Equal Employment Opportunity Commission v. MacMillan Bloedel Containers, Inc.

503 F.2d 1086, 8 Fair Empl. Prac. Cas. (BNA) 897, 19 Fed. R. Serv. 2d 233, 1974 U.S. App. LEXIS 6569, 8 Empl. Prac. Dec. (CCH) 9727
CourtCourt of Appeals for the Sixth Circuit
DecidedOctober 9, 1974
DocketNo. 74-1191
StatusPublished
Cited by20 cases

This text of 503 F.2d 1086 (Equal Employment Opportunity Commission v. MacMillan Bloedel Containers, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Equal Employment Opportunity Commission v. MacMillan Bloedel Containers, Inc., 503 F.2d 1086, 8 Fair Empl. Prac. Cas. (BNA) 897, 19 Fed. R. Serv. 2d 233, 1974 U.S. App. LEXIS 6569, 8 Empl. Prac. Dec. (CCH) 9727 (6th Cir. 1974).

Opinion

PHILLIPS, Chief Judge.

This action was brought by the Equal Employment Opportunity Commission (EEOC) against MacMillan Bloedel Containers, Inc. (MacMillan) for alleged race and sex discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000 et seq. Local 544, United Paperworkers International Union, AFL-CIO (the Union), was joined as a party-defendant under Rule 19(a), Fed.R.Civ.P., but was not charged with a Title VII violation. The District Court granted MacMillan’s motion for summary judgment because it found that a condition precedent to suit, namely the filing of a charge with the EEOC, had not been fulfilled. The court, sua sponte, entered summary judgment in favor of the Union because its position in the suit was derivative of Mac-Millan’s. We reverse.

In 1969, a Mrs. Della Mercer filed charges of race and sex discrimination with the EEOC against the Flintkote Company, Hankins Container Division (Flintkote)-. The charges were directed at Flintkote’s Cleveland, Ohio facility, located at 14801 Emery Avenue. The charges were investigated by the EEOC. On November 27, 1972, the EEOC notified Flintkote that it had reasonable cause to believe that Flintkote had engaged in unlawful employment practices. The EEOC invited the parties to join with it in a collective effort to resolve the matter. At some time, not apparent from the records, MacMillan took over operation of Flintkote’s Cleveland facility. The nature of the transaction between Flintkote and MacMillan does not appear in the record.

On July 5, 1973, the EEOC filed suit against MacMillan who was then and is now operating the Cleveland facility. The complaint alleged, inter alia, that MacMillan maintained policies and practices which discriminated on the basis of sex and race. Additionally, paragraphs eight and nine of the complaint stated:

“8. More than thirty days prior to the institution of this action, a charge was filed with the Commission in which it was alleged that Defendant Corporation engaged in employment practices made unlawful by Title VII.
“9. All conditions precedent to the institution of this action have been fulfilled.”

The Union, although named as a party-defendant, was not charged with a Title VII violation. Rather, it was joined under Rule 19(a), Fed.R.Civ.P., because the decree entered by the court might affect its collective bargaining agreement with MacMillan.

MacMillan moved in the alternative: 1) to dismiss under Rule 12, Fed.R.Civ. [1089]*1089P., for failure to state a claim upon which relief could be granted and for lack of subject matter jurisdiction, 2) for a grant of summary judgment in its favor, or 3) to require a more definite statement of the allegations in paragraphs eight and nine of the complaint, supra. An affidavit of Douglas D. Thompson, the administrative officer of MacMillan, was submitted with these motions. The thrust of the motions and affidavit was that, prior to July 5, 1973, MacMillan had not been named in any charges alleging race and sex discrimination at its Cleveland facility.

Throughout the entire proceedings in the District Court, the EEOC relied solely upon its allegations in the complaint. At no time did it submit evidence in support of or amplify upon the allegations in paragraphs eight and nine of the complaint.

The District Court granted summary judgment in favor of MacMillan because no charges had been filed against Mac-Millan for its Cleveland facility prior to institution of the suit and, sua sponte, in favor of the Union because its position in the suit was derivative of MacMillan’s.

I.

The EEOC, while not denying that MacMillan was not charged, contends that MacMillan is, nevertheless, liable as a successor employer to remedy the discriminatory practices of Flintkote. This liability, it is alleged, rests upon the same considerations which govern liability as a successor employer under the National Labor Relations Act (Labor Act), 29 U.S.C. § 151 et seq.

The issue has two 'aspects: 1) Can a successor company be held liable for the unlawful employment practices of its predecessor? and 2) When a successor company has notice of an EEOC charge naming its corporate predecessor, is it necessary for the discriminatee to refile the charge and additionally name the successor company?

The Supreme Court has considered the obligations of a successor company under the Labor Act, supra. In John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 548, 84 S.Ct. 909, 914, 11 L.Ed.2d 898 (1964), the Supreme Court held:

“[T]he disappearance by merger of a corporate employer which has entered into a collective bargaining agreement with a union does not automatically terminate all rights of the employees covered by the agreement, and that, in appropriate circumstances the successor employer may be required to arbitrate with the union under the agreement.”

Substantial continuity of identity in the business enterprise before and after the change was set forth as the key factor in the determination. Id. at 551, 84 S.Ct. 909.

The holding rested on considerations of national labor policy:

“Employees, and the union which represents them, ordinarily do not take part in negotiations leading to a change in corporate ownership. The negotiations will ordinarily not concern the well-being of the employees, whose advantage or disadvantage, potentially great, will inevitably be incidental to the main considerations. The objectives of national labor policy, reflected in established principles of federal law, require that the rightful prerogative of owners independently to rearrange their businesses and even eliminate themselves as employers be balanced by some protection to the employees from a sudden change in the employment relationship.” Id. at 549, 84 S.Ct. at 914.

In National Labor Relations Board v. Burns International Security Services, Inc., 406 U.S. 272, 281-291, 92 S.Ct. 1571, 32 L.Ed.2d 61 (1972), the Supreme Court recognized that the decision in Wiley, supra, was not without its limitations. The Court held that while successor employers may be bound to bargain with an incumbent union, they would not be bound by the substantive provisions of a collective bargaining agreement negotiated by their predecessors but not [1090]*1090agreed to or assumed by them. This holding was based on the importance attached to private bargaining without official compulsion over the actual terms of the contract. The Court also observed that requiring a new employer to be bound by the substantive terms of a pre-existing collective bargaining agreement might inhibit the free transfer of capital and restrict him from making substantial changes in the business. Id. at 287-288, 92 S.Ct. 1571.

In Golden State Bottling Co., Inc. v. N. L. R. B., 414 U.S. 168, 171-174, 94 S.Ct.

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503 F.2d 1086, 8 Fair Empl. Prac. Cas. (BNA) 897, 19 Fed. R. Serv. 2d 233, 1974 U.S. App. LEXIS 6569, 8 Empl. Prac. Dec. (CCH) 9727, Counsel Stack Legal Research, https://law.counselstack.com/opinion/equal-employment-opportunity-commission-v-macmillan-bloedel-containers-ca6-1974.