Overnite Transportation Co. v. National Labor Relations Board

372 F.2d 765, 64 L.R.R.M. (BNA) 2359, 1967 U.S. App. LEXIS 7530
CourtCourt of Appeals for the Fourth Circuit
DecidedFebruary 6, 1967
DocketNos. 10570, 10617
StatusPublished
Cited by2 cases

This text of 372 F.2d 765 (Overnite Transportation Co. v. National Labor Relations Board) 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
Overnite Transportation Co. v. National Labor Relations Board, 372 F.2d 765, 64 L.R.R.M. (BNA) 2359, 1967 U.S. App. LEXIS 7530 (4th Cir. 1967).

Opinions

CRAVEN, Circuit Judge.

On November 19, 1964, Overnite Transportation Company bought, with approval of the Interstate Commerce Commission,1 certain operating franchises and physical assets of Rutherford Freight Lines, Inc. Both before and after take-over, the Union2 was the exclusive bargaining agent for thirty employees in units at Roanoke and Pulaski, Virginia. Without affording the Union an opportunity to discuss and bargain with respect to changes in rates of pay and [767]*767other conditions of employment, Over-nite immediately (the day of take-over) put into effect its own scale of wages and other benefits then prevailing throughout the Overnite system. The result was to reduce the wages of the former Rutherford employees at Pulaski and Roanoke from $3.05 per hour to $2.60 per hour and to eliminate other more favorable terms and conditions of employment.

There is presented for our decision this question: May the Board lawfully direct Overnite to restore to employees who formerly worked for the selling company the economic benefits that had been maintained by the seller and incorporated in its contract with the Union, notwithstanding that the contract had expired before the sale, and that the purchaser, Overnite, had made known in advance and consistently its unwillingness to maintain such level of employee benefits? We think so on the facts of this case.

The case is before the court upon Over-nite’s petition to review and set aside the order of the Board, and upon the Board’s cross-petition to enforce the order. The Union has intervened in case No. 10,570 and has itself filed a petition in No. 10,-617 to review and modify certain portions of the Board’s order.

I.

The Union’s petition and intervention presents the only fact question sought to be reviewed.3 The Union insists that the labor contract was in effect between Rutherford and the Union on the date of take-over, November 19, 1964. The Trial Examiner and Board found otherwise, holding that the contract expired on August 31, 1964. The Union concedes in its brief that Rutherford “did terminate the contract by letter dated August 27, 1964,” but insists that Rutherford agreed to continue the contract in effect as long as it (Rutherford) remained in operation. Our examination of the record discloses that there was imprecise testimony by the president and business representative of Local 171 of the Union to that effect. But his testimony was persuasively contradicted by a letter dated October 28, 1964, to the president of the Local and signed by the president of Rutherford containing the following: “What you say about extension of the old contract is not exactly accurate. What I actually said was that if we continue to operate as Rutherford Freight Lines, Inc., we will not make changes in the rates of pay or insurance coverage before meeting with you again.” Credibility and the weighing of evidence is for the Trial Examiner and the Board. Considering the record as a whole, the finding of the Board that the labor contract had expired prior to take-over by Overnite is supported by substantial evidence and will not be disturbed. Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951).

II.

Overnite earnestly urges upon us its own sophisticated version of familiar and traditional common law principles. Com; pare United Steelworkers of America v. Reliance Universal, Inc., 335 F.2d 891 (3rd Cir. 1964). We agree (indeed, it is not contended otherwise) that Overnite did not voluntarily assume its predecessor’s labor obligations when it acquired the business. The obligation of Overnite does not rest upon contract principles.

On March 30, 1964, about six months before Overnite bought out Rutherford, the Supreme Court decided John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964). In that case the Court concluded that “in appropriate circumstances” certain obligations may be imposed upon a new owner of a business by reason of the collective bargaining contract of the preceding owner.

Our case does not come squarely within Wiley because the Rutherford collective bargaining contract had expired [768]*768prior to take-over.4 But what was said in Wiley is not irrelevant: “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.” Wiley, supra, 376 U.S. at 549, 84 S.Ct. at 914.

In Wiley, the “new” employer was held bound by one of the terms of a collective bargaining contract to which he had never agreed. Wiley reaches beyond the Board’s order in this case and, in so doing, strongly supports the more limited successor doctrine developed by the courts of appeal but not as yet expressly declared by the Supreme Court.

It can now be considered settled that if the transfer of assets and employees from one employer to another leaves intact the identity of the employing enterprise, then the former’s duty to recognize and bargain with an incumbent union devolves upon the latter as “successor employer.” See NLRB v. Downtown Bakery Corp., 330 F.2d 921 (6th Cir. 1964); NLRB v. McFarland, 306 F. 2d 219 (10th Cir. 1962); NLRB v. Auto Ventshade, Inc., 276 F.2d 303 (5th Cir. 1960); NLRB v. Parran, 237 F.2d 373 (4th Cir. 1956); NLRB v. Lunder Shoe Corp., 211 F.2d 284 (1st Cir. 1954); NLRB v. Armato, 199 F.2d 800 (7th Cir. 1952); NLRB v. Blair Quarries, Inc., 152 F.2d 25 (4th Cir. 1945); compare NLRB v. John Stepp’s Friendly Ford, Inc., 338 F.2d 833, 835-836 (9th Cir. 1964).

The record shows that Overnite continued Rutherford’s business and, with respect to the pertinent Pulaski and Roanoke terminals, made no significant changes in their operation. Overnite offered employment to all of the terminal employees, and they all accepted. The Pulaski and Roanoke drivers, who punched in on a Rutherford time card the morning of November 19, punched out on an Overnite time card that afternoon. The terminal managers and supervisory personnel remained as before. Rutherford’s President Mclnturff, who had bargained with the Union before take-over, bargained thereafter with the Union as “Assistant to the President” of Overnite.

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372 F.2d 765, 64 L.R.R.M. (BNA) 2359, 1967 U.S. App. LEXIS 7530, Counsel Stack Legal Research, https://law.counselstack.com/opinion/overnite-transportation-co-v-national-labor-relations-board-ca4-1967.