Golden State Bottling Co., Inc. v. NLRB
414 U.S. 168 (1973)

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U.S. Supreme Court

Golden State Bottling Co., Inc. v. NLRB, 414 U.S. 168 (1973)

Golden State Bottling Co., Inc. v. NLRB

No. 72-702

Argued October 11, 1973

Decided December 5, 1973

414 U.S. 168

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 the National Labor Relations Board (NLRB) had ordered Golden State, "its officers, agents, successors, and assigns" to reinstate with backpay a driver-salesman whose discharge by Golden State was found to have been an unfair labor practice. In a subsequent back-pay specification proceeding to which both firms were parties, upon finding that All American, after the acquisition, continued the business without interruption or substantial change in operations, employee complement, or supervisory personnel, and that, hence, All American, having acquired the business with knowledge of the outstanding NLRB order, was a "successor" for purposes of the National Labor Relations Act (NLRA) liable for the reinstatement of the driver-salesman with backpay, the NLRB ordered All American to reinstate him and both firms jointly or severally to pay him a specified sum of backpay. The Court of Appeals enforced the order.

Held:

1. The Court of Appeals did not err in determining that, on the record as a whole, substantial evidence supported the NLRB's finding that All American purchased the business with knowledge of the unfair labor practice litigation, since it cannot be said on the basis of the record that the Court of Appeals "misapprehended or grossly misapplied" the standard of review. Universal Camera Corp. v. NLRB,340 U. S. 474. Pp. 340 U. S. 172-174.

2. The issuance of a reinstatement and backpay order against a bona fide successor that did not itself commit the unfair labor practice does not exceed the NLRB's remedial powers under § 10(c) of the NLRA, since such powers include broad discretion to fashion and issue such an order in order to achieve the ends and effectuate the policies of the Act. Pp. 414 U. S. 175-177.

Page 414 U. S. 169

3. Federal Rule Civ.Proc. 65(d), which provides that injunctions and restraining orders shall be binding only upon the parties to the action, their officers, agents, servants, employees, and attorneys, and upon those persons in active concert or participation with them who receive actual notice of the order, does not bar judicial enforcement of the NLRB order running to All American, since a bona fide successor, acquiring, with knowledge that the wrong remains unremedied, the employing enterprise which was the locus of the unfair labor practice, may be considered in privity with its predecessor for purposes of Rule 65(d). Pp. 414 U. S. 177-181.

4. The NLRB properly exercised its discretion in issuing the order against All American by striking an equitable balance among the conflicting legitimate interests of the bona fide successor, the public, and the affected employee for purposes of effectuating the national labor policies of avoiding labor strife, preventing a deterrent effect on the exercise of rights guaranteed employees by § 7 of the NLRA, and protecting the victimized employee, such policies being achieved at a relatively minimal cost to the bona fide successor. Pp. 414 U. S. 181-185.

5. The NLRB did not err in ordering both firms jointly or severally to pay the driver-salesman a specified sum of backpay, since an offending predecessor employer should at least be required to make the dischargee whole for any loss of pay suffered by reason of the discharge until such time as he secures substantially equivalent employment, since joint and several liability will more fully insure that the employee is fully recompensed by protecting him against, e.g., the successor's insolvency, and since the possibility that the successor will unjustifiably delay reinstatement to the predecessor's prejudice can be met by a protective provision in the contract of sale. Pp. 414 U. S. 186-187.

6. The fact that the driver-salesman, but for his discharge as an ordinary employee would, under Golden State's policy, have become a distributor about a year later, and, as an independent contractor, would have been excluded from NLRA coverage, did not preclude the NLRB from including in the gross backpay computation the dischargee's putative earnings as a distributor, since a reinstatement and backpay order is aimed at restoring the status quo that would have obtained but for the employer's unfair labor practice. Pp. 414 U. S. 187-189.

467 F.2d 164, affirmed.

BRENNAN, J., delivered the opinion for a unanimous Court.

Page 414 U. S. 170

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