SAN CLEMENTE RANCH, LTD., Petitioner, v. AGRICULTURAL LABOR RELATIONS BOARD, Respondent,
UNITED FARM WORKERS OF AMERICA, AFL-CIO, Real Party in Interest. HIGHLAND RANCH, Petitioner, v. AGRICULTURAL LABOR RELATIONS BOARD, Respondent, UNITED FARM WORKERS OF AMERICA, AFL-CIO, Real Party in Interest.
These cases are before us on writs of review sought by petitioners, as parties aggrieved, seeking review and annulment of a final Order of the Agriculture Labor Relations Board (Board). (Lab.Code, s 1160.8.)1 The Order arises out of unfair labor practice charges brought by the Board's General Counsel (ss 1149, 1160.2), and adjudicated under the hearing and review provisions (ss 1160-1160.9) of the Agriculture Labor Relations Act (ALRA). (ss 1140-1166.3.)
The petitions present questions of an employer's duty to provide pertinent information to and to bargain with a union during the time between the union's apparent victory at a representational election and the resolution of election challenges; the criteria for successorship and the liability of a successor; the substantiality of evidence to sustain various unfair labor practice determinations; and the appropriateness of remedies.
With respect to Highland Ranch, we have decided that certain aspects of the Order must be annulled and remanded to the Board for further proceedings, that some provisions of the Order must be annulled and that the remaining provisions should be affirmed. In a separate opinion, the court concludes that the question of San Clemente's status as a successor must be remanded for resolution of certain factual issues. (See Opinion of Hanson, J.) Consequently, the portion of this opinion relating to that subject (III-C) expresses the view of the undersigned rather than the court.
Between August 1 and December 19, 1977, the Union, United Farm Workers of America, AFL-CIO (UFW or Union) filed 12 separate unfair labor practice charges against either or both of two agricultural employers, Highland Ranch (Highland) and San Clemente Ranch, Ltd. (San Clemente). The unfair practices were alleged to have occurred on a ranch operated first by Highland, then by San Clemente, in Orange County.
The Board's General Counsel filed a complaint based on some of these charges, on November 7, 1977. Four amended complaints followed, the last filed on March 3, 1978. Answers were duly filed by Highland and San Clemente.
A consolidated hearing was held before an Administrative Law Officer of the Board on March 13-30, 1978. The Administrative Law Officer issued his decision and recommended order on September 8, 1978. In the decision he found most of the charged unfair labor practices to have been committed.2 His proposed order granted relief for these violations.
All parties to the hearing (Highland, San Clemente, the Union, and General Counsel) filed timely exceptions to the decision, as authorized by section 1160.3. The Board issued its consolidated Decision and Order on August 16, 1979. The Board sustained and upheld the findings of the Administrative Law Officer essentially in the form recommended. (5 A.L.R.B. No. 54 (1979).)
San Clemente filed its petition for writ of review and mandate in this court, since its principal place of business is in Ventura County.3 Highland originally sought review in the Fourth Appellate District, the court having jurisdiction over Orange County. The Supreme Court ordered that case transferred to this court. (Cal. Rules of Court, Rule 20.)
Following certification and filing of the record by the Board and the filing of briefs by all parties, we exercised our discretion to grant writs, thereby affording a full appellate review to each case. (s 1160.8; Tex-Cal Land Management, Inc. v. Agricultural Labor Relations Board (1979) 24 Cal.3d 335, 351, 156 Cal.Rptr. 1, 595 P.2d 579.) We have consolidated the cases for purposes of section 1160.8 review. We also stayed enforcement of the Board's orders pending determination of the petitions.
FACTUAL BACKGROUND 4
We begin our inquiry mindful of the scope of review applicable to factual determinations of the Board. Section 1160.8 provides that “(t)he findings of the board with respect to questions of fact if supported by substantial evidence on the record considered as a whole shall . . . be conclusive.” Given the statutory safeguards provided for Board determinations of unfair labor practices charges, this is a valid standard of review. (Tex-Cal Land Management, Inc. v. Agricultural Labor Relations Board, supra, 24 Cal.3d at 346, 156 Cal.Rptr. 1, 595 P.2d 579.)
It is undisputed that both Highland and San Clemente are “agricultural employers” engaged in “agriculture” as those terms are defined in section 1140.4, subdivisions (a) and (c). It is also established that UFW is a “labor organization” as defined in section 1140.4, subdivision (f).
For some years before November 29, 1979, Highland was engaged in farming operations at a 647 acre ranch leased from the United States Marine Corps at Camp Pendleton.
The ranch grew vegetables for the fresh market: tomatoes, cauliflower, cabbage, cucumbers, and corn. It also operated a packing shed on the ranch. Crops were moved from the fields to the shed, where they were placed on a conveyor belt, sorted and packaged in boxes, which were formed on site.
Many of the agricultural workers were housed in a rent-free labor camp operated by Highland.
The number of agricultural workers required by Highland accordioned in and out during the crop cycles. It was apparently at its lowest ebb in late November or early December, after the second tomato crop had been harvested and the cabbages had been planted.
The Administrative Law Officer did not specifically find when the labor force was at its peak. An officer of San Clemente testified (at the March, 1978 hearing) that he expected the number of employees to peak at “300 plus” the following November, during the tomato harvest. The Petition for Certification filed by the Union on July 21, 1977,5 includes a verified statement that 250 agricultural employees were then working on the ranch. The verified response, filed by Highland's president on July 23, 1977, stated that 255 persons were then employed, and that the peak employment period is July 10-16. We also note that 203 ballots were cast in the July 28, 1977, representational election.
B. The Organizational Effort and the Election
The election was preceded by an organizational effort by the Union that began no later than Spring 1977.
As the months went by, the level of campaign intensity increased. With knowledge that an organizational effort was in full swing, Highland, on June 1, 1977, announced a set of new work rules. The rules increased existing benefits, created new ones, and made other changes.
The campaign peaked during the two weeks preceding the election. The Union's petition for certification was filed on July 21, and the Board directed that the election be held within one week of that date, as required by section 1156.3, subdivision (a).
On the day of election, Highland's officers sought to deny access to Board election personnel, and had them arrested in the presence of workers.6
No other union contested UFW in the election; the balloting was between the UFW and “no labor organization.” (s 1156.3, subd. (a).)
As we have seen, 203 ballots were cast in the election. Of these, 187 were for the Union, 14 for no union, and 2 resulted in unresolved challenges.
Four days after the election, Highland filed a petition to set it aside under section 1156.3, subdivision (c). It argued that the Board lacked jurisdiction to hold the election because the ranch was on property leased from the federal government, and that Board agents had committed acts of misconduct by interfering with a fair election. The latter charges were supported by a declaration by a labor relations consultant retained by Highland.
On November 2, 1977 (three months after the election challenges were filed), the Board issued an order without hearing, dismissing the challenges on the ground that the supporting declarations did not set forth facts which, if uncontraverted, would constitute grounds to refuse certification to the Union.
On November 29, 1977, the Board certified the election and the Union as exclusive collective bargaining representative for Highland's agricultural employees. No review has been sought from the Board's dismissal of the election challenges and its certification of the Union.
C. Sale of the Ranch
We now turn to the actions of Highland during the period between the election and the Board's certification of the Union as collective bargaining representative.
In late September, Highland's president, Toby Tsuma, contacted Deardorff-Jackson Co. about selling the ranch. Deardorff-Jackson is a California corporation engaged in farming operations. By mid-November, Tsuma had had some twelve substantive discussions about the sale with Deardorff-Jackson officers. Deardorff-Jackson established San Clemente as a limited partnership (with itself as the general partner) to act as purchaser and operator of the ranch.
The agreement finally entered into provided for an assignment of Highland's land lease (originally a five-year lease, it had a little over two years yet to run) to San Clemente, which also purchased virtually all of Highland's ranch facilities, machinery and equipment. A collateral security agreement between the parties bound San Clemente not to remove certain of the equipment from Orange and San Diego Counties.
By this time, UFW had filed several unfair labor practice complaints against Highland. Highland warranted to San Clemente that “(a)ny unfair labor charges issued prior to December 15, 1977, against Highland Ranch will be resolved or disposed of by Seller.”
Originally, San Clemente was to take possession on December 15. The tomato harvest was completed early, however, and the parties agreed to advance the date of possession to December 1.
Tsuma signed the final escrow papers for Highland on November 29. On the same day the Board issued its certification of UFW as exclusive bargaining representative. The sale papers were signed for San Clemente the next day.
Learning of the impending sale, UFW's counsel made strenuous efforts to reach Tsuma and representatives of Deardorff-Jackson. Both telegram and telephone communications were attempted.
A meeting was finally set up with Highland's attorneys on December 2. By that time, Highland had given all of its agricultural employees layoff notices (effective November 30), and had closed the labor camp. The Union presented Highland's attorney with three demands: reopening of the labor camp, specified severance pay, and a specified contribution to the Union's Martin Luther King, Jr., Fund. After conferring, the attorneys for Highland rejected the first two demands and agreed to take the third under submission. That demand was not specifically addressed again, and may be regarded as having been constructively rejected.
UFW also demanded certain information about the sale from Highland. The information was not furnished, a matter which is the subject of an unfair labor practice finding discussed later in this opinion.
On December 9, UFW presented a written demand for negotiation to San Clemente, asserting its certified status as exclusive bargaining representative. San Clemente did not formally respond until December 21, when it notified UFW that it refused to bargain because the Union was not the certified bargaining representative for its employees.
D. San Clemente
There is no finding nor any evidence that San Clemente is an alter ego or agent of Highland. Both San Clemente and its organizer, Deardorff-Jackson, are entirely separate and distinct from Highland.
As we have seen, San Clemente acquired substantially all the ranch assets of Highland, including the ground lease. It immediately hired several of Highland's supervisors including the ranch supervisor, who was given a similar position with San Clemente.
With relatively minor modifications, San Clemente planned to carry on (and, at least through the March 1978 hearing, has carried on) substantially the same farming operations as were conducted by Highland. The same crops were grown and harvested in the same places and times, and they were processed in substantially the same way as they were by Highland.
Besides hiring three of Highland's supervisors on December 1, San Clemente also hired one field worker an irrigator needed to water a recently planted cabbage crop. During the following weeks and months, as the cabbage crop grew to maturity and other crops were planted and harvested, San Clemente employed the services of other agricultural workers, as follows:
San Clemente presented evidence that it expected to reach peak employment of “300 plus” in November 1978. It also planned to have 70 year-round agricultural employees, to be selected from among its non-labor contractor-supplied employees.
We will discuss, in order, the ALRA and its setting, the issues concerning Highland's failure to notify and bargain, the issues concerning San Clemente's successor status and successor liability, the unfair labor practice decisions concerning particular employees, and episodes, and, finally, the appropriateness of the remedies ordered in this case.
A. The ALRA and Its Setting
The right of agricultural workers to engage in collective bargaining was recognized prior to enactment of ALRA. (See ss 923, 1126; McDaniel and Gordon, “Comment: Agricultural Labor Relations The Other Farm Problem: A Rebuttal” 15 Stan.L.Rev. 616, 621 (1963).) But agricultural employment is excluded from the National Labor Relations Act (NLRA).7 (29 U.S.C., s 152(3).)
Major efforts to organize California agriculture were beset by a number of problems due largely to the features of farm and ranch employment that differentiate it from most other callings.8
Many California farm workers “are migrants; they arrive in town in time for the local harvest, live in motels, labor camps, or with friends or relatives, then move on when the crop is in.” (See Agricultural Labor Relations Board v. Superior Court (1976) 16 Cal.3d 392, 414-415, 128 Cal.Rptr. 183, 198, 546 P.2d 687, 702.) A significant number of the workers do not read or understand English, and many read no language at all. (See Agricultural Labor Relations Board v. Superior Court, supra, 16 Cal.3d at 415, 128 Cal.Rptr. 183, 546 P.2d 687.)
The employers and the employment sites also differ from “traditional” settings. “California agricultural land is characterized by complicated and constantly changing patterns of ownership. Transfer of interests in agricultural property in California are much more common than transfers of businesses subject to federal labor laws. For a variety of business, tax, or family reasons, agricultural land is continuously conveyed, leased, leased back, reconveyed, mortgaged, partitioned, put under management or harvesting contracts, and so forth. Moreover, sales of a crop before harvest are common.” (Herman & Zenor, Agricultural Labor and California Land Transactions, 53 Cal.S.Bar J. 48, 49 (Jan.-Feb., 1978).)
The problems flowing from the differences between California agricultural employment and the working conditions of industry in general were compounded by the absence of any comprehensive statute and dispute resolution machinery, and the results might have been predictable. (See, for example, the circumstances recounted in Englund v. Chavez (1972) 8 Cal.3d 572, 105 Cal.Rptr. 521, 504 P.2d 457.)
By 1975, the condition in the fields was described by the Legislature as “unstable and potentially volatile.”9
Agricultural labor relations legislation was introduced in the 1960's and early 1970's, and a ballot initiative (Proposition 22) was put forward in 1972; six more bills were introduced in the 1975 session. None of these measures survived the enactment process.10
ALRA consists of an entire part of the Labor Code. Its similarity to the NLRA is obvious, and has been consistently noted as a basis for construing its provisions. (Nishikawa Farms, Inc. v. Mahoney (1977) 66 Cal.App.3d 781, 787-788, 136 Cal.Rptr. 233; J. R. Norton Co. v. Agricultural Labor Relations Board (1979) 26 Cal.3d 1, 8, 160 Cal.Rptr. 710, 603 P.2d 1306; Butte View Farms v. Agricultural Labor Relations Board (1979) 95 Cal.App.3d 961, 967, 157 Cal.Rptr. 476.)
The statutory scheme includes a guarantee of the right of collective bargaining to agricultural employees, including the right to engage in “concerted activities for the purpose of collective bargaining or other mutual aid or protection” (ss 1140.2, 1152), language that has been construed to permit a strike. (Los Angeles Met. Transit Authority v. Brotherhood of Railroad Trainmen (1960) 54 Cal.2d 684, 687-689, 8 Cal.Rptr. 1, 355 P.2d 905.)
The statute establishes a board (s 1141), analogous to the National Labor Relations Board (NLRB) and vests it with authority to administer the ALRA, including the functions of rule-making (s 1144), supervising the conduct of elections (s 1156.3), and administrative adjudication (ss 1160, 1160.6). The enforcing agency is the General Counsel, an office patterned after the NLRA General Counsel, charged with investigating charges, and with issuing and prosecuting complaints. (s 1149.)
Separate sections denounce unfair labor practices by employers (s 1153) and employees (s 1154). Because of its pertinence to the issues in this case, we have set out section 1153 below (deleting the “security” provision in subdivision (c)).11
The central provision is the obligation to “bargain collectively in good faith” (s 1153, subd. (e)). That phrase is defined (s 1155.2, subd. (a)) to mean “the performance of the mutual obligation of the agricultural employer and the representative of the agricultural employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment, or the negotiation of an agreement, or any questions arising thereunder, and the execution of a written contract incorporating any agreement reached if requested by either party, but such obligation does not compel either party to agree to a proposal or require the making of a concession.”
Ordinarily the bargaining unit consists of all agricultural employees of an employer. (s 1156.2.)12 Whether or not a union is opposed by other unions in a representational election, selection of an exclusive bargaining agent is by secret ballot at a Board-sponsored election. (s 1156.) In this, the ALRA differs from the NLRA, which permits several other bases for union recognition.13
The statute sets up the machinery and procedures for determining unfair labor practice charges. Contested charges may be tried before an administrative law officer who issues a report and recommended order. Unless exceptions to the proposed order are filed within 20 days (or an extended period if the Board so authorizes), the order becomes effective as a Board decision. If exceptions are filed, the Board decides the issues (ss 1160.2-1160.3), subject to judicial review by petition to the appropriate court of appeal. (s 1160.8.)
In addition to its single system for selecting a bargaining representative, the ALRA differs from the NLRA in three other ways material to this case.
The ALRA includes an express authorization to the Board “to take affirmative action, including reinstatement of employees with or without backpay, and making employees whole, when the board deems such relief appropriate, for the loss of pay resulting from the employer's refusal to bargain.” (s 1160.3.)14
Section 1153, subdivision (f), makes it an unfair labor practice for an employer to “recognize, bargain with, or sign a collective-bargaining agreement” with a labor organization not certified under the ALRA. There is no corresponding provision in the NLRA.
Finally, section 1148 provides: “The Board shall follow applicable precedents of the National Labor Relations Act, as amended.” Thus, “decisions interpreting the national act are persuasive in construing the California law.” (Kaplan's Fruit & Produce Co. v. Superior Court, supra, 26 Cal.3d at 65, 67-68, 73-75, 160 Cal.Rptr. at 747, 603 P.2d at 1344.)
Probably, applicable NLRA precedent would be considered as persuasive authority even if the statute did not expressly so provide. (See, e. g., Fire Fighters Union v. City of Vallejo (1974) 12 Cal.3d 608, 615-616, 116 Cal.Rptr. 507, 526 P.2d 971, and Placentia Fire Fighters v. City of Placentia (1976) 57 Cal.App.3d 9, 22, 129 Cal.Rptr. 126 (construing the former Meyers-Milias-Brown Act, Gov.Code, ss 3500-3510); Posner v. Grunwald-Marx, Inc. (1961) 56 Cal.2d 169, 176, 14 Cal.Rptr. 297, 363 P.2d 313; Los Angeles Metropolitan Transit Authority v. Brotherhood of Railroad Trainmen, supra, 54 Cal.2d at 688-689, 8 Cal.Rptr. 1, 355 P.2d 905.)
It is also notable that only applicable NLRA precedent is to be followed, and it is followed by the courts as well as by the Board. (See Perry Farms v. Agricultural Labor Relations Board (1978) 86 Cal.App.3d 448, 466-467, 150 Cal.Rptr. 495; San Diego Nursery Co. v. Agricultural Labor Relations Board (1979) 100 Cal.App.3d 128, 141, 160 Cal.Rptr. 822.)
The purpose of this provision is to give the new field of labor-management relations in California agriculture the advantage of over 40 years of case law development by the National Labor Relations Board and by the federal courts that review its decisions. (See Kaplan's Fruit and Produce Co. v. Superior Court, supra, 26 Cal.3d 75, 160 Cal.Rptr. 745, 603 P.2d 1341.)
Congress intended the NLRB to be able to define the “gamut of remedies” to effectuate Congressional labor relations policy, expressed in the NLRA, and the Supreme Court has observed that:
“Because the relation of remedy to policy is peculiarly a matter for administrative competence, courts must not enter the allowable area of the Board's discretion and must guard against the danger of sliding unconsciously from the narrow confines of law into the more spacious domain of policy. On the other hand, the power with which Congress invested the Board implies responsibility the responsibility of exercising its judgment in employing the statutory powers.”
(Phelps Dodge Corp. v. Labor Board (1941) 313 U.S. 177, 194, 61 S.Ct. 845, 852, 85 L.Ed. 1271.) On another occasion, the court recognized the “function of the Labor Board as one of those agencies presumably equipped or informed by experience to deal with a specialized field of knowledge, whose findings within that field carry the authority of an expertness which courts do not possess and therefore must respect.” (Universal Camera Corp. v. Labor Board (1951) 340 U.S. 474, 488, 71 S.Ct. 456, 465, 95 L.Ed. 456. See also, Golden State Bottling Co. v. N. L. R. B. (1973) 414 U.S. 168, 172, 94 S.Ct. 414, 419, 38 L.Ed.2d 388; Labor Board v. Seven-Up Co. (1953) 344 U.S. 344, 348, 73 S.Ct. 287, 289, 97 L.Ed. 377.)
The ALRB occupies a similar position under the ALRA. (Tex-Cal Land Management, Inc. v. Agricultural Labor Relations Board, supra, 24 Cal.3d at 346, 156 Cal.Rptr. 1, 595 P.2d 579.) Its interpretation and application of the statute it is charged to administer is entitled to respect and, in our Supreme Court's term, deference.15
This does not imply a judicial abdication of the constitutional role of reviewing decisions of the Board for legal correctness, including the sufficiency of supporting evidence. The Board, no less than the courts, is bound to the limits of its mandate, and when cases are properly presented, courts will not hesitate to correct errors of the Board.16
We now review the Board's application of the ALRA to the parties and issues in this case.
B. Highland's Failure to Notify and Bargain
A little over one month after UFW's apparent victory at the representational election, Highland's president opened negotiations which led to sale of the ranch. Shortly after that, on October 21, Highland unilaterally changed the terms and conditions of employment by increasing board rates and, for the first time, charging rent in the labor camp.
The tomato crop was harvested the following month. Negotiations to sell the ranch were successfully completed, and Highland gave layoff notices to its employees and closed the labor camp.
All of this occurred while its election challenge was under review by the Board.
Highland never informed the Union of its intention to sell the ranch and there was no pre-sale bargaining over the economic effects of the decision on members of the bargaining unit. The only bargaining that occurred on the subject took place at the December 2 meeting, after the sale had been completed and the new owner had taken possession. By that time, all of Highland's agricultural employees had been laid off, and those who had resided at the labor camp had been required to move out.
The Board found that Highland's failure to notify the Union about the sale and to bargain about its effects on bargaining unit members constituted an unfair labor practice, in violation of section 1153, subdivisions (a) and (e).17 It imposed a “limited make whole” remedy to correct the violations found to have been committed.
This fact setting requires initial examination of two issues: (1) the consequences of an employer's unilateral change in the terms and conditions of employment during the period of an election challenge, and (2) an employer's obligation to inform the union of its decision to go out of business, and to bargain over the economic effects of that decision on members of the bargaining unit.
There is well established NLRA precedent on each of these issues.
1. NLRA Precedent
(a) Changes While an Election Challenge is Pending.
It is settled that federal law does not impose a duty on an employer to bargain with a union during the period between an election the union appears to have won, and the time the employer's objections to that election are resolved. (Sundstrand Heat Transfer, Inc. v. N. L. R. B. (7th Cir. 1976) 538 F.2d 1257, 1259.) But it is equally settled that, ordinarily, an employer acts “at its peril” in changing the terms and conditions of employment during that interim, without bargaining. If the challenges are resolved in favor of the union, resulting in its certification, the employer's failure to bargain is considered an unfair labor practice under 29 U.S.C. s 158 (a)(5) (1). (N. L. R. B. v. Allis-Chalmers Corp. (5th Cir. 1979) 601 F.2d 870, 874; Mike O'Connor Chevrolet, 209 N.L.R.B. 701, 703 (1974); see also W. R. Grace & Co., N.L.R.B. 617 (1977), enforced as mod. N. L. R. B. v. W. R. Grace & Co. (5th Cir. 1978) 571 F.2d 279, 282; St. Elizabeth Community Hospital, 240 N.L.R.B. No. 151 (1979); Boiler Tube Company of America, 246 N.L.R.B. No. 69, pp. 5-6 (1979). Cf., Sundstrand Heat Transfer, Inc. v. N. L. R. B., supra, 538 F.2d at 1259.)
(b) Failure to Notify of Decision to Discontinue Business.
An employer has an undoubted right to cease being an employer and to go out of business, and that decision is not subject to negotiation. According an employer anything less “would significantly abridge its freedom to manage its own affairs. Bargaining is not contemplated in this area under the history and usage of s 8(a)(5).” (29 U.S.C. s 158 (a)(5).)18 (N. L. R. B. v. Adams Dairy, Inc. (8th Cir., 1965) 350 F.2d 108, 111.) The right to completely go out of business is untrammeled even if the decision is prompted by vindictive animus against the union. (Textile Workers Union v. Darlington Mfg. Co. (1965) 380 U.S. 263, 269-274, 85 S.Ct. 994, 998-1001, 13 L.Ed.2d 827.)19
A decision to change the basic operations of a company receives similar treatment: the decision itself is not a subject of bargaining, at least if it is based on something other than anti-union animus. (N. L. R. B. v. Transmarine Navigation Corp. (9th Cir., 1967) 380 F.2d 933; N. L. R. B. v. Adams Dairy, Inc., supra, 350 F.2d at 111-113; N. L. R. B. v. Rapid Bindery (2d Cir., 1961) 293 F.2d 170, 174; N. L. R. B. v. Royal Plating and Polishing Co. (3d Cir. 1965) 350 F.2d 191, 196; cf. Fibreboard Corp. v. Labor Board (1964) 379 U.S. 203, 213, 85 S.Ct. 398, 404, 13 L.Ed.2d 233.)
But this is “not to hold that the employer is absolved of all duty to bargain with a union when he makes such a managerial decision. Once a decision is made the employer is still under an obligation to notify the union of its decision so the union may be given the opportunity to bargain over the rights of the employees whose employment status will be altered by the managerial decision. . . . Such bargaining over the ‘effects' of the decision on the displaced employees may cover such subjects as severance pay, vacation pay, seniority, and pensions, among others, which are necessarily of particular importance and relevance to the employees.” (N. L. R. B. v. Transmarine Navigation Corp., supra, 380 F.2d at 939; accord: Cooper Thermometer Co. v. N. L. R. B. (2d Cir. 1967) 376 F.2d 684, 688; N. L. R. B. v. Rapid Bindery, supra, 293 F.2d at p. 176; N. L. R. B. v. Royal Plating and Polishing Co., supra, 350 F.2d at 196; Summit Tooling Co., 195 N.L.R.B. 479, 480 (1972); Vons Packing Plant, 211 N.L.R.B., 692 (1974); W. R. Grace & Co., supra, 230 N.L.R.B., at p. 619; J-B Enterprises, 237 N.L.R.B. 383, 387 (1978); Raskin Packing Co. (1979) 246 N.L.R.B., No. 15, p. 7.)
(c) The Failure to Notify and Bargain in This Case.
The principal change in terms and conditions of employment in this case was brought about by Highland's decision to go out of business completely. It made and substantially effectuated that decision during a period in which the Union's election victory was under review because of objections filed by Highland. There can be no question (and none was raised) about Highland's decision to go out of business, however that decision may have been motivated. The problem arises from its failure to inform the Union of this impending change so that bargaining could occur about its effects on members of the bargaining unit at a time when the Union had some bargaining strength.
The marriage of the two lines of N.L.R.A. precedent, and their application to a case such as ours, is illustrated by W. R. Grace & Co., supra, 230 NLRB 617. In W. R. Grace, a union won a representation election at the employer's Monokote plant. The employer challenged the election. While its objections were under review it decided to close the Monokote operation and lay off the employees who worked there. The election challenge was made in good faith and was not frivolous, and the layoff decision was prompted by economic necessity, not by a desire to retaliate against the union.
The national board held that, under these circumstances, no unfair labor practice was committed by the employer's decision to close its Monokote operation, to lay off its employees there, and to make related changes. It did find, however, that the employer was “under an obligation to bargain with the Union over the effects of its decision to discontinue its Monokote operation, to lay off employees as well as to change its work schedules, and that its failure to do so violated section 8(a)(5) and (1) of the Act.” (230 NLRB at p. 619; emphasis in opn.) (29 U.S.C. s 158 (a)(5) and (1).)
The Fifth Circuit enforced the NLRB order. After noting that “an employer who refuses to bargain on the ground that an election is invalid does so at his own risk; if the election challenge proves fruitless, an order by the Board based on the refusal to bargain will be enforced,” the court held that the employer was required to notify the union of its decision to close its facility “in order that the voices of those affected by the changes are heard,” and that this is true even though the election challenge was still pending. (N. L. R. B. v. W. R. Grace Co. Construction Products, supra, 571 F.2d at 282, 283.)
In each of these cases, the board applied its limited make whole remedy developed in Transmarine Navigation Corporation, (1968) 170 NLRB 389, enforced N. L. R. B. v. Transmarine Navigation Corp., supra, 380 F.2d 933.) In that case, the board recognized that it was impossible to reestablish the status quo ante of the parties once the employer had gone out of business. A normal bargaining order would therefore be futile. Instead the NLRB fashioned a remedy to make the affected employees whole for the losses they suffered because of the employer's failure to notify the union of the impending shut down of operations and to bargain about its effect on members of the bargaining unit. The remedy was designed “to recreate in some practicable manner a situation in which the parties' bargaining position is not entirely devoid of economic consequences” for the employer. (Transmarine Navigation Corp., supra, 170 NLRB at 390.)
The ALRB's remedy in this case was taken directly from Transmarine. It requires Highland to pay wages to the affected employees beginning five days after the decision and continuing until the parties bargain to decision or impasse, or UFW fails or refuses to bargain in good faith. There is a cut-off of benefits as soon as there has been enough time for the employees to obtain alternative employment and, for those evicted from the labor camp, comparable housing.20
2. California Law
If this aspect of the case were to be determined entirely on the basis of NLRA precedent without regard to special provisions of California law (other than section 1148, which directs us to NLRA precedent), it would be resolved on the basis of Transmarine and W. R. Grace. That, in fact, is how the Board resolved it.
However, there are two aspects of California law which must be considered, each flowing from specific provisions of the ALRA.
(a) Nature of the Election Challenge.
The Board's application of the Transmarine limited make-whole remedy was based on the language, already quoted,21 in section 1160.3. This language is somewhat similar, but more specific than its NLRA analogue. (29 U.S.C., s 160, subd. (c) (2d sen.) The NLRA provision and its particular history led to an expansive interpretation of the national board's authority to afford make-whole relief.22 The legislative history and language of section 1160.3 require more limited application of the state board's make-whole relief authority.
In J. R. Norton Co. v. Agricultural Labor Relations Board, supra, 26 Cal.3d at 27-28, 160 Cal.Rptr. 710, 603 P.2d 1306, the Supreme Court reviewed section 1160.3 in light of the purpose of ALRA that agricultural employees elect representatives of their own choosing, the legislative history of the Act, and applicable principles of statutory construction.
It disapproved the Board's practice of ordering make-whole relief whenever an employer's election challenge is unsuccessful. Such relief “is appropriate when an employer refuses to bargain for the purpose of delaying the collective bargaining process.” (26 Cal.3d at 31, 160 Cal.Rptr. at 727, 603 P.2d at 1323.) In such cases it “serves the salutary purpose of discouraging frivolous election challenges designed to stifle employees' self-organization.” (26 Cal.3d at 31, 160 Cal.Rptr. at 727, 603 P.2d at 1323.)
The court stated:
“It is true that make-whole relief is compensatory in that it reimburses employees for the losses they incur as a result of delays in the collective bargaining process. It does not follow, however, that such compensation is justified in every case in which the employer pursues his case in a judicial forum and ultimately does not prevail. As discussed above, when the integrity of an election is being attacked, the pursuit of judicial review in itself is not contrary to the objectives of the ALRA; such review undermines ALRA policy only when the employer's election challenges lack merit and are pursued as a dilatory tactic designed to stifle union organization. The critical inquiry, therefore, is not whether the employees have incurred losses during the period when collective bargaining did not take place as a result of the employer's pursuit of election challenges. Rather, the issue is in what circumstances the employees' losses are compensable under the Act in light of the tension between the interest in avoiding unnecessary delays and the need to provide a check on arbitrary ALRB action in cases in which it rejects meritorious objections to representation elections.” (26 Cal.3d at p. 36, 160 Cal.Rptr. at p. 730, 603 P.2d at pp. 1326-27.)
It concluded that on remand:
“(T)he Board must determine from the totality of the employer's conduct whether it went through the motions of contesting the election results as an elaborate pretense to avoid bargaining or whether it litigated in a reasonable good faith belief that the union would not have been freely selected by the employees as their bargaining representative had the election been properly conducted. We emphasize that this holding does not imply that whenever the Board finds an employer has failed to present a prima facie case, and the finding is subsequently upheld by the courts, the Board may order make-whole relief. Such decision by hind-sight would impermissibly deter judicial review of close cases that raise important issues concerning whether the election was conducted in a manner that truly protected the employees' right of free choice. As discussed above, judicial review in this context is fundamental in providing for checks on administrative agencies as a protection against arbitrary exercises of their discretion. On the other hand, our holding does not mean that the Board is deprived of its make-whole power by every colorable claim of a violation of the laboratory conditions of a representation election: it must appear that the employer reasonably and in good faith believed the violation would have affected the outcome of the election.” (26 Cal.3d, at 39, 160 Cal.Rptr. at 732, 603 P.2d at 1328-29.)
The history of the make whole language in section 1160.3 suggests that it was addressed to bad faith conduct on the part of the employer.
Norton has a clear application to our case.23 Like Norton, we are concerned with a Board direction to make employees whole for losses they may have suffered due to a failure to bargain at a time when the union's apparent victory was being challenged by the employer. And, like Norton, we do not know whether the employer's challenge was frivolous and for purposes of delay (which would constitute “bad faith”) or potentially meritorious. That issue was not adjudicated and it would be unfair to the parties for this court to attempt to resolve it based on the record we have.
These circumstances point to a remand to the Board for the limited purpose of determining whether Highland's objections to the election were potentially meritorious or in bad faith. If the former, a limited make-whole remedy would be appropriate; if the latter, it would be improper.
(b) The Effect of Section 1153, Subdivision (f)
There would be no reason to remand, however, if there were no circumstances under which Highland could be subject to a make-whole remedy based on a failure to notify or bargain during the election challenge period. Highland argues24 that this is the case by reason of section 1153, subd. (f). In context, that provision makes it an unfair labor practice for an employer to “recognize, bargain with, or sign a collective-bargaining agreement” with a labor organization not certified as such under ALRA. As pointed out earlier, there is no corresponding provision in the NLRA.
Highland argues that bargaining with UFW about the effects on members of the bargaining unit of its decision to go out of business would have amounted to recognition of the Union, and any agreement reached on the subject would have involved execution of some sort of collective bargaining agreement25 with the Union. Since UFW had not yet been certified, it is argued, Highland was not under an obligation to do either, and was specifically prohibited from such actions by the fact that they are denounced as unfair labor practices by subd. (f).
The Board counters with the argument that subd. (f) was never intended to apply to a case such as this, where a union has been selected in an election not contested by another union. Instead, it argues, the provision is aimed at “sweetheart contracts” produced by employer favoritism toward one union in an effort to freeze out another. The Board announced its view three years ago in Kaplan's Fruit & Produce Co. (1977)26 3 ALRB No. 28, page 7:
“The prohibition against an employer's recognizing an uncertified union is clearly directed, not towards an arbitrary time limit on bargaining, but towards preventing voluntary recognition of labor organizations. The facts in Englund v. Chavez, 8 Cal.3d 572, (105 Cal.Rptr. 521, 504 P.2d 457) are too much a part of the history leading to the enactment of the ALRA for us to consider 1153(f) as anything but a guarantee of freedom of choice to agricultural employees through the machinery of secret ballot elections. The prohibition against bargaining with an uncertified union does not and should not preclude bargaining with a union that has been chosen through a secret ballot election.”
The Board repeats this language in its Decision in this case, and adds that “(t)he prohibition against bargaining with an uncertified union in Section 1153(f) is not a license for an employer to make unilateral changes in working conditions between an election and certification.”
There may be a legislative history that supports the Board's position. But no specific history in the nature of changes in pending legislation, committee reports, testimony before legislative committees or similar materials, has been cited to us. We are aware of none that bears on this issue.
Our concern with Highland's position is more fundamental. We start with the proposition, explicated in Norton, that the make-whole remedy cannot be applied unless the election challenge was made in bad faith. Thus, unless it is proven that the challenge was baseless and presented in order to delay certification, to harass the union, or for a similar motive (or combination of such purposes) the employer incurred no liability for failure to notify and bargain while the challenges were pending.
Only Highland's challenge prevented almost immediate certification of the Union.27 If that challenge was made in bad faith, Highland would be taking advantage of its own wrong in invoking section 1153, subd. (f) as a reason not to deal with the Union.
Nothing is more fundamental in our jurisprudence than that “(n)o one can take advantage of his own wrong.” (Civ.Code, s 3517.) It is a principle recognized not only in state jurisprudence but in national labor law as well.28
We must remember that we are construing a statute and, as in Norton, our basic focus must be on legislative intent. To ascribe to the Legislature a purpose that an employer could escape the consequences of an unfair labor practice it has committed by reason of its further misconduct, would demean the intelligence of that body. We can see no purpose to be served by so absurd a result. It certainly would fly in the face of the “certainty and . . . sense of fair play” demanded by the statute. (Stats.1975, 3d Ex.Sess., ch. 1, s 1.)
Indeed, the result in the Norton case itself is entirely consistent with this conclusion. In that case, certification of the union was delayed by the employer's election challenge. Yet, on remand, the court authorized the Board to apply its make-whole remedy on account of the employer's refusal to bargain during the challenge period, if it determines that the election challenge had been in bad faith. Obviously that remedy would have been inappropriate if section 1153, subd. (f) had the effect urged to us by Highland.
It does no violence to the ALRA, and is entirely consistent with its purposes to hold, as we do, that if Highland's election challenge was in bad faith, section 1153, subd. (f) did not insulate it from its duty to inform the Union that it was going out of business and to bargain about the economic effects of that decision on the unit employees who were about to lose their positions.
We emphasize that we are not deciding that Highland's election challenge was or was not in bad faith. That is a matter yet to be adjudicated. We only say that the remedy applied by the Board is appropriate if the challenge was in bad faith, and is inappropriate if it was not.
C. San Clemente's Status as a Successor
In arguing that it is not successor for labor law purposes, San Clemente urges that we adopt what it claims is the federal rule: that a new employer is not a successor unless a majority of its bargaining unit employees at the point of peak employment had been employed by its predecessor. The Board asks us to approve its case-by-case approach, in which all pertinent factors, including employee continuity, are considered. The Union supports the ALRB position.
San Clemente's position does not accurately state the federal rule, and is unsound as applied to the agricultural employment setting presented in this case. Instead the development of decisional law on successorship should proceed on a case-by-case basis in which all pertinent factors are considered. Of these, continuity of employment is particularly significant. On the basis of these factors, the Board's determination that San Clemente is a successor should be upheld.
1. Nature of the Issue.
If an employer is a “successor” it is obliged to recognize and bargain with the bargaining representative of its predecessor, and it may succeed to a number of related obligations and liabilities. In particular, refusal to recognize and bargain with a certified bargaining representative is generally held to constitute an unfair labor practice in violation of 29 United States Code section 158 (a)(5) and (1).
The successorship concept has been developed in NLRA precedent.29 “It has been aptly observed that the doctrine of ‘successor’ employer in the field of labor law is ‘shrouded in somewhat impressionist approaches.’ ”30 It “leads over ground both dense and largely uncharted.”31
But a number of landmarks have emerged from the national precedents. They are sufficient, we believe, to guide us in applying the underlying principles to this case.
As is true in so much of labor law, successorship theory represents a balancing of competing interests, each deserving of legal recognition.
In its first successorship case, the United States Supreme Court observed:
“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. The transition from one corporate organization to another will in most cases be eased and industrial strife avoided if employees' claims continue to be resolved by arbitration rather than ‘the relative strength . . . of the contending forces.’ ” (John Wiley & Sons v. Livingston (1964) 376 U.S. 543, 549, 84 S.Ct. 909, 914, 11 L.Ed.2d 898; the internal quotation is from United States Steelworkers v. Warrior and Gulf Navigation Co., supra, 363 U.S. at 580, 80 S.Ct. at 1351.)
Ten years after Wiley, the court observed that because of “the difficulty of the successorship question, the myriad factual circumstances and legal contexts in which it can arise, and the absence of congressional guidance as to its resolution, emphasis on the facts of each case as it arises is especially appropriate.” (Howard Johnson Co. v. Hotel Employees (1974) 417 U.S. 249, 256, 94 S.Ct. 2236, 2240, 41 L.Ed.2d 46.)
That common law approach has characterized the successorship doctrine from the beginning.
2. Development of the Successorship Doctrine
The first court case on successorship in the context of NLRA disputes N. L. R. B. v. Colten (6th Cir. 1939) 105 F.2d 179. The change in the employing entity in that case was purely technical: a partner died, dissolving the partnership as a matter of law. The court held that the new partnership succeeded to the unfair labor practices of its predecessor, and observed that “it is the employing industry that is sought to be regulated and brought within the corrective and remedial provisions of the Act in the interest of industrial peace. . . . It needs no demonstration that the strife which is sought to be averted is no less an object of legislative solicitude when contract, death, or operation of law brings about change of ownership in the employing agency.” (105 F.2d at 183.)
Succeeding cases focused on the employing industry concept as the key to successorship. (See, e. g., Apex Record Corp., 162 NLRB 333, 338 (1960); C. G. Conn., Ltd., 197 NLRB 442, 447 (1972); Hackney Iron & Steel Co., 167 NLRB 613, 616 (1967); Tom-A-Hawk Transit v. NLRB (7th Cir. 1969) 419 F.2d 1025, 1027; Overnite Transportation Co. v. NLRB (4th Cir. 1967) 372 F.2d 765, 768, cert. den. (1967) 389 U.S. 838, 88 S.Ct. 59, 19 L.Ed.2d 101.) It was established that mere change in ownership of the employing entity does not vitiate the position of a certified union under the certification bar rule.32
Continuity of the employing industry was determined on a case-by-case basis, based on examination of a number of indicia, including continuation of the composition and size of the work force, personnel policy, lapse in production, and change of product, plant location or internal operations. (Slicker, supra, pp. 1054-1062, and cases cited.) Since the doctrine arose out of a desire to protect the decision of the predecessor's employees to be represented by a particular union,33 continuity of employment has been a particularly significant factor.34
The successorship doctrine has been defined, refined, clarified and, to some degree, complicated, by a series of United States Supreme Court cases beginning in 1964.
The first case, John Wiley and Sons v. Livingston, supra, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898, held that a successor was bound by the arbitration clause in its predecessor's collective bargaining agreement. In holding a party to be bound by an agreement to which it was not a party, and whose obligations it did not assume, Wiley appears to be at odds with the labor law principle that an employer must bargain but need not agree. The holding of Wiley has been confined by subsequent decisions.35 But the court's statements in Wiley about the policies underlying the successorship rule have had continued vitality. (Boeing Co. International Associations of Machinists, supra, at 312-317.) The court focused the inquiry in every successorship case as depending:
“. . . on the particular facts, what are the legal obligations of the new employer to the employees of the former owner or their representative? The answer to this inquiry requires analysis of the interests of the new employer and the employees and the policies of the labor laws in light of the facts of each case and the particular legal obligation which is at issue, whether it be the duty to recognize and bargain with the union, the duty to remedy unfair labor practices, the duty to arbitrate, etc. There is, and can be no single definition of ‘successor’ which is applicable in every legal context. A new employer, in other words, may face successor for some purposes and not for others.” (Howard Johnson v. Detroit Local Joint Executive Board, supra, 417 U.S. at 262-263, fn. 9, 94 S.Ct. at 2243, fn. 9.)
The most often cited successorship case, N. L. R. B. v. Burns Security Services, supra, 406 U.S. 272, 92 S.Ct. 1571, 32 L.Ed.2d 61, arose out of a change in service contractors. Burns was the successful bidder for a security guard service contract with Lockheed Aircraft Service Company. The contract had been held by Wackenhut Corporation.
An NLRB-sponsored representational election had been conducted only a few months before the changeover, following which the union selected entered into a collective bargaining agreement with Wackenhut. Lockheed informed prospective bidders, including Burns, of these facts before awarding the contract.
The changeover was scheduled for July 1st, and Wackenhut's contract was due to expire on June 30. Wackenhut paid off its 42 employees, effective June 30. Meanwhile, during June, Burns hired 27 of Wackenhut's employees. It brought in 15 of its own employees, for an aggregate force of 41. Burns refused to be bound by the collective bargaining agreement entered into by Wackenhut and the union. Instead, it told the rehired Wackenhut employees to join the union representing other security guards employed by Burns. The union that had concluded the agreement with Wackenhut argued that this constituted interference, an unfair labor practice (29 U.S.C., s 158 (a)(3)), and that Burns' refusal to recognize and bargain violated 29 United States Code section 158, subd. (a)(5) and (1).
Resolution of these claims turned on Burns' status as a successor. The court held that it was a successor, and, as such, was bound to recognize and bargain with the union. But it was not bound by the collective bargaining agreement entered into with Wackenhut.
The court pointed out that the union had been designated as bargaining agent only a few months before the changeover, and that a majority of Burns' employees in the unit had been in the Wackenhut bargaining unit. The court recounted the familiar rules that recent board certification bars a new election for at least a year, absent unusual circumstances, and that mere change of ownership is not such a circumstance.
The court stated that it would have a different case if the former bargaining unit had become inappropriate by reason of differences in Burns' operating structure and practices as compared with those of Wackenhut, or if Burns had not hired guards who had been employed in the unit by Wackenhut. It also noted that the winning bidder for a service contract has no obligation to hire the incumbent employer's staff, but that it cannot decline to do so solely because of union membership.36
The court next discussed Burns' right to make changes in the terms and conditions of employment without consulting the union. Its authority to do that depends on when its duty to bargain as a successor arose; once it arose, Burns was entirely in the shoes of its predecessor insofar as recognition is concerned, and was subject to the certification bar.
“Although a successor employer is ordinarily free to set initial terms on which it will hire the employees of a predecessor, there will be instances in which it is perfectly clear that the new employer plans to retain all of the employees in the unit and in which it will be appropriate to have him initially consult with the employees' bargaining representative before he fixes terms. In other situations, however, it may not be clear until the successor employer has hired his full complement of employees that he has a duty to bargain with a union, since it will not be evident until then that the bargaining representative represents a majority of the employees in the unit as required by s 9(a) of the Act, 29 U.S.C. s 159(a). Here, for example, Burns' obligation to bargain with the union did not mature until it had selected its force of guards late in June.” (406 U.S., at pp. 294-295, 92 S.Ct. at 1585-86.)
The full impact of the Burns dictum, just quoted, is easy to state but difficult to apply.37
It is the source of San Clemente's claim that since it would not reach its “full complement” of employees until a year after it took possession of the ranch, it was not a successor at or near the time it rejected the Union's bargaining request.
Golden State Bottling Co. v. N. L. R. B., supra, 414 U.S. 168, 94 S.Ct. 414, 38 L.Ed.2d 388, is the next case in the series. In it, the court bound a successor to the unfair labor practices of its predecessor, of which it was on notice. The court quoted Wiley with approval on the principles of successorship in labor law, and pointed out how they differ from successorship for other purposes. (414 U.S. at 182, fn. 5, 94 S.Ct. at 424.) It refused to base its decision on legalistic distinctions between merger, purchase of assets and consolidation. Instead, the focus must remain on continuity of the employing industry. (414 U.S. at 182, 94 S.Ct. at 424.) The court pointed out that a succeeding employer is not bound to hire any of its predecessor's employees, nor is it, or a union of the predecessor's employees, bound by the terms of a preexisting collective bargaining contract. But if the new employer acquires substantially all the assets of the predecessor and continues operations without interruption or substantial change, the retained employees will see their job situation as unchanged, and under those circumstances, the new employer may be required to remedy the predecessor's unfair labor practices of which it had notice.
This “expectation” theory was refined in the final case in the series, Howard Johnson v. Detroit Local Joint Executive Board, supra, 417 U.S. 249, 94 S.Ct. 2236, 41 L.Ed.2d 46. In that case, the court refused to bind a successor to an arbitration clause in its predecessor's collective bargaining agreement. Wiley was distinguished.38 The court repeated the rule that an employer who purchases all the assets of another employer is under no obligation to hire the latter's work force, and it repeated the caveat to this rule: refusing to hire them because of union membership or activity is an unfair labor practice in violation of 29 United States Code section 158(a)(3). (417 U.S. at 261, fn. 8, 94 S.Ct. at 2243, fn. 8.) In Howard Johnson the new employer hired only nine of its predecessor's employees and none of its supervisors. Although the basic nature of the business (a motel) was not changed, there was no “substantial continuity in the identity of the work force” (417 U.S. at 263, 94 S.Ct. at 2244), nor any assumption of the agreement to arbitrate. Consequently, the new employer was not a successor for purposes of a duty to arbitrate.39
From these cases, it can be concluded that for purposes of NLRA, the certification bar rule applies to a new employer if it is a successor; that a successor is bound to recognize and bargain with a union certified as the representative of its predecessor's employees, but generally is not bound to its predecessor's collective bargaining agreement; that successorship is determined by continuity of the “employing industry;” and that continuity of employment is a principal criterion for that determination.40
The Burns dictum was followed by a line of NLRB cases concerning unilateral changes of terms and conditions of employment by a successor. Even should the new employer turn out to be a successor, if that fact is not evident when it establishes initial work rules, it cannot be faulted for failing to bargain about those rules.
The leading authority is Spruce Up, 209 NLRB 194 (1974). In that case, the new operator of a chain of barber shops offered to hire its predecessor's employees, who were members of a bargaining unit represented by a union, but at new and less attractive terms. The NLRB, strictly construed Burns, and held that the new operator was not a successor from the beginning. It focused on continuity of the work force, and reasoned that since less advantageous terms were offered, it could not be assumed at the beginning that many of the former employees would accept them. It was therefore not “perfectly clear” that a majority of the new work force would come from membership of the predecessor's unit. Absent conduct by the new employer that misled the old employees into believing that their union would be recognized, the new employer is not to be initially bound as a successor in this situation. Spruce Up has been consistently followed by the NLRB,41 even in a case in which the changes by the new employer were limited to improvements in the terms and conditions of employment. (Half-Century, Inc. (1979) 241 NLRB No. 101.)
But even under Spruce Up, the new employer must recognize the union and bargain with it once it is evident that a majority or, arguably, a substantial number, of its employees come from the predecessor bargaining unit. (Id., see International Association of Machinists v. N. L. R. B. (Boeing ) supra, 595 F.2d at 675, fn. 52.)
Neither the NLRB nor the circuit courts that have reviewed its decisions have understood Burns to call for a formula approach to successorship. Instead, they have tried to develop a practical approach, recognizing the realities of the varied cases coming before them.
In a recent decision, the NLRB described its successorship doctrine as “founded on the premise that where a bargaining representative has been selected by employees, a continuing obligation to deal with that representative is not subject to defeasance solely on grounds that ownership of the employing entity has changed.” (Hudson River Aggregates, 246 NLRB No. 32, p. 9 (1979).)
Consistent with this view, the NLRB has concluded that a new employer is not a successor even if a majority (or even all) of its employees came from a predecessor bargaining unit, if the new employer's operations are so different as to make the doctrine inapplicable. (Lincoln Private Police Inc., 189 NLRB 717 (1976); Mondovi Foods Corporation, 235 NLRB 1080 (1978).) And it is open to question whether a majority or only a “substantial” portion of the employees in the new employer's unit must come from the predecessor's unit.42
What is clear is that the decision in not made on the basis of a mathematical formula (Pacific Hide and Fur Depot v. N.L.R.B. (9th Cir. 1977) 553 F.2d 609, 613) but on an examination of all factors pertinent to deciding whether “the essential nature of the enterprise” remains substantially unchanged by the transfer.43 Besides continuity of employees, the cases have given weight to such factors as whether the new employer provides the same services or product as its predecessor,44 whether it operates out of the same facility and with substantially the same machinery and equipment as before,45 whether there was a break between the predecessor's operations and the takeover by the new employer and, if so, whether it was caused by a collapse of the predecessor's business or by other factors,46 acquisition of the predecessor's supervisory structure (Hudson River Aggregates, supra, 246 NLRB No. 32 at 10) and, whether the new employer continued its predecessor's operations without substantial change. (Golden State Bottling Co. v. N.L.R.B., supra, 414 U.S. at 184, 94 S.Ct. at 425; Dynamic Machine Co. v. N.L.R.B., supra, 552 F.2d at 1204.)
It is now well established that the test for successorship is different, and less stringent, when the duty to recognize and bargain with a union is involved than it is for other purposes, such as a duty to arbitrate under a predecessor's collective bargaining agreement.47
But it cannot be gainsaid that continuity of employment is a major factor in successorship determinations.48 There is authority that analysis starts with this issue and proceeds on to other only if a sufficient work force continuity is found. (See Mondovi Foods Corp., supra, 235 NLRB at 1082.)
1 Consideration of continuity of employment is also compatible with the declared ALRA purpose that agricultural employees be represented by an employee organization of their own choosing.49 (s 1152; J. R. Norton Co. v. Agricultural Labor Relations Board, supra, 26 Cal.3d at p. 30, 160 Cal.Rptr. 710, 603 P.2d 1306.)
While the NLRB has no jurisdiction over agriculture employment, it has been called upon to deal with several of the labor problems characteristic of that sector. It has consistently adapted its general rules to meet the special needs of these cases, preserving the underlying principles but modifying their specific application.
For example, the NLRB has accommodated the circumstance of transient and intermittent employment in the oil drilling industry by developing a special application of its usual rule for voter eligibility in representational elections. Recognizing the realities of the occupation, the board extended eligibility beyond current employees, to also include those who had worked for the employer within a particular time in the recent past. (Daniel Construction Co., 133 NLRB 264 (1961); Hondo Drilling Co., 164 NLRB 416 (1967) enforced N.L.R.B. v. Hondo Drilling Co. (5th Cir. 1970) 428 F.2d 943.)
The national board also has imposed successorship obligations notwithstanding a substantial turnover of employees, following a union's certification and a later takeover of the business by a successor. (See Dynamic Machine Co. v. N.L.R.B., supra, 552 F.2d at 1205; Zim's Foodliner, Inc. v. N.L.R.B., supra, 495 F.2d at 1141; cf. N.L.R.B. v. Burns Security Service, supra, 406 U.S. at 279, 92 S.Ct. at 1577, fn. 3.
1 The NLRB's treatment of cases involving a greatly reduced work force at the time of takeover or resumption of operations by a successor, is particularly significant. If a majority of the employees in the relevant unit came from the predecessor's work force in the same unit, the new employer has been required to recognize and bargain with a union that had been selected to represent them before the changeover. Failure to do so is an unfair labor practice, under 29 United States Code section 158 (a)(5) and (1).
In Hudson River Aggregates, supra, 246 NLRB No. 32, at page 11, the board described the reduced work force as “clearly representative” of those to be hired.50 In Zim's Foodliner, Inc., v. N.L.R.B., supra, 495 F.2d at 1141, the Seventh Circuit pointed out that “mere diminution of the employer complement of the bargaining unit does not relieve the successor of his duty to bargain.”51
San Clemente proposes a strict, mathematical application of the Burns dictum. It contends that Burns and cases that have followed it require that successorship be tested by whether a majority of the new employer's work force, measured when it is at full complement, come from the predecessor's unit. Since San Clemente's evidence is that it would not reach full complement52 until almost a year after it took over the ranch (i.e., not until November 1978), it urges that a demand for recognition and bargaining before that date was premature, and could be ignored.
As an “arguendo” alternative, San Clemente suggests that if the majority issue is not tested at the point of peak employment, it should be measured by the composition of the work force when the new employer is at one half its “full complement.” (This alternative is apparently founded on the ALRA provision that a petition for election must show that the work force is at least 50 percent of peak. Section 1156.3, subd. (a)(1).)
The court (see Dissenting and Concurring Opinion of Hanson, J.) has concluded that a one-half-of-peak employment rule should be adopted to govern successorship determinations in California agriculture. I cannot agree. While that or any other line would have the advantage of relative certainly, it would achieve it at the cost of unfairness and artificiality in many cases, as illustrated by its application to this case. More fundamentally, to promulgate it in an appellate review of an ALRB order is, I believe, to exercise a legislative function that is beyond our authority, I do not believe any of us can say, at this time and from this vantage, that the nature of agriculture employment is such that 50 percent, rather than 40 percent, 60 percent, or any other figure, is so appropriate that it must be selected as a matter of law. Or that it would suit all varieties of farm and ranch employment, regardless of other circumstances.
It happens that slightly less that one-half of the San Clemente agriculture work force was made up of former Highland employees when San Clemente was at what it claimed to be one-half peak (on March 25).
On March 25, some 53 percent of San Clemente's work force came from Highland. But just three weeks before, on March 7, some 94 percent had been Highland employees, and only 6 percent were new hires. Even on March 25, San Clemente had only 108 agricultural employees of its own; the other 42 were brought in by a labor contractor.53 San Clemente planned to draw its year-round complement of 70 entirely from persons it had hired, rather that from persons brought in by a labor contractor. If the calculation is confined to San Clemente's direct employees a clear majority (70 out of 108, or about 65%) came from the Highland work force.
The validity of the March 25 date is open to question. San Clemente had 150 workers at that time, one-half of its estimate of “300 plus” at peak employment. But the “300 plus” figure is itself suspect. It was based on testimony given six months before the expected event. And there was uncontroverted evidence (the verified statements of the Union representative and Highland's president on the election petition and response) that the work force peaked at 250-255, and that this occurred in July.
Whether the peak member is 250 or 300, and whether it would occur in July or November probably should not affect the outcome of the successorship issue in this case, even under the strict majority analysis suggested by San Clemente. But it demonstrates the artificiality of that approach. If the peak were 250, then the half-way point was reached sometime during the few weeks prior to the March 25 date proffered as the test point.
More fundamentally, agricultural employment is characterized by peaks and valleys, as crops are harvested, new crops are sown, and workers are hired on, laid off, and hired on again. If a “full complement” mathematical majority were to govern, the system would be so subject to manipulation at so many points as to deprive it of value as a determinant on so critical an issue.
The Burns dictum occurred in the context of the usual “industrial” model of work force continuity. In Burns itself, the employing enterprise was a continuing one, and required approximately the same number of persons, whether employed by Wackenhut or Burns.
In the typical case, a continuing business or service, it makes sense to test successorship largely by whether the successor's work force is made up mainly, or at least substantially, of the predecessor's employees.
In other situations, characterized by substantial business interruptions or other special circumstances, the NLRB itself has declined to apply the Burns dictum. It is hardly likely that the United States Supreme Court intended its brief dictum in Burns to announce an inflexible rule of majority at “full complement” regardless of the circumstances of the case.
The unfairness of San Clemente's approach is illustrated by application of its major argument to this case: that successorship be based on whether a majority of predecessor personnel are employed when the new employer's work force reaches peak employment. If, as San Clemente says, that would not occur until November 1978, it would mean that the successorship issue would not be resolved until eleven months after the takeover by San Clemente and the certification of the Union, and some fifteen months after the election won by the Union.
During that time, presumably, all parties would remain in limbo, uncertain where they stand and unable to make responsible decisions based on work force stability. That is precisely the situation the Legislature sought to avoid in enacting the ALRA.54 A statement of the District of Columbia Circuit, quoted with approval by our Supreme Court, aptly describes the hazards of a protracted delay in settling a union's status:
“Employee interest in a union can wane quickly as working conditions remain apparently unaffected by the union or collective bargaining. When the company is finally ordered to bargain with the union some years later, the union may find that it represents only a small fraction of the employees. (Citations.) Thus the employer may reap a second benefit from his original refusal to comply with the law; he may continue to enjoy lower labor expenses after the order to bargain either because the union is gone or because it is too weak to bargain effectively.”55
Nevertheless, San Clemente cites several NLRA precedents which, it claims, support its position that the Burns dictum should be literally applied to test successorship by a majority of predecessor employees at the point of “full complement.” These cases, which are next discussed, do not sustain its position.
Pacific Hide & Fur Depot, Inc. v. NLRB, supra, 553 F.2d 609, involved the takeover of a hide processing plant by a new operator. The predecessor's 18 employees were covered by a collective bargaining agreement. A sale having been arranged, the predecessor terminated all its employees. The new employer interviewed them the same day. It began operations the next day with a crew of seven, all of whom had worked for the predecessor. Citing the line United States Supreme Court cases on successorship, the court concluded that “absent a refusal to hire because of anti-union animus, a majority of the work force of the purchasing employer in the unit (must) be former employees of the seller in that unit. If that is the case, there is a duty to bargain, it being assumed that the holdover majority continue to desire representation by the union.” (553 F.2d at p. 611.) There is, however, no duty to bargain if the successor employer has never employed a majority in its unit from the predecessor's employees.
In Pacific Hide, the predecessor's employees constituted a majority when the new employer resumed operations and the majority lasted through the date the union demanded recognition and the date the new employer refused to bargain. The administrative law judge had sought to distinguish the Burns dictum as relating only to unilateral changes in terms and conditions of employment, and concluded that the new employer was a successor because it had a “nucleus” of predecessor employers and there had been no break in operations.
The evidence showed that when the new employer took over operations, it did not know exactly how many employees would be needed or how long it would take to have a full work force. By the date that a steady level of full production had been achieved, 12 of the 19 employees were new hires. (553 F.2d at 614.) Significantly, the court stated that it did not mean to imply that this was a crucial date. “Rather, considering such factors as the plant's method of operation and the level of output to be maintained, the logical time for measuring the ‘full complement’ would, in this case, regardless of the precise date, occur after a majority of the unit was no longer composed of former employees.” (553 F.2d at 614, fn. 3.)
Three important factors differentiate Pacific Hide from the instant case. First, the plant in that case had a steady, constant level of full employment; once it had been reached, little variation was expected. In our case, the numbers of employees needed to fully utilize the ranch's resources varied from only a few to over 250. Second, the lapsed time from the takeover to “full complement” was short in Pacific Hide, a point emphasized by the court. Here, it was expected to last almost a year (or, if San Clemente's alternative argument is used, some four months). Third, Pacific Hide involved a steady work force and method of operation, while the ranch farming in our case involves a very fluid work force. And, as just noted, its numbers showed a wide and continual fluctuation.56
In N. L. R. B. v. John Stepp's Friendly Ford, Inc. (9th Cir., 1964) 338 F.2d 833, a pre-Burns successorship case, the predecessor sold his car dealership to a new franchisee, shortly after a union had been certified to represent the salesman in a NLRB-sponsored election. Like the hide processing plant in Pacific Hide, the automobile dealership in Friendly Ford involved a steady level of operations and employment. There was no significant delay in reaching the level of full complement. The decisive factor pointing away from successorship was that the new dealer started with its own work force. Under those circumstances, it was not a successor for purposes of the NLRA. None of these factors characterize our case. Besides the differences in the nature of the business, already discussed, San Clemente's work force was principally in fact, overwhelmingly made up of predecessor employees for nearly four months.
In N. L. R. B. v. Pre-Engineered Products, Inc., supra, 603 F.2d 134, the Tenth Circuit summarized the object of identifying a full complement, as stated in Pacific Hide, as involving “balancing the objective of insuring maximum employee participation in the selection of a bargaining agent against the goal of permitting employees to be represented as quickly as possible. It would be ludicrous to postpone defining a full complement until the successor of a small enterprise has achieved the status of a multibillion dollar international corporation. But it could also be inappropriate to precipitately point to a full complement as existing at the moment a successor assumes operation of an essentially moribund predecessor.” (603 F.2d at 136; N. L. R. B. v. Houston Distribution Services, Inc. (5th Cir. 1978) 573 F.2d 260, 266, cert. den. (1978) 439 U.S. 1047, 99 S.Ct. 722, 58 L.Ed.2d 705.)
In Pre-Engineered, the predecessor company had collapsed. The court refused to enforce the NLRB's unfair labor practice orders on the new employer because it had not been permitted to present evidence about the expected composition of its work force. On remand, NLRB was directed to permit the company to present evidence on when a full complement had been reached and whether the company was under an obligation to bargain at that point.
Central American Airways, 204 NLRB 161 (1973) involved a new employer that clearly was a successor. The issue was the date that its obligation to bargain with the union representing its predecessor's employees matured. The NLRB held that this did not occur when the union's demands were sent or during the job interviewing process, but only after hiring decisions for a new staff had been made. The rationale, apparently, was that it could not be determined until then how many, if any, of the predecessor's employees would be hired. Significantly, the obligation to bargain matured during the changeover period and before the successor began operations. And, as with the other cases, it appeared that the successor's staffing would be relatively constant, and about the same as the predecessor.
Bachrodt Chevrolet Co. (1973) 205 NLRB 784 is cited by San Clemente for the same proposition as Central American. The unfair labor practices alleged in that case were based on changes in terms and conditions of employment made without consulting the union, and after a full complement of employees had been hired. Thus, the point at which successorship is determined was not significant in the decision.
United Maintenance and Manufacturing Co., supra, 214 NLRB 529, is cited by the Administrative Law Officer for the proposition that so long as a new employer continues operations substantially intact and most of its work force is composed of its predecessor's employees, it succeeds to the predecessor's obligation to bargain with a union representing its employees. San Clemente says that the case holds that this obligation does not arise until a “full complement” of employees has been reached. Neither view of the case is entirely correct.
The successor in United Maintenance took over from a predecessor whose employees were on strike. On August 6, it sent out a letter to 21 of the 38 striking employees, offering to hire them on the same terms as they had with the predecessor. None accepted. The successor then obtained an injunction against the strike, and began hiring. On August 24, it had four employees, two old and two new. By August 28, it had 10, of which 7 had worked for the predecessor and 3 were new. The mix and the number rose gradually after that. Predecessor employees represented at least half the work force through October 10; after that their share decreased to a low of 40 percent (November 26), and finally regained a majority (January 30). The aggregate number of workers after August 28 fluctuated between 11 and 16, but on 13 of the 15 dates reported in the decision, the number was between 12 and 15.
The business operations of the new employer were substantially the same as they had been under the predecessor.
On these facts, the NLRB held that the new employer was a successor, and that its NLRA obligations as such dated from August 28. An earlier date was not selected because under the Spruce Up doctrine, there had been no way to tell how many of the predecessor's employees would wind up in the new employer's work force. It could not be assumed that persons who were on strike in protest over the predecessor's terms and conditions of employment would accept the same terms and conditions from a successor. But by August 28, enough of them had done so to justify a determination of successorship.
In sum, the NLRB did not say that a new employer is always a successor so long as a majority of its work force is made up of predecessor employees and the predecessor's operations are continued substantially intact. Neither does the case support the full complement reading San Clemente would give it. If the successorship had been delayed until a full complement had been reached, it would not have attached until substantially later than August 28.57
Both Daneker Clock Co. (1979) 211 NLRB 719, enforced N. L. R. B. v. Daneker Clock Co., Inc., supra, 516 F.2d 315, and C. G. Conn., Ltd., supra, 197 NLRB 442 were principally concerned with the effect of a substantial hiatus between the predecessor's close-down and the start-up by a new employer. In each case the new employer was held to be a successor, based on continuity of the business enterprise (same plant equipment, product) and the fact that most of its work force came from the predecessor's bargaining unit.
In Daneker Clock, the NLRB held that the critical date for purpose of unfair labor practice determination based on a refusal to recognize was the date the union's request for recognition was received. Since that date fell within the one-year period of the certification bar, it was determinative. It is true, as San Clemente argues, that at that point most of the successor's work force had come from the predecessor's employee complement, but the case does not rely on the successor having achieved a “full complement” of employees.
Daneker Clock cites and relies upon C. G. Conn. That case also involved the takeover of a moribound enterprise. The new employer began hiring on the week of January 18, with one predecessor employee. By January 29 it had 12 employees, of which 10 were from the predecessor and 2 were new. Over the ensuing weeks, it continued to staff towards full complement. By April 30, it had 93 employees, of which 48 were old and 45 new. (Its predecessor had been staffed at 116 employees.) Later the number of predecessor employees in the work force dropped below a majority.
Based on these and other facts (concerning continuity of operations), the NLRB held that the new employer was a successor, notwithstanding the hiatus. It is significant that the successor's duty to recognize and bargain was dated to January 29 (when the new employer refused to recognize the union, at which time it had only 12 employees), not later when full staffing was substantially completed.
3. Successorship in this Case
The Burns statement speaks in terms of a “full complement.” Presumably, this means the number of employees required to conduct the business at full operation. San Clemente apparently takes the position that this point is reached at “peak employment,” the ALRA phrase, and for purpose of discussion the phrase has been treated as though it had that meaning.
The Board argues that a “full complement” of employees is the number required to perform whatever function the employer requires at seasonal occupations. Since San Clemente only required a single agricultural employee on December 1, the Board urges that it was at “full complement” on that date. Inasmuch as the single employee had worked for Highland, the Board would conclude that under the full complement test, a majority indeed, 100 percent of San Clemente's work force came from the predecessor and hence that it is a successor.
That is a literal and wholly unrealistic rendering of the phrase. “Full complement” connotes a continuing level of employment, reached after a business has been staffed up to a steady rate of production or service. This appears to be the sense in which it was used in Burns and other cases. The ALRA provisions reflect the fact that, typically, California farming operations such as those involved in this case, have no stable, year-round level of employment.
The Board's argument does serve to illustrate the problems encountered when a standard developed in the context of a constant, stable work force is imported to an entirely different setting without critical examination of the original circumstances to which it was addressed.
Whether or not it is consistent with “peak employment,” the Burns dictum is not applicable to the employment conditions that characterize California agriculture. It is doubtful that the federal courts or the NLRB would apply it in a similar setting. No analogous case has been found in which such an application has been made and, as we have seen, there is ample NLRA precedent pointing the other way.
Successorship determination cannot be made to await the attainment of peak employment, or even one-half of peak employment. It must be recalled that we are dealing with a case in which the farm employees already have selected a bargaining representative, and that representative has been duly certified after an ALRB-conducted election. To require the basic organizational rights of recognition and bargaining to be postponed until the next harvest, or several harvests, until employment reaches a plateau would effectively nullify the employees' collective bargaining rights. It also could severely impair the union, which would be hard pressed to maintain itself during a period of such inactivity. That very prospect may invite deliberate delay. And the apprehension that a delay is prompted by such motives may invite the kind of disruption the ALRA seeks to avoid.
In the long run, such unrest and unfairness benefits no one.
Recognizing the features of agricultural employment that differentiate it from other work, the Board proposes to decide successorship issues on a case-by-case basis, rather than to attempt a comprehensive statement in a single case. In doing so, the Board is acting within its legislative charge of developing and applying a “cumulative experience” to the special problems of California agriculture. (See Pandol and Sons v. Agricultural Labor Relations Board (1979) 98 Cal.App.3d 580, 587-588, 159 Cal.Rptr. 584; Butte View Farms v. Agricultural Labor Relations Board, supra, 95 Cal.App.3d at 967-968, 157 Cal.Rptr. 476.)
This is a proper common law approach. Certainly mathematical formulae are inapposite, and rules developed in the context of steady and permanent employment must be carefully examined before they are applied to a setting characterized by seasonal fluctuation and a largely migrant labor force.
The Board is correct in its determination to consider all circumstances relevant to a successorship determination. These should include enterprise continuity factors, such as the similarity of farming operations. Continuity of the work force is especially important, and must be a factor in all successorship determinations.
It bears emphasis that an employer cannot refuse to hire a predecessor's employee (or anyone else) because of real or perceived union sympathy or membership. The NLRA cases that so state are legion.58 Such refusal is an unfair labor practice under NLRA (28 U.S.C. s 158 subd. (a)(3) and (1)) as well as ALRA (s 1153, subd. (a) and (c)).
It is not necessary to determine in this case whether, or under what circumstances an employer that takes over another's farming operations may be a successor even though it employs less than a majority of the latter's farm workers. A demonstrated refusal to hire predecessor employees because of their union's affiliations may well be such a case.
There also may be cases in which the new employer is not a successor even though it does hire a majority of predecessor employees, if it makes changes that are so substantial as to negate the inference of successorship. Planting squash instead of tomatoes is hardly likely to be such a case (cf. Hot Bagels and Donuts of Staten Island, 244 N.L.R.B. No. 22 (1979) (change of brand names used not enough to break continuity for successorship purposes)), but converting a farm into a resort may well be enough.
Certainly, the Board's decision that the new employer is a successor is sufficiently supported by credited evidence that a majority of its initial work force was made up of predecessor employees and that condition continued for several months of normal operations, during which the predecessor's farming operations were maintained without substantial change.
That is our case. Highland's farming operations were carried on by San Clemente without substantial change. The same leasehold, buildings, machines and equipment were used. Many of the same supervisors were kept on in the same or similar jobs. The same crops were grown, harvested, and processed in the same manner as before.
San Clemente took over when the farming operations were at low ebb. It needed one agricultural employee to irrigate a newly planted crop. That was on December 1. By December 7, it had hired a dozen agricultural employees, all of whom had worked for Highland.
The Union's bargaining demand came on December 9. Thereafter, the work force continued to rise, with a continued majority of predecessor employees. They retained majority status until March 25.
There is no indication that San Clemente refused to hire anyone because of anti-union animus on its part. Instead, it hired the employees it needed from the nearest and most logical source: the persons who had worked the fields and processing shed of its predecessor.
The record supports a determination that San Clemente had a sufficient complement for successorship determination on December 9, when the Union's demand for recognition and bargaining was received. It certainly was sufficiently staffed for successorship purposes by early March, when it had 49 agricultural employees, of which all but three had worked for Highland.59 It was aware of the Union's certified status, and of the pendency of unfair labor practice charges against its predecessor.
Under the facts established, we should hold that the Board was correct in its decision that San Clemente's refusal to recognize and bargain constituted an unfair labor practice, in violation of section 1153, subdivisions (a) and (e).
The Board also held that San Clemente violated section 1153, subdivision (e), by refusing to furnish requested information to the Union, that was necessary to enable it to discharge its bargaining agent responsibilities. (See N.L.R.B. v. Whitin Machine Works (4th Cir. 1954) 217 F.2d 593, 594, cert. den. (1955) 349 U.S. 905, 75 S.Ct. 583, 99 L.Ed. 1242.) San Clemente's duty in this regard is dependent on whether it was obliged to recognize and bargain with the Union, a point it concedes in its brief. If San Clemente is a successor, the Board was correct in its unfair labor practice determination with respect to the refusal to furnish information.
D. Unfair Labor Practice Decisions Concerning Particular Employees and Episodes.
We now turn to a group of specific unfair labor practice determinations recommended by the Administrative Law Officer and made by the Board. We review only those decisions presented to us. Several allegations were dismissed at the Board level, and one (the charge of election day unfair labor practices) was not challenged beyond the Administrative Law Officer's decision.
Our review is guided by the principles stated in Tex-Cal Land Management, Inc. v. Agricultural Labor Relations Board, supra, 24 Cal.3d 335, 355, 156 Cal.Rptr. 1, 595 P.2d 579, and the other cases discussed earlier in the opinion, bearing on review of ALRB determinations.
Most of the charges allege violation of section 1153, subdivisions (a) and (c). Like their NLRA counterparts (29 U.S.C. s 158 (a)(1) and (5)), these two subdivisions are related. Subdivision (a) makes it an unfair labor practice to interfere with, restrain or coerce agricultural employees in the exercise of organizational rights, and subdivision (c) makes it an unfair labor practice to discriminate in hiring, tenure or terms or conditions of employment in order to encourage or discourage membership in a labor organization. When an action is taken against an employee out of anti-union animus, it is likely to violate both subdivisions: subdivision (a) because such action is coercive of section 1152 rights, and subdivision (c) because such action discriminates against the employee in order to discourage union membership.
Most, but not all, of the specific actions next discussed involve both subdivisions (a) and (c).
1. Changes in Employee Benefits and Work Rules
The Board adopted the Administrative Law Officer's finding that Highland committed an unfair labor practice by changing its employee benefits and work rules shortly before the election.
It is established under federal law that the NLRA prohibits not only “intrusive threats and promises” but also conduct “immediately favorable to employees which is undertaken with the express purpose of impinging upon their freedom of choice for or against unionization and is reasonably calculated to have that effect.” (Labor Board v. Exchange Parts (1964) 375 U.S. 405, 409, 84 S.Ct. 457, 460, 11 L.Ed.2d 435.) Such conduct violates 28 U.S.C., section 158, subdivision (a)(1), and the Board found that it also violates the corresponding provision of ALRA, section 1153, subdivision (a).
In this case, Highland issued an Employee Handbook on June 1. It included significant improvements in existing benefits, and some new benefits. There is substantial evidence that Highland was aware of the Union's organizing activity when the handbook was issued.
The problem with this unfair labor practice finding is that no such violation was ever charged. The ALRA specifies that the prosecution of unfair labor practice charges requires a complaint stating the charges, which the employer is entitled to answer and defend. (s 1160.2.) Although the General Counsel filed an original complaint and four amended complaints in this case, he did not allege the work rule changes as an unfair labor practice. Nor were the pleadings modified during the extended hearing to include the charge; no request for such modification was ever made.
Ordinarily, the imposition of unfair labor practice liability under these circumstances would be “contrary to elementary constitutional principles of procedural due process” and should be annulled. (Sunnyside Nurseries, Inc. v. Agricultural Labor Relations Board, supra, 93 Cal.App.3d at 933-934, 156 Cal.Rptr. at 158.)
It is claimed, however, that the issue was fully litigated without objection by Highland, and hence that the pleading defect may be disregarded.
There is NLRA precedent for the proposition that a variance between a complaint and findings is not fatal if the issues on which the findings were based were fully litigated. (Rea Trucking Co. v. N.L.R.B. (9th Cir. 1971) 439 F.2d 1065, 1066; N.L.R.B. v. Thompson Transport Co. (10th Cir. 1970) 421 F.2d 154, 155.) But that is not our case. Examination of pertinent portions of the transcript reveals that the handbook issue initially came up in the context of alleged discrimination conduct against Prado Navarro; it was claimed that Highland refused him a leave of absence although, under its then established employee policies, the leave could have been granted. The subject was reintroduced from time to time and, on occasion, the Administrative Law Officer seemed to suggest an 1153, subdivision (a) theory. But it was never made explicit that the work rules issue was being pursued as an independent charge, nor was there any point in the hearing during which such a charge was clearly the focus of the examination.60
This is not a case in which the variance between complaint and proof was minor or technical, or in which the litigants unequivocally focused on the issue for a period sufficiently extended to preclude a legitimate claim by the employer of being taken unaware.
We conclude that this portion of the Board's order must be annulled.
2. November 1, 1977, Discharge and Eviction of Employees
The Administrative Law Officer and the Board found that Highland committed unfair labor practices, in violation of section 1153, subdivisions (a) and (c), in its discharge of Fermin Galvan Torres, Salvador Ramirez, Jose Magana Martinez and Salvador Flores. It was concluded that their dismissals were motivated by anti-union animus. As a result of the dismissals, they were evicted from the labor camp operated by Highland, and those actions, too, were found to constitute unfair labor practices.61 We now summarize the events immediately preceding these dismissals.
On October 21, Highland posted notice that it was increasing the meal price it charges employees, and that it was instituting a room charge at the labor camp. (Up to then, there had been no charge for lodging at the camp.) The notice was posted on a bulletin board in the dining area adjacent to the kitchen.
Magana, Ramirez and Galvan discussed the new charges. Each had played an active role in the UFW organizing effort, and was known by management to be a union leader. Ramirez had been told by a Highland supervisor that he would get in trouble for his union activity. Another Highland supervisor had told Magana that he had been demoted from a foreman's position because he was a Chavista (i. e., a supporter of Ceasar Chavez, leader of UFW). All three had worked for Highland for substantial periods; in Magana's case, his service stretched back to 1954. The three agreed that the notice would be obtained for Galvan, to send to the Union. On the evening of October 31, Ramirez and Magana went to the dining area to get the notice. Flores was with them at the time. He was a recent UFW member, but had not engaged in overt Union activity. The cook, who was present (but who was not a supervisor) told them not to take the notice down. Magana and Ramirez removed it anyway. They drove to San Clemente where the notice and other papers were copied for the Union. By inadvertence, Galvan placed the original notice (instead of the Xerox copy) in the materials mailed to the Union.
When this was discovered, Ramirez gave the Xerox copy to Magana with instructions to replace it on the bulletin board. It was put on the bulletin board the same evening. The next morning, November 1, the cook told Highland supervisors about what he had seen. They informed Tsuma, Highland's president.
The supervisors drove out to the fields to see the employees involved. Ramirez was told to get his check, and that he was fired. He was then asked who had the original notice, and answered that he had given it to Galvan. Galvan, confronted at his work station and told that Tsuma wanted the original notice back, said that the Xerox copy amounted to the same thing, and that if Tsuma wanted an original he could print one. Galvan was then fired for taking company property and was told to go to the office to get his check.
Flores denied participating in the removal of the notice, but admitted that he was present when it was taken down. Magana said that he did not know where the notice was but that he thought Galvan had it. When neither responded to a statement that they would be fired unless the original was produced, they were dismissed.
The stated ground for the dismissals was damage to company property (removal of the notice and failure to return the original), insubordination (referring to the cook's admonition not to take the notice), and dishonesty (failing to respond accurately when asked where the original was).
At the hearing, the attorney for Highland asked Tsuma why it was so important to him to have the original notice back. In reply, Tsuma said that he had seen a UFW petition which he thought had been produced by pasting a Union letterhead to a set of signatures and copying the whole. Apparently, the Xerox copy produced made it appear that all signatures were on the original. He said he was afraid of a similar misuse of his notice.62 Tsuma also testified that if the Union had asked for a copy of the rate increase bulletin, he would have furnished it.
Subject to the rule that an employer cannot take action against an employee because of union membership or to interfere with a union, the NLRA does not restrict an employer from discharging an employee for any reason, just or unjust. (N.L.R.B. v. Ogle Protective Service, Inc. (6th Cir.1967) 375 F.2d 497, 505.) Such a discharge is lawful (at least insofar as NLRA is concerned) although measured against the provocation, it may be draconian or even malevolent. (N.L.R.B. v. Whitfield Pickle Co. (5th Cir.1967) 374 F.2d 576, 582.)
While the action cannot be taken on account of anti-union bias, the fact that a transgressing employee “is a union member and an active movant in an organizational campaign will not shield him from release for good cause.” (Wellington Mill Division, West Point Mfg. Co. v. N.L.R.B. (4th Cir.1964) 330 F.2d 579, 586, cert. den. (1964) 379 U.S. 882, 85 S.Ct. 144, 13 L.Ed.2d 88.) On the other hand, employer knowledge of an employee's union activity is a factor going to the employer's motive in acting against the employee. (M.S.P. Industries, Inc. v. N.L.R.B. (10th Cir.1977) 568 F.2d 166, 176.)
Cases such as this are often said to present problems of multiple motives: anti-union animus, and the meting out of employee discipline. The decisions are not entirely consistent as to whether it is enough for an unfair labor practice finding that the action would not have been taken but for the union sentiment, or whether more than that is required. (See Polynesian Cultural Center, Inc. v. N.L.R.B. (9th Cir.1978) 582 F.2d 467, 473; N.L.R.B. v. Eastern Smelting and Refining Corp. (1st Cir.1979) 598 F.2d 666, 670-671.)
At any event, the question is one of the employer's motive, and that is an issue of fact. We are bound to accept the trier's determination of that issue if it is supported by substantial evidence based on the whole record.
The trier in this case (the Board) concluded that the stated reason for the discharge was pretextual, and invoked the rule that “an apparently justifiable ground for discharge may in fact be a pretext for unlawful discrimination.” (Tex Cal Management, Inc. v. California Agricultural Labor Relations Board, supra, 24 Cal.3d at 352-353, 156 Cal.Rptr. at p. 11, 595 P.2d at p. 589.) There is sufficient record evidence to support that conclusion.
No one has argued that any of the employees had a right to remove the notice from the bulletin board. Such self help cannot be defended or condoned. If the employees wanted a copy of the notice, they should have asked for one and memorialized any refusal, or made a handwritten or photograph copy, or taken other steps similar to these.
While a harsh punishment does not violate NLRA or ALRA, the severity of the sanction in relation to the transgression involved is a fact the trier can consider in relation to all the circumstances of the case.
According to the credited evidence, the employees' intention was to remove the notice for a few evening hours, copy it, and return it the same evening, and it was only through inadvertence that a copy was returned instead of the original.
1 These were not employees who had first joined the work force at the last harvest, but workers who had been with Highland for season after season.
The discharges occurred against a background of intense hostility against UFW, as manifested at the recent election. Three of the four employees were known Union leaders, active in the organizational campaign; the fourth, Flores, appears to have been swept up with the others. Of particular significance is Tsuma's explanation of why he wanted the original bulletin back. A simple explanation that it was the company's property and he wanted it would have made hard but clear sense. But the explanation he actually gave makes none. Apparently, he was afraid that the bulletin would be used in a cut-and-paste operation to produce a false Xerox copy. But a Xerox copy could itself be misused just as readily, and Tsuma admitted that he would have supplied the copy on request.
An obviously weak or implausible reason for a discharge supports the inference that there was an illegal reason. (N.L.R.B. v. Eastern Smelting and Refining Corp., supra, 598 F.2d at 670-671; Loeb v. Textron, Inc. (1st Cir.1979) 600 F.2d 1003, 1012, fn. 6.)
The unconvincing explanation, together with the evidence of anti-Union animus, the leadership position of three of the four discharged employees in the Union, the relative harshness of the penalty and the other circumstances we have summarized amount to “substantial evidence from which the Board could draw the inference of a causal nexus,” (Royal Packing Co. v. Agricultural Labor Relations Board, supra, 101 Cal.App.3d at 834, 161 Cal.Rptr. at 874) between a purpose of weakening the Union, and the dismissals.63
The labor camp evictions followed the dismissals, since only employees were permitted to live at the camp.
The unfair labor practice findings at issue are supported.
3. Discharge of Francisco Perez Navarro
Pretextual cause also forms the basis for the unfair labor practice finding in the discharge of Francisco Perez Navarro. The Administrative Law Officer found that his dismissal violated section 1153, subdivisions (a) and (c) as being at least partially motivated by the employee's Union activity. We are unable to uphold that finding.
Perez first worked for Highland in 1975. He quit in October and was rehired the following February (1976). He quit again in April and was again rehired in May. In August, he quit again telling Highland that he would be gone for a month. On his return he worked until November when he again quit. He was again rehired in March (1977). This time he worked until August.
On Wednesday, August 4, he asked his supervisor for permission to be absent on the following Thursday and Friday, because of personal problems. The supervisor testified that Perez had said that he wanted to visit a sick relative in Mexicali. It was a busy time on the ranch, but the leave was approved (for Perez and another employee who was to go with him). The supervisor told them to be sure to return on Sunday, August 8 (a workday; Saturday, August 7, was a day off). Perez and his companion promised to be back on Sunday.
They did not return on Sunday, or on Monday. Perez did not call the supervisor until Monday afternoon, when we told him that it had not been possible to complete his business by Sunday, and that he would be back at work on Tuesday.64 No explanation was given as to why it was not possible to return to work, or at least call, at an earlier time. The supervisor reminded Perez of his promise to be back on Sunday and, in effect, discharged him. Perez reported for work the next morning, but his supervisor reaffirmed his dismissal and the reason: failure to return to work on Sunday or Monday, as promised.
Perez had been active in the Union since he joined it in April 1977, and his action role was known to the Highland management.
The administrative law officer rejected the general counsel's argument that Highland's discriminatory purpose was shown by the fact that it had taken Perez back so many times before. On each of these occasions, Perez had quit. On this one he did not quit, but had asked for and had received a leave.
Nevertheless, an unfair labor practice finding was made. The administrative law officer's conclusion was based on the following factors: reliance by Highland on the June 1 work rules; disparate treatment of Perez as compared with another employee; the harshness of the action; and its proximity to the “bizarre events” on the election day. The Board accepted the finding without specific comment.
With respect to the first factor, the Administrative Law Officer pointed out that he had found promulgation of the work rules to be an unfair labor practice. He continued, that “(r)eliance on those rules to support Perez' discharge permits an inference that the motive for the discharge was interdicted.”65 Apparently, this means that the illegality of the work rules taints any action based on them.
We cannot agree that the work rules “interdict” the propriety of Perez' dismissal. First, as we have discussed, there was no proper adjudication that issuance of the work rules was an unfair labor practice because there was no charge or waiver on that issue. Second, and more fundamentally, whatever the status of those rules, it could not be concluded that the employer is helpless to dismiss an employee who fails to return to work.
The “desperate” application of the rules is grounded on the single instance that another employee, who had been absent without notice for three days, was only giving a warning. That fact, standing by itself and with nothing more, hardly amounts to proof of discrimination against Perez, given the established circumstances of his absence.
The action taken, dismissal, is not so disproportionate under these circumstances as to permit the inference of illegal motivation. The case cited for the proposition that it is, Unimasco, Inc. (1972) 196 NLRB 400 involved dismissal of employees who had disobeyed a company rule that they not leave the premises without permission. They did leave on one occasion during a work break, but their break time was within company limits. The rule had just been announced and was discontinued the next day. (196 NLRB at 403-405.)
There remains the fact of Perez' active status in the Union and Highland's animosity toward the Union. Union activities do not shield an employee against discipline for misconduct. (Royal Packing Co. v. Agricultural Labor Relations Board, supra, 101 Cal.App.3d at 833, 161 Cal.Rptr. 870.) There is no dispute about the misconduct in this case. Perez had been given permission to leave during a busy season of work. He did not quit and return for rehiring, as he had before, but instead sought to retain his employment status. He failed to return on the day promised, or the next day, nor did he make any effort to contact Highland until the afternoon of the second day of unauthorized absence.
Under the circumstances presented, Highland did not act illegally in dismissing him. The unfair labor practice finding that it did must be annulled.
4. Refusal of Leave to Bartolo Prado Navarro
On September 2, 1977, Bartolo Prado Navarro (called Navarro), one of Highland's year-round workers, asked for a leave for a “couple of weeks” because a daughter needed an operation. The supervisor refused the request because he did not know when Navarro would return and there might be no work when he did. Navarro was told that he would have to terminate in order to be away for the time he requested. Navarro found it necessary to be away, and on September 2, he was given a notice stating that he had voluntarily terminated.
Navarro went to Mexico for 28 days. In late September he filed an unfair labor practice charge against Highland, for discriminatorily denying him the leave. When Highland received the notice, it made an unconditional offer of employment to Navarro, who accepted it and resumed work.
Highland had a policy of granting leaves of absence for up to 30 days “depending upon the season.” Apparently, this was part of the work rules announced on June 1. Highland's president could not recall if Highland had authorized a leave when the anticipated return date would occur during a slack period.
Navarro was a Union member and wore its button, but the Administrative Law Officer concluded that “the record does not clearly establish employer knowledge of Navarro's Union activities.”
The Administrative Law Officer's theory in finding that refusal of the leave violated section 1153, subdivision (a), is that an employer's intent to frustrate organizational rights need not be proven, and that it is enough that the employer's act could reasonably be expected to frustrate such rights. He concluded that it was to be expected that Navarro and his fellow workers would construe the denial of leave as a reprisal for the UFW election victory.
If this reasoning were correct, it would follow that any denial of an employee request for leave (or, probably, for other benefits, such as transfer or reassignment) after a union election victory would constitute an unfair labor practice. There is nothing beyond pure surmise that Navarro or anyone would construe the denial or leave as a reprisal for the Union victory. That inference might be sustainable if the denial were coupled with other facts. But standing by itself, as it does in this case, the denial of a leave to Navarro is not sufficient evidence of an unfair labor practice in violation of section 1153, subdivision (a).
The finding must be annulled.
5. Removal of Francisco Ruiz Guzman from the Shed Crew
The Board found that Highland committed an unfair labor practice by reassigning Francisco Ruiz Guzman from the shed crew to lower paying work, on account of his active role in the UFW. Ruiz had been a year-round employee of Highland since 1968. Each year he had worked in the packing shed and in the fields, the work customarily being divided into three hours of field work and the rest of day in the shed. His shed work consisted of cleaning, sorting and packing vegetables, making up boxes, loading trucks and general cleaning. The hourly wage for shed work and field work was the same, but the overtime eligibility was different. Overtime was not paid for field work until over 60 hours had been worked during the week; for shed work, hours over 48 a week were paid at overtime rates. No complaint or warning notice was given to Ruiz on account of his work performance. He had joined the Union in February 1977, and had done some organizational work on its behalf. About April 20, he started wearing a UFW button to work; he was the only worker in the shed who did so. On April 27, he was removed from shed work, and assigned entirely to field work. Highland reduced it male complement of shed workers during this period, assigning several of them to the field. Later, when workers were reassigned to shed work, Ruiz was left in the field. The stated reason for this is his shed supervisor's testimony that, during several ten minute observed periods. Ruiz seemed to be lagging in his field work. The Administrative Law Officer, noting discrepancies and other problems in this supervisor's testimony, did not credit it. Ruiz' field supervisor did not testify about any deficiency in field work.
The Board based its decision about Ruiz on “the timing of his removal from the shed, the fact that less experienced workers were allowed to continue shed work and, most importantly, Highland's failure to return Ruiz to shed work later in the season.”66
Based on the credited evidence, we affirm the decision.
6. Failure to Assign Salvador Ramirez to Harvest Tractor Driving
Salvador Ramirez worked for Highland since March 1975. Each year he was assigned to drive a tractor during the cauliflower and corn harvests. The harvesting of these crops involved depositing the vegetables into a bin pulled down rows of crops by a tractor.
Starting in February 1976, tractor work paid ten cents an hour more than field work.
Ramirez broke a tractor tongue during each of the first two seasons of his assignment to tractor driving, but not thereafter. He was also warned to be careful not to drive over the cauliflower. He received no warnings in 1977, and did not break a trailer tongue during that year.
The last assignment to tractor work was in May 1977, during a tomato harvest. When the corn harvest began in July of that year, Ramirez was not assigned to a tractor, and was never again assigned to such work by Highland.
He began wearing a UFW button in March 1977 a fact noticed by his supervisor, who told him that he must have showered and bathed to put it on. Another supervisor said he would get into trouble for wearing it. That supervisor also told a fellow employee (in May 1977) that Ramirez had been taken off tractor work because he was a Chavista. Another employee testified to a supervisor's statement that Ramirez would be fired from tractor work because he was a Chavista.
Highland's evidence tended to show that Ramirez was replaced in tractor work by another employee who was a more careful driver.
There is ample evidence in the record, credited by the trier, to sustain the unfair labor practice findings based on violations of section 1153, subdivisions (a) and (c).
7. Discharge of Salvador Guzman Ortiz
Salvador Guzman Ortiz began working for Highland in February 1977. He joined UFW in April. Following several episodes in August, he was discharged on August 24. The Board found that the discharge was retaliatory and discriminatory, based on Guzman's support of the Union, and constituted an unfair labor practice in violation of section 1153, subdivisions (a) and (c).
The evidence supports this finding.
Guzman lived in Highland's labor camp. With others, he was transported to and from the camp on a ranch bus driven by Isaac Rodriguez, a Highland supervisor. One evening in early August, while driving Guzman and other workers to the camp, Rodriguez remarked that they were a bunch of dummies and did not know what they were doing in believing everything Galvan and Ramirez (UFW leaders) told them. Only Guzman spoke up, answering that they were grown up enough to know whether to vote for the Union or management.
Guzman and Rodriguez had another encounter about the Union on August 15, during lunch. When it ended, Rodriguez said he would make Guzman's food bad for him.
August was a time for cucumber weeding. On August 8, Guzman's crew was apparently divided into two groups. The first started 40-50 feet ahead of the seven-man group in which Guzman was working. Rodriguez approached Guzman's group and asked why they were behind. Only two workers replied. Guzman said their rows had more weeds. Another crew member, Gregorio Villa Ortega, said that Rodriguez should examine the rows and that there is a difference between ordering work and doing it. Rodriguez went to his office and prepared warning notices for Guzman and Villa. Each notice said that the worker had fallen behind the rest of the crew, and could do the work but did not want to do it. Guzman's notice added that he had argued with and threatened the supervisor. According to the crew foreman, Guzman's crew started 40 to 50 feet behind the others and finished the same distance behind. Further, he said that a 40 to 50 foot lag was not unusual for some workers.
Guzman's crew was still working on cucumbers on August 24, when the final encounter with Rodriguez occurred. Rodriguez told the group that they were putting a noose around their necks. He told one worker (Ramon Garcia) that he had been given work out of pity; he told another (de la Torre) that he was falling down. Only Guzman responded. He said that he was not a slave or doing piecework, but an hourly employee and “If you don't like it, fire me.”
Rodriguez did so, but not right away. He prepared a worker notice stating that Guzman was insubordinate, instigated a slow-down, did not want to work, and was disobedient to the point of asking to be fired.
The notice did not discharge Guzman. But as Guzman was getting on the bus to return home that afternoon, Rodriguez gave him two checks and said that he was no longer needed. He was the only one of his work crew to be dismissed.
The foregoing supports the determination that Guzman's discharge was prompted by anti-union animus. On at least two occasions, Guzman defended the Union against attacks by the supervisor; on one occasion the supervisor threatened Guzman, and on another he called Guzman and other employees dummies for following Union leaders. According to the credited testimony, the complaint about lagging behind was not justified. Guzman's remarks to Rodriguez on August 24 may have been impertinent, as the Administrative Law Officer suggested, but as found by that trier of fact, they were triggered by Rodriguez' baiting remarks. (See N.L.R.B. v. Ampex Corp. (7th Cir. 1971) 442 F.2d 82, 86, cert. den. (1971) 404 U.S. 939, 92 S.Ct. 274, 30 L.Ed.2d 252.)
E. The Remedy
Based on its several unfair labor practice determinations, and on its authority under section 1160.3, the Board issued a detailed order in five parts: (1) Highland was directed to cease and desist section 1153, subdivisions (a) and (c) violations; (2) San Clemente was directed to bargain in good faith with the Union and not to interfere with section 1152 rights; (3) both Highland and San Clemente were directed to make whole employees found to have been discriminated against by Highland; (4) the Transmarine remedy was applied against Highland; and (5) San Clemente was directed to offer reinstatement to certain employees and to bargain and to make whole persons it employed for any losses suffered by reason of its refusal to bargain.
The order includes record preservation and notice provisions. Its final clause extends the Union's certification period for one year after San Clemente begins bargaining in good faith. This provision is within the Board's authority on a finding of a failure to bargain in good faith (s 1155.2, subd. (b)), and is appropriate in this case.
Except for those portions of the order which must be annulled or remanded pursuant to this opinion, the order is properly drafted and consonant with orders of this kind. (See, e.g., Tex-Cal Land Management, Inc. v. Agricultural Labor Relations Board, supra, 24 Cal.3d at 354-355, 156 Cal.Rptr. 1, 595 P.2d 579, regarding the notification provisions.) Only two of its provisions remain to be considered.
1. Successorship Liability
The Board has imposed an obligation on San Clemente, as a successor, to make whole the losses suffered by particular employees as a result of Highland's unfair labor practices (discussed in part D of this opinion).
The NLRB wrestled for many years with the question of whether a successor is subject to such liability, ruling first one way, then another. (See Slicker, at pp. 1069-1075.)
Finally, in Perma Vinyl Corp., 164 NLRB 968 (1967) enforced sub nom. United States Pipe and Foundry Co. v. N.L.R.B. (5th Cir. 1968) 398 F.2d 544, it ruled in favor of successorship liability. In this leading case, the NLRB discussed the interests involved, and pointed out that the successor is in the best position to remedy the unfair labor practices of the predecessor, and can protect itself by bargaining over the contingency of such liability with the predecessor. The successor may, for example, obtain an indemnity agreement, perhaps with security, and the existence of this contingency may be reflected in the price it pays the predecessor.
The Perma Vinyl rule was approved by the United States Supreme Court in Golden State Bottling Co. v. N.L.R.B., supra, 414 U.S. 168, 94 S.Ct. 414, 38 L.Ed.2d 388.
The Supreme Court also reviewed the interests involved, including the successor's ability to indemnify itself. However, successorship liability requires that the successor be on notice of the pendency of the unfair labor practice charges.
As we have seen, San Clemente was on notice of pending unfair labor practice charges, and exacted a commitment from Highland to resolve and dispose of any charges issued prior to December 15, 1977. It is also noted that San Clemente fully participated in the ALRB hearing in this case, in which those charges were adjudicated.
I would conclude that San Clemente is liable as a successor for the unfair labor practice determinations upheld in part D of our opinion.
2. The Transmarine Remedy
The make-whole order (see fn. 20, supra ) based on the failure to bargain about the effects on Highland's agricultural employees of its decision to go out of business, must be remanded. The failure to bargain occurred during an election dispute, and liability is contingent on a finding that the election challenge was made in bad faith.
Whatever the determination of whether the challenge was in bad faith, this part of the Board's Transmarine order was against Highland only. Liability was not imposed on the successor, San Clemente.67
THE ORDERA. Highland Ranch.
The Order of the Agricultural Labor Relations Board is annulled as to the work rules (paragraph 2, subparagraphs (a)(3)) and as to Francisco Perez Navarro (paragraph 3, subparagraph (d) and the portion of paragraph 5, subparagraph (a) relating to him) and Bartalo Prado Navarro (paragraph 3, subparagraph (e)). The provision of the Order concerning a limited make whole remedy against Highland (paragraph 4) is remanded to the Board for further proceedings consistent with this opinion. All other aspects of the Order as it applies to Highland are affirmed. The temporary stay order heretofore issued is terminated.
B. San Clemente.
I would affirm the Order as it applies to San Clemente.
I concur in the foregoing opinion only insofar as it relates to and disposes of the case of Highland Ranch v. Agricultural Labor Relations Board, 2d Civ. No. 57728.
I concur in the dissenting and concurring opinion by Hanson, J. only insofar as it relates to and disposes of the case of San Clemente Ranch, Ltd. v. Agricultural Labor Relations Board, 2d Civ. No. 57298.
I respectfully dissent to several material portions of the majority opinion but concur in those remaining portions of the majority opinion which are not affected by my dissent.1
At the outset I recognize that section 1148 of the New ALRA provides that the Board shall follow “applicable ” precedents of the NLRA. However, the NLRA is not the ALRA. Moreover, neither the federal case law cited nor the California Supreme Court cases primarily relied on in the majority opinion address the specific issues discussed below as raised by the language of California's new ALRA and all are factually distinguishable. While such authorities may supply food for thought and analogy, they are not binding precedent. In essence, as we fill in case law “chinks”, in accordance with the legislative purpose and intent, we are writing on a clean slate.
HIGHLAND v. ALRB
Did Highland's failure to bargain concerning the economic effects of its decision to go out of business constitute an unfair labor practice in violation of section 1153, subdivisions (a) and (e), as found by the Board?
Relevant here is the clear and concise language of section 1153, subdivision (f), which provides:
“It shall be an unfair labor practice for an agricultural employer to do any of the following: . . . (f) To recognize, bargain with, or sign a collective-bargaining agreement with any labor organization not certified pursuant to the provisions of this part.”
In the case at bench the union was Board-certified on the same day that Highland signed final escrow papers and went out of business (Nov. 29, 1977). Section 1153, subdivision (f), makes it an unfair labor practice for Highland prior to that date to “recognize, bargain with, or sign a collective-bargaining agreement ” with the UFW because it was an uncertified labor organization.
As the majority opinion points out “there is no corresponding provision (of section 1153, subdivision (f)) in the NLRA.”
It is uncontested that Highland had the absolute right to cease being an employer and to go completely out of business and that such rights are not subject to negotiation. In view of the explicit language of section 1153, subdivision (f), I conclude that Highland was under no obligation to notify the union of its decision to go out of business as it would be tantamount to “recognizing” the union which it was expressly prohibited from doing by virtue of section 1153, subdivision (f). In addition, such notification would constitute the opening phase, and an integral part, of “bargaining” prior to Board certification which is also specifically prohibited by section 1153, subdivision (f).
Nowhere in section 1153, subdivision (f), is there language referring to “Sweetheart Contracts” or the requirement of notification or the perils flowing from the failure to notify by way of a “make whole” remedy as read (or written) into that section by the Board. Nor, apparently, has the majority opinion accepted the Board's reasoning in that respect. The majority opinion bases its holding on the broad principle that “(n)o one can take advantage of his own wrong” citing Civil Code section 3517 and in order to promote “certainty and . . . sense of fair play” citing Statutes 1975, Third Extraordinary Session, chapter 1, section 1, and the case of J. R. Norton Co. v. Agricultural Labor Relations Bd. (1979) 26 Cal.3d 1, 160 Cal.Rptr. 710, 603 P.2d 1306.
The majority's reliance on Norton as having “clear application” to the instant case cannot withstand scrutiny and is clearly misplaced. In Norton the state Supreme Court was concerned with an employer's “technical” refusal to bargain under section 1153, subdivision (e), in order to obtain judicial review of election objections. The Norton court nowhere deals with the express prohibition against bargaining prior to certification contained in section 1153, subdivision (f).
The other two bases are mighty slim reeds upon which to base the majority's conclusion. Giving full effect to the clear language of section 1153, subdivision (f), Highland has done no “wrong” of which it could take advantage. It is also just as reasonable to conclude that the Legislature in its wisdom in order to instill “certainty and . . . sense of fair play” took into consideration that employers have the absolute right to go completely out of business when they choose and meant exactly what it said in section 1153, subdivision (f). In my view the majority opinion is something more than the mere filling in of a “chink”. I would leave any changes in the language of section 1153, subdivision (f), to the state Legislature. Public policy should be made by the Legislature and not the courts.
SAN CLEMENTE v. ALRB 2
Is San Clemente a “successor” employer obliged to recognize and bargain with the union certified as the bargaining representative of its predecessor Highland? NO
At the outset it should be pointed out, as noted in the majority opinion, that there is no finding or evidence that San Clemente is an alter ego or agent of Highland. In short, the record reflects that San Clemente was starting from “scratch” as an independent legal entity operating the leased land and equipment it acquired from Highland when it closed escrow on November 29, 1977, and took possession on December 1, 1977.
The majority opinion has noted that the court created doctrine of successorship has been developed in the NLRA precedent and is “ ‘shrouded in somewhat impressionist approaches' ” leading “over ground both dense and largely uncharted” and that “successorship theory represents a balancing of competing interests, each deserving of legal recognition.”
Following an exhaustive analysis of existing case law dealing with the doctrine of “successorship” the majority opinion upholds the board's decision that San Clemente's refusal to recognize and bargain with the union constituted an unfair labor practice in violation of section 1153, subdivisions (a) and (e). The majority reasons that San Clemente is a successor because “a majority of its initial work force was made up of predecessor (Highland's) employees and that condition continued for several months of normal operations, during which the predecessor's (Highland's) farming operations were maintained without substantial change.” The majority concludes that San Clemente “had a sufficient complement for successorship determination on December 9, when the Union's demand for recognition and bargaining was received,” and “certainly was sufficiently staffed for successorship purposes by early March, when it had 49 agricultural employees, of which all but three had worked for Highland.”
I have no quarrel with the majority's conclusion that San Clemente continued and maintained Highland's physical assets and farming operations without “substantial change.” The record clearly supports that finding.
I do, however, disagree with the majority opinion in respect to the manner of arriving at and its conclusion that San Clemente was obligated to recognize and bargain with the union.
The majority, as did the Board, in arriving at its conclusion that San Clemente had engaged in an unfair labor practice has elected to reject an objective formula-type method of determining when successorship attaches apparently concluding that such an approach is inappropriate because of the various shifting factors inherent in the agricultural industry.
In my view, the shifting factors3 described in the majority opinion which are inherent to the agricultural industry (as distinguished from other industries) coupled with other considerations discussed below render an objective, easily understood formula-type method for fixing a point in time when successorship attaches highly desirable for California's agricultural industry as a whole, the largest industry in the largest state (population wise) in the Nation.
Some of the “other considerations” in addition to the constant state of flux in California's agricultural industry as previously described (see fn. 3, ante ) which clamor for simple, easily understood objective formula-type ground rules for determining the point in time when successorship attaches are: (1) the necessity of promoting the basic purpose of the new ALRA;4 (2) the need to insure fairness to each of the competing interests; (3) the desirability of reducing the exposure of pro-labor or pro-management bias inadvertently creeping into the resolution of labor disputes; (4) the desirability of avoiding a proliferation of costly protracted law suits between the competing interests when such disputes are handled on a case-by-case basis which would tend to clog already overburdened courts; and (5) the realization that the consuming public desires an end to strife in the fields which affects the availability of farm products and drives up prices.
Certainly the simple is always preferable to the complex in any field of endeavor. Objective formula-type methods of fixing the point in time giving rise to or cutting off rights between competing interests are by no means rare and are common throughout the legal field as well as in the business world.
A successor employer's duty to recognize and bargain with its predecessor's union is predicated on the concept of majority rule. Obviously in those cases where the successor employer expressly indicates that it will retain all of its predecessor's employees and honor previous bargaining agreements there is no problem. The problem arises when, as here, the predecessor employer (Highland) had not entered into a bargaining agreement with the union and its agricultural work force had been reduced to zero when it sold out to San Clemente.
In view of the basic objectives of the ALRA and the “valleys” and “peaks” in employment inherent to the agricultural industry, it would appear to be unfair to successor employers and their employees who never voted for union representation to hold that a single predecessor employee hired during the initial stage of taking over the predecessor's business is sufficient to establish the predecessor union's bargaining rights in the successor company. On the other hand it would also appear to be unfair to place the predecessor union and its members in a state of limbo by requiring that union rights could not be determined until the successor's agricultural work force “peaked” or was at a “full complement.”
Accordingly, in my view a reasonable and fair way to cut the Gordian knot is to establish the point in time for determination of majority status of a union in a successor employer's agricultural work force at a point not earlier than when the successor's work force is at 50 percent of its actual (or projected) full complement (peak).
In my view such a formula approach is desirable because it is simple and easily understood, pays close attention to the majority rule requirement, and is completely consistent and compatible with the basic purposes of the ALRA in that it tends to promote “certainty” and “stability” in labor relations in the agricultural industry as a whole while being “fair” to all competing interests in each individual case. Such a test reduces the risk of abridging a successor employer's right to manage its own affairs and minimizes the occurrence of a situation in which the Board may be involved in the business of compelling a successor employer to recognize and bargain with a union at a time when in fact the union does not represent a majority of the successor employer's work force. A union's fear that a successor employer may purposely discriminate in hiring its predecessor's employees to avoid any bargaining obligation is protected against by section 1153, subdivision (c), which would subject the successor employer to a claim of unfair labor practices and to a possible restraining order or injunctive relief (ss 1160.2; 1160.3; 1160.4; 1160.6; 1160.8) for discriminating against a labor organization in regard to hiring.
Of importance in the instant case is the fact that there is no indication whatsoever that San Clemente at any time refused to hire anyone because of hostility toward farm labor unions.
In applying the above formula to the case at bench the controlling operative facts as set forth in the majority opinion, particularly at page 380, and the conclusions to be drawn therefrom are as follows:
When San Clemente, starting from “scratch”, took possession of the land and equipment from Highland on December 1, 1977, it hired one irrigator who had been employed by Highland. By December 7, 1977 (two days before the union's demand for recognition and bargaining was made and was rejected), San Clemente had only hired 12 agricultural employees, all of whom had worked for Highland. Since San Clemente's agricultural work force at that point in time had not reached the level of 50 percent of its full complement, San Clemente properly rejected the union's demand for recognition and bargaining and its rejection of the demand did not constitute an unfair labor practice.
On March 25, 1978, San Clemente had hired a total of 150 agricultural employees comprised of less than a majority of the agricultural workers from the predecessor company (Highland) because only 70 employees had worked for Highland while 80 workers were other than former Highland employees. However, it is not clear from the record whether or not the March 25 date was the date on which San Clemente reached 50 percent of “peak” employment as required by the objective formula. Although there is some evidence that San Clemente projected “300 plus” agricultural workers to reach “peak” employment in November 1978, there is also a mention in the record of the “peak” employment being 250 to 255 to be reached in mid-July 1977. In any event no factual determination has been made in respect to the essential ingredients of the objective formula, namely: (1) the number of total agricultural employees (either actual or projected) in the work force at “peak” employment, (2) the point in time San Clemente arrived at 50 percent of “peak” employment, and (3) whether or not former Highland agricultural workers constituted a majority at that point in time. Accordingly, I would remand the San Clemente case to the Board to make the foregoing three factual determinations for the purpose of determining the successorship issue in accordance with the objective formula discussed above.
Re HIGHLAND RANCH, 2d Civ. No. 57728 (5 ALRB No. 54): For the reasons stated I would annul all portions of the Agricultural Labor Relations Board's order dated August 16, 1979, pertaining to Highland which are inconsistent with the views and conclusions expressed herein. I concur in those portions of the majority opinion pertaining to Highland which do not conflict with the views and conclusions expressed herein.
Re SAN CLEMENTE RANCH, LTD., 2d Civ. No. 57298 (5 ALRB No. 54): Since Lillie, Acting Presiding Justice, has concurred in the views and conclusions expressed herein as to the San Clemente case the order is as follows:
The temporary stay order heretofore issued as to San Clemente is terminated. The order of the Agricultural Labor Relations Board dated August 16, 1979, pertaining to San Clemente is annulled and the matter is remanded to the Agricultural Labor Relations Board to make the requisite factual findings and successorship determination in accordance with the views expressed herein.5
1. All code citations are to the California Labor Code unless otherwise indicated.
2. Highland argues that one of the unfair labor practices found to have been committed was neither alleged in the complaint nor fully litigated at the hearing. The charge concerns a change of terms and conditions of employment contained in an Employee Handbook issued by Highland just prior to the election. We discuss this procedural issue in the portion of the opinion directed to particular employees and episodes.
3. Section 1160.8 provides that review may be sought in the Court of Appeal having jurisdiction over the county in which the unfair labor practices are alleged to have occurred, or in which the petitioner “resides or transacts business.”
4. Facts concerning the unfair labor practices charged with respect to specific employees and episodes are discussed in part III-D of this opinion.
5. Section 1156.3, subdivision (a)(1), provides that an election to chose a collective bargaining representative can only be held at a time when the number of eligible employees in the bargaining unit is at least one-half of the peak agricultural employment for the current calendar year. (See also, s 1156.4.)
6. The election day misconduct allegations were admitted by Highland, and the resulting unfair labor practice findings were not excepted to by that employer.
7. The federal statute consists of the National Labor Relations Act (Wagner Act; 49 Stat. 449), enacted in 1935, as amended. The principal amendments were made in 1947 by enactment of the Labor Management Relations Act, 1947 (Taft-Hartley Act; 61 Stat. 136). For simplicity, we refer to the federal legislation as NLRA, and cite to the provisions as codified in Title 29, rather than to the original NLRA numbers. (See, 29 U.S.C., s 167.)
8. See Note, Commuters, Illegals, and American Farm-Workers: The Need for a Broader Approach to Domestic Farm Labor Problems, 48 N.Y.U.L.Rev. 439 (1973).
9. See the “intent” provision of the ALRA, Stats.1975, 3d Ex.Sess., ch. 1, s 1. Legislation introduced in April 1975, modeled on the NLRA (Kaplan's Fruit & Produce Co. v. Superior Court (1979) 26 Cal.3d 60, 65, 160 Cal.Rptr. 745, 603 P.2d 1341), was refined and reintroduced in an extraordinary legislative session called for the purpose. That session produced the ALRA.
10. See the discussion in Levy, The Agricultural Labor Relations Act of 1975 La Esperanza de California Para el Futuro, 15 Santa Clara Law, 783, 784-785 (1975).
11. Section 1153 provides as follows:“It shall be an unfair labor practice for an agricultural employer to do any of the following:“(a) To interfere with, restrain, or coerce agricultural employees in the exercise of the rights guaranteed in Section 1152.“(b) To dominate or interfere with the formation or administration of any labor organization or contribute financial or other support to it. However, subject to such rules and regulations as may be made and published by the board pursuant to Section 1144, an agricultural employer shall not be prohibited from permitting agricultural employees to confer with him during working hours without loss of time or pay.“(c) By discrimination in regard to the hiring or tenure of employment, or any term or condition of employment, to encourage or discourage membership in any labor organization. . . .“(d) To discharge or otherwise discriminate against an agricultural employee because he has filed charges or given testimony under this part.“(e) To refuse to bargain collectively in good faith with labor organizations certified pursuant to the provisions of Chapter 5 (commencing with Section 1156) of this part.“(f) To recognize, bargain with, or sign a collective-bargaining agreement with any labor organization not certified pursuant to the provisions of this part.”
12. The Board determines the unit or units if agricultural employees of the same employer are employed at two or more non-contiguous locations.
13. N. L. R. B. v. Gissell Packing Co. (1969) 395 U.S. 575, 595, 89 S.Ct. 1918, 1930, 23 L.Ed.2d 547. The alternatives include card checks (see Linden Lumber Division v. N. L. R. B. (1974) 419 U.S. 301, 95 S.Ct. 429, 42 L.Ed.2d 465), as well as employee petitions and polls. (See San Clemente Publishing Corp., 167 N.L.R.B. 6 (1967), enforced N. L. R. B. v. San Clemente Publishing Corp. (9th Cir. 1969) 408 F.2d 367.) The guiding criterion is “convincing evidence of majority support.” (N. L. R. B. v. Gissell Packing Co., supra, 395 U.S. at 596, 89 S.Ct. at 1931.)
14. NLRA precedent recognizes these remedies in appropriate cases, but the federal statute does not expressly provide for them.
15. J. R. Norton Co. v. Agricultural Labor Relations Board, supra, 26 Cal.3d at 29, 160 Cal.Rptr. 710, 603 P.2d 1306. See also, San Diego Nursing Co. v. Agricultural Labor Relations Board, supra, 100 Cal.App.3d at 140, 160 Cal.Rptr. 822; Bodinson Mfg. Co. v. California E. Com. (1941) 17 Cal.2d 321, 325, 109 P.2d 935 (state employment commission); Holloway v. Purcell (1950) 35 Cal.2d 220, 226, 217 P.2d 665 (highway commission); Cohon v. Department of Alcoholic Beverage Control (1963) 218 Cal.App.2d 332, 338-339, 32 Cal.Rptr. 723.
16. As they have in several cases already decided under this fairly new law. (See, e. g., J. R. Norton Co. v. Agricultural Labor Relations Board, supra, 26 Cal.3d at 27-40, 160 Cal.Rptr. 710, 603 P.2d 1306, particularly 129; Cadiz v. Agricultural Labor Relations Board (1979) 92 Cal.App.3d 365, 155 Cal.Rptr. 213; Sunnyside Nurseries, Inc. v. Agricultural Labor Relations Board (1979) 93 Cal.App.3d 922, 156 Cal.Rptr. 152; Royal Packing Co. v. Agricultural Labor Relations Board (1980) 101 Cal.App.3d 827, 161 Cal.Rptr. 870.)
17. A complaint that the December 2 bargaining was in bad faith and hence itself a separate violation of section 1153, subdivision (e), was rejected.
18. The N.L.R.A.‘s duty to bargain provision.
19. But there may be a duty to bargain about a decision to partially go out of business if it is motivated by a purpose to weaken the union in other operations of the same employer and if the employer may reasonably have foreseen that it would have that effect. (Textile Workers Union v. Darlington Mfg. Co., supra, 380 U.S. at 274-277, 85 S.Ct. at 1001-03.)
20. The order was that Highland “pay to its agricultural employees their daily wages as of November 28, 1977, from five days after the issuance of this Decision until: (1) the date Highland bargains to agreement with the UFW about the impact of its decision to close the business; or (2) the date Highland and the UFW bargain to a bona fide impasse; or (3) the failure of the UFW to request bargaining within five days after issuance of this Decision or to commence negotiations within five days after Highland's notice of its desire to bargain; or (4) the subsequent failure of the UFW to bargain in good faith. In no event shall the back pay period exceed the period of time necessary for the employees to obtain alternative employment and, for those employees who were evicted from the labor camp, to obtain other, comparable housing.”
21. See text accompanying Note 14, supra.
22. See Fibreboard Corp. v. Labor Board, supra, 379 U.S. at 218, 85 S.Ct. at 407; Labor Board v. Seven-Up Co., supra, 344 U.S. at 346, 73 S.Ct. at 288.
23. Norton was decided after the Board rendered its decision in this case, but its application was briefed and argued before this court.
24. San Clemente makes a similar argument, based on the apprehension that the make whole remedy might be fixed on it as successor. As we discuss in the remedies portion of this opinion, this part of the Board's order is not applicable to San Clemente.
25. It might be argued that an agreement limited to the narrow issues presented by Highland's decision to go out of business would not have amounted to a “collective-bargaining agreement” under the expansive interpretation of that kind of contract in federal labor relations law. (See Steelworkers v. Warrior and Gulf Co. (1960) 363 U.S. 574, 578-579, 80 S.Ct. 1347, 1350-51, 4 L.Ed.2d 1409.) But the term is not necessarily coextensive with the matters that are subject to collective bargaining. We do not believe it was intended to be so limited in section 1153, subd. (f).
26. The Board points out that Englund involved “employer favoritism toward one of two competing unions prior to the adoption of secret ballot election procedures.” The fact pattern in Kaplan's is somewhat different from our case. It did not arise in the context of an election contest. Instead, the UFW had been certified after an election, but the period of its certification had expired. The employer argued that section 1153, subd. (f) prevented it from bargaining with the union. In its holding, the Board rejected that position.
27. But for the challenge, certification would have occurred five days after the election. (s 1156.3, subd. (d).)
28. See Carroll v. Civil Service Commission (1973) 31 Cal.App.3d 561, 567, 107 Cal.Rptr. 557; Overton v. Vita-Food Corp. (1949) 94 Cal.App.2d 367, 371, 210 P.2d 757; Mastro Plastics v. N. L. R. B. (1956) 350 U.S. 270, 287, 76 S.Ct. 349, 360, 100 L.Ed. 309; N. L. R. B. v. Guernsey Muskingum Elec. Corp., Inc. (6th Cir., 1960) 285 F.2d 8, 11.
29. The doctrine of successorship developed as a matter of common law through NLRB and court decisions. Until 1970, there was no Congressional guidance on the subject, and legislation enacted that year (the Service Contract Act, 41 U.S.C., s 351) has only very limited application. (See Slicker, A Reconsideration of the Doctrine of Employer Successorship A Step Toward a Rational Approach, 57 Minn.L.Rev. 1051, 1055 (1973) hereafter cited as Slicker.)
30. Rehnquist, J., dissenting in N. L. R. B. v. Burns Security Services (1972) 406 U.S. 272, 299, 92 S.Ct. 1571, 1588, 32 L.Ed.2d 61 quoting Leventhal, J., concurring in International Association of Machinists v. N. L. R. B. (D.C. Cir. (1969) 414 F.2d 1135, 1139).
31. Boeing Co. v. International Association of Machinists and Aerospace Workers (5th Cir. 1974) 504 F.2d 307, 312, cert. den. (1969) 396 U.S. 889, 90 S.Ct. 174, 24 L.Ed.2d 163.
32. N. L. R. B. v. Burns Security Services, supra, 406 U.S. at 279, fn. 3, 92 S.Ct. at 1578, fn. 3, and cases cited. The certification bar rule obligates an employer to recognize and bargain with a union certified by the NLRB as bargaining representative, for a reasonable time, usually a year. Exceptions are recognized for “unusual circumstances”: dissolution of the union, a schism within the union leading to the transfer of substantially all of its members and officers to a new union, and a radical fluctuation in the size of the bargaining unit within a short time. (See, Brooks v. Labor Board (1954) 348 U.S. 96, 98, 75 S.Ct. 176, 178, 99 L.Ed. 125.) The ALRB tracks NLRA protection of an elected and certified union's status for one year, reviewable for a further year. (See, ss 1155.2, subd. (b), 1156.7, subd. (d)(2) and (3), 1153, subd. (a)(e).)
33. Slicker, supra, pp. 1054-1058.
34. Slicker, supra, p. 1055; Service Hospital, Etc. v. Cleveland Tower Hotel (6th Cir. 1979) 606 F.2d 684, 687.
35. Wiley arose out of a suit to compel performance of a collective bargaining contract. (29 U.S.C. s 185.) See Comment, Contractual Successorship: The Impact of Burns, 40 U. of Chi. L.Rev. 617 (1973).
36. 406 U.S. at 280, fn. 5, 92 S.Ct. at 1578, fn. 5. The court cited the leading case on this point, K.B. & J. Young's Super Market, Inc. v. N. L. R. B. (9th Cir. (1967)) 377 F.2d 463, cert. den. 389 U.S. 841, 88 S.Ct. 71, 19 L.Ed.2d 105 (1967).
37. N. L. R. B. v. Pre-Engineered Products (10th Cir. 1979) 603 F.2d 134, 135.
38. Among other things, Wiley involved the contract enforcement provision of NLRA, not a duty to recognize or bargain; the employer in that case hired all of the predecessor's employees and made no changes in the operation of the enterprise; and the former employer merged into the successor, leaving no responsible party to be held other than the successor. (417 U.S. at 256-258, 94 S.Ct. at 2240-41.)
39. The court limited its holding to enforcibility of an arbitration clause on a successor, and did not decide successorship issues for other purposes. (417 U.S. at 262-263, fn. 9, 94 S.Ct. at 2243-44.)
40. Only a few California cases have considered the successorship issue in labor relations, all in a non-agricultural context. Holayter v. Smith (1972) 29 Cal.App.3d 326, 104 Cal.Rptr. 745, applied Wiley in holding that the new operator of an ongoing business was a successor in light of the substantial continuity of identity and operation of the business before and after the changeover. Burns was distinguished because it did not involve the transfer of a business. In this pre-Howard Johnson case, the court concluded that the successor was bound by the terms of its predecessor's collective bargaining agreement. Paud v. Alco Plating Corporation (1971) 21 Cal.App.3d 362, 98 Cal.Rptr. 706 reached the same result under similar facts. The principal distinction between the two cases is that in Paud the successor hired all of its predecessor's employees.Local Joint Executive Bd. of Hotel & Rest. Employees, etc., Union v. 3539 Century, Inc. (1975) 47 Cal.App.3d 821, 121 Cal.Rptr. 40, applied Howard Johnson in refusing to bind a new employer to the arbitration clause in the previous operator's collective bargaining contract.Retail Clerk's Union, Local 775 v. Purity Stores, Inc. (1974) 41 Cal.App.3d 225, 116 Cal.Rptr. 40, held a successor employer to be bound by its predecessor's arbitration clause in a collective bargaining agreement. The evidence showed that the successor offered probationary employment to all of the predecessor's employees, that some accepted and some did not, and there was a substantial similarity of operation and continuity of identity of the business operations. The court concluded that Burns did not make Wiley inapplicable with respect to the continuing force of a collective bargaining agreement. The continuity of work force was discussed in light of Howard Johnson ; the court concluded that since a “considerable number” of the predecessor's employees were retained and all of them were offered employment, the successor was bound to deal with union as representative of the employees.
41. United Maintenance and Manufacturing Co., 214 NLRB 529, 535 (1974); Arden's, 211 NLRB 501 (1974); International Association of Machinists v. NLRA (Boeing ) (D.C.Cir.1978) 595 F.2d 664, 672, fn. 40; Starco Farmers Market, 237 NLRB 373 (1978); Pinewood Care Center, 242 NLRB No. 86, pp. 10-11, fn. 18 (1979); Nazareth Regional High School v. N. L. R. B. (2d Cir. 1977) 549 F.2d 873, 881.)
42. Dynamic Machine Co. v. N.L.R.B.. (7th Cir. (1977)) 552 F.2d 1195, 1203, fn. 9, cert. den. (1977) 434 U.S. 827, 98 S.Ct. 103, 54 L.Ed.2d 85; Boeing Co. v. International Association of Machinists and Aerospace Workers, supra, 504 F.2d at 318; Howard Johnson Co. v. Detroit Local Joint Executive Board, supra, 417 U.S. at 263, 94 S.Ct. at 2244; and see Zim's Foodliner v. N.L.R.B. (7th Cir. 1974) 495 F.2d 1131, 1138: “Burns thus recognizes that in at least some circumstances, the democratic principle embodied in section 9 of the National Labor Relations Act is not offended by procedures which leave some doubt as to the actual, immediate desires of the employees with regard to representation.”
43. Tom-A-Hawk Transit, Inc. v. N.L.R.B., supra 419 F.2d at 1027, a pre-Burns case, quoted with approval in N.L.R.B. v. Daneker Clock Co., Inc., (4th Cir. 1975) 516 F.2d 315, 316; see also United Maintenance and Manufacturing Co., supra, 214 NLRB at 533, fn. 14; Boeing Co. v. International Association of Machinists and Aerospace Workers, supra, 504 F.2d at 317.
44. Pacific Hide and Fur Depot v. N.L.R.B., supra, 553 F.2d at 611; N.L.R.B. v. Daneker Clock Co., Inc., supra, 516 F.2d at p. 316; Mondavi Foods Corp., supra, 235 NLRB at p. 1082; United Maintenance and Manufacturing Co., supra, 214 NLRB at p. 531.
45. Pacific Hide and Fur Depot v. N.L.R.B., supra, 553 F.2d at p. 611; N.L.R.B. v. Daneker Clock Co., Inc., supra, 516 F.2d at p. 316; United Maintenance and Manufacturing Co., supra, 214 NLRB at p. 531.
46. N.L.R.B. v. Pre-Engineered Products, supra, 603 F.2d at 136; Dynamic Machine Co. v. N.L.R.B., supra, 552 F.2d at 1204; United Maintenance and Manufacturing Co., supra, 214 NLRB at p. 532.
47. Boeing Co. v. International Association of Machinists and Aerospace Workers, supra, 504 F.2d at 319; Dynamic Machine Co. v. N.L.R.B., supra, 552 F.2d at 1204; United Maintenance and Manufacturing Co., supra, 214 NLRB at 534. See also, Goldberg, The Labor Law Obligations of a Successor Employer, 63 Nw.L.Rev. 735 (1968); Howard Johnson v. Detroit Local Joint Executive Board, supra, 417 U.S. at 261, 94 S.Ct. at 2243, fn. 8.
48. See e.g., Boeing Co. International Association of Machinist and Aerospace Workers, supra, 504 F.2d at 317; United Automobile, A. & A. Workers of America v. N.L.R.B. (9th Cir., 1974) 442 F.2d 1180, 1181-2.
49. Compare s 1127, added in 1976. This statute makes a collective bargaining agreement containing a successorship clause binding for up to three years on “any successor employer who succeeds to the contracting employer's business”. It defines “successor employer” on a continuing enterprise basis, listing criteria other than continuity of employment, (subd. (b)) but it excludes employers subject to ALRA. (Subd. (a).)
50. The NLRB analogized to cases applying “clearly representative” criterion as a defense to charges that an employer had committed an unfair labor practice by prematurely recognizing a union. (28 U.S.C., s 158, subd. (a)(3).) If the work force was “clearly representative” at the time, the recognition would not constitute an unfair labor practice. (See British Industries Co., 218 NLRB 1127, 1141 (1975).)
51. Other cases reach the same result in similar situations. See, United Maintenance and Manufacturing Co., supra, 214 NLRB at 533; Gardena Buena Ventura, Inc., 242 NLRB No. 85, page 7, fn. 14 (1979); see also, C. G. Conn., Ltd., supra, 197 NLRB 442 (duty to bargain even though ratio of predecessor's employees to work force in relevant unit fell from five to one, to five to six, thus losing a majority.)
52. San Clemente apparently construes “full complement,” the term used in Burns, to mean “peak employment”, the term used in ALRA. The appropriateness of this usage is discussed later in this opinion.
53. It is noted, however, that for ALRA purposes, employees of a labor contractor are deemed employees of the employer entity that engages the contractor. (Section 1140.4, subd. (c).)
54. “In enacting this legislation the people . . . seek to ensure peace in the agricultural fields by guaranteeing justice for all agricultural workers and stability in labor relations . . . to bring certainty and a sense of fair play to a presently unstable and potentially volatile condition in the state.” (Stats.1975, 3d Ex.Sess., ch. 1, s 1.)
55. International Union of E. R. & M. W., AFL-CIO v. N. L. R. B. (Tiidee Products) (D.C.Cir.1970) 426 F.2d 1243, 1249; quoted in J. R. Norton Co. v. Agricultural Labor Relations Bd., supra, 26 Cal.3d at page 30, 160 Cal.Rptr. 710, 603 P.2d 1306. The courts were discussing dilatory tactics by an employer after a representation election.
56. Subsequent NLRB cases have questioned Pacific Hide. In Gardena Buena Ventura Homes, supra, 242 NLRB No. 85, page 7, n. 14, it was noted that the Board does not follow the rigid “full complement” formula attributed to Pacific Hide by the employer, and that, in any event, even that case recognizes the necessity to decide each case on its own facts rather than by a mathematical formula. In Hudson River Aggregates, supra, 246 NLRB No. 32, at page 11, n. 18, it was noted that Pacific Hide is inapposite where the union's continuing support in the new employer's unit had been undermined by the foreseeable consequences of unfair labor practices. Attrition in union membership due to union ineffectiveness could be expected, in time, to erode away its representational status. The same could be said in this case if a long delay were involved before the facts revealed the existence of successorship.
57. The maximum number of employees, 16, was working on January 8. It is difficult to determine a mean from the facts as reported in the decision for the period August 24 to January 30, but it would appear that that number is 12 employees. The mode is 14 employees. August 31 is the first day the work force consisted of at least 12 employees, and September 7 was the first day the number reached 14. This sort of after-the-fact computation illustrates the difficulty and implicit arbitrariness of resolving the time for successorship determination by mathematical formula.
58. They include: N.L.R.B. v. Burns Security Services, supra, 406 U.S. at 280, fn. 5, 92 S.Ct. at 1575, fn. 5; Howard Johnson Co. v. Detroit Local Joint Executive Board, supra, 417 U.S. at page 262, fn. 8, 94 S.Ct. at page 2243; Vantage Petroleum Corporation, 247 N.L.R.B., No. 202, pp. 6-7 (1980); and the leading NLRB case, cited by the others, K.B. & J. Young's Super Markets, Inc. (1966) 157 N.L.R.B. 271, 278-279, enforced K.B. & J. Young's Super Markets, Inc. v. N.L.R.B., supra, 377 F.2d 463.
59. San Clemente argues that the Union should have renewed its demand for recognition and bargaining at some point after December 9. In light of San Clemente's refusal to bargain on December 21, such a renewal would have been futile, and unnecessary. (See S. Prawer and Company, 232 N.L.R.B. 495, 496, fn. 5 (1977).)
60. This theory of unfair labor practice was not referred to in General Counsel's opening statement. (Rep.Tr. Vol. I, pp. 9-18; see also questions and colloquy, Vol. I, pp. 91-94 (including Highland's objection on grounds of relevancy), Vol. VI, pp. 42-47, Vol. X, pp. 178-179 and Vol. XIII, pp. 117-118.) There seemed to be some suggestions by General Counsel that promulgation of the work rules amounted to an unfair labor practice on the theory that it involved a change in terms or conditions of employment without consultation and bargaining with the Union. But the election had not been held when the rules were issued, and, in any event, General Counsel's argument proceeded on a different theory from the Exchange Parts approach alluded to by the Administrative Law Officer during the hearing, and ultimately relied upon for the section 1153, subdivision (a) finding on this issue.
61. The complaint also alleged that the detentions of these employees at the Camp Pendleton main gate by United States Marine Corps enlisted men were unfair labor practices. Those allegations were not sustained.
62. Reporter's Transcript, Vol. VI, page 30, line 12 to page 32, line 1. The petition to which Tsuma referred is San Clemente's Exhibit C. The October 21 notice is General Counsel's Exhibit 19. Both are Xerox copies.
63. The Administrative Law Officer declined to follow N.L.R.B. v. Uniform Rental Service, Inc. (6th Cir.1968) 398 F.2d 812, 813. In that case, a circuit court refused to enforce an NLRB finding of unfair labor practice in a seemingly similar case: dismissal of an employee who had taken an employer notice posted on the company bulletin board. Instead, the Administrative Law Officer decided to follow the decision (161 NLRB 187) in that case, on the theory that a NLRB administrative law judge would follow board, rather than circuit court, decisions where there is a conflict. (See, e. g., Iowa Beef Packers (1963) 144 N.L.R.B. 615, 616; Burns Electronic Security Systems, Inc., 245 N.L.R.B. No. 96, p. 17, fn. 26 (1979); Gardena Buena Ventura, Inc., supra, 242 NLRB No. 85, p. —-, fn. 14.) The approach taken by NLRB administrative law judges is obviously a function of the difference of the precedent effect of circuit court decisions in the federal system, and of published court of appeal decisions in California. The Board found it unnecessary to decide which is the better NLRA precedent in cases of a difference between the NLRA and one or more of the circuit courts. So do we. The administrative law judge in Uniform Rental found that the discharge was not motivated by anti-Union animus, and the Sixth Circuit concluded that the evidence did not justify the Board's reaching a different decision. There certainly is no doubt that an otherwise proper dismissal is an unfair labor practice if it is shown to be a mere pretext for an improper discharge based on an anti-Union animus.
64. His companion did not return for work at all.
65. The Administrative Law Officer cited Hemet Wholesale (1977) 3 A.L.R.B. No. 47, page 25, as a “See” case in connection with this statement. Hemet involved work rules issued in reprisal to a union election victory, an unfair labor practice. But the discharges in that case were not based on the work rules, but on independent unfair labor practices.
66. The Board rejected that part of the Administrative Law Officer's finding that no other male workers were removed from shed work.
67. In oral argument, the Board conceded that this is the correct reading of its order. I express no opinion as to whether San Clemente could have been held to such liability as a successor.
1. For the sake of brevity I will adopt the abbreviations used in the majority opinion: petitioner Highland Ranch (Highland); petitioner San Clemente Ranch, Ltd. (San Clemente); respondent Agricultural Labor Relations Board (Board); real party in interest United Farm Workers of America, AFL-CIO (UFW or union); California's New Agricultural Labor Relations Act (ALRA); National Labor Relations Act (NLRA); National Labor Relations Board (NLRB); and all code sections refer to the California Labor Code except as otherwise specified.
2. In view of Justice Lillie's concurrence in respect to the views hereinafter expressed pertaining to the San Clemente action only for the sake of clarity whenever the word or words “majority” or “majority opinion” are used, it or they are more correctly referring to the 119 page “lead opinion” by Epstein, J. * which does not constitute the majority view in relation to San Clemente.* Assigned by the Chairperson of the Judicial Council.
3. The many shifting factors which differentiate agricultural employment from work in other industries causing employment in the agricultural industry to be in such a constant state of flux are the different types of crops, each with its own typical seasonal period of growth and each requiring a different level of employment depending on the number of employees needed for ground preparation, sowing or planting, irrigation and cultivation, harvesting or picking, and packing. Superimposed upon the foregoing is the fact that many of the employees are migrant farm workers.
4. The basic purpose of California's new ALRA (enacted in 1975) was, and is, to “seek to ensure peace in the agricultural fields by guaranteeing justice for all agriculture workers and stability in labor relations.” (Italics added.) The legislation “is intended to bring certainty and a sense of fair play to a presently unstable and potentially volatile condition in the state.” (Stats.1975, Third Ex. Sess., ch. 1, s 1, p. 4013, italics added.)
5. The comment at page 68 in the lead opinion addressing my dissent calls for a brief comment.Reasonable minds may differ but in my view “certainty” and “stability” in this particular area of the law should be of great importance not only to the competing interests in the farming industry but to the public in general. Handling successorship disputes as present here on a case-by-case basis utilizing a laundry list of vague criteria breeds “uncertainty” and “instability”, resulting in litigation which clogs the courts and only benefits labor and management lawyers.Assuming, as I do, that majority rule is of signal importance in such cases I cannot see in the broader context of the agricultural industry as a whole why setting the earliest point for determining successorship rights at the time employment is at 50 percent of peak would in any way be unfair. Moreover, applying the objective formula discussed in the instant case in no way illustrates “unfairness” or “artificiality” since on remand the final determination of the successorship issue could go either way. Certainly, looking down the road since we are writing on a clean slate, future cases will be less subject to manipulation stemming from possible built in pro-labor or pro-management bias on the part of hearing officers or Board members.Nor can I perceive that electing to devise an easily understood objective-type formula for resolving successorship disputes is invading the legislative function since on this issue the Legislature has referred us to “applicable” NLRA precedents. There are “applicable” precedents justifying an objective formula-type approach. I simply do not agree that California should follow or fall into the case-by-case morass selected by the Board and adopted in the lead opinion for obvious reasons displayed in the tortured opinions cited in the lead opinion.Finally, the 50 percent figure (instead of 40 or 60 percent) was arrived at for obvious reasons. It is the mean average between “zero” (low ebb) employment (of a company starting up such as San Clemente) and “peak” (full complement) employment. It is fair and impartial because it evenhandedly cuts both ways as to both labor and management in a field plagued with uncertainties by reason of the constant state of flux inherent to an industry in dire need of easily understood ground rules.
EPSTEIN, Associate Justice.* FN* Assigned by the Chairperson of the Judicial Council.