus its
tractor lessors
March is financially much larger and stronger than
most of its tractor lessors . That is particularly true of the
60 percent of its lessors who are owner-operators. As
touched on earlier, many of the lessors have to keep cash
coming in (because of the substantial tractor financing
costs they must meet). That need on the part of the les-
sors inevitably is reflected in the lessors ' relationship
with March.
But there is another side to the coin . For one thing,
March is no colussus either and is thinly capitalized.
Thus, March's survival too depends on keeping revenues
flowing in. For another , March is just one among many
motor carriers that eagerly seek out leased tractors-with-
driver. The result is that : (1) it is by no means in March's
interest to gratuitously alienate either a lessor or a non-
owner driver; and (2) many tractors have been signed on
with March only to be quickly taken off when the driver
or lessor concluded that other carriers offered better
prospects than March.
23. The extent of the entrepreneurial activity of
March's owner-operators
In considering whether March's drivers are employees
of March, to some extent the issues differ as between
owner-operators , on the one hand , and nonowner driv-
ers, on the other. One question of importance regarding
the nonowner drivers is the nature of their relationship
with the owners of the tractors they drive. That question
will be considered later . As for owner-operators, Board
standards focus on , among other things , to what degree
they may be deemed entrepreneurs.
March 's owner-operators are not in a position to hold
themselves out as available to do business with the
public. Their leases with March preclude it. Their trac-
tors carry placards indicating that the tractors belong to
March. And the tractor base plates are March 's, not their
own. All owner-operators associated with regulated
common carriers face the same limitations . But at some
carriers, the trip lease business that each owner-operator
69 Tr. 5279.
70 Question (by March's counsel): "Is it not a fact that every driver is
is responsible for developing constitutes a sizeable por-
tion of the owner-operators' revenue.71 That is not the
case at March . Trip leases represent only a small portion
of the loads hauled by March's owner-operators.
On the other hand:
(1) An over-the-road tractor represents a very consid-
erable investment , as discussed earlier; and an owner-op-
erator's profits (and often financial survival) depend on
the expertise the owner -operator brings to the decisions
he must make in the course of acquiring , financing, and
maintaining his tractor.
(2) March's owner-operators frequently, and perhaps
most of the time , are in a position to choose among sev-
eral different available loads . The record in this proceed-
ing makes it clear that in order to choose the best load a
not inconsiderable number of considerations have to be
juggled-including differences in the total revenue and in
the revenue per mile to be earned from each of the
loads' and deadheading necessary to get to them ; likely
return loads, likely waiting times and deadheading at the
destination point of each of the available loads; kind of
cargo; and the likelihood of delays loading or unloading
or en route-to name just the more obvious factors. The
level of knowledge and foresight each owner -operator
brings to those decisions , which must be made on a near
daily basis, will make a difference.
(3) Some of March's owner-operators haul many more
loads than others (because of such factors as a willing-
ness to spend more time on the road, fewer accidents
and breakdowns, and the like ) and, consequently , accrue
much higher revenues.
(4) Although trip leasing does not represent a major
part of the revenues for any March owner-operator, trip
leasing is not uncommon. Accordingly the energy and
ability of a March owner-operator in finding trip leases
when March has no nearby loads ready for him will
affect the owner-operator's earnings.
24. The tripartite relationship between March, the
lessors who do not drive their own tractors, and
March's nonowner drivers
In almost all cases each tractor signed on with March
has just one driver more or less permanently assigned to
the tractor. The tractors owners hire the drivers of the
tractors, can and sometimes do fire them, and set the
terms of their compensation . March may help a prospec-
tive driver to find a tractor owner in need of a driver,
and may assist a tractor owner in finding a driver. But
March provides only assistance in those respects. The
decisions are left to the tractor owners and drivers. The
rates of pay of March' s various nonowner drivers vary
from one driver to another . (Most, but not all, of the
owners of tractors signed on with March pay their driv-
ers a percentage of the revenues that the tractor owner
receives.) March has no requirements in that respect and
does not keep track of the compensation of the non-
owner drivers. (It is clear, however, that March's non-
considered by March to be an independent contractor?" Answer (by ex- 71 See Conley Motor Express, 197 NLRB 624, 625 (1972). That case in-
March salesman Ney, who had been called to the stand by the General volved a carrier whose business was one way. Any backhaul business had
Counsel): "To the best of my knowledge, yes." Tr. 1376. to be trip leases.
1056 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
owner drivers earn considerably less than CTI's did. As
Fox put it, compared to March and many other carriers,
"CTI was a country club.")72
Some of March's nonowner drivers have worked for
several of March's tractor lessors. And some tractors
signed on with March have had a number of different
drivers. Tractor owners with several tractors signed on
with March rountinely switch drivers from one truck to
another.
It is not uncommon for a tractor owner and a driver
not to communicate with one another for weeks at a
time. And as discussed above: (1) communications be-
tween March and a tractor owner may be limited to
weekly checks mailed to the owner by March; and (2)
March and each of its drivers, including nonowner driv-
ers, frequently communicate with one another-for dis-
patch purposes, and because of the drivers'- paperwork
requirements. (As that earlier discussion indicates, the
extent to which a driver is willing to keep moving, the
driver's choice of which loads to take, and the driver's
acumen in determining whether and when to trip lease
can have a considerable impact on the revenue earned by
any given tractor leased to March. Nonetheless lessors
leave such matters to the drivers of their trucks. Based
on the record in this proceeding, it appears that if a
lessor concludes that a tractor's revenues have been too
low, the lessor will handle the matter either by taking
the truck from March and putting it on with another car-
rier or by firing the driver.)
25. Are March's owner-operators employees or
independent contractors?-conclusion
The question of whether, March's owner-operators are
employees of March, as the General Counsel contends,
or independent contractors, as March claims, hinges on
the outcome of a "two-prong analysis": (1) does March
"have the right to control _ not only the result but the
manner and means by which the desired result is to be
obtained"; and (2) to what extent can March's owner-op-
erators be considered entrepreneurs-what are their
"proprietary interests," and to what extent does their
work entail "risk of loss and opportunity for profit."73
March's relationship with its owner-operators is not
precisely the same as that described in any of the many
Board cases dealing with the status of owner-operators.
Nonetheless, it is reasonably clear that the degree of con-
trol that March exerts over its owner-operators is no
more than, and the extent to which those owner-opera-
tors are entrepreneurs is no less than, that spelled out in
a number of cases in which the Board concluded that the
owner-operators associated with over-the-road motor
carriers were independent contractors, not employees.
E.g., George Transfer & Rigging Co., 208 NLRB 494
(1974); Portage Transfer Co., 204 NLRB 787 (1973); and
Fleet Transport Co., 196 NLRB 436 (1972).
But that is not the end of the matter because: (1) in
Mitchell Bros Truck Lines74 the Board overruled George
Transfer, Portage Transfer, and. Fleet Transport; and (2)
March's arrangements with its owner -operators are at
least as employee-like as relationships found to create
employee status in such as subsequent cases Redhiehs
Interstate, 255 NLRB 1073 (1980).
There is still more to the story, however , because it
does not appear that either Mitchell Bros. or Redhiehs
Interstate remains good law. The overruling of cases like
George Transfer by Mitchell Bros. was in part the result
of a generalized difference in the way the Board meas-
ured control and risk taking . But a major reason for the
switch had to do with the fact that much of the control
that motor carriers exert over owner -operators is a func-
tion of Federal and state requirements . In Fleet Transport,
for example , in the course of ruling that the owner-oper-
ators were independent contractors the Board noted that
"essentially the only indicia of control over the means of
delivering [the carrier 's freight] are those required by"
governmental regulation. 75 In contract , in Redhiehs
Interstate, the Board held that:
The fact that the Employer is required by Gov-
ernment regulations to control the means and
manner in which the drivers perform the Employ-
er's hauling does not diminish the validity ' of our
findings. The actual relationship between the Em-
ployer and its drivers, rather than the reasons for
the relationship, is the critical consideration... .
We note that in certain earlier decisions, the Board
held that because Federal regulations are imposed
on the parties by governmental fiat, they are insuffi-
cient by themselves to establish employee status.
However, the Board, in Mitchell Bros. Truck Lines,
noted that these earlier cases [had been] implicitly
overruled . . . .76
The Board now appears to have returned to the phi-
losophy espoused in cases like Fleet Transport with re-
spect to the import of control stemming from govern-
mental requirements. Checker Cab Co., 273 NLRB 1492
(1985); Air Transit, 271 NLRB' 1108 (1984).
According to Checker Cab:
"Government regulations constitute supervision not
by the employer but by the state;" therefore, the
greater the control exerted by the governmental
entity, the less opportunity for control by the puta-
tive employer.7 7
And in Air Transit the Board concluded that "nearly all
the factors allegedly demonstrating control over the
manner and means of the drivers' performance of their
duties stem from [governmental] requirements . . . and
thus do not constitute evidence of employer control."78
Checker Cab and Air Transit involved taxicab drivers,
not over-the-road tractor owner-operators. And the
degree of control exerted over the alleged employees in
74 196 NLRB at 439
72 Tr. 8741 78 255 NLRB at 1077
72 -The quotes are from Capital Parcel Delivery Co, 269 NLRB 52, 53 77 273 NLRB 1492, quoting Seafarers Local 777 (Yellow Cab) Y. NLRB,
(1984). ' 603 F.2d 862 (D.C. Cir. 1978).
74 249 NLRB 476, 480-481 (1980). 78 271 NLRB at 1111.
CONTAINER TRANSIT
those cases appears to be considerably less than the con-
trol March has over its owner -operators . But the lan-
guage quoted above from Checker Cab and Air Transit
seems wholly at odds with the conclusions expressed in
cases like Mitchell Bros. and Redhiehs Interstate. And re-
cently, in Don Bass Trucking, 79 the Board made it clear
that the reasoning of Checker Cab and Air Transit is ap-
plicable to trucking company cases (albeit, in the case of
Don Bass, an intrastate dump truck operation).eo
Because it appears that the Board intends to return to
standards akin to George Transfer, Porter Transfer, and
Fleet Transport, and because March 's owner-operators
have at least as much independence as the owner-opera-
tors in those three cases-in all of which the Board held
that the owner-operators were independent contractors,
my conclusion is the March 's owner-operators should
also be deemed independent contractors rather than em-
ployees.
26. Are March's nonowner drivers employees of
March?
It is clear that March 's nonowner drivers are employ-
ees of the owners of the tractors they drive. The ques-
tion is whether the drivers are also employees of
March-whether the lessors and March are joint em-
ployers.
There have been numerous Board cases in which (1) a
motor carrier 's drivers included both owner-operators
and nonowner drivers of leased equipment; and (2) at
issue was whether the carrier 's drivers were "employ-
ees" of the carrier . In apparently all such cases, if the
owner-operators were found to be employees of the car-
rier, then the nonowner drivers were found to have that
status too . And if, instead, the owner-operators were
found to be independent contractors, the nonowner driv-
ers were found to be employees of the tractor lessors and
not of the motor carrier.81
There is nothing about the circumstances at March
that suggest that that approach should not be followed. I
accordingly conclude that the nonowner drivers of
March's leased tractors are not employees of March.
D. Were Unlawful Reasons Behind March 's Decision
to use Independent Contractors, Rather than
Employees, as Drivers?
For purposes of this decision I will assume that an em-
ployer may not lawfully use independent contractors
rather than employees if the basis for the employer's use
of independent contractors is a desire to avoid Burns or
Golden State obligatons. See, e.g., Sun Coast Foods, 273
NLRB 1642, 1643 (1985) ("An alleged successor employ-
er . . . has a right to choose the size and composition of
79 275 NLRB 1172 ( 1985).
80 See also Atlantic Interstate Messengers, 274 NLRB 1144 fn. 2 (1985),
in which the Board expressly avoided reliance on Mitchell Bros.
81 Cases finding that the owner-operators and the nonowner drivers of
leased equipment were employees of the carrier: e.g., Redhiehs Interstate,
Mitchell Bros.; and Robbins Motor Transportation, 225 NLRB 761 (1976).
Cases finding that neither the owner-operators nor the nonowner drivers
of leased equipment were employees of the carrier : e.g., George Transfer,
Portage Transfer, Fleet Transport, and Ace Damn Hauling & Rigging Co.,
214 NLRB 798 (1974).
1057
its own workforce limited only by the duty not to dis-
criminate against employees of its predecessor for rea-
sons proscribed by the Act"); United Dairy Farmers Co-
operative Assn. v. NLRB, 633 F.2d 1054, 1063 (3d Cir.
1980) ("The conversion of employees to independent
contractor status is an unfair labor practice when moti-
vated by antiunion animus").82
1. March 's reasons for not using employee-drivers
included a desire to avoid unionization and Golden
State successorship obligations
There is ample evidence showing that March 's deci-
sion not to use employee -drivers included a desire to
avoid: (1) Burns obligations ; (2) unionization efforts by
the Teamsters ; and (3) Golden State obligations. For ex-
ample, an ex-member of March 's sales force credibly tes-
tified that:
There were . . . comments made that they [March's
management] felt that if they hired drivers who did
not own equipment, that the union would probably
come in and unionize them . There was considerable
concern probably for a period of about 6 months
that either the union or the NLRB would come
after March.88
What is left for consideration is whether March had
additional , lawful , reasons for opting to use independent
contractors rather than employee-drivers, and whether
those lawful reasons would have led March to use inde-
pendent contractors even if March had not cared about
unionization of its drivers or about Golden State obliga-
tions. The question is a difficult one.
2. March's lawful reasons for utilizing independent
contractors
To begin with, it is clear that March 's management did
not have to use tractors leased on a short -term basis be-
cause of a lack of cash or credit . March's management
had the resources to purchase tractors (or acquire them
from a tractor seller via longterm lease). Although
March itself did not have the funds or credit for such
action, Fox, or Fox plus other members of March's man-
agement together, did. But Fox was convincing in testi-
fying that he was reluctant "to go on the hook for most
of the money.84
That does not end the inquiry, however, because
March could have used employee drivers even though its
tractors were leased on a short-term basis. At CTI, for
example, even owner-operators were bargaining unit em-
ployees. Moreover, March's witnesses testified that ship-
pers would have preferred March to use employee driv-
ers (because of the shippers ' view that "you can 't control
independent contractors").85
as See, however, sec. VI,C, below.
es Tr. 1350. See also sec. VI,A, below, in which it is concluded that
the process by which March recruited independent contractors was
shaped by the Burns and Golden State concerns of March's management.
84 Tr. 466. See also Tr. 1350 (witness Ney) ("It was stated that its
[using independent contractors] would be perhaps a less expensive way to
go. The company would not have to purchase tractors").
85 Tr. 8741-8742.
1058 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
I nonetheless think that March would have used inde-
pendent contractors and employees of independent con-
tractors as its drivers even had its management been ob-
livious to', unionization and successor considerations.
March's management adopted a low-cost, bare-bones,
philosophy right from the start. And by using independ-
ent contractors March avoided paying social security
and unemployment compensation taxes and workers'
compensation insurance, and avoided the paperwork that
goes with such matters and with Federal, and state
income tax withholding. Thus, from the point of view of
March's management, the use of independent contractors
was cheaper and "saves a lot of hassle," compared with
use of employee drivers, entirely apart from unionization
considerations,86 Those benefits accruing from the use of
independent contractors, in turn, were thought to out-
weigh the lack of control that came with independent
contractors.
As Y add up the evidence, in other words, it shows-
albeit by a slim margin-that March would have used in-
dependent contractors rather than employee drivers even
had its management been unconcerned about unioniza-
tion matters and about the liabilities that would arise
were March found to be a Golden State successor. `
E. Conclusion-March's use of Independent
Contractors
CTI's drivers were CTI's employees . In contrast, my
conclusion about March's drivers is that each of them is
either an independent contractor or an employee of an
independent contractor-that none is an employee of
March. If I am correct about that, for that reason alone
March may not be deemed a successor to CTI.
That is obvious in respect to the General Counsel's
Burns contentions. But even as regards Golden State
successorship issues: (1) the change from use of employ-
ees by the predecessor to use of independent contractors
by the new employer would appear to preclude a finding
that the "new employer ... has . . . continued, without
... substantial change, the predecessor's business oper-
ations";87 and (2) Golden State 's reasoning hinges on a
determination that the workers who have been retained
"will . . . view their job situations as essentially unal-
tered"88-a determination that may not reasonably be
made where there has been a shift from employee status
to independent contractor status.
The discussion about whether March is a successor to
CTI accordingly need go no further-if I am right in my
conclusions that: (1) March's drivers are not its employ-
ees; and (2) March would have used independent con-
tractors, instead of employees, even had March not been
concerned about unionization and successorship obliga-
tions. But because neither of those conclusions is free
from doubt, it seems worthwhile to consider whether, if
March's drivers were held to be its employees, March
ought to be deemed a successor to CTI. The pages ahead
undertake that consideration.
88 Witness Fox, Tr. 8486.
87 Golden State, 414 U.S at 184 See fn. 40, above.
88 414 U.S. at 184
F. Were a Majority of March's Drivers Previously
Employed by CTI?
1. Introduction
March may not be deemed a Burns successor unless,
during an appropriate period of time, either: (1) a majori-
ty of March's drivers were persons who had been em-
ployed by CTI about the time it closed; or (2) the reason
a majority of March's employees were not ex-CTI driv-
ers was because March avoided hiring ex-CTI drivers in
order to escape its Burns obligations. (For simplicity's
sake, the discussion in this section will assume that
March's drivers are its employees, and will use terminol-
ogy appropriate to that status-as in the use of the term
"hiring" in the preceding sentence.)
That requirement has always been part of any Burns
successorship case. See, e.g., Burns, 406 U.S. at 279;
Howard Johnson Co. v. Detroit Local Hotel & Restaurant
Employees, 417 U.S. 249, 262 fn. 8 (1974). It now appears
that that same requirement also applies to Golden State
issues . Airport Bus Service, 273 NLRB 561, (1984) (in
order to establish a Golden State successorship "the, Gen-
eral Counsel must demonstrate that a majority of the [al-
leged successor's] bargaining unit employees . . . had
been employed in the relevant units" by the predeces-
sor).89
2. Percentage of March drivers who had worked
for CTI
From 12 April 1982, when March began operations
with 1 driver, to 29 June 1982 , when March had 19 driv-
ers, a majority of March 's drivers consisted of persons
who had been employed by CTI about the time CTI
closed . The ex-CTI majority ended on 30 June 1982 and
never was regained.
The following table lists, at 1-month intervals : (1) the
total number of March drivers who had been employed
by CTI; (2) the number of March drivers who had been
employed by CTI; and (3) the percentage of March's
work force made up of ex-CTI drivers. s 0
89 Airport Bus appears to make new law in this respect It had long
been clear that the extent to which an alleged successor hired the prede-
cessor's bargaining unit employees was relevant to whether the alleged
successor was in fact a Golden State successor E.g., Colonie Hill Ltd, 256
NLRB 1076, 1077 (1981) (factors to be considered in determining the ex-
istence of a Golden State successorship include "substantial continuity in
.. work apparently could be found to be a Golden State successor even
though only a minority of the employer's work force had been employed
by the predecessor: Bell Co, 243 NLRB 977 (1979) (employer found to
be a Golden State successor even though only three of its seven employ.
ees worked for the predecessor)
90 Not long before CTI closed, CTI's management formed a division
called Foxtrot (see part IV, above). Foxtrot's drivers were compensated
on a basis different from the rest of CTI's drivers But they wre members
of Local 200; they drove the same kinds of trucks and hauled the same
kinds of traders filled with the same kinds of loads as CTI's other drivers;
and they operated out of the same terminal. It is clear , in other words,
that , the Foxtrot drivers were members of the same bargaining unit as the
other CTI drivers Accordingly the "ex-CTI Drivers" column in the
table includes ex-Foxtrot drivers.
Continued
CONTAINER TRANSIT
3. Representative complement issues
Given those figures, the question is what date is appro-
priate for determining whether a majority of March's
work force was made up of ex-CTI drivers. If the appro-
priate date is after 29 June 1982 , then a majority of
March 's drivers did not come to March from CTI. If the
appropriate date is on or prior to 29 June then a majority
of March's drivers did come from CTI. Answering that
question, in turn , "involves striking a balance between
the objective of allowing the maximum number of em-
ployees a voice in selecting their bargaining representa-
tive and the goal of assuring that the employees have
representation as quickly as possible ." Premium Foods v.
NLRB, 709 F.2d 623, 628 (9th Cir. 1983).
My conclusion is that by 29 June March 's driver work
force constituted "a substantial complement, representa-
tive of the skills and types of employees who will ulti-
mately constitute the unit ," and that for purposes of
Burns and Golden State a majority of March's drivers did
come to March from CTI.92
It is true that for several months after 29 June March's
driver complement did grow steadily . And it is also true
that ultimately March employed in the neighborhood of
50 drivers (as of the hearing in 1983-1984). Finally, ac-
count must be taken of the fact that March's predecessor,
CTI, was "essentially moribund" when March began op-
erating.9 s
But by 29 June, March had been operating for 2-1/2
months. The Teamsters had already asked to be recog-
nized as representative of March's drivers.94 The kind of
April 12 1 1 100
May 12 14 9 64
June 12 16 10 63
June 29 19 10 53
June 30 20 10 50
July 12 23 10 43
August 12 28 9 32
September 12 27 9 33
October 12 31 11 35
November 12 27 12 44
December 12 26 11 42
91 According to CTI's seniority lists , one of March 's first drivers, R.
Dean, left CTI sometime between 15 January and 6 March 1982 , and an-
other, J. Smith, left Foxtrot sometime between 1 and 6 March. Given
CTI's circumstances during its last weeks , I am assuming these early de-
partures are without significance for purposes of the Board's successor-
ship rules. The list also includes drivers who stayed with CTI until it
closed but who waited for months before joining March (as the figures
for October and November suggest) On the other hand, the list excludes
drivers who left CTI many months before it closed.
92 The quote is from Premium Foods, above, 709 F.2d at 628. Cases
that discuss representative complement issues , such as Premium Foods,
focus on whether the employer is a Burns successor. I know of no com-
parable discussion relating to Golden State issues. (Presumably that is be-
cause Airport Bus was so recently decided . See fn . 89, above.) This deci-
sion proceeds on the assumption that if a majority existed for Burns pur-
poses , it also existed for Golden State purposes.
99 NLRB v. Pre-Engineered Building Products, 603 F.2d 134, 136 (10th
Cir. 1979).
94 An agent of Local 200 demanded recognition about 13 April. By
any test 13 April was before March had hired a representative comple-
1059
work that March's drivers were doing on and prior to
that date was the same kind of work that they were to
do thereafter. Although it is clear that as of 29 June
March's management wanted to increase its volume of
business (and, therefore, its driver complement), March
had adopted no specific timetables or planned work
force levels in that regard . And the number of drivers
March had on board as late as December was only about
one-third greater than on 29 June.
(The General Counsel contends that March would
have even hired more ex-CTI drivers but for March's
deliberate avoidance of them. That contention will be
considered in part VI of this decision , relating to claims
by the General Counsel that March independently violat-
ed the Act.)
G. Other Factors Relevant to the General Counsel's
Successorship Allegations
1. Introduction
Putting aside independent contractor issues, then, the
General Counsel has proved the existence of the primary
prerequisite to a finding of successorship : during an ap-
propriate time period a majority of March's drivers had
previously been employed by CTI. And as discussed ear-
lier (in sec. V,B), a variety of other considerations
strongly suggest a successorship relationship between
CTI and March.
Other factors, however, point in the other direction.
Three of such factors-the difference in size between
CTI and March, March's use of different premises, and
differences in dispatching arrangements-are discussed
below.
2. Change in size
March is considerably smaller than CTI (as will be
shown in more detail below). That change in size had an
impact on the way March conducted its operations, on
the geographic scope of its operations , and, to some
extent, on the willingness of ex-CTI customers to deal
with March . (One shipper that provided extensive busi-
ness to CTI was unwilling to do business with March be-
cause of March's small size . (See Tr. 6618): "[W]hen
March transportation started calling on me , understand-
ing the number of units they had available at the time, [I]
basically indicated to them that they would not be a car-
rier that we would put into our . . . preferred routing
scheme.")
There is no doubt, moreover, that a difference in size
between a predecessor employer and the company that is
alleged to be a successor is a factor to take into account
in making a successorship determination. E.g., Inland
Container Corp., 275 NLRB 378, 379 fn. 11 (1985); Band-
Age, Inc., 217 NLRB 449 (1975), enfd. 534 F.2d 1 (1st
Cir. 1976); Lincoln Private Police, 189 NLRB 717, 720
(1971). On the other hand , "a change in the scale of op-
erations by itself 'must be extreme before it will alter a
finding of successorship ."' Contract Carrier, 258 NLRB
ment of drivers But that request remained effective. See Hudson River
Aggregates, 246 NLRB 192 (1979), enfd. 639 F.2d 865 (2d Cir. 1981).
1060 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
353 fn. 2 (1981) (quoting Mondovi Foods Corp., 235
NLRB 1080, 1082 (1978)); see Inland Container, above;
Band Age, above.95
The following table compares March's size with CTI's,
using a variety of criteria. (Keep in mind that CTI closed
on 19 March 1982; March opened on 12 April 1982.)96
CTI March
Assets ......................... Dec. 1980: May 1982: $124,967
$3,093,000.
Dec. 1981:
1,382,000.
Average revenues 1980:1,200,000 .......... 1st month of
per month. operations:
89,00097
1981:1,000,000 .......... 1983: 296,000
Avg. loads per day... 1981: 77 ...................... 1st week of
operations: 1-1/2
Feb. 1982: 64 ............. 4th week of
operations: 5
1st month of
operations: 5
No. of drivers............ Jan. 1981: 180............ 1st day of
operations: 1
Oct. 1981:131 ........... I month after
operations began:
14
Mar. 1982: 102 .......... 2 months after
operations began:
16
3 months after
operations began:
23
6 months after
operations began:
31
8 months after
operations began:
27
Trailers owned or March 1982: 400....... 8 months after
lease& operations began:
35
1-1/2 years after
operations began:
57
In sum , of CTI's assets , business , and personnel, the
overwhelming preponderance-perhaps 90 percent-
95 Even a dramatic change in overall size is of little import if the
reason for the change in size is that the alleged successor acquired only a
discrete part of the predecessor. See C.J.B. Industries, 250 NLRB 1433
(1980) (successor acquired only one of the predecessor's two plants);
Ranch-Way, Inc., 183 NLRB 1168, 1169 (1970), enfd. 445 F.2d 625 (1st
Car. 1971). But the issue here is whether March, as a whole, is a succes-
sor to CTI, as a whole.
96 The record is reasonably complete in respect to CTI statistics,
except for financial data for any period in 1982. (The parties provided
CTI financial record for 1982 . But no witness who could authenticate the
documents was available .) Concerning statistics covering March's oper-
ations, March chose not to provide information that could be relevant
(e.g., financial data for periods subsequent to May 1982). The mconsisten-
cy of the dates and time periods used in the table are to some extent a
function of March 's reluctance to provide a complete picture of its oper-
ations.
97 Represents total revenues for, March's first 35 days of operations.
See G.C. Exh. 183.
ended up at places other than March. To put it in the
terms used in Contract Carrier, above, the size difference
between CTI and March virtually defines the term "ex-
treme."98
3. Change in premises
Until CTI's last months its offices, garage, and Mil-
waukee marshaling yard were at one large facility: 52223
South 9th Street in Milwaukee. (In those last months
CTI moved some of its functions to nearby rented facili-
ties, keeping, however, its South 9th Street facilities.)
The facility was owned by Nashban and, for the most
part, was used solely by CTI.
March did not acquire the facility from Nashban/CTI
and has never used it. Nor has March used CTI's rented
quarters. Instead March at all times has operated out of a
small suite of offices about one-half mile from what had
been CTI's premises . (March has no marshaling yards
and no garage.)99
The question is what significance to ascribe to this dif-
ference in locations.
An employer need not occupy the premises used by
the predecessor to be deemed a successor . Western
Freight Assn., 172 NLRB 303, 305 (1968). Moreover it is
relevant that March's headquarters are so close to the fa-
cility that CTI used. Mondovi Foods Corp., 235 NLRB
1080, 1082 (1978) (a change in location is relevant "in
proportion to the distance from the prior location"). Fi-
nally, a change in premises ought to be less significant
when the alleged successor is a trucking company than
in the case of, say, a manufacturer or a retail operation.
Truckdrivers (the only category of employees we are
concerned with here) spend relatively little time at their
employer's premises." 00
Nonetheless, a change in location does suggest a dis-
continuity. See Lincoln Private Police, above at 719
(1971). And, indeed, of the hundreds of cases in which
the Board has found successorship status, to my knowl-
edge only the five referred to in footnote 100 involved
change in location.101 Thus, even trucking company
cases almost always involve the successor 's use of the
predecessor's facility. E.g., Harley-Davidson Co., 273
NLRB 1531 (1985); Sherwood Trucking Co., 270 NLRB
445 (1984); Harbor Cartage, 269 NLRB 927 (1984); Con-
tract Carrier, 258 NLRB 353 (1981); Navajo Freight Lines,
254 NLRB 1272 (1981); Joe Costa Trucking Co., 238
98 See, in this regard, Lincoln Private Police, above.
99 One reason March used a new location was to lessen the chance of
being found to be a CTI successor. March has always used a telephone
number different from CTI's, again at least in part to reduce the chances
of being held to be a CTI successor.
ioo With only one exception (Western Freight, above), the only cases of
which I am aware that found successorship status notwithstanding a
change in location are cases involving truckdnvers (Ponn Distributing
Co., 232 NLRB 312 (1977), enf. denied 578 F.2d 892 (1st Cir. 1978)), and
analogous operations-viz, buslines (Will Coach Lines, 175 NLRB 518
(1969), and West Suburban Transit Lines, 158 NLRB 794 (1966)), and an
ocean carrier (Pacific Tankers, 84 NLRB 965 (1949)).
ioi Although Mandan (cited earlier) discussed change of location, the
alleged successor there did occupy the predecessor 's facilities In Mer-
chants Home Delivery Service, 230 NLRB 290, 291 (1977), the successor's
office apparently was at a location different from the predecessor's. But
all deliveries were made from the predecessor's warehouse.
CONTAINER TRANSIT 1061
NLRB 1516 (1979); Co-Op TruckingCo., 209°NL1 R'`829
(11974); Overnite Transportation Co., 157 NLRB 1185
(1966).
Here, moreover, not only does March not use CTI's
erstwhile premises, the premises it does use are vastly
different, in size and facilities available at the location,
from CTI's. As will be next discussed, those differences
in facilities do have an impact on March's operations.
4. Dispatching arrangements
CTI's dispatching arrangements were predicated on
the fact that it had a terminal in Milwaukee and a yard
in Chicago, on CTI's recognition of seniority, and on its
distinction between "city" drivers and "over-the-road"
drivers.
CTI's weekend dispatch. Most of CTI's drivers lived in
the Milwaukee area. On weekends all Milwaukee-domi-
ciled drivers who were not out on the road completing a
previously assigned run were required to call in to CTI's
dispatchers at specified times. (The more senior the
driver the earlier he was to call in. That meant he had a
bigger choice of loads.) For such drivers the first loads
of the week usually, began from CTI's Milwaukee termi-
nal.
CTI's weekday dispatch from the Milwaukee terminal.
An over-the-road driver who delivered a load to the
Milwaukee area during the week was expected to wait at
the terminal for his next load. Loads out of the terminal
were assigned'on the basis of seniority.
CTI's weekend dispatch of non Milwaukee drivers. Some
of CTI's drivers were domiciled outside of the Milwau-
kee area-in St. Louis, for instance, and Fort Wayne.
For weekend dispatch purposes, the drivers in each such
locale were treated as a group, with assignments made
on the basis of seniority.
CTI's dispatch of drivers out on the road, Once out on
the road seniority rarely made any difference. CTI driv-
ers were expected to advise their dispatcher as soon as
they were unloaded. The first driver to call in from any
given area had the' best choice of loads (among available
loads near him). '
CTI city drivers. CTI's drivers were divided into
over-the-road drivers and city drivers. Early in CTI's
history the over-the-road drivers did not make pickups
or deliveries directly from or to customers in either Mil-
waukee or Chicago. Rather, the over-the-road drivers
would pick up or drop their loads at CTI's terminal in
Milwaukee or its marshaling yard in Chicago.102 CTI's
city drivers would handle the intracity part of the run.
Similarly only city' drivers handled trips between Mil-
waukee and Chicago (and other relatively short runs).
That division of work was expensive for CTI, and as
CTI's finances worsened, work that had been done by
city drivers was increasingly assigned to over-the-road
drivers (with the at least tacit agreement of Local 200).
Nonetheless, even at the time of CTI's collapse CTI had
both city and over-the-road drivers.
112 CTI did not own or rent its Chicago yard Rather, the yard was
made available to CTI by one of CTI' s customers.
March's dispatching arrangements. In contrast to CTI:
(1) March has no terminals and no yards;103 (2) March
does not take seniority into account; (3) March has no
city drivers (which means that in all but the most unusu-
al circumstances the driver who handles the over-the-
road portion of the trip makes the pickup and the deliv-
ery); and (4) March makes no distinction between week-
end and weekday dispatch.
March's dispatching system was described earlier (in
connection with independent contractor issues). In brief,
all March's dispatching is comparable to CTI's weekday
dispatching of over-the-road drivers. Thus: (1) March
drivers call in to March's office when they are ready for
a load; (2) the dispatcher advises the driver of available
loads; (3) the driver chooses the load he prefers (or-and
this differs from CTI-rejects all choices in favor of a
trip lease, etc.); and (4) on delivery of that load the
driver again calls in, and so on. All dispatching is done
on the basis of first-in-first-out.
H. The General Counsel's Successorship Allegations-
Conclusion
The following discussion is predicated on the criteria
for a Burns successorship being the same as for a Golden
State successorship where, as here, knowledge of the
predecessor's unfair labor practice is conceded. See Air-
port Bus Service, 273 NLRB 561 (1985); Blu-Fountain
Manor, 270 NLRB 199 (1984); Colonie Hill, 256 NLRB
1076 (1981); Navajo Freight Lines, 254 NLRB 1272, 1281
(1981).1°4
If I am right about March's drivers being independent
contractors or employees of independent contractors,
and if I am also right that March utilizes independent
contractors, rather than employee-drivers, for lawful rea-
sons, then it is evident that March is not a successor to
CTI. But the status of March's drivers and the lawfulness
of the reasons behind March's decision not to hire em-
ployee-drivers are both close calls. I have thus sought to
determine whether March should be deemed a successor
to CTI, putting aside independent contractor consider-
ations.
If independent contractor considerations are put aside,
however, the question- of whether March is a successor
to CTI becomes excruciatingly difficult to answer.
The problem stems from the fact that the various
successorship criteria point in' such different directions.
On the one hand, given the enormous change in size,
March's lack of terminal facilities, the accompanying
changes in dispatching arrangements, and the change in
premises , March simply cannot be construed to be the
same "employing business operation" or "essentially the
103 The CTI customer that permitted CTI to use the customer's yard
in Chicago (see In 101, above) has not accorded March that same bene-
fit
104 Howard Johnson, 417 U.S. at 262-263 fn 9, suggests that the crite-
ria for the two kinds of successorships need not be the same But the
Board has not followed that suggestion This facet of Howard Johnson is
discussed further, below
1062 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
same business" or "substantially the same business" as
CTI.105
On the other hand, there is much about March that
points to "substantial continuity of identity ... 106 rela-
tive to CTI. And the question of whether the "essential
nature of the enterprise" changed 1 ° 7 can fairly be an-
swered with either a yes or a no.
Ultimately, the problem is how to resolve the "tension
between the principal of entrepreneurial freedom eco-
nomic efficiency, on the one hand, and stability of labor
relations, on the other." 108 And as I weigh the various
considerations present here, it seems to me that March is
different enough from CTI that finding March to be a
successor to CTI would more severely impinge on "en-
trepreneurial freedom and economic efficiency" than
would a contrary finding on the "stability of labor rela-
tions." I accordingly conclude that-even apart from in-
dependent contractor issues-March should not be
deemed a successor to CTI, for either Burns or Golden
State purposes.
Other Successorship Considerations
The relevance of CTI's demise,to successor issues. During
the course of the hearing I expressed interest in the ques-
tion of whether CTI's collapse prior to March's creation
should weigh against deeming March to be a Golden
State successor to CTI.109 My concern was that, accord-
ing to the rationale expressed in both Perma Vinyl and
Golden State, one reason why it is appropriate to require
a successor to remedy the unfair labor practices of its
predecessor is that the benefits flowing from such a re-
quirement-
are achieved at a relatively minimal cost to the
bona fide successor. Since the successor must have
notice before liability can be imposed, "his potential
liability for remedying unfair labor practices is a
matter which can be reflected in the price he pays
for the business, or he may secure an indemnity
clause in the sales contract which will indemnify
him for liability arising from the seller's unfair labor
practices." 110
Here no such protections were available to March.
According to the General Counsel, CTI's unfair labor
practice liabilities exceed $1 million, an amount far more
than the value of CTI's assets. As for an indemnification
105 The quotes are from, respectively, Golden State at 414 U.S 181
(quotmg, in turn, Perma Vinyl Corp., 164 NLRB 968 (1967)); Jeffries Lith-
ograph Co., 752 F.2d 459 (9th Or 1985), enfg. 265 NLRB 1499 (1982),
and Harbor Cartage, 269 NLRB 927 (1984)
106 Golden State, 414 U S at 182
107 NLRB v. Bandage-Age, Inc, 534 F.2d 1, 3 (1st Cir 1976), enfg 217
NLRB 449 (1975)
108 Leventhal, concurring , in Machinists District Lodge 94 v. NLRB,
414 F 2d 1135, 1142 (D C. Or 1969). Judge Leventhal's concurring deci-
sion is cited with approval in Howard Johnson, above at 263 fn 9 (1974).
For an alternate expression of the issue, see the reference in Golden State
to the "balance between the conflicting legitimate interests of the bona
fide successor, the public, and the affected employee" 414 U.S at 181.
100 It is clear, of course, that an employer may be a Burns successor to
a "moribound" predecessor. Burns, 406 U S at 287-288.
110 Golden State, above at 185, quoting Perma Vinyl, 164 NLRB at 969
(1967).
agreement: (1) one from CTI would have been meaning-
less; and (2) there is no indication that an indemnification
agreement from Nashban would offer much protection
either. (As noted earlier, Nashban did agree to indemnify
the subscribers against any liabilities they might incur re-
sulting from CTI's obligations.' 11 But that does not
mean that Nashban could in fact cover such liabilities.
And it is noteworthy that the provision covers the sub-
scribers individually, not March, even though it would
be March, rather than the subscribers, that would be re-
sponsible for CTI's unfair labor practice liabilities if
March were found to be a successor.)' 12
There seems to be no case directly on point. But sev-
eral cases suggest that the fact of the predecessor' s finan-
cial failure and the resulting inability on the part of the
successor to protect itself through price adjustments or
indemnification provisions have little if any bearing on
whether successor should be required to remedy the
unfair labor practices of the successor. E.g., Hot Bagels &
Donuts of Staten Island, 244 NLRB 129 (1979), enfd. 622
F.2d 1113 (2d Cir. 1980); Ponn Distributing Inc., 232
NLRB 312, 314 (1977), reversed on other grounds 578
F.2d 892 (1st Cir. 1978). In view of this state of law, and
in view of March's determination to not argue the point
on brief, I have not taken CTI's demise into account in
passing on March's Golden State obligations.
Import of Howard Johnson v. Hotel & Restaurant Em-
ployees. Footnote 9 of the Supreme Court's opinion in
Howard Johnson reads in pertinent part as follows:
The question of whether Howard Johnson is a "suc-
cessor" is simply not meaningful in the abstract.
Howard Johnson is of course a successor in the
sense that it succeeded to the operation of a restau-
rant and motor lodge formerly operated by the
Grissoms. But the real question in each of these
"successorship" cases is, on the particular facts,
what are the legal obligations of the new employer
to the employees of the former employer or their
representative? The answer to this inquiry requires
analysis of the interests of the new employer and
the employees and of the policies of the labor laws
in the light of the facts of each case and the particu-
lar legal obligation which is at issue, whether it be
the duty to recognize and bargain with the union,
the duty to remedy unfair labor practices, the duty
to arbitrate, etc. There is and can be, no single defi-
nition of "successor" which is applicable in every
legal context. A new employer, in other words,
may be a successor for some purposes and not for
others. 113
111 See the test at fn. 29, above
112 Fox contends that "we [March] have some kind of indemnification
against anything that happens to us, we have recourse against Container
Transit and Mel Nashban." Tr. 8456 The evidence does not support that
position. I recognize, however, that arguably Fox's statement should be
deemed accurate for purposes of this proceeding, whether it actually is.
113 417 U.S at 262-263 For discussion of this facet of Howard Johnson
see J L F. Silver, Reflections on the Obligations of a Successor Employer, 2
Cardozo L Rev. 545, 556-557 (1981), Bellingham Frozen Foods v. NLRB,
626 F.2d 674, 680-681 (9th Or. 1980), cert denied 449 U.S. 1275 (1981)
CONTAINER TRANSIT 1063
One question that language points to is whether March
might be deemed a successor for some Golden State pur-
poses but not for others. The Board has never taken that
tack, and thus the foregoing discussion states my conclu-
sions about the General Counsel 's successorship allega-
tions under the current state of the law as I understand
it.
But the Board may wish to consider whether a pur-
pose-by-purpose analysis of successorship status might be
useful in at least some cases. Here, for example: (1) even
though my conclusion is that March should not be
deemed a successor to CTI for all purposes, many crite-
ria do point toward March being a CTI successor; (2) it
is undisputed that Harry Fox played the largest role in
organizing March and is March's chief executive; and (3)
the General Counsel claims that Fox was the motivating
force behind many of CTI's alleged unfair labor prac-
tices (while he was serving as CTI's general manager). If
the General Counsel is correct in those claims about that
unlawful behavior by Fox, arguably the appropriate reso-
lution of the "tension between the principal of entrepre-
neurial freedom and economic efficiency, on the one
hand, and stability of labor relations, on the other" (see
the text at fn. 108, above) would be to impose Golden
State liability on March in respect to those particular
unfair labor practices. (Imposing even that limited form
of successorship liability on March might depend, how-
ever, on determining either that March's drivers are its
employees or that March adopted the independent con-
tractor approach for unlawful reasons.)
VI. MARCH'S ALLEGED INDEPENDENT VIOLATIONS
OF THE ACT
All previous discussion in this decision relates to
whether March is an alter ego or disguised continuance
of CTI or a successor to CTI. This part of the decision
deals with the question of whether March itself violated
the Act. The General Counsel alleges that March did
violate the Act' in the course of its efforts to recruit driv-
ers. According to the General Counsel, March:
1. For unlawful reasons used recruiting techniques that
minimized the number of applications it received from
former CTI drivers.
2. Refused to take on former CTI drivers, again for
unlawful reasons.
3. Made remarks to former CTI drivers, and to per-
sons associated with those drivers, that interfered with,
restrained, or coerced the drivers in the exercise of their
Section 7 rights.
(In sec. V,E, I concluded that March did not employ
drivers; that, instead, March's drivers were either inde-
pendent contractors themselves-owner-operators-or
employees of independent contractors. That lack of an
employer-employee relationship between March and its
drivers is relevant, of course, to consideration of the
General Counsel's allegations regarding March's inde-
pendent violations of the Act and will be discussed fur-
ther in this section.)
A. March's Avoidance of Ex-CTI Drivers
This section discusses the way March went about en-
couraging drivers to apply to March. It does not cover
March's handling of driver applications. (That subject is
considered in the next section.)
As discussed earlier, March did use ex-CTI drivers.
But virtually all those drivers began driving for March
no later than 9 June 1982-that is, within 8 weeks of
March's commencement of operations. Between 10 June
and 23 September, March took on an additional 26 driv-
ers. None came from CTI.
Based on the evidence before me, there can be no
doubt that absence of ex-CTI drivers among those 26
was the product of March's deliberate avoidance of such
drivers as, indeed, was the recruiting of at least some of
the half-dozen non-CTI drivers whom March took on
prior to 9 June. Much of the time during March's first
months March wanted more drivers than it had. Given
the background of March's officers, given the undisputed
fact that many of CTI's drivers were good at their jobs,
and given the likelihood that because of CTI's collapse
many of the drivers were in need of work, the obvious
approach to filling those driver slots would have been
for March to get in touch with the drivers who had
worked for CTI. (Although March was interested only
in owner-operators or drivers who otherwise had access
to tractors that March could rent, many ex-CTI drivers
were in that position, as March's officers knew)
But except in limited respects, March did not do that.
In fact March did not even advertise for drivers in Mil-
waukee, which is where March's offices are located and
where most of the ex-CTI drivers live. Instead March in-
curred substantial expenditures of cash and executive
time (both of which were in short supply) embarking on
recruiting efforts in other areas.
March proffered a number of reasons its recruiting ef-
forts took the shape they did. One is that March planned
to focus its traffic development efforts on certain "traffic
lanes" and that it wanted drivers who lived in or near
those lanes.114 A second was that March tried to recruit
Milwaukee-based drivers but was unsuccessful in those
attempts.115 And third, because March "only needed a
few guys," March "handpicked" only "the best
people."116
But although I found the testimony of the March offi-
cer responsible for driver recruiting-Martin Johnson-
to be credible in many respects, that did not seem to me
to be the case as regards his testimony about why March
used the recruiting methods it did. Moreover: (1)
March's officials were aware ' of, and much concerned
about, the Board's successorship rules; (2) those officials
were also aware that th'e more ex-CTI drivers March
hired, the more likely it would be that March would be
deemed a successor to CTI; (3) in discussions among
themselves, March officials stated that, because of the
114 E.g., March 's Br. at 64, Tr. 7672.
116 March's Br. at 64.
116 Tr. 5235.
1064 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Board's successorship rules, March would limit the
number of ex-CTI drivers it would hire.117
Accordingly, I find that March did shape its recruiting
efforts in a way that would avoid attracting ex-CTI em-
ployees; that March acted in that manner in order to
avoid successorship obligations; and that absent such
considerations March would have sought out the serv-
ices of additional ex-CTI drivers.
The question, however, is whether March ought to be
found to have violated the Act by reason of the way it
went about encouraging drivers to apply to March (as
opposed to the way March dealt with drivers who did
apply).
In a case, with facts similar in significant respects to
those before the Board here, the Board concluded that
the employer violated Section 8(a)(3) of the Act when,
because of union animus, it used hiring techniques calcu-
lated to reduce to a minimum the number of applications
from employees of the predecessor employer. Love's Bar-
beque Restaurant No. 62, 245 NLRB 78 (1979 ). I none-
theless must conclude that the record fails to show that
March unlawfully discriminated against ex-CTI employ-
ees in its driver-recruiting efforts.
First,, March did not have an employer-employee rela-
tionship with its drivers; and because independent con-
tractors are not protected by the Act presumably one
may use virtually any techniques one wishes to recruit
them without violating the Act. See Plumbers Local 447
(Malbaff Landscape), 172 NLRB 128, 129 (1968). And
second, unlike the situation in Love's Barbeque, March
made no attempt to hide the fact that it needed drivers
and, concomitantly, CTI's drivers knew of March's re-
cruiting efforts while March was still engaged in them.
(Very few drivers expressed any interest in signing on
with March, but that was not a function of a lack of
awareness that March was looking for drivers.)' 18
As for March's handling of the few unsolicited propos-
als it received that would have brought ex-CTI drivers
to March, as discussed below the record fails to show
that March dealt with them discriminatorily.
B. Drivers Whom the General Counsel Claims March
Rejected for Unlawful Reasons
1. Jack Lemley's testimony
Lemley owned a number of trucks that he had leased
to CTI. He did not drive for CTI and did not offer to
drive for March. But soon after CTI closed, Lemley
117 "I heard it specifically stated [by March Chief Executive Fox] that
they cannot hire too many CTI drivers. They were discussing successor,
to avoid, say, the appearance of successor They were going to hue some
[CTI drivers] . . They were just going to limit how many they would
hire." Witness Ney, Tr. 1351-1352
118 One reason for the lack of interest was that the compensation that
March offered was not particularly attractive (Numerous motor carriers
offered the same 65-percent-of-revenues arrangement that March did; and
some paid considerably more.) Another reason expressed by some of the
ex-CTI drivers was that they did not like or respect the persons who
made up March's management. The General Counsel suggests that coer-
cive statements by March kept ex-CTI drivers from applying That possi-
bility will be considered in sec. VLD.
called Martin Johnson at March to say that he "had
some trucks available" for lease to March.11 s
According to Lemley, when he made that offer to
March, Johnson's response was that although March was
interested in the trucks, March was not willing to lease
them if Lemley was going to use the same drivers who
had driven the trucks when they had been leased to CTI.
Lemley also testified that Johnson said that March
would not permit Lemley to use the drivers who had
been on with CTI "because of their union affiliation."120
Johnson denied Lemley's version. According to John-
son, Lemley lost all interest in putting his trucks on with
March when Johnson told him that Lemley, not March,
would be the drivers' employer.
The first issue to be resolved is whether the General
Counsel's allegations, even if true, represent a violation
of the Act by March. The issue arises because of my
conclusion that March's drivers are not its employees.
In that connection, it appears that March could lawful-
ly have refused to deal with Lemley because March dis-
approved of the drivers Lemley used, even if that disap-
proval was the result of the protected activities of Lem-
ley's drivers. Malbaff Landscape Construction, 172 NLRB
at 129 ("an employer does not discriminate against em-
ployees within the meaning of Section 8(a)(3) by ceasing
to do business with another employer because of the
union or nonunion activity of the latter's employees").
But, according to the General Counsel, March did more
than that. 'The General Counsel claims that March said
that it would deal with Lemley if, but only if, he rid
himself of certain employees. And that is impermissible
(if March's actions were in fact predicated on the em-
ployees' protected activity or on their association with
CTI). Dews Construction Corp., 231 NLRB 182 fn. 4
(1977) ("An employer violates the Act when it directs,
instructs , or orders another employer with whom it has
business dealings to discharge, layoff, transfer, or other-
wise affects the working conditions of the latter's em-
ployees because of the union activities of said employ-
ees), enfd. mem. 578 F.2d 1374 (3d Cir. 1978); Sandpiper
Builders, 152 NLRB 796 (1965).
Returning to the facts of the Lemley-Johnson conver-
sation, obviously there is a good reason for crediting
Lemley's version: the evidence shows that from the start
March was deeply concerned about the possibility of
being found to be a successor of CTI and accordingly
was determined to limit the number of ex-CTI drivers it
used. Lemley's testimony, of course, is consistent with
that evidence.
I nonetheless think that Johnson's version of the con-
versation is the more accurate one.
For one thing, initially March did use a number of ex-
CTI drivers. Secondly, the record indicates that March
was carefully counseled: (a) on what its officials could
and could not lawfully say and do; and (b) on the likeli-
hood that what they did say and do was going to be the
subject of litigation. That reason alone makes it unlikely
that Johnson told Lemley he would take the trucks but
118 Tr 5611.
120 Tr. 5598
CONTAINER TRANSIT
not the drivers . (That same reason makes it even less
likely that Johnson referred to the "union affiliation" of
Lemley's drivers .) Finally, one can credit Lemley's ac-
count almost completely (as I do) without, however,
finding that Johnson did or said anything unlawful. At
CTI the drivers of Lemley's trucks were employed by,
and directly paid by, CTI. Johnson, who knew that and
who emphasized to everyone that March was using inde-
pendent contractors , can be expected to have told
Lemley something on the order of "March will not
employ your drivers" in the course of discussing the tri-
partite relationship between March, truck owners, and
truckdrivers . The interpretation that Lemley testified to
would have followed naturally.
2. Donald Groom 's testimony
Groom leased four trucks to CTI until 4 months
before CTI closed . Subsequently Groom sought to lease
one of those trucks to March. George Dillenberg drove
one of Groom's trucks when they were leased to CTI.
Groom planned to use Dillenberg as his driver for the
truck with March . March agreed to lease Groom 's truck
but refused to allow Groom to use Dillenberg as a
driver. When Groom asked why Dillenberg was not ac-
ceptable, Johnson's only response was, "Well , you know
why." 121
Johnson gave Groom the names of some drivers who
Johnson knew to be available . Two of them had driven
for CTI (Walter Muller and Dwight Anderson). Many of
them had not . After considering the matter further
Groom decided not to put his truck on with March.
Groom assumed that Johnson's "Well, you know
why" remark was a reference to the fact (in Groom's
view) that Dillenberg "was a union man ... [a] strong,
very strong member." 122 But the validity of Groom's as-
sumption is not all that clear . Indeed , apart from that
statement by Groom , there is no evidence that Dillen-
berg was particularly active in union matters.
There are other possibilities , of course.
One relates to a waiver program led by Fox at CTI.
(Starting in the autumn of 1981 and continuing into early
1982 CTI officials urged every CTI driver to sign a
waiver form by which the driver purportedly gave up
his rights to certain moneys that CTI owed to him pur-
suant to the collective-bargaining contract .) The General
Counsel alleges that CTI massively discriminated against
CTI drivers who resisted signing the waivers . And Dil-
lenberg on a number of occasions refused to sign any
such waiver . Evidence supporting the General Counsel's
waiver allegations is relevant to the question of whether
March unlawfully discriminated against Dillenberg, and I
have taken that evidence into account. But there is also
contrary evidence, including the fact that Lorand
Schultz, who, while driving for CTI, also refused to sign
a waiver and , moreover, wrote a letter to Fox denounc-
ing the waiver program . Yet March eagerly , and success-
fully, recruited Schultz to drive for March. All things
considered , my conclusion is that Dillenberg 's refusal to
121 Tr. 5561 (witness Groom).
122 Tr. 5564.
1065
sign a waiver while at CTI had nothing to do with John-
son's rejection of Dillenberg as a driver.
Another interpretation of the "you know why" phrase
could be that it referred to Dillenberg 's propensity for
filing grievances while a driver for CTI. That interpreta-
tion would be consistent with the testimony of March's
insurance broker , who testified that March 's officers had
said that they planned to avoid ex-CTI drivers who had
been "troublemakers ." 123 According to that witness,
"troublemaker" meant the kind of driver who would "do
anything to give Mel Nashban a hard time and try to
squeeze him for his last dollar type of attitude ." 124 Ar-
guably to like effect is the credible testimony of witness
Clifford Ney who heard March officials say that they
specifically tried to avoid "complainers"; that is, "some-
one who was constantly complaining about what he was
getting paid or what work he had to do and how he had
to do it .11 125 That interpretation is also consistent with
the General Counsel 's claim that March 's officers (in
their prior roles as officers of CTI) discriminated against
drivers who filed grievances against CTI.
Again, in considering March 's action in respect to Dil-
lenberg I have considered the General Counsel's and
March 's evidence relating to CTI's alleged discrimination
against employees who filed grievances . Having done so,
I cannot conclude that the record shows that the griev-
ances Dillenberg filed against CTI were the cause of
March's unwillingness to accept Dillenberg as a driver.
For one thing , it is by no means clear that CTI did dis-
criminate against drivers who filed grievances, even in
respect to those employees the General Counsel specifi-
cally names as CTI discriminatees. (Dillenberg is not one
of those named discriminatees .) 126 For another, one of
the drivers whom Johnson urged Groom to use in place
of Dillenberg (Walter Muller) filed at least one grievance
against CTI comparable to one of Dillenberg's.
Finally, it is evident that the "you know why" remark
did not refer to the fact that Dillenberg had been a CTI
driver and that March did not want to hire very many
ex-CTI drivers . After all, in Johnson's conversation with
Groom, two of the drivers Johnson suggested as replace-
ments for Dillenberg had also driven for CTI (Muller
and Dwight Anderson).
Turning to possible appropriate reasons for March's
refusal to accept Dillenberg as a driver, it could be that
Johnson simply considered Dillenberg to be an unsatis-
factory employee . The impression I got from Dillen-
berg's testimony is that he is the kind of person who in-
terprets, and complains about, even the most innocent
kinds of employer action as malevolently motivates and
aimed personally at him . An employer may lawfully
choose not to associate with that kind of individual (so
long as the employer 's action is not predicated on the
employee's concerted activity). In that connection, the
testimony of witness Ney referred to at footnote 125
above can fairly be construed as an indication that
123 Tr 1430 (witness Zarek)
1'4 Tr. 1430-1431.
laa Tr 1354.
188 See G.C. Br. 74-94.
1066 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
March officials did want to avoid that kind of "com-
plainer."
But if that was Johnson's reason for rejecting Dillen-
berg as a driver, it is not clear why Johnson would have
responded so ambiguously to Groom. Moreover, since
Johnson testified in this proceeding, he had a ready op-
portunity to explain what he had in mind by his "you
know why." Yet he offered no such explanation. Finally,
the impression Dillenberg gave at the hearing might well
have been misleading. For one thing, Groom presumably
would not choose to use,Dillenberg as the driver of his
truck if Dillenberg was a problem employee. For an-
other, CTI's head of operations testified that Dillenberg
was "a real nice easy-going guy on a normal basis."127
All in all, although I cannot conclude that the record
shows that March's rejection of Dillenberg was for
lawful reasons, neither can I conclude that the record
shows that rejection was for unlawful reasons.128
3. Freeman and Ladwig
Jerry Freeman and Jeffrey Ladwig, both of whom had
driven for CTI, each inquired about driving for March.
But at the time of their inquiries neither was either an
owner-operator or associated with a truck owner. John-
son's response to both of them was that March was using
independent contractors exclusively and was not hiring
drivers.
The General Counsel points out that in a number of
instances March went out of its way to link driver appli-
cants with potential tractor lessors. According to the
General Counsel, March refrained from providing that
kind of assistance to Freeman and Ladwig for discrimi-
natory reasons in violation of Section 8(a)(1) and (3).
I will assume, for present purposes, that March's un-
willingness to provide either Freeman or Ladwig with
the names of tractor owners in need of drivers was a
product of the two drivers' protected activity while they
were employed by CTI. But it does not appear to me
that, even with that assumption , March's actions regard-
ing Freeman and Ladwig violated the Act. I think that is
clear in respect to Section 8(a)(3). And- although the
question of whether March's actions interfered with, re-
strained, or coerced employees in violation of Section
8(a)(1) is closer, I think there too the law supports
March. For one thing, there is no evidence that either
Freeman or Ladwig knew that March was providing
truck-finding help to other driver applicants. For an-
other, March's statements to both Freeman and Ladwig
indicated that March would take them on as drivers if
they could find trucks to drive. Third, March said noth-
ing to either of them that hinted that March might be
concerned about their past protected activities. Finally,
March's use of independent contractors rather than em-
ployee-drivers might alone preclude the conclusion that
March's acts violated Section 8(a)(1), even if the first
three considerations did not. (The Lemley situation (dis-
127 Tr. 6415 (witness Thomsen)
128 See Pullman Power Products, 275 NLRB 765 (1985) When March
rejected Dillenberg, Groom suggested another ex-CTI driver, Amsden.
But March turned down that proposal too However, Amsden testified
that he was not interested in driving for March. Thus, the record fails to
show that March's position about Amsden affected Amsden in any way
cussed above) differs from the Freeman/Ladwig circum-
stances in that: (1) March is not alleged to have said any-
thing about Freeman or Ladwig to actual or prospective
employers of either of the two; (2) as just noted, March
said nothing to anyone that could be construed as an in-
dication that March was concerned about the two driv-
ers' protected activity.)
4. Dave Wallace
Wallace is an owner-operator. He had previously
driven for CTI. The General Counsel claims, that
March's Johnson rejected Wallace's effort to sign on
with March, and that Johnson did so because "he was
going to avoid a CTI majority even if it greatly incon-
venienced March"129 But the evidence of such purport-
ed refusal consists almost entirely of testimony by Wal-
lace that when he said to Johnson, shortly after CTI
closed (and before March had hired any driver), that "I
heard you was making a company up," Johnson respond-
ed: "its going to be a while" and recommended that
Wallace apply for work with another motor carrier.1130
That falls considerably short of evidence of a refusal to
deal with Wallace, much less proof of a refusal to sign
Wallace on because of Wallace's CTI connection.
5. Dan Grahl
Grahl leased several trucks to CTI and later leased
trucks to March. The General Counsel claims that
March officials told Grahl that they were avoiding
former CTI drivers and that that affected Grahl's choice
of drivers for the trucks he leased to March. But the
record does not support the General Counsel's claim.
C. Does an Employer Violate the Act if its
Employment Decisions are Shaped by a Desire to
Avoid Golden State Successorship Obligations?
Implicit in the foregoing discussion is the conclusion
that had March refused to take on an ex-CTI driver as a
March employee because of March's fears about being
deemed a successor, March would thereby have violated
the Act. (The General Counsel refers to Section 8(a)(1),
(3), and (5).) In the circumstances of this case, that con-
clusion merits explicit consideration.
An employer who refuses to hire former employees of
its predecessor in order to avoid unionization (under
Burns) thereby violates the Act. E.g., Howard Johnson,
417 U.S. at 280-281 fn. 8; Inland Container Corp., 275
NLRB 378 (1985). And there is no doubt that March
very much wanted a nonunion driver corps. But March's
main successorship concern was to avoid responsibility,
under Golden State, for CTI's huge backpay liabilities.
Indeed as I add up the evidence, March's actions regard-
ing avoidance of ex-CTI drivers would have been the
same even if March had been indifferent about the union-
ization of its drivers. That raises the question of whether
it is unlawful for an employer to refuse to hire a prede-
cessor's former emloyees in order to avoid Golden State
129 G C Br 175.
130 Tr. 3618.
CONTAINER TRANSIT
successorship obligations . To my knowledge that ques-
tion has never been answered.
A case can be made for the proposition that failure to
hire based on Golden State concerns raises different issues
under the Act than does a failure to hire based on Burns
concerns; that there is nothing in the Act that prohibits
an employer from refusing to hire employees of a prede-
cessor if the reason for that refusal is the employer's
desire to avoid the costs associated with remedying the
predecessor's unfair labor practices ; and that a rule of
law requiring a potential successor to act as though it
were indifferent about possibly ruinous liabilities (as
here): (a) is unworkable in that it requires employers to
behave in a way no one will ever be willing to behave;
and (b) at least on occasion would stand in the way "the
free transfer of capital."131
On the other hand, if employers could lawfully base
hiring decisions on a desire to avoid Golden State succes-
sorship obligations, the protections that Golden State was
intended to 'provide could all too easily instead have a
net detrimental impact on employees. '
Given my finding that the record fails to show that
March discriminated against driver applicants (or against
employees of independent contractors), the matter may
be academic . But if the Board should disagree with that
finding , the question of whether an employer violates
Section 8(a)(1) if the employer fails to hire a predeces-
sor's employees because of a desire to avoid Golden State
obligations may, have to be resolved.
D. Did March 's Officials Make any Coercive
Statements?
March Officer Johnson told various ex-CTI drivers
and persons associated with such drivers that March was
"non-union" and that March "is going to be non-
union." 1 s 2 (One witness testified that Johnson said that
March's management was "going to ' try to keep" March
nonunion . 133 But Johnson denied saying anything like
that and I credit his denial.)
If March's drivers were its employees , a difficult ques-
tion would be raised about whether those remarks by
Johnson violated Section 8 (a)(1). Compare Inland Con-
tainer Corp., 267 NLRB 1187 (1983) with Love's Barbeque
Restaurant No. 62, 245 NLRB at 124. If I am correct
about March's drivers not being employees of March,
however, then statements to the effect that March was
nonunion and was going to be nonunion were merely an
accurate reflection of what was so and, therefore, were
no nviolative.
As a last matter , if an employer adopts a policy of re-
fusing to accept the employment applications of persons
121 The quote is from Howard Johnson, 417 U S. at 255 CTI's potential
unfair practice liabilities exceeded $1 million That is not only way
beyond anything that March could have afforded, it is far more than
March's total assets. (See the table in sec . V,G, above.)
1112 E.g, Tr. 3349, 4730, and 5522.
133 Tr 5522 (witness Groom)
1067
employed by' its predecessor , and if the predecessor's em-
ployees, knowing of that policy, refrain from applying
for employment on the ground that it would be futile to
do so, "a continuity in the identity of the work force
... arises . . . by operation of law ." Crawford Contain-
er, 234 NLRB 851, 860 (1978). I have accordingly con-
sidered whether March 's various statements and actions
created a sense of futility on the part of: (1) ex-CTI driv-
ers who would otherwise have made an effort to find
some way to drive for March , either as owner-operators
or as nonowner drivers; or (2) 'truck owners who had
leased their trucks to March , or wanted to do so, and
who wanted to use as drivers persons who had been em-
ployed by CTI.
But because I have 'concluded that none of March's
actions or statements in respect to driver and independ-
ent contractor recruiting were unlawful , it would not
appear that March 's behavior may be deemed to have
led anyone to reasonably conclude that March was not
willing to use ex-CTI drivers. As touched on above,
moreover , the record shows that the lack of interest of
ex-CTI drivers in March was a reflection of economic
and personality considerations , not of March's hiring
policies or statements by March relating to hiring.
CONCLUSIONS OF LAW
1. March Transportation, Inc., April Sales , Inc., and
Charm Leasing are a single employer for purposes of the
Act.
2. Neither March nor April Sales nor Charm Leasing
are a single employer with or an alter ego or disguised
continuance of Container Transit, Inc. or of any person
having a single-employer relationship with Container
Transit, Inc.
3. Neither March nor April Sales nor Charm Leasing
is a successor to Container Transit , Inc. or to any person
having a single-employer relationship with Container
Transit, Inc., either within the meaning of NLRB v.
Burns Security Services, 406 U.S. 272 (1972), or within the
meaning of Golden State Bottling v. NLRB, 414 U.S. 168
(1973).
4. There has been no showing that March violated the
Act in any respect.On these findings of fact and conclu-
sions of law and on the entire record , I issue the follow-
ing recommended'35
ORDER
The complaint is dismissed in its entirety insofar as it
relates to March Transportation , 'Inc., April Sales, Inc.,
or Charm Leasing.
135 If no exceptions are filed as provided by Sec . 102 46 of the Board's
Rules and Regulations , the findings , conclusions, and recommended
Order shall, as provided in Sec 102 48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses.