Maxwell Co. v. National Labor Relations Board

PHILLIPS, Circuit Judge.

The Maxwell Company filed a petition to review and set aside the decision and order of the National Labor Relations Board reported at 164 N.L.R.B. No. 97. The Board cross-petitioned for enforcement.

The facts are set forth in the reported decision of the Board and its Trial Examiner and in the comprehensive dissenting opinion prepared by Judge Mc-Allister and will not be repeated here in detail.

In a ruling¹ dated May 14, 1962, on the Union’s petition for an election the Regional Director after an ex parte investigation held that the proposed unit was inappropriate for the purposes of collective bargaining, inasmuch as it was composed of independent contractors not included within the definition of employees as defined in § 2(3) of the Act as amended in 1947, 29 U.S.C. § 152(3). No appeal was taken by the Union from that ruling.

In the present unfair labor practices case the Board ruled diametrically contrary to the earlier decision of the Regional Director and issued an order requiring Maxwell among other things to bargain with the Union as representative of the appropriate unit.

A central question raised by Maxwell is whether the 1962 decision of the Regional Director was a final and binding adjudication that cannot be relitigated by the Board. Maxwell contends that it is deprived of due process of law under the Fifth Amendment when it is denied the right to rely upon the previous decision of the Regional Director involving the same issues and parties, until such decision is either reversed or redetermined.

The Board asserts that what is basically at issue is the right of an administrative agency to change a policy decision in an area of discretion squarely committed to it by Congress and to apply the new policy to parties to which the old policy previously had been applied.

The right to make such changes is essential. Without it agency law could never be improved as a result of experience but would be burdened forever with its encrusted errors. Without the right to make changes agency law could not adjust to varying social and economic conditions or to the impact of the continuing technological revolution.

We reject the contention that the decision of the Regional Director is a final and binding adjudication which cannot be relitigated. Neither the Fifth Amendment nor the principles of res judicata and equitable estoppel preclude the Board from reaching a decision in a later proceeding contrary to the 1962 ruling of the Regional Director.

“Whatever may be the effect of quasi-judicial determinations of administrative agencies (Cf. Arizona Grocery Co. v. Atchison, etc., R. Co., 284 U.S. 370, 389, 52 S.Ct. 183, 76 L.Ed. 348), it is well settled that the principle of res adjudicata has no application to their exercise of other powers. 30 Am.Jur. p. 930; Pearson v. Williams, 202 U.S. 281, 26 S.Ct. 608, 50 L.Ed. 1029; Tagg Bros. & Moorehead v. United States, 280 U.S. 420, 445, 50 S.Ct. 220, 74 L.Ed. 524; State Corp. Comm. v. Wichita Gas Co., 290 U.S. 561, 569, 54 S.Ct. 321, 78 L.Ed. 500; St. Joseph Stock Yards Co. v. United States, 298 U.S. 38, 64, 56 S.Ct. 720, 80 L.Ed. 1033. An administrative agency, charged with the protection of the public interest, is certainly not precluded from taking appropriate action to that end because of mistaken action on its part in the past. Cf. Federal Communications Commission v. Pottsville Broadcasting Co., 309 U.S. 134, 145, 60 S.Ct. 437, 84 L.Ed. 656; Houghton v. Payne, 194 U.S. 88, 100, 24 S.Ct. 590, 48 L.Ed. 888. Nor can the principles of equitable estoppel be applied to deprive the public of the protection of a statute because of mistaken action or lack of action on the part of public officials. United States v. San Francisco, 310 U.S. 16, 32, 60 S.Ct. 749, 84 L.Ed. 1050; Utah Power & Light Co. v. United States, 243 U.S. 389, 409, 37 S.Ct. 387, 61 L.Ed. 791; United States v. City of Greenville, 4 Cir., 118 F.2d 963, 966.” National Labor Relations Board v. Baltimore Transit Co., 140 F.2d 51, 54-55 (4th Cir.), cert. denied, 321 U.S. 795, 64 S.Ct. 848, 88 L.Ed. 1084. See Talavera v. Pederson, 334 F.2d 52, 57 (6th Cir.).

Although we recognize the authority of the Board to make a redetermination of the 1962 decision of the Regional Director, we deny enforcement of the bargaining order in the present case on the ground that there is not substantial evidence to support the findings of violations of § 8(a) (1) and (3).²

The unit which the Union demanded to represent was not the same as the appropriate unit determined by the Board. The original demand for recognition included multiple owner-drivers as a part of the unit. The Trial Examiner and Board held that the multiple owner-drivers are supervisors and are not to be included in the bargaining unit.

The initial demand of the Union for recognition was made upon the Company’s president by telephone at his home on Sunday, February 27, 1966. When the President refused in this telephone conversation to recognize the Union as bargaining representative, the strike was called by the Union that day. John Ward, the business representative of the Union who made this telephone call to the Company president, admitted that at the time he made the demand and called the strike he was aware of the 1962 decision of the Regional Director that the unit “is inappropriate for purposes of collective bargaining, inasmuch as it is composed of persons who are independent contractors not included within the definition of employees. * * * ”

On March 18, 1966, the Union wrote a letter making formal demand for recognition. On March 29, 1966, the Company wrote the following letter declining to recognize the Union as bargaining agent:

March 29, 1966

Mr. Mit Duncan

Truck Drivers Union

Local No. 13

233 South High Street

Columbus, Ohio 43215

Dear Mr. Duncan:

This will acknowledge receipt of your letter dated March 18,1966, which we received March 23, 1966, in which you advised that you were requesting recognition of your Local Union as the bargaining agent for truck drivers employed by us.

We desire to advise you that the truck drivers referred to in your letter are not employees of The Maxwell Co. These men were, in fact, independent contractors, each having a separate contractual arrangement with The Maxwell Co. By reason of certain action taken by these independent contractors, with which you are familiar, The Maxwell Co. has terminated the contractual relationship.

Since the drivers referred to in your letter are not employees of The Maxwell Co., we are not able, nor could we properly recognize your Union as bargaining agent for these men.

Very truly yours,

THE MAXWELL CO.

T. L. Maxwell

President

This letter reflects the position taken by Maxwell throughout these proceedings. We find nothing in the record to indicate that this contention was not made in good faith.

It is to be emphasized that the Trial Examiner expressly found:

“ * * * Respondent asserts, and I find, that the unit which the Union now claims to represent is identical with that involved in the 1962 case, and that since then there has been no material change in the nature of Respondent’s dealings with the drivers.”

The Board contends that its decision in Deaton Truck Lines Inc., 143 N.L.R.B. 1372 (1963), petition to review dismissed, 337 F.2d 697 (1964), cert. denied sub nom. Teamsters, Chauffeurs, Warehousemen and Helpers Local Union 612 v. N.L.R.B., 381 U.S. 903, 85 S.Ct. 1448, 14 L.Ed.2d 285, represented a clear-cut announcement of a change in policy which placed Maxwell on notice of the change. We find ourselves unable to agree with the proposition that Deaton was a clear warning to Maxwell from which Maxwell should have known with reasonable certainty that the underpinning of the 1962 decision of the Regional Director relating to its bargaining unit problem had been removed.

Although Board decisions after the 1947 amendment reflected changes in the interpretation of the common law control test in relation to what constitutes an employee as contrasted with an independent contractor, we do not find that Dewton purported to announce any new policy. This and other decisions of the Board reflect an evaluation of fact patterns rather than a clear-cut change in policy. Cf. Reisch Trucking and Transportation Co., 143 N.L.R.B. 953 (1963). Following the 1947 amendment, 29 U.S.C. § 152(3), Board decisions seem to have been concerned primarily with applying the provisions of this amendment under the facts involved in particular cases.

The following cases (by no means a complete list) illustrate the fact that different results achieved by a majority of the Board have represented an application of the same general principles to somewhat (but not very dramatically) different fact situations. See, e.g., Eldon Miller, Inc., 103 N.L.R.B. 1627 (1953) (truck drivers held employees); Malone Freight Lines, Inc., 106 N.L.R.B. 1107 (1953) (truck drivers held independent contractors); Hugh Major Truck Service, 124 N.L.R.B. 1387 (1959) (truck drivers held independent contractors); Reisch Trucking and Transportation Co., 143 N.L.R.B. 953 (1963) (truck drivers held independent contractors); Chemical Leaman Tank Lines, Inc., 146 N.L.R.B. 148 (1964) (truck drivers held employees); Indiana Refrigerator Lines, Inc., 157 N.L.R.B. 539 (1966) (truck drivers held employees).

We find no decision of the Board prior to its ruling in the present proceeding that is sufficient to put Maxwell on notice of a clear-cut change of Board policy relating to the industry as a whole or to Maxwell’s own bargaining situation.

The Board issued its bargaining order on the basis of violations of §§ 8(a) (1) and 8(a) (3). The Trial Examiner found that Maxwell in refusing to recognize the Union “was motivated at least in part by a rejection of the principle of collective bargaining,” and that the Company’s refusal to bargain with the Union “was motivated basically by an antipathy to collective bargaining, and by the hope that, by postponing the issue, respondent would be afforded an opportunity to undermine the drivers’ adherence to the Union.” The Board found that the Company “had completely rejected the collective bargaining principle and its violations could only have the effect of destroying conditions needed for a fair election.” We do not find evidence to sustain these conclusions and are of the view that they are not supported by substantial evidence on the record considered as a whole. This Court’s decision in N.L.R.B. v. Delight Bakery, Inc., 353 F.2d 344 (6th Cir.), therefore is not controlling.

We find that the Board’s determination of the appropriate bargaining unit is supported by substantial evidence and is consistent with the law. On the facts in this record, however, the determinations in this case must be prospective from May 27, 1967, the date of the Board’s decision, and not retroactive.

We hold that substantial evidence on the record as a whole does not support the findings of §§ 8(a) (1) and 8(a) (3) violations by Maxwell under the unique facts of this case.

There is substantial evidence on this record as a whole to support the following findings of the Board as they apply to the future,:

“1. The Trial Examiner found, and we agree, that the single-owner drivers and the drivers who operate vehicles owned by others are employees of the Respondent, rather than independent contractors or employees of independent contractors. * * *

“2. Since we have found the drivers to be employees, we also adopt the Trial Examiner’s conclusion that the unit sought by the Union, consisting of all employee drivers operating from respondent’s Ironton, Ohio, terminal, is appropriate.”

We conclude, however, that under the NLRA and established Board procedure ³ these findings do not constitute a basis for enforcement of any part of the present order of the Board. Enforcement therefore is denied.

Petitioner will recover its costs from the Board in accordance with Rule 39(b), Fed.R.App.P.

Judge McAllister would deny enforcement for the reasons stated in his dissenting opinion.

1 . The complete text of the ruling of the Regional Director is quoted in the opinion of Judge McAllister.

2 . The Trial Examiner found a § 8(a) (5) violation but the Board dismissed this charge.

3 . N. L. R. B. V. Checker Cab Co., 367 F.2d 692 (6th Cir.), cert. denied, 385 U.S. 1008 [87 S.Ct. 715, 17 L.Ed.2d 546].