LOCAL UNION NO. 5741, UNITED MINE WORKERS OF AMERICA, PETITIONER V.
NATIONAL LABOR RELATIONS BOARD

   No. 88-2132

   In The Supreme Court Of The United States

   October Term, 1989

   On Petition For A Writ Of Certiorari To The United States Court Of
Appeals For The Sixth Circuit

   Brief For The National Labor Relations Board In Opposition

            TABLE OF CONTENTS
   Question Presented
   Opinions below
   Jurisdiction
   Statement
   Argument
   Conclusion

                            OPINIONS BELOW

   The opinion of the court of appeals (Pet. App. 1-14) is reported at
865 F.2d 733.  The decision and order of the Board (App., infra,
1a-3a), and the decision of the administrative law judge (App., infra,
4a-19a), are reported at 284 N.L.R.B. No. 47.

                             JURISDICTION

   The judgment of the court of appeals was entered on January 10,
1989.  A petition for rehearing was denied on March 29, 1989.  The
petition for a writ of certiorari was filed on June 27, 1989.  The
jurisdiction of this Court is invoked under 28 U.S.C. 1254(1).

                          QUESTION PRESENTED

   Whether the National Labor Relations Board reasonably found that
Local 5741 was a successor to Local 9639 and liable for the unpaid
backpay obligation resulting from the latter's unfair labor practice.

                               STATEMENT

   1. On February 27, 1981, following a hearing, the National Labor
Relations Board found that Local Union No. 9639, United Mine Workers
of America, had violated Sections 8(b)(1)(A) and 8(b)(2) of the
National Labor Relations Act (29 U.S.C. 158(b)(1)(A) and 158(b)(2)),
by striking at Beth-Elkhorn Corporation's mines to force the discharge
of an employee for refusing to join the union.  The Board's order
required Local 9639 to pay the employee backpay for the earnings he
lost as a result of its unfair labor practice.  Local 9639's backpay
liability was stipulated to be $12,327.65, plus interest, and the
Court of Appeals for the Sixth Circuit enforced that order by consent
of the parties.  Pet. App. 2;  App., infra, 4a-5a.

   About two weeks later, Local 9639 filed a petition under Chapter 7
of the Bankruptcy Code (11 U.S.C. 701 et seq.), in an effort to
discharge its backpay obligation.  In response, the Board filed a
proof of claim on behalf of the employee, and the bankruptcy court
awarded him all of Local 9639's monetary assets -- about $2100.  The
bankruptcy court did not discharge the balance of the debt.  Pet. App.
2.

   In the meantime, Local 9639 filed a motion with the bankruptcy
court for authority to continue to operate.  But after learning that
its backpay obligation would not be discharged, Local 9639 withdrew
its motion and simply ceased to operate.  Subsequently, Local 9639
surrendered its charter to the UMW.  Pet. App. 2.

   At the time it ceased operations, Local 9639 represented the
employees of two Beth-Elkhorn mines, all of whom were required to
remain affiliated with a single local under the United Mine Workers'
constitution.  The UMW District Representative with responsibility for
the area advised Local 9639's membership to consider joining
petitioner, the next closest local, and after discussion among
themselves, the Local 9639 members decided to do so.  Between October
21 and November 9, 1982, all of the approximately 55 working members
of Local 9639 transferred their membership to petitioner.  By November
23, approximately 190 of Local 9639's 243 idle or retired members also
transferred into petitioner, and an additional 29 inactive members
transferred by July 21 of the following year.  The UMW District
Representative helped facilitate the membership transfers.  Pet. App.
2-3;  App., infra, 2a n.1, 6a, 7a, 9a-10a.  At the time of these
transfers, petitioner concedes that it knew, through its president,
that "Local 9639 had been found in violation of the National Labor
Relations Act by causing the constructive discharge of (a non-union
miner) by Beth-Elkhorn and was under an order to pay backpay to (the
miner), and that as a result of that financial liability, had filed
bankruptcy and ceased to function" (App., infra, 7a).

   Petitioner was an older UMW local than Local 9639 and had
approximately 132 active and 356 inactive members at the time of the
transfers.  The UMW constitution gave petitioner no choice but to
accept transfers from other locals, and it received no transfer fees
from the new members.  It similarly received no money or property from
Local 9639, given the latter's insolvency.  App., infra, 7a, 10a n.2.

   Petitioner began representing the former members of Local 9639
without any break in service.  Although no Local 9639 officers became
officers of petitioner, it did reappoint four former Local 9639
members to mine committees responsible for adjusting disputes at the
mines previously represented by Local 9639.  Petitioner also
reappointed four former Local 9639 members to safety committees
responsible for inspecting the former Local 9639 mines for health and
safety.  The reconstituted mine and safety committees handled
grievances, including several that were pending at the time of the
transfer.  Pet. App. 4;  App., infra, 8a, 10a.

   At the same time that petitioner assumed representation of the
former Local 9639 members at Beth-Elkhorn, it also began receiving
those members' monthly dues.  The former Local 9639 members did not
execute new dues deduction authorization cards in behalf of
petitioner.  Instead, Beth-Elkhorn continued to remit dues to UMW
District 30 in the name of Local 9639.  These dues were not returned
to the employer;  rather, Local 9639's share was turned over to
petitioner.  District 30 ultimately advised Beth-Elkhorn that the
Local 9639 miners had transferred into petitioner and that future dues
should be submitted to District 30 in petitioner's name.  Pet. App. 3;
 App., infra, 7a-8a.  At the time of the transfer, the dues for
working members were $32 per month, which were divided evenly among
the local, the district, and the International.  In 1985, the dues
were increased to about $40 per month.

   2. On December 4, 1985, the Board's Regional Director, noting that
"questions of fact had arisen concerning the relationship between
Local 9639 and (petitioner)" (App., infra, 5a-6a), directed that a
hearing be held on whether petitioner should be made liable for the
unpaid backpay.

   In that proceeding, the Administrative Law Judge, "(c)onsidering
all the foregoing" circumstances, was "persuaded that (petitioner) is
a successor to Local 9639" (App., infra, 17a):

      (Petitioner) succeeded to the only shown asset of Local 9639,
      the future dues obligation of its membership.  Moreover, it
      succeeded to the representation obligations of Local 9639 in the
      same bargaining unit of the same employees operating at the same
      location of the same employer.  (Petitioner) assumed Local
      9639's jurisdiction under the same international union in the
      same district subdivision.  It succeeded, too, in administering
      the same collective-bargaining agreement with no changes
      whatsoever and apparently without any hiatus in representation.
      It even processed grievances originally filed with Local 9639.
      While the officers of (petitioner) were not the same as those of
      the other local, some continuity in leadership was maintained in
      the retention and reappointment of essentially the same mine
      committees and safety committees at both Beth-Elkhorn's mines 21
      and 22.

   The Board agreed that petitioner had become "a successor to the
Respondent Local 9639 with knowledge of its backpay liability" and
"adopt(ed) the (administrative law) judge's reasoning in all respects"
(App., infra, 2a n.1).  /1/

   3. The court of appeals, Judge Duggan dissenting, upheld the
Board's decision and enforced its order.  Pet. App. 11.

   Citing Golden State Bottling Co. v. NLRB, 414 U.S. 168 (1973), the
court explained that "(t)he Board's remedial powers under (Section)
10(c) of the Act include the power to order a bona fide successor
employer who has not committed an unfair labor practice to reinstate
and provide back pay to an employee wrongfully discharged by the
predecessor employer" (Pet. App. 5).  "The decision whether to impose
such liability involves striking a balance between the conflicting
interests of the innocent successor, the public, and the victimized
employee, * * * and the Board is uniquely qualified to make that kind
of judgment" (id. at 5-6).

   The court concluded that the principles of Golden State Bottling
Co. apply to a successor union.  Pet. App. 5.  /2/ On the facts of
this case, the court could not "say that the NLRB erred in holding
(petitioner) liable as a successor" (id. at 8).  Reviewing the record,
the court concluded that "(t)he indicia of continuity between Local
9639 and (petitioner) are more numerous and more substantial than the
indicia of discontinuity" (ibid.).  /3/ From the perspective of the
victimized employee, "nothing in the employing industry had changed --
and the need for remedying the unfair labor practice had not
dissipated" (id. at 9).

   The court rejected the argument that imposition of successorship
liability was inappropriate because petitioner became Local 9639's
successor involuntarily.  Although the court thought "it (was)
probably true" (Pet. App. 9) that petitioner did not become Local
9639's successor voluntarily, it reasoned that the Board properly
balanced this factor against other factors in finding that "an
imposition of liability would be equitable on the facts of this case"
(id. at 10).  The court noted that "there has been no real change in
the employing industry insofar as the victim of the unfair labor
practice is concerned" and "(t)he need for remedying the unfair labor
practice remains undiminished" (id. at 10-11).  It further noted that
petitioner "did succeed to the dues obligations of the former members
of Local 9639," and "the transfer of this source of revenue is at
least analogous to a transfer of income-producing assets from a
predecessor employer to a successor employer" (id. at 11).  The court
concluded that "(t)he judgment call that the NLRB had to make in this
case was not an easy one," but "(h)ere, as in similar cases, the
courts 'cannot say that the Board has erred in thus "striking (the)
balance to effectuate national labor policy"'" (ibid. (quoting Golden
State Bottling Co., 414 U.S. at 187 (quoting NLRB v. Truck Drivers
Local No. 449, Int'l Bhd. of Teamsters, 353 U.S. 87, 96 (1957))).

   Judge Duggan dissented.  In his view, "(t)he courts' tacit
assumption, in the Golden State and Perma Vinyl opinions, is that the
application of successor liability is inequitable unless the successor
voluntarily agreed to assume the position of its predecessor,
including the predecessor's liabilities" (Pet. App. 12-13).  He deemed
it "unjust to burden (petitioner) with the financial obligations of
(Local 9639)" (id. at 13), because it had no choice in accepting the
transfer of former Local 9639 members.

                               ARGUMENT

   The Board reasonably found petitioner to be a successor to Local
9639 and liable for the latter's unpaid backpay obligation even if
petitioner did not become a successor voluntarily.  This Court's
decision in Golden State Bottling Co. v. NLRB, 414 U.S. 168 (1973),
which upheld the Board's authority to impose liability for unfair
labor practices on bona fide successor employers, does not -- contrary
to petitioner's submission -- bar imposition of liability on
involuntary successors.  In fact, the Board's decisions have imposed
successor liability in circumstances in which the successor did not
assume such liability voluntarily, and neither this Court nor any
court of appeals has questioned that practice.  Moreover, national
labor policy requires the imposition of liability on involuntary
successors in certain situations in order to strike an equitable
balance among the conflicting interests of the successor, the public,
and the victimized employee.  The case is thus one turning on its
particular facts, which, as the court below held, amply support the
Board's determination.

   1. In Golden State Bottling Co., this Court upheld the Board's
Perma Vinyl rule /4/ and recognized the Board's broad discretion to
issue "reinstatement and backpay orders against bona fide successors
when the Board has properly found such orders to be necessary to
protect the public interest in effectuating the policies of the Act."
414 U.S. at 177.  In finding that the Board in that case had struck an
appropriate "balance between the conflicting legitimate interests of
the bona fide successor, the public, and the affected employee" (id.
at 181), the Court explained (id. at 184) that when a successor
employer

      has acquired substantial assets of its predecessor and
      continued, without interruption or substantial change, the
      predecessor's business operations, those employees who have been
      retained will understandably view their job situation as
      essentially unaltered.  Under these circumstances, the employees
      may well perceive the successor's failure to remedy the
      predecessor employer's unfair labor practices arising out of an
      unlawful discharge as a continuation of the predecessor's labor
      policies.  To the extent that the employees' legitimate
      expectation is that the unfair labor practices will be remedied,
      a successor's failure to do so may result in labor unrest as the
      employees engage in collective activity to force remedial
      action.  Similarly, if the employees identify the new employer's
      labor policies with those of the predecessor but do not take
      collective action, the successor may benefit from the unfair
      labor practices due to a continuing deterrent effect on union
      activities.

The Court reasoned that imposition of liability on otherwise innocent
successors would achieve "(a)voidance of labor strife, prevention of a
deterrent effect on the exercise of (Section 7) rights, * * * and
protection for the victimized employee -- all important policies"
under the Act -- "at a relatively minimal cost to the bona fide
successor" (id. at 185).  The Court surmised that (ibid. (quoting
Perma Vinyl Corp., 164 N.L.R.B. at 969)):

      Since the successor must have notice before liability can be
      imposed, "his potential liability for remedying the unfair labor
      practices is a matter which can be reflected in the price he
      pays for the business, or he may secure an indemnity clause in
      the sales contract which will indemnify him for liability
      arising from the seller's unfair labor practices."

   2. The Board and the court below concluded that the principles
articulated in Golden State Bottling Co. are as applicable to
successor unions as they are to successor employers.  /5/ Petitioner
does not dispute that general proposition, but insists that it was
inequitable to impose liability on it for Local 9639's unfair labor
practice because it had no choice in accepting transfer of members
from Local 9639 and therefore cannot be said to have met "the
knowledge requirement articulated in Golden State" (Pet. 9).
Petitioner maintains that the notice required by Golden State Bottling
Co. really means voluntary assumption of liability, because notice is
meaningless if a party cannot act on it.  In petitioner's view, Golden
State Bottling Co. and Section 10(c) of the NLRA, 29 U.S.C. 160(c),
implicitly contain a per se rule barring imposition of liability on
involuntary successors.  That contention is in error.

   a. The Golden State Bottling Co. Court did not make successor
liability contingent upon the availability of compensation or
indemnification.  While the Court required "notice before liability
can be imposed" (414 U.S. at 185), it plainly placed "emphasis upon
protection for the victimized employee" (id. at 181) above the
interests of the bona fide successor.  Compensation and indemnity
merely reduced the cost of extending that protection and effectuating
the purposes of the labor act.  The Court did not hold that protection
was extended because the cost would be minimal in most cases.  To the
contrary, because the availability of compensation and indemnification
affects the burden on bona fide successors, it is a matter for the
Board to take into the calculus when it balances the competing
equities and arrives at a result that will best effectuate the
policies of the Act.  Indeed, Golden State Bottling Co.'s explanation
of the mechanics of compensation and indemnification makes clear that
innocent successors will not always be able fully to protect
themselves.  For example, unfair labor practices committed after the
parties have contracted to sell the enterprise but before ownership
has been transferred may not be reflected in the terms of sale,
leaving the successor without contractual protection.  For similar
reasons, sale of a financially troubled company before backpay has
been specified -- the situation in Golden State Bottling Co. itself
(414 U.S. at 170 & n.1) -- may leave the successor unable to seek
indemnification and insufficiently informed to adjust the purchase
price accurately.

   b. Consistent with Golden State Bottling Co., the Board has found
employers to be successors when they had little choice as to whether
they would take over an enterprise, and no realistic possibility of
indemnifying themselves.  In Ponn Distributing, Inc., 232 N.L.R.B.
312, 314 (1977), enforcement denied on other grounds sub nom. NLRB v.
Cott Corp., 578 F.2d 892, 895 n.6 (1st Cir. 1978), and All State
Factors, 205 N.L.R.B. 1122, 1124, 1126-1127 (1973), secured creditors
took over failing businesses only to protect their threatened security
interests.  In both cases, the creditors unsuccessfully argued that
they should not be found to be successors since, as a practical
matter, they had no way to recoup their added liability from the
assets they would obtain from the financially troubled predecessor.
As these cases illustrate, the need to protect the victimized employee
and further the purposes of the national labor laws makes it
reasonable for the Board to impose successor liability on employers --
even in circumstances in which they did not assume those obligations
voluntarily.  The same considerations also justify imposing liability
on successor unions irrespective of the voluntariness of the
successorship.

   c. National labor policy precludes wholesale exemption of
involuntary successors because it would give employers and unions a
blueprint for minimizing the consequences of their unfair labor
practices.  Accepting petitioner's view would allow unions to organize
themselves into small, judgment-proof units that would become
insolvent whenever an individual local was found to have committed an
unfair labor practice.  While the victimized employee would be without
a remedy, the defunct local's members would transfer to another local
that would assume its predecessor's collective-bargaining
responsibilities without missing a dues payment.  /6/ In sum, the
decision below does not conflict with any decision of this Court or
any other court, and raises no question of policy that warrants
further review.

   3. Since involuntary successors enjoy no blanket exemption from the
imposition of liability, the present case turns entirely on its
particular facts, and on those facts the record amply supports the
Board's determination.  As indicated above, petitioner reconstituted
Local 9639's mine and safety committees, processed preexisting
grievances, collected dues designated for its predecessor, and took up
the representation of Local 9639's miners where Local 9639 had left
off.  Under these circumstances, "the employees may well perceive the
successor's failure to remedy the predecessor('s) * * * unfair labor
practices * * * as a continuation of the predecessor's labor
practices" (Golden State Bottling Co., 414 U.S. at 184).  For this
reason, petitioner may well have profited from its predecessor's
unfair labor practice by maintaining an implicit threat against
failures to join the union.  Indeed, the manner in which petitioner
stepped into its predecessor's role casts doubt on the assumption that
its successorship was truly "involuntary," and this doubt is
underscored by the fact that it is the UMWA's constitution, not
federal law, that required petitioner to accept inter-local membership
transfers.  /7/

   4. Finally, in addition to the "traditional factors, other
equitable concerns do not counsel against the imposition of successor
liability." Bates v. Pacific Maritime Ass'n, 744 F.2d 705, 711 (9th
Cir. 1984).  Even if petitioner did not assume successor liability
voluntarily, it achieved some measure of compensation in the form of
future dues of Local 9639's former members.  The parties' stipulation
(JX 4, para. 5) shows that petitioner would receive $10.70 per month
per employee, from 1982 through January 1985;  $13.35 per month until
October 1985;  and $13.60 per month thereafter.  /8/ Thus, the active,
working members of Local 9639 who transferred to petitioner paid dues
to petitioner at the annual rate of $3852, $4806, and $4896,
respectively, during the three periods.  In addition, the stipulation
reveals (ibid.) that inactive members who transferred paid dues to
petitioner at the rate of $3 per year, providing an additional $660
per year to petitioner from the 220 inactive transfers (id. para. 1).
In total, petitioner received between $4500 and $5500 per year in
additional revenues, to be balanced against the approximately $10,000
liability that it inherited as Local 9639's successor.  Moreover,
equal amounts were received by District 30 and by the International,
and it is within their power to relieve petitioner of any remaining
financial burden.

                              CONCLUSION

   The petition for a writ of certiorari should be denied.

   Respectfully submitted.

   KENNETH W. STARR

      Solicitor General

   JOSEPH E. DESIO

      Acting General Counsel

   D. RANDALL FRYE

      Associate General Counsel

   ROBERT E. ALLEN

      Associate General Counsel

   NORTON J. COME

      Deputy Associate General Counsel

   LINDA SHER

      Assistant General Counsel National Labor Relations Board

   AUGUST 1989

   /1/ The Board further agreed that a successorship finding was
appropriate based on (App., infra, 2a n.1):

         (1) (petitioner's) assumption of Local 9639's representation
      obligations with respect to the same employees at the same
      location;  (2) (petitioner's) administration of the same
      collective-bargaining agreement without any hiatus;  (3) the
      maintenance of some continuity of leadership by (petitioner's)
      retention of essentially the same mine and safety committees;
      (4) the expression of Local 9639's members' desires by their
      requests to transfer to (petitioner);  and (5) (petitioner's)
      succession to the only shown asset of Local 9639 -- the future
      dues obligations of its former members.

   /2/ The court noted that in NLRB v. Local Union No. 46, Metallic
Lathers, 727 F.2d 234 (1984), the Second Circuit refused to enforce
the imposition of liability upon a successor union.  See Pet. App. 7.
The Lathers court did not quarrel with the Board's finding that a
Carpenters local "was the Lathers successor," nor did it hold the
successor doctrine inapplicable to unions.  Instead, it found that the
successor union, unlike petitioner in this case, had no knowledge of
the unfair labor practices at the time of the succession.  Pet. App.
7.

   /3/ The court explained (Pet. App. 8-9):

         The 55 active employees who transferred to (petitioner)
      continued to work in the same mines without interruption or
      dislocation.  The mine and safety committees remained in place
      with the same members.  Dues continued to be checked off and
      remitted to District 30 of the UMWA without interruption.
      Grievances filed before the dissolution of Local 9639 were
      processed by (petitioner), and District 30 continued to be
      substantially involved in the grievance process, just as it had
      been before.  (Petitioner) took over representation of Local
      9639's former members without any hiatus and administered the
      same contract previously administered by Local 9639.

   /4/ In Perma Vinyl Corp., 164 N.L.R.B. 968, 969 (1967), enforced
sub nom. United States Pipe & Foundry Co. v. NLRB, 398 F.2d 544 (5th
Cir. 1968), the Board held that when a successor employer takes over
the employing enterprise, with notice of the predecessor's unfair
labor practices, it is jointly and severally liable to remedy those
unfair labor practices.

   /5/ Several district courts have recognized successor union
liability under Title VII of the Civil Rights Act of 1964, 42 U.S.C.
2000e et seq.  See Boieru v. Cuyahoga County Library Union, 46 Empl.
Prac. Dec. (CCH) Paragraph 38,059, at 52,522-52,523 (N.D. Ohio 1988)
(denying union's challenge to a Title VII plaintiff's theory of
successor union liability and applying same principles applicable to
successor employer liability under the NLRA);  EEOC v. Sheet Metal
Workers Int'l Ass'n, Local Union No. 10, 46 Empl. Prac. Dec. (CCH)
Paragraph 37,846, at 51,322 (S.D.N.Y. 1988) ("(T)he union (defendant
in this Title VII race discrimination case) argues that the general
principles for a determination of successorship which have been
applied to corporations are not applicable to unions.  This argument
is without merit.");  Burwell v. Eastern Air Lines, Inc., 394 F. Supp.
1361, 1369 (E.D. Va. 1975) (finding a "genuine issue of material fact
as to the successor status" of a union local in an action under Title
VII for a violation allegedly committed by its predecessor).  Our
research has not discovered any decision in which a court has rejected
union successor liability.

   /6/ The risks in automatically exculpating involuntary successors
are illustrated by the background and subsequent history of Local 28,
Sheet Metal Workers' Int'l Ass'n v. EEOC, 478 U.S. 421 (1986).  Local
28 had been found guilty of egregious violations of Title VII by
discriminating against nonwhite workers in recruitment, selection,
training, and admission to the union.  This Court affirmed the lower
courts' orders providing for substantial race-conscious relief.  On
remand (EEOC v. Sheet Metal Workers Int'l Ass'n, Local Union No. 10,
46 Empl. Prac. Dec. (CCH) Paragraph 37,846 (S.D.N.Y. 1988)), another
union local -- Local 10, which had also been found guilty of violating
Title VII -- merged into Local 28 by order of the International union.
 When the beneficiaries of the judgment against Local 10 sought relief
against Local 28 as a successor union, Local 28 countered that the
merger of Local 10 into it was involuntary and stemmed from actions by
the International union -- just as petitioner argues in this case.
The district court rejected the argument (id. at 51,328) on grounds of
policy:

      If I were to accept Local 28's argument that it is not the
      successor to Local 10, the victims of Local 10's alleged conduct
      would be subjected to the extinguishment of substantial rights.
      * * * Such a course of action would undermine Title VII and
      afford any union in a similar situation an easy out.  All they
      would need do is be merged into an "innocent" local, claim the
      merger was forced upon them, and contend that they had no
      notice.

   /7/ As the court below noted (Pet. App. 9), although "(t)he
Landrum-Griffin Act guarantees equal rights to all persons who have
fulfilled union membership requirements, 29 U.S.C. (Sections) 402(o),
411(a)(1)," it "does not prevent unions from reserving discretionary
power to refuse membership, Gavin v. Structural Iron Workers Local No.
1, 553 F.2d 28, 30-31 (7th Cir. 1977)." The International presumably
is free, if it desires, to accord its locals some discretion in
accepting transfers, in which case successor liability could have been
avoided.  There is thus no merit to petitioner's contention (Pet. 10)
that it would have violated federal law had it not accepted the Local
9639 transferees as members.

   /8/ Not per year, as the dissent assumed (Pet. App. 13-14) in
calculating that petitioner only would receive $800 per year from the
former Local 9639 members.

   APPENDIX