Document: 414 U.S. 168 94 S.Ct. 38 L.Ed.2d 388 GOLDEN STATE BOTTLING COMPANY, INC., et al., Petitioners,v.NATIONAL LABOR RELATIONS BOARD. No. 72—702. Argued Oct. 11, 1973. Decided Dec. 5, Syllabus Petitioner All American Beverages, Inc. (All American), purchased the soft drink bottling and distribution business of petitioner Golden State Bottling Co. (Golden State) after National Labor Relations Board (NLRB) had ordered State, 'its officers, agents, successors, assigns' to reinstate with backpay a driver-salesman whose discharge by was found have been an unfair labor practice. In subsequent back-pay specification proceeding which both firms were parties, upon finding that acquisition continued without interruption or substantial change in operations, employee complement, supervisory personnel, hence American, having acquired knowledge outstanding NLRB order, 'successor' for purposes Act (NLRA), liable reinstatement backpay, him jointly severally pay specified sum backpay. The Court Appeals enforced order. Held: 1. did not err determining that, on record as whole, evidence supported NLRB's practice litigation, since it cannot be said basis 'misapprehended grossly misapplied' standard review. Universal Camera Corp. v. N.L.R.B., 340 474, 71 456, 95 L.Ed. 456. Pp. 172—174. 2. issuance order against bona fide successor itself commit does exceed remedial powers under § 10(c) NLRA, such include broad discretion fashion issue achieve ends effectuate policies Act. 175—177. 3. Federal Rule Civ.Proc. 65(d), provides injunctions restraining orders shall binding only parties action, their servants, employees, attorneys, those persons active concert participation them who receive actual notice bar judicial enforcement running successor, acquiring, wrong remains unremedied, employing enterprise locus practice, may considered privity its predecessor 65(d). 177 181. 4. properly exercised issuing striking equitable balance among conflicting legitimate interests public, affected effectuating national avoiding strife, preventing deterrent effect exercise rights guaranteed employees 7 protecting victimized employee, being achieved at relatively minimal cost successor. 181—185. 5. ordering offending predecessor-employer should least required make dischargee whole any loss suffered reason until time he secures substantially equivalent employment, joint several liability will more fully insure is recompensed against, e.g., successor's insolvency, possibility unjustifiably delay predecessor's prejudice can met protective provision contract sale. 186—187. 6. fact driver-salesman, but his ordinary would, State's policy, become distributor about year later independent contractor would excluded from NLRA coverage, preclude including gross computation dischargee's putative earnings distributor, aimed restoring status quo obtained employer's 187—189. 9 Cir., 467 F.2d 164, affirmed. Morton B. Jackson, Los Angeles, Cal., petitioners. Norton J. Come, Washington, D.C., respondent. Mr. Justice BRENNAN delivered opinion Court. 1 principal question decision this case whether purchaser business, acquires continues has committed 2 Petitioners are Co., State), American). bought Kenneth L. Baker, practice.1 see 29 CFR §§ 102.52—102.59, carry changes method operation, personnel. circumstance, although unconnected Baker principles announced Perma Vinyl Corp., 164 N.L.R.B. 968 (1967), sub nom. United States Pipe & Foundary NLRB, 398 544 (CA5 1968).2 therefore net 187 1017 (1971). Ninth Circuit, one judge dissenting, (1972). We granted certiorari, 410 953, 93 1417, 35 685 (1973). affirm. 3 * There threshold erred 'offered support Board's (the business) litigation.' F.2d, 165. address mindful congressionally imposed limitation Court's review Appeals' determination: 4 'Whether there agency findings Congress placed keeping Courts Appeals. This intervene what ought rare instance when appears misapprehended misapplied.' 5 491, 466, 456 (1951). (Emphasis added.) 6 Thus limited, we find fault conclusion litigation. Eugene Schilling, secretary manager discharged then closely followed progress American's ownership title general 'president'. Indeed, purchase conditioned Schilling's staying managerial capacity; sales expressly stipulated Schilling 'shall agreed employed American) period Closing Date General Manager . ..' participated occasion president, Edwin Crofoot, sale negotations. Even if strict impute actually entered employ, Restatement (Second) Agency 9(3) (1958); Thomas Engine 179 1029, 1042 (1970), NAW 442 1180 (CA9 1971), governing appraising sufficiently inference informed prospective employer litigation before completion It true Crofoot testified hearing they completed. But trial examiner refused credit testimony light documentary inferred officials attempted conceal Board, 1021. also Crofoot's while asked pending, mention because forgotten it, admitting authorized payment fees connection it. Ibid. Finally, unexplained failure produce negotiators witnesses disclaimer knowledge.3 On state record, no justification intervention, precludes us substituting our judgment 'This place reverse tilting way rather than other Pitsburg S.S. 498, 503, 453, 479 (1951); Central Hardware 407 539, 548, 92 2238, 2243, 33 122 II 8 pursued uneven course treatment remedy practices predecessor. 1944 determined South Carolina Granite 58 1448, Blair Quarries, Inc., 152 25 (CA4 1945). 1947 abandoned view responsibility seller's purchase, Alexander Milburn 78 747. When, however, two enforce successors Birdsall-Stockdale Motor 208 234 (CA10 1953), Lunder Shoe 211 284 (CA1 1954), 1954, re-examined overruled declaring Symns Grocer 109 346, '(n)o (National Relations) authorizes impose remedying engage therein.' Id., 348. 1967, yet another turnabout, Vinyl, supra, circumstances defined, n. 2, predecessors. must consider outset exceeds Act, U.S.C. 160(c). Section 10(c), pertinent part, provides: 10 'If preponderance taken person named complaint engaged cause served requiring cease desist take affirmative action back pay, 11 restrictive derived perceived inhere words 'any practice' (emphasis added). These regarded precluding authority persons, like perpetrated broader section authorizing 'to Act.' construed granting 'broad administrative power frame not, course, restricted alone,' 969, necessary further public interest subserved See Colten, 105 (CA6 1939). 12 agree relief adequate ends, policies, Early on, recognized limit perpetrator thereby prevent himself unlawful act. case, runs 'officers, employer, applied, new 'merely disguised continuance old employer,' Southport Petroleum 315 100, 106, 62 452, 86 718 (1942), "in appropriate (to) whom transferred, means evading reasons." Regal Knitwear 324 9, 14, 65 478, 481, 89 661 (1945) added); Ozark Hardwood 282 1, (CA8 1960). If 'person do restrict assigns how read protect run evader purchaser, act evasion obligated Construing thus grant results reading section, read, "the provisions law, object policy." Mastro Plastics 350 270, 285, 76 349, 359, 100 309 (1956); Lion Oil 352 282, 288, 77 330, 333, 331 (1957). 13 argued, Fed.Rule event, illegally disagree.4 65(d) 'binding personal service otherwise.' generally O. Fiss, Injunctions 691—700 reject petitioners' contention supports argument successors. Knitwear, application strike phrase 'successors citing Walling James V. Reuter, 321 671, 64 826, 88 1001 (1944), involved injunction violation Fair Standards treated cease-and-desist 'somewhat analogous' injunction, stated: 14 "Not enforcible contempt proceedings corporation, agents officers individuals associated conduct also, circumstances, reasons.' 15 'We undertake decide kind assign (W)hether brings 'successor assign' depends appraisal relations behavior mere construction terms order.' U.S., 14—15, 481. 16 Plainly then, recognizes all themselves employers. simply left open purchaser. answer today holding case. 17 'is common-law doctrine decree binds defendant identified interest, 'privity' them, represented subject control.' Persons acquiring property bound by, entitled benefit of, judgment, despite lack knowledge. Judgments 89, comment c (1942); Story, Equity Jurisprudence 536 (14th ed. 1918). principle limited rem quasi proceedings. Judgments, d; ICC Western N.Y. P.R. 82 F. 192, 194 (W.D.Pa.1897). apply here 'Courts equity may, frequently do, go much farther give withhold furtherance accustomed private involved.' Virginia R. System Federation, 300 515, 552, 57 592, 601, 81 789 (1937); 674 675, 827. hold Cf. Hall, 472 261, 266—267 1972); Rivera Lawton, 823 1929); Dean Rubber Mfg. F.Supp. 96 (WD Mo.1946); Gilpin Wilmore, Colo. 68 P.2d 34 Moore, Practice 65.13, p. (2d 1973). 18 Our contravenes policy underlying 'order(s) injunction(s) so punishable independently adjudged according law.' 13, 481; Alemite Staff, 42 832 (CA2 1930). tie between supplied continuing enterprise, establishes requisite relationship dependence. Moreover, procedures provide procedural safeguards. adjudication 'without affording (it) full opportunity hearing, notice, present responsible practices. (will) entitled, heard issued it.' 969. 19 denied due fair hearing. made party supplemental proceeding, given afforded opportunity, assistance counsel, contest successorship pendency purchase. 20 now turn American. decisional process line cases employee. What context here: 21 'The ultimate problem balancing interests. function often difficult delicate responsibility, primarily review.' Truck Drivers Local Union 449 International Brotherhood Teamsters, 353 87, 96, 643, 648, 676 22 introduced into emphasis protection employee: 23 'Especially need help, seems us, victims who, discharge, meaningful operation hands.' 24 think properly, observation John Wiley Sons, Livingston, 376 543, 549, 84 909, 919, 898 (1964): 'Employees ordinarily part negotiations leading corporate ownership. concern well-being advantage disadvantage, potentially great, inevitably incidental main considerations. objectives reflected established federal require rightful prerogative owners rearrange businesses even eliminate employers balanced some studden employment relationship.' 26 union sued 301 Management 1947, 61 Stat. 156, 185, compel arbitrate collective-bargaining agreement. agreement originally corporation subsequently merged genuine reasons. held disappearance contracting merger necessarily terminate could compelled arbitrate, long 'substantial continuity identity enterprise,' evidenced wholesale transfer 551, 915.5 27 Later, Burns Security Services, 406 272, 1571, 32 (1972), extended where original plant company, displaced different company. company hired majority bargain bargaining representative certified unit remained essentially unchanged. held, inasmuch 8(d) well legislative history laws, compelling substantive contractual obligations. 281— 284, 291, 1579, 1584. Similarly, bind union, might concessions previous 1582. 28 qualify holdings concluding strikes balance.6 When assets continued, change, retained understandably job situations unaltered. Under these perceive arising out continuation policies. To extent employees' expectation remedied, result unrest collective activity force action. identify activities. experience reasonably lead believe intent suppressing select most actively affairs, leadership vacuum unit. Phelps Dodge 313 177, 193, 845, 852, 85 1271 (1941). Further, unlike Burns, important opposed saddling obligations agreement, congressional militating imposition liability. Avoidance prevention 157, employee—all 141—are Since imposed, 'his potential matter price pays secure indemnity clause indemnify practices.' reinstated effectively perform, cause. 160(c).7 III 30 attacked directing contends most, 'should earned employ date wrongful termination January 31, 1968.' Brief 60.8 declined orally paid 'liable wages virtue absent agreement.' 166. obligation defenses challenge validity State. merit challenge. 31 justified words: 'With respect himself, obvious permit violator shed own disposing business. unlawfully transferring another, dischargees discharges employer.' 970. addition, him, insolvency injustifiably say 'striking (the) Teamsters 449, 648.9 IV August 16, 1963, driver-salesman. October 1964, began converting top driver-salesmen distributors, contractors, realized profits, deduction operating expenses, products resale customers. 1963. computed Baker's date. argue driversalesman ended distributors 'independent contractors' coverage 152(3). rejected contention, stating: 'However, undisputed discriminatorily Act's remedies thwarted within protections discrimination occurs promoted transferred position covered discriminated against. Bell Aircraft 206 235, 236 237 Cir. 1953).' add buttressed consideration 'restoring economic company's refusal H. Rutter-Rex 396 258, 263, 90 417, 420, 405 (1969).10 treats profits goes interim purpose computing 136 1342, 1350 (1962), 354 170 1965). effort restore proper compute distributor. Rice Lake Creamery 124 U.S.App.D.C. 355, 358, 365 888, 891 (1966); Mooney Aircraft, 375 402 1967). 36 Affirmed. June 10, violated 8(a)(3) (1) 49 amended, 158(a)(3) (1), discharging activities, 147 410. December 1965, Circuit Baker. 667. Due disposition petition rehearing portion court's unrelated final November 27, 1968, 401 454. states rationale follows: 'To 'objectives law,' persuaded operates guilty basically unchanged form charge charges conduct. 'In imposing unmindful operate However, equities significant factors account. Thus, 'It industry sought regulated brought corrective industrial peace.' substituted real insofar past concerned, Appropriate steps still effects erased reassured statutory rights. And over control best effectively. work hardship him. practices, became beneficiary unremedied Also, 968, 969 (footnotes omitted). See, Interstate States, 306 208, 226, 59 467, 83 610 (1939); Dorn's Transp. 706, 713 1969). A short appear future activity, injunctive ordered, considered. previously applicable mandatory noted courts appeals applied 'not prohibitory decrees well.' Longshoremen's Assn., 1291 Philadelphia Marine Trade 389 64, 75 201, 207, (1967); Developments Law—Injunctions, Harv.L.Rev. 994, 1061—1063 (1965). desist, prior 1029 UAW 1971). approach consistent arise earlier 747 (1947), desist. account decisions appeals, 234, opposing Milburn, eventually led overruling 346 (1954). DuRoss, Protecting Employee Remedial Rights Doctrine, 39 Geo.Wash.L.Rev. 1063, 1089 recognize situation law provided consolidation liable, 547—548, 912, rule sells latter debts liabilities, except impliedly agrees assume obligations; (2) merely selling corporation; (3) transaction escape W. Fletcher, Cyclopedia Corporations 7122—7123 (1961 rev. ed.); Kloberdanz Joy 288 817 (Colo.1968). perimeters labor-law successorship, narrowly confined. 7122 196 (Supp.1972); Slicker, Reconsideration Doctrine Employer Successorship—A Step Toward Rational Approach, Minn.L.Rev. 1051, 1062—1063 Successorship 'where purchases 453 269 1971); (and) entire McFarland, 219 1962) 306, 1591, (1972) (opinion Rehnquist, J.); id., 1584 Court). adopt mode analysis distinguish mergers, consolidations, attributable 'employing industry,' application. 179, 183 purchasing every unsatisfied Board. For example, hire 280 1578, tied agent involved. 280—281, 1578. court panel decision, Fifth enforcing Foundry 544, review, expressed approval. 1183 (Tuttle, J.). Commentators concurred. 4; Goldberg, Law Obligations Successor Employer, 63 Nw.U.L.Rev. 735 (1969); Comment, Employer's Obligation Remedy Unfair Practices, Col.L.Rev. 1602 (1968); N.Y.U.L.Rev. 1202 47 N.C.L.Rev. 459 41 Temp.L.Q. 156 Vill.L.Rev. 232 (1967). Although 412, concedes terminated obligation. New Madrid 215 908 1954). reliance Textile Workers Darlington 380 827 (1965), misplaced. Darlington, liquidation motivated antiunion animus, 273—274, 1001. four years apparent already complied employees. 6, supra.

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