Court Opinion

ID: 8879070
Source: CourtListenerOpinion
Date Created: 2022-11-26 20:00:53.90436+00
Date Added: 2024-06-11T17:06:32.545379
License: Public Domain

HAYNSWORTH, Chief Judge
(concurring) :
I generally join the judgment of the court, but not without some misgivings springing principally from the conduct of the independent stockholders and directors.
I have no doubt that any executive in the position of Roger Milliken would not have approached the closure of Darling-ton, whether or not a union was in the picture, without careful thought to the effect of the closure upon employees of other mills under his general management. Anything less would have been managerial imprudence. In light of the proof of his purpose to avoid unionization elsewhere, therefore, I can readily accept the finding that he expected Darlington’s closure so soon after the election *775to serve the purpose of a dramatic warning to employees of other mills.
The difficulty in accepting the Board’s other findings, for me, stems principally from the concurrence of Darlington’s independent directors and stockholders, for they had no discernible interest in labor relations at other mills. Two of the directors were truly independent. One of them was a former treasurer of Darlington, but he was then retired and resident in the town of Darlington, while the other was a Darlington businessman without even a former history of employment by any Deering-Milliken related enterprise. Those directors, as directors, and they and other independent stockholders representing a third of the outstanding stock, were totally unconcerned with Milliken’s present or prospective managerial problems in other mills. Their only interest was that of Darling-ton’s stockholders, qua stockholders, except that those two directors and other stockholders resident in Darlington may have been influenced against the closure by its adverse impact upon other businesses in that small town. Their interest, therefore, indisputably was to oppose closure of the plant unless closure was dictated by the economic hopelessness of continued operation.
While Roger Milliken was the dominant individual in the management of all of the corporations, he had no power of control over the independent stockholders and directors on the question of plant closure. He could not ask them to sacrifice their financial interest for the sake of some anticipated advantage to Milliken elsewhere. Nor were they in a position of helplessness. If a purpose to chill unionization elsewhere was the procuring cause of the votes of the majority of the directors and of the Milliken stockholders, they committed a gross breach of their fiduciary duty to the minority stockholders, for which the courts provide injunctive and compensatory remedies. Armed with the weapons the minority had, there was no occasion for supine acquiescence; they had every incentive to fight for their own financial interest, and, if pointed toward continued operation of the mill, for the financial interests of their fellow townsmen.
If the independent, minority directors and stockholders, except those few dissenting stockholders, were convinced that subsequent operation of the mill was not in their economic interest, as they clearly were, it is difficult to ascribe a different controlling purpose to the majority. Closure of antiquated textile mills is far from unknown in the South as in the East, and everything in this record points to the conclusion that Darlington’s days were numbered. The capital improvement program does not militate against the conclusion, for the capital expenditures were concentrated in movable machinery, not in brick and mortar or in such equipment as air conditioning, in which installation charges constitute a large proportion of the cost, and cost recovery is dependent upon subsequent successful operation. The expenditures were entirely consistent with last efforts to retrieve a dying venture and contain no suggestion of a willingness to reconstruct the building to one of modern efficiency or to incur all of those other costs which would have been necessary to convert the plant to other fabrics which might have been sold profitably. In short, on this score, the only open question on the record appears to have been not whether Darlington might have survived, but when its demise would have occurred.
On the question of timing, however, it seems to me there is a basis in the record for the Board’s findings. No one contends that the relation. in time between the election and the decision to suspend operations was fortuitous or coincidence. It may be, as Darlington contends, that the election result simply made a bleak prospect more dismal, but the record is not devoid of support for the inference that Roger Milliken was substantially motivated to move when he did with a purpose to salvage what advantage he could from a dramatic example to the employees of other plants. It is clear that the independent directors *776would have made no such move at that time, for the subject of plant closure had not been discussed, and there is no showing that they had been shown the projections of the next year’s losses. To the extent, therefore, that Roger Milliken was influenced by his interest in labor relations at other Milliken controlled mills and that his actions may be said to have been prompted by mixed motives, consistent with each other, the inference that his concern about other plants was not insubstantial is not so tenuous as to warrant our rejection. There is room for a difference of opinion as to whether, without a thought of the other plants, he would have moved when he did or waited for the next regularly scheduled directors’ meeting. A leisurely approach to the avoidance of projected heavy losses is not to be expected but there is room in this record for the inference, drawn by the Board, that his action was more precipitate than it would have been had he been unconcerned about the employees of other plants.
The choice between permissible inferences, of course, is for the Board, not the Court, and, to the extent I have indicated, I think the inference the Board drew was a permissible one.
As the principle opinion notices, the duration of any back pay period has been left for determination in compliance proceedings, and there is no occasion for us to address ourselves to that matter, except that I would note that one cannot reconcile the emphatic evidence of the conduct of the independent directors and stockholders with any notion that Darlington had more than a very brief expectancy.
Finally, I would relieve Darlington of its joint obligation to discharge any back pay awards. It has liquid assets available for distribution to its stockholders subject to the payment of such awards. Equitably, a third of the fund belongs to the independent stockholders, who have committed no unfair labor practice. If an unfair labor practice was committed, as the Board found, it was committed by Roger Milliken and his associates for the supposed benefit and advantage of other Milliken enterprises, not in the least for the advantage of Darlington’s stockholders. I think Deering-Milliken should alone shoulder the burden of payment of any back pay award.