National Labor Relations Board v. Fmg Industries Dba Gamco Industries, and Galaxie Universal Corp., Inc.

820 F.2d 289, 125 L.R.R.M. (BNA) 3013, 1987 U.S. App. LEXIS 7631
CourtCourt of Appeals for the Ninth Circuit
DecidedJune 17, 1987
Docket81-7180
StatusPublished
Cited by7 cases

This text of 820 F.2d 289 (National Labor Relations Board v. Fmg Industries Dba Gamco Industries, and Galaxie Universal Corp., Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Labor Relations Board v. Fmg Industries Dba Gamco Industries, and Galaxie Universal Corp., Inc., 820 F.2d 289, 125 L.R.R.M. (BNA) 3013, 1987 U.S. App. LEXIS 7631 (9th Cir. 1987).

Opinions

BRUNETTI, Circuit Judge:

INTRODUCTION

These proceedings result from the petition of the National Labor Relations Board (Board) to adjudge both FMG Industries, dba GAMCO Industries (FMG), and Galaxie Universal Corp., Inc. (Galaxie) as the successor to FMG, in civil contempt for failing to comply with this court’s decision enforcing a Board order directed at FMG and its successors. We review the Special Master’s conclusion that due process requires that determinations of successorship status be made in the first instance by the Board and not by a court of appeals in contempt proceedings.

FACTS AND PROCEEDINGS

On January 15, 1980, the Miscellaneous Warehousemen, Drivers and Helpers, Local 986, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (the Union) was certified as the exclusive bargaining representative for FMG’s shipping and receiving employees, warehousemen and truck drivers, and a unit of the company’s production and maintenance employees. On July 21, 1980, the Board found that FMG was engaged in an unfair labor practice by refusing to negotiate with the Union. We enforced the unheeded Board decision and ordered FMG, “its officers, agents, successors, and assigns” to commence collective bargaining with the Union.

Because FMG continued to ignore Board and court orders, the Board instituted contempt proceedings in this court. We suspended these proceedings, relying on FMG’s indications that it would commence bargaining with the Union. The company's promises, however, essentially have been unfulfilled.

In May 1982 the Board was advised that FMG's business had been sold to Galaxie. Following an investigation of the sale, the Board determined that Galaxie was a successor to FMG and thus liable for the unfair labor practices of its predecessor. Accordingly, the Board amended its contempt petition, alleging that Galaxie had failed to [291]*291comply with the Board’s enforced order directed at FMG and its “successors.”

During a pretrial conference with a Special Master appointed by this court, Galaxie moved for dismissal, arguing that fifth amendment due process guarantees required the Board preliminarily to determine the successorship issue. In an offer of proof, the Board referred to evidence that purportedly would reveal that Galaxie’s non-successorship defense was a sham. Counsel for Galaxie responded by offering to produce evidence that allegedly controverted the Board’s claims.

The Special Master recommended that supplemental proceedings be held by the NLRB before an adjudication of contempt as to Galaxie. This recommendation was based on the Special Master’s conclusion that courts of appeals were without jurisdiction to determine successorship because due process guarantees required the Board to resolve the issues first. Alternatively, the Special Master based the recommendation on grounds of judicial policy and economy, finding that, even if the court had jurisdiction, the case presented a bona fide factual dispute concerning successorship that necessitated initial Board review.

FMG was thereafter found by the Special Master to be in civil contempt; however, FMG and the Board subsequently reached a settlement, obviating the need for further proceedings involving FMG. Consequently, our review is limited to two issues: whether this court has jurisdiction to determine in a contempt proceeding whether Galaxie is a successor to FMG when the Board has not first convened a hearing on the question; and, if so, whether reasons of judicial policy and economy counsel against exercising jurisdiction in the present case?

STANDARD OF REVIEW

A Special Master’s findings of fact will not be disturbed unless clearly erroneous. N.L.R.B. v. Sequoia District Council of Carpenters, 568 F.2d 628, 631 (9th Cir.1977). A Special Master’s conclusions of law receive no deference. Oil, Chemical & Atomic Workers Int’l Union v. N.L.R.B., 547 F.2d 575, 580 (D.C.Cir.1977) cert. denied, 431 U.S. 966, 97 S.Ct. 2923, 53 L.Ed.2d 1062 (1977).

DISCUSSION

A. Due Process Right to an Initial Board Determination

The issue raised here previously has been discussed in other circuits. In Aquabrom v. N.L.R.B., 746 F.2d 334 (6th Cir.1984), a chemical company, Drug Research Inc., refused to negotiate with the union elected by the employees of the company’s Adrian, Michigan, plant. The union was certified as the exclusive bargaining representative for the plant’s employees. Prior to the Board’s ruling on certification, Great Lakes Chemical Corp. (Great Lakes) purchased the plant. Thereafter, the Board ordered Drug Research, “its officers, agents, successors, and assigns,” to bargain with the union. Id. at 335 (emphasis in original). Great Lakes refused to bargain, claiming not to be a successor. Without convening a prior Board hearing on the successorship question, the Board instituted contempt proceedings before the court of appeals. A Special Master appointed by the court found Great Lakes was a successor corporation and thus responsible for the remedial steps outlined in the Board’s enforced order.

The court did not review the merits of the Special Master’s findings, holding that the Board must make the initial determination of successorship, and remanded the case to the Board. See Id. at 336. The court drew authority for its position from Golden State Bottling Co. v. N.L.R.B., 414 U.S. 168, 180, 94 S.Ct. 414, 423, 38 L.Ed.2d 388 (1973), where the Supreme Court stated:

The tie between the offending employer and the bona fide purchaser of the business, supplied by a Board finding of a continuing business enterprise, establishes the requisite relationship of dependence. Moreover, procedures were announced in Perma Vinyl which provide the necessary procedural safeguards. There will be no adjudication of liability against a bona fide successor “without affording [it] a full opportunity at a hear[292]*292ing, after adequate notice, to present evidence on the question of whether it is a successor which is responsible for remedying a predecessor’s unfair labor practices. The successor [will] also be entitled, of course, to be heard against the enforcement of any order issued against it.” (Citations omitted).

The court in Aquabrom concluded that the prerequisite hearing referenced in Golden State meant a hearing before the Board, stating: “[w]e do not believe that the Supreme Court meant for us to focus only on the safeguards and not the forum in which they are provided.” 746 F.2d at 836. Galaxie urges us to adopt this interpretation of the Supreme Court’s language in Golden State.

It is clear that notice and a hearing on the successorship issue are prerequisites to imposing liability on the purchaser of a business for the predecessor’s unfair labor practices. Due process, however, does not require that the initial hearing be conducted by the Board. In Golden State,

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820 F.2d 289, 125 L.R.R.M. (BNA) 3013, 1987 U.S. App. LEXIS 7631, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-labor-relations-board-v-fmg-industries-dba-gamco-industries-and-ca9-1987.