National Labor Relations Board v. Gibraltar Industries, Inc.

307 F.2d 428, 51 L.R.R.M. (BNA) 2029, 1962 U.S. App. LEXIS 4248
CourtCourt of Appeals for the Fourth Circuit
DecidedAugust 23, 1962
DocketNo. 8548
StatusPublished
Cited by2 cases

This text of 307 F.2d 428 (National Labor Relations Board v. Gibraltar Industries, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth 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. Gibraltar Industries, Inc., 307 F.2d 428, 51 L.R.R.M. (BNA) 2029, 1962 U.S. App. LEXIS 4248 (4th Cir. 1962).

Opinion

BOREMAN, Circuit Judge.

The National Labor Relations Board, in accord with section 10(e) of the National Labor Relations Act, 61 Stat. 136, 147 (1947), as amended, 29 U.S.C.A. § 160(e) (1961 Supp.), petitions the court for enforcement of its order of October 30, 1961, issued against International Trailer Company, Inc., and Gibraltar Industries, Inc., as joint employers. It is conceded that International engaged in certain unfair labor practices, including the discharge of several employees because of their union activities. The sole issue here is whether the Board properly found that Gibraltar Industries, Inc., was a joint employer with International of the affected employees and thus jointly subject to the remedial portion of the Board’s order.

Though there is no substantial dispute as to the evidentiary facts, Gibraltar challenges some of the Board’s inferene-[429]*429es and the ultimate conclusion drawn from those facts. International, wholly owned by its president, James Fyle, had been engaged for several years in the manufacture of mobile homes and cpm-mercial trailers at its plant in Baltimore, Maryland. At the time of the hearing in January 1961, International was insolvent and in receivership in a state court. On December 2, 1960, International ceased doing business and a few days thereafter all former International employees went to work for Gibraltar doing exactly the same work they had done for International.

In December 1958 Gibraltar was formed by Charles Frederick Painter and E. B. Jeffress to engage in business as a wholesale mobile-home dealer. James Fyle became Gibraltar’s secretary and a holder of two per cent of its stock. On January 1, 1960, Painter bought Jeffress’ interest in Gibraltar and thus became the owner of ninety-eight per cent of that corporation’s outstanding stock. Shortly after Gibraltar was organized, it executed, with Painter individually and with International, a contract whereby International agreed to sell all the mobile homes it produced to Gibraltar which, in turn, agreed to buy all its mobile homes from International. Painter agreed to provide International with working capital and to indemnify its suppliers. The-agreement was subject to termination upon terms and conditions not here relevant ; it had not been terminated at the time International went out of business.

Apparently because International was so critically short of working capital, it was unable, soon after executing _the 1958 agreement, to meet the production quota established therein and Painter was dissatisfied with the workmanship and the quality of the finished products. In early 1959 Gibraltar established offices on International’s premises. Painter moved into offices adjoining Fyle’s office and a “Gibraltar” sign was placed over that corporation’s office door. Both Painter and Gibraltar began advancing large sums of money to International. In June 1959, Fyle endorsed all his shares of International stock — the total outstanding issue — to Painter, who was also given a chattel mortgage on most of International’s equipment.1 A written hypothecation instrument was executed by Fyle with respect to the “assignment” of the International stock which permitted Painter to sell the shares in accord with the terms of a note to be signed by International as evidence of the loan. The record does not indicate that such a note was ever executed, and Fyle testified that when he turned the stock over to Painter, he relinquished control of International and never expected to have the stock returned to him. Painter testified that he took the stock in addition to a chattel mortgage on International’s equipment as security for the loans to International.

By June 23, 1959, when the stock “assignment” was made, Painter had access to all International books and records and, according to Fyle, it was Painter who completely controlled International. But during the ensuing months International’s financial condition became worse despite Painter’s aid. In October 1959 International’s bank refused to permit Fyle to draw any more checks on the corporation’s account. For a few months International was permitted to retain a checking account with Painter as a guarantor, but after February 1960 International’s account was discontinued entirely; thereafter the company had no bank account.

Although the 1958 agreement required only Painter’s personal indemnification of International’s suppliers, Gibraltar began in early 1960 (right after the closing of International’s bank account) to pay the suppliers directly, taking credit for such amounts against future delivery of mobile homes. Eventually purchases [430]*430of materials for the use of International were made directly on Gibraltar purchase orders. Painter, in February 1960, began advancing cash to meet International’s weekly payroll and this procedure continued through the remaining months that International was in business. Other funds were advanced to pay for all insurance carried by International, including workmen’s compensation insurance for all the corporation’s employees. In the early summer of 1960, when International’s credit had become suspect among dealers and suppliers, the “International” sign was removed and a “Gibraltar” sign was installed over the door of International’s offices. Also, Gibraltar’s name, instead of International’s, began appearing on the completed mobile homes.

Early in 1960, International was about $8000 in arrears in its rent when the owner of the premises demanded a guarantee of payment by a responsible party. Painter assumed liability for the payment of the back rent and advanced funds each month for the current rent. In August 1960 International’s lease expired and Gibraltar took it over, retaining the right to terminate it upon sixty days’ notice to the landowner.

As Painter and Gibraltar gained financial control over International, Painter himself commenced direct participation in the actual operations of International’s business. The 1958 agreement authorized Painter to inspect International’s inventory and production records and to refuse to guarantee payment of suppliers when in his discretion inventory was in excess of production needs. After Painter became Gibraltar’s dominant stockholder in January 1960 he began to make frequent appearances at International’s production line, inspecting the work, making suggestions and ordering changes which he thought necessary or desirable. He sometimes appeared at meetings of supervisors and group leaders and in other ways exerted his influence over the details of the production processes.

There are several instances where Painter exercised control over International’s employees. In June 1959 he decided that the plant superintendent who had worked for International a number of years was not capable and should be replaced. Wayne Stutsman was employed as the new plant superintendent, according to the Board’s findings, at the instigation of Painter. At one point Fyle noticed that he, as president of International, was receiving less compensation for his work than was the plant superintendent and decided to give himself a raise of $50 per week. In the discussion that followed, Painter told Fyle that he (Fyle) was not as valuable an employee as the plant superintendent; Fyle did not receive the raise he had intended. International’s controller, who had been selected and employed by Painter to guide Fyle’s purchasing policies, looked to Painter for a salary increase. Over Fyle’s objection, Painter determined that Fyle’s former secretary should not be rehired.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Gahagan Const. Corporation v. Armao
165 F.2d 301 (First Circuit, 1948)

Cite This Page — Counsel Stack

Bluebook (online)
307 F.2d 428, 51 L.R.R.M. (BNA) 2029, 1962 U.S. App. LEXIS 4248, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-labor-relations-board-v-gibraltar-industries-inc-ca4-1962.