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12/05/78 Retail Store Employees v. National Labor

December 5, 1978




Before: ROBINSON, ROBB and WILKEY, Circuit Judges.



Opinion for the Court filed by Circuit Judge ROBB.

Dissenting opinion filed by Circuit Judge ROBINSON.

ROBB, Circuit Judge: Local 1001 of the Retail Store Employees Union (the Local) petitions for review of an order of the National Labor Relations Board. The Board cross-applies for enforcement of its order. In its order the Board held that by picketing five land title companies doing business in the State of Washington the Local had conducted an illegal secondary consumer boycott in violation of section 8(b)(4)(ii)of the National Labor Relations Act, 29 U.S.C. ยง 158(b)(4)(ii). Retail Store Employees Local 1001, 226 N.L.R.B. 754 (1976).

Section 8(b)(4)(ii)of the Act makes it an unfair labor practice for a union "to threaten, coerce, or restrain any person" with the object of "forcing or requiring any person to cease using, selling, handling, transporting, or otherwise dealing in the products of any other producer... or to cease doing business with any other person...." A proviso excepts from this proscription "publicity, other than picketing, for the purpose of truthfully advising the public... that a product or products are produced by an employer with whom the labor organization has a primary dispute and are distributed by another employer...."

The Local is the certified collective bargaining representative of Safeco Title Insurance Company. Safeco is a California corporation that operates a title insurance company in Seattle, Washington. The five land title companies which were picketed sell only insurance underwritten by Safeco and derive 90-95 percent of their income from such sales. Their other income comes from title searches and escrow services which, as the Board noted, are largely ancillary to the issuance of title insurance policies. The Local began striking Safeco after contract negotiations between them broke down in November 1974. During that strike, on various dates between February and April 1975, the Local picketed the premises of the five land title companies. The pickets urged consumers to boycott Safeco insurance. *fn1 Additionally, the picketers distributed handbills asking Safeco policy holders to cancel their insurance.

On March 24, 1975, one of the land title companies, Land Title Company of Pierce County, filed a complaint before the Board alleging that the Local had committed an unfair labor practice by conducting an illegal secondary boycott. Safeco filed similar charges on May 8, 1975. The parties waived a hearing before an administrative law judge and submitted the case directly to the Board on a stipulation of facts. The Board found that the land title companies were not allied with Safeco and were therefore protected by section 8(b)(4)(ii). The Board analyzed the Supreme Court's opinion in NLRB v. Fruit & Vegetable Packers Local 760 (Tree Fruits), 377 U.S. 58 (1964), and concluded that the holding in that case did not control because the Local was seeking "a virtually complete boycott of the land title companies." (J.A. 10) We agree with the Board's reasoning and accordingly dismiss the petition for review and grant the Board's application for enforcement of its order. I.

Section 8(b)(4), as amended, "was enacted to prevent the widening of a labor dispute to entangle employers who had no concern with the original dispute." NLRB v. Steel Fabricators Local 810 (Sid Harvey), 460 F.2d 1, 5 (2d Cir. 1972), cert. denied, 409 U.S. 1041. Thus, the land title companies are protected by section 8(b)(4)(ii), and the picketing is illegal, only if the companies were neutral in respect to the dispute between the union and Safeco. The Local challenges the Board's finding of neutrality, contending that because of their economic dependence on Safeco the companies cannot be deemed neutral. The Local points also to Safeco's part ownership of the companies, the presence of officers common to Safeco and the companies, and the restrictions that Safeco imposes on the issuance of policies it underwrites.

The Board in determining that the companies were neutrals examined four factors: the degree of common ownership between Safeco and the land title companies, the extent to which there is actual common control of their day-to-day operations, the integration of their business operations, and the land title companies' dependence on Safeco for a substantial portion of their business. See Sid Harvey (supra) 460 F.2d at 5-6. The purpose of this inquiry was to assay "the factual relationship between the alleged secondary employer and the primary employer in light of the congressional intent to protect employers who are unconcerned and not involved in the labor dispute of the union and the primary employer." (J.A. 7)

The fourth factor to be considered under this test - the companies' economic dependence on Safeco - was recognized by the Board as significant. It emphasized however that no single factor is dispositive. Analyzing the other factors, the Board found them to be insubstantial. Regarding the degree of common ownership it found that except with respect to Land Title Company of Clark County, Safeco owns only a minority interest in each company *fn2 and has no potential for exercising control. The Board further concluded that although Safeco is a majority shareholder (53%) of Land Title Company of Clark County, Safeco no more controls that company than it does the other three. The Board also found that notwithstanding that a Safeco officer is a member of the board of directors of each land title company - except Land Title Company of Clark County, which has two Safeco officers on its board - there is no showing that Safeco was involved in the day-to-day operations of any of the five companies. The Board noted that the Local does not contend that the companies were performing struck work. It observed moreover that the parties had stipulated both that no employees are interchanged between Safeco and the companies, and that Safeco has no control over the companies' labor relations policies. Safeco's only apparent influence over the operations of the land title companies is in the issuance of title commitments over certain dollar limits; before issuing a policy over a specified limit, varying from $50,000 to $150,000, a company must obtain Safeco's written approval. In this situation, however, Safeco seeks to control only its own potential liability as an underwriter, rather than the companies' management policies and day-to-day operations. The Board held this relationship is not of the type or degree that would support a finding that Safeco and the companies have integrated their business operations. The Board consequently ruled that the land title companies are neutral with respect to the dispute.

This finding of neutrality is based on substantial evidence and must therefore be affirmed. Carpet Layers Local 419 v. NLRB, (Carpet Layers), 151 U.S. App. D.C. 338, 348, 467 F.2d 392, 402 (1972); United Telegraph Workers v. NLRB, U.S. App. D.C. , , 571 F.2d 665, 668 (1978). Indeed, the Local does not contest the substantiality of the evidence. Rather, the Local chiefly argues that economic dependence alone establishes an allied relationship. In Carpet Layers, however, we squarely rejected that contention. 151 U.S. App. D.C. at 346-47, 467 F.2d at 400-01; accord, NLRB v. Electrical Workers Local 3, 542 F.2d 860, 865-66 (2d Cir. 1976). Moreover, the need for a flexible standard in this area is well recognized. See, e.g., Sid Harvey (supra) 460 F.2d at 5-6.Regarding the existence of some common ownership and officers between Safeco and the companies, we reiterate what we have previously said: "There must be in addition such actual or active common control, as distinguished from merely a potential, as to denote an appreciable integration of operations and management policies." American Federation of Television Artists v. NLRB, 149 U.S. App. D.C. 272, 277, 462 F.2d 887, 892 (1972); see Carpet Layers (supra) 151 U.S. App. D.C. at 347, 467 F.2d at 401. The Board found that there had been no appreciable integration here, and except with respect to one company the potential for control was not even alleged.The Board's finding of neutrality accordingly is affirmed. II.

As neutrals to the dispute, the land title companies are protected by section 8(b)(4)(ii)from secondary pressures. Section 8(b)(4), originally enacted as one of the 1947 Taft-Hartley amendments, was intended by Congress "to confine labor conflicts to the employer in whose labor relations the conflict had arisen, and to wall off the pressures generated by that conflict from unallied employers." Miami Newspaper Pressmen's Local No. 46 v. NLRB, 116 U.S. App. D.C. 192, 197, 322 F.2d 405, 410 (1963). The section's broad proscription was believed necessary in part because "'[more] often than not the [secondary] employers are powerless to comply with demands giving rise to the [secondary] activities, and many times they... are the helpless victims of quarrels that do not concern them at all.'" Carpet Layers (supra) 151 U.S. App. D.C. at 343, 467 F.2d at 397, quoting H. REP. NO. 245, 80th Cong., 1st Sess. 23 (1974).

The Local contends however that because the picketing was aimed at only the struck product, it was within the exception to section 8(b)(4)(ii)that the Supreme Court recognized in Tree Fruits. We disagree. The dispute in Tree Fruits arose between Local 760 of the Fruit & Vegetable Packers and several fruit packers and warehousemen who sold Washington State apples to Safeway retail stores in Seattle, Washington. The union began picketing at the premises of the Safeway stores, urging customers not to buy Washington State apples. The Board ruled that the consumer boycott violated section 8(b)(4)(ii). It reasoned that "'by literal wording of the [publicity] proviso as well as through the interpretive gloss placed thereon by its drafters, consumer picketing in front of a second establishment is prohibited.'" 132 N.L.R.B. 1172, 1177. This court denied enforcement of the Board's order because no evidence regarding the picket's impact on Safeway sales had been adduced. Fruit & Vegetable Packers Local 760 v. NLRB, 113 U.S. App. D.C. 356, 308 F.2d 311 (1962). We remanded the case to the Board, leaving it free to receive evidence on whether Safeway was in fact threatened, coerced, or restrained.

The Supreme Court vacated the judgment of this court and remanded with directions to enter judgment setting aside the Board's order. The Court held that the union's picketing of Washington State apples was legal because it was "employed only to persuade customers not to buy the struck product." 377 U.S. at 72. This holding was based on the Court's reading of the legislative history of the 1959 Amendments. The Court concluded that the legislative history did "not reflect with the requisite clarity a congressional plan to proscribe all peaceful consumer picketing at secondary sites." Id. at 63. Instead, it showed that the "isolated evil" at which the section was directed was the use of consumer picketing "to persuade the customers of the secondary employer to cease trading with him in order to force [the secondary employer] to cease dealing with, or to put pressure upon, the primary employer." Id. [emphasis added] The Court therefore reasoned that Congress intended not to outlaw boycotts such as Local 760's if directed at only the struck product, but to prohibit "union [appeals] to the public at the secondary site not to trade at all with the secondary employer." Id.

The union argues in this case that regardless of the intended or foreseeable effect of its picketing on the land title companies, the picketing is lawful under the holding in Tree Fruits because it followed the struck product, Safeco insurance. The Court in Tree Fruits, however, repeatedly stressed that section 8(b)(4)(ii)proscribes picketing which is intended to persuade the customers of a seondary employer to cease dealing with him. And the Board has found here that the Local was seeking a "virtually complete boycott of the land title companies." Thus, the legislative history recounted ...

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