Morris Road Partners, LLC v. National Labor Relations Board

637 F. App'x 682
CourtCourt of Appeals for the Third Circuit
DecidedJanuary 19, 2016
Docket15-1884
StatusUnpublished

This text of 637 F. App'x 682 (Morris Road Partners, LLC v. National Labor Relations Board) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Morris Road Partners, LLC v. National Labor Relations Board, 637 F. App'x 682 (3d Cir. 2016).

Opinion

OPINION *

CHAGARES, Circuit Judge.

Morris Road Partners, LLC (“MRP”) and Lederach Electric, Inc. (“LEI”) filed a petition for review of a National Labor Relations Board (“NLRB”) Order holding that the petitioners were a “single employer,” and therefore jointly and severally liable for LEI’s previously determined back pay liability of $122,229.06. The NLRB cross-petitioned to enforce its order. For the following reasons, we will deny the petition for review and grant the petition to enforce the NLRB’s Order.

I.

We write solely for the parties and therefore recite only the facts necessary to our disposition. In the underlying matter, on March 4, 2013, the NLRB held that LEI owed $122,229.06 in backpay for laying off certain employees for engaging in protected labor practices. Appendix (“App.”) 33. On September 24, 2013, the NLRB’s Regional Director of the Fourth Region pursued compliance proceedings to determine whether MRP and LEI were a single employer and jointly and severally liable for the backpay. App. 43^46. After a hearing, Administrative Law Judge Arthur J. Amchan found that LEI and MRP were not a single employer, but on February 3, 2015, the NLRB reversed, holding that LEI and MRP were a single employer, and therefore jointly and severally liable for the unfair labor practices at issue. App. 3-5. This Second Supplemental Decision and Order (“Order”) was the NLRB’s final order. On February 23, 2015, MRP petitioned this Court for review of the Order, and on April 10, 2015, the NLRB cross-petitioned for enforcement of its Order against the parties. App, 1-2.

LEI was an electrical contractor incorporated in Pennsylvania. App. 59. When LEI dissolved in late 2012, James Leder-ach owned-100% of its stock. App. 59. James Lederach and Judy Lederach were the sole officers of LEI. James exercised complete managerial, financial, and operational control of LEI, and Judy signed LEI’s checks. App. 59. From 1986 until it dissolved in late 2012, LEI leased an office in the Lederach Commons Building, which is owned by MRP. App. 59-60.

MRP is a real estate property management company incorporated in Pennsylvania. App. 60. James and Judy each own 50% of the shares of MRP, and have been its only managers, running its day-to-day business. App. 60. Judy signs all of MRP’s checks. App. 60. MRP has never had any employees. App. 60. MRP and LEI share the same post office box. App. 59-60. MRP and LEI have separate bank *684 accounts, pay their bills separately, and file separate tax returns. App. 19. Occasionally, MRP’s tenants dropped off their rent payments at LEI’s office, and sometimes James used LEI’s phone for MRP business, instead of his cell phone as he usually did for MRP business. App. 15.

LEI had a rental lease with MRP and was required to pay $3,000 a month for rent. App. 62-74. Sometime around 2008 and 2009, LEI’s financial situation began to deteriorate. App. 16. James said that LEI did not pay MRP rent because he knew MRP would not sue LEI for rent, but, of course, LEI’s other creditors could sue LEI if it failed to meet its obligations. App. 18-19. Subsequently, from January 1, 2009 through March 2012, LEI accumulated a debt of $62,000 in rent owed to MRP, inconsistently paying rent, if at all. App. 60, 75-78. Even when LEI paid rent, it did so in a piecemeal way. For example, in 2010, LEI failed to pay rent for eight different months but paid $25,000 in the month of December. App. 76. LEI decided to wind down in 2011, paying its oldest debtors .first. App. 19. The remaining debtors were MRP and the parties associated with this matter. App. 19.

II.

The NLRB had jurisdiction pursuant to the National Labor Relations Act (“NLRA”), 29 U.S.C. § 160(a), which empowers the NLRB to prevent unfair labor practices that affect commerce. This Court has jurisdiction to review the final orders of the NLRB pursuant to 29 U.S.C. §§ 160(e), (f).

“We afford considerable deference to the Board.” Grane Health Care v. N.L.R.B., 712 F.3d 145, 149 (3d Cir.2013). We will uphold “the Board’s interpretation of the NLRA as long as it is rational and consistent with the Act.” 800 River Rd. Operating Co., LLC v. N.L.R.B., 784 F.3d 902, 906 (3d Cir.2015) (citations omitted) (quotation marks omitted). “ ‘[I]f the Board’s application of such a rational rule is supported by substantial evidence on the record,’ ” we will enforce the Board’s order. Id. (quoting Fall River Dyeing & Finishing Corp. v. N.L.R.B., 482 U.S. 27, 42, 107 S.Ct. 2225, 96 L.Ed.2d 22 (1987)). Substantial evidence means “‘such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’ ” Id. (quoting Consola v. Fed. Maritime Comm’n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L,Ed.2d 131 (1966)). Our Court has held that “we defer to the Board’s credibility determinations,” and we will reverse them “only if they are inherently incredible or patently unreasonable.” Grane Health Care, 712 F.3d at 149 (quotation marks omitted).

III.

When the NLRB determines two entities are a single employer, both are jointly and severally liable for the unfair labor practices committed by either. Id. at 150. Whether there is single employer status depends on “ ‘all the circumstances of the case’” and is “‘characterized as an absence of an arm’s length relationship found among unintegrated companies.’” Id. at 150 (quoting N.L.R.B. v. Browning — Ferris Indus, of Pa., Inc., 691 F.2d 1117, 1122 (3d Cir.1982)). Four factors are considered to determine whether single employer status exists: “ ‘(1) functional integration of operations; (2) centralized control of labor relations; (3) common management; and (4) common ownership.’” Id. at 150 (quoting Browning—Ferris Indus. of Pa., Inc., 691 F.2d at 1122). No one factor by itself is controlling, but the first' three factors, especially centralized control over labor relations, are considered “more compelling” than the fourth factor, common ownership. Id.

*685 Two of the factors for single employer status do not appear to be in dispute in this case — common ownership and common management. The NLRB called these factors “clearly established,” App. 4, and we agree. James Lederach owned LEI, and he owned MRP together with his wife. That establishes common ownership. James managed and controlled LEI, and he and Judy managed MRP. That establishes common management.

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Bluebook (online)
637 F. App'x 682, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morris-road-partners-llc-v-national-labor-relations-board-ca3-2016.