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Moore-Duncan ex rel National Labor Relations Board v. Aldworth Company

December 20, 2000


The opinion of the court was delivered by: Simandle, District Judge




This matter comes before the Court upon a petition by the Regional Director of the National Labor Relations Board ("NLRB" or "Board") for a temporary injunction pursuant to section 10(j) of the National Labor Relations Act (the "Act"), as amended, 29 U.S.C. § 160(j). The petition follows the issuance of an unfair labor practice complaint under section 10(b) of the Act alleging that respondents Aldworth Company ("Aldworth") and Dunkin' Donuts Mid-Atlantic Distribution Facility ("Dunkin' Donuts") have engaged, and are engaging in, unfair labor practices within the meaning of sections 8(a)(1), (3) and (5) of the Act by dissuading and/or coercing employees from unionizing, suspending or firing workers suspected of union involvement, and by refusing to negotiate with a duly elected majority collective bargaining unit at the Dunkin' Donuts Mid-Atlantic Distribution Facility in Swedesboro, New Jersey.

At the hearing on the issues raised by this petition and the answers thereto, all parties were afforded full opportunity to be heard, to examine and cross-examine witnesses, to present relevant evidence, and to argue on the evidence and the law. The Court heard final oral argument on this matter five weeks later. This Court has reviewed the extensive record in this case, including the transcripts of proceedings and other evidence before Administrative Law Judge William G. Kocol, and Judge Kocol's Opinion of April 20, 2000, detailing his findings that the respondents had committed substantial unfair labor practices surrounding union organizing activities and a certification election conducted September 19, 1998. The essential issue under section 10(j) is whether this Court should grant a temporary injunction compelling the respondents to take steps to ameliorate their alleged unfair labor practices pending final determination by the NLRB upon review of ALJ Kocol's decision.

Respondents urge this Court to deny the request for a 10(j) injunction. As a preliminary matter, respondent Dunkin' Donuts denies knowledge of or responsibility for any unfair labor practices carried out by Aldworth, claiming that Aldworth at all times was the sole employer of the workers involved in this case. The Court accordingly must decide whether Aldworth and Dunkin' Donuts are "joint employers" for the purposes of the Act. For reasons discussed in Part II below, the Court finds that the respondents are joint employers, and are jointly liable for any unfair labor practices committed.

Having determined that the respondents are joint employers, the Court must then determine whether the NLRB has satisfied the two-pronged test for 10(j) relief: (1) whether there is reasonable cause to believe the respondents engaged in unfair labor practices; and (2) whether the requested relief--which includes reinstating suspended and/or fired workers, setting aside the prior certification election, and the imposition of a mandatory bargaining order--is just and proper. As discussed below, the Court finds that the petitioner has satisfied both prongs, and will grant the requested injunctive relief.


The NLRB seeks to compel both Dunkin' Donuts and Aldworth to bargain with the union representing workers at the Dunkin' Donuts Mid-Atlantic Distribution facility in Swedesboro, NJ. The issue of whether Dunkin' Donuts and Aldworth are "joint" employers of these workers is a significant one. Where two employers are found to occupy joint employer status, both are required to bargain with a union representing the employees, and thus the joint employer determination governs whether an injunctive order from this Court applies to one or both of the respondents. See Capitol-EMI Music, 311 NLRB 997 (1993), enforced, 23 F.3d 399 (4th Cir. 1994). In joint employer cases, the inquiry focuses on determining which of the two, or whether both, of the employers control the labor relations of a unit of employees. NLRB v. Condenser Corp. of America, 128 F.2d 67 (3d Cir. 1942). Where it can be shown that two entities share or co-determine essential matters of employment, both are joint employers. See NLRB v. Browning Ferris Indus., 691 F.2d 1117, 1124 (3d Cir. 1982). With these principles in mind, the Court turns to consider the facts relevant to the joint employer issue.

A. The Respondents' Functions

Respondent Dunkin' Donuts is a nonprofit purchasing and delivery cooperative that operates for the benefit of the individual owners and franchisees of Dunkin' Donuts retail stores. The owners of the retail stores pay a fee to use the services provided by Dunkin' Donuts, and the owners of the member retail shops collectively are the owners of Dunkin' Donuts. (ALJ Dec. at 5.) *fn1 There are about 970 retail members in about 1,200-1,400 retail stores. (Id.) Dunkin' Donuts maintains a distribution facility located in Swedesboro, NJ, where it stores, sells, and trucks goods and products to retail outlets in the Mid-Atlantic region. (Id. at 6) The Swedesboro facility ships a total of about 4.2 million pounds of product annually. (Id. at 5.)

Dunkin' Donuts has personnel both in Massachusetts (its home state) and at the Swedesboro facility. Craig Setter is the president of Dunkin' Donuts. Michael Shive is the distribution facility manager for the Swedesboro plant, and is responsible for the warehousing functions of facility maintenance, building and grounds maintenance, and slot location. He creates, maintains, and manages the budget covering all warehouse and transportation functions. (Id.) Reporting to Shive are Thomas Noble, the transportation manager, and Warren Engard, the warehouse supervisor. (Id.)

Dunkin' Donuts also employs customer service representatives ("CSRs") at the Swedesboro facility. These employees take weekly orders from the retail shops, and make necessary adjustments to drivers' delivery routes. For example, an unusually large order may require placing the store on another delivery route or scheduling an additional delivery. Once the CSR makes the adjustment, he or she then prints the manifests used by the drivers. (Id.)

Respondent Aldworth is a company in the business of leasing drivers, warehouse workers, and other relevant employees to firms whose business involves transporting goods. Kevin Roy, executive vice-president, and Wayne Kundrat, director of operations, work out of Aldworth's main office in Lynnefield, MA. Aldworth employs about 1,500 employees in about 24 states, and provides services to about 25 businesses, including Dunkin' Donuts. (Id.) At the Swedesboro facility, Aldworth employs about 130-140 employees, consisting of about 63 drivers, 40-45 warehouse employees, and 30-40 driver helpers. (Id. at 6.) Aldworth also employs a number of supervisors at the facility.

The duties of the employees at the facility mainly involve packing stock and delivering merchandise to individual Dunkin' Donuts Shops. Warehouse workers select merchandise from stock according to the invoices supplied by the CSRs, and load the stock onto waiting trucks. Truck drivers then deliver the merchandise to the retail stores where, with the assistance of drivers' helpers, they unload and store the merchandise. (Id.)

B. Uniforms

Aldworth provides the uniforms worn by the employees. The standard uniform is comprised of a tan long-sleeved shirt with a Dunkin' Donuts logo patch, and the words "contractor for" appearing in small type above the logo. (Id.) Workers are also issued T-shirts for wear in the summer months. These T-shirts simply bear the name Dunkin' Donuts. (Id.) The trailers used by Aldworth drivers to ship the merchandise to the retail shops are owned by Dunkin' Donuts and bear pictures of doughnuts and other Dunkin' Donuts products. The costs for the uniforms are passed through Aldworth and onto Dunkin' Donuts as part of their cost-plus contract, by which Dunkin' Donuts repays Aldworth for the costs of the workers' labor, plus an additional fee for Aldworth's services. The minimal size of the "contractor for" language, and the overall appearance of the uniforms, allows the inference that both the public and the employees had grounds to believe that the workers are jointly employed by Aldworth and Dunkin' Donuts.

C. Employees' Wages & Benefits

Under the cost plus arrangement, in return for Aldworth's provision of personnel to staff the warehouse and deliver goods, Dunkin' Donuts pays Aldworth for the employees' wages and services, plus an additional fee for Aldworth's services. Aldworth pays the employees wages and benefits, maintains workers' compensation insurance, withholds taxes, and keeps records. (Id. at 7.)

Under this contract, Aldworth nominally makes hiring and firing decisions, but it is clear that Dunkin' Donuts, not Aldworth, controls the workers' wages. By setting limits on the extent to which it will reimburse Aldworth for wages paid, Dunkin' Donuts effectively dictates what the workers' pay will be. (Id.)

The structure of the employees' compensation plan also reflects the extent of Dunkin' Donuts' involvement. Dunkin' Donuts personnel actually generate the payroll records, and Dunkin' managers Shive or Knoble authorize the payroll. (Id. at 11.) Among the benefits provided to Aldworth employees is a 401(k) plan which is the same plan provided to Dunkin' employees. The plan identifies Dunkin' Donuts as the administrator of the plan, and lists Dunkin' Donuts as "your employer". Questions that Aldworth employees have regarding the 401(k) are answered by Dunkin' Donuts personnel.

Based on the foregoing, the record establishes that Dunkin' Donuts had de facto power to set Aldworth employees' wages and benefits. This finding adds to Dunkin' Donuts status as a joint employer.

D. Dunkin' Donuts' Hiring/Firing/Discipline Power at the Facility

In addition to involvement in setting employees' wages and schedules, Dunkin' Donuts also exercised control over multiple hiring, firing, and disciplinary decisions made at the facility. For example, ALJ Kocol found that Dunkin' Donuts directors and Aldworth made what seemed to be a joint decision to hire Daniel Hoffman for the position of field supervisor. Hoffman had separate interviews with Dunkin' Donuts facility directors Shive and Knoble and then-Dunkin' Donuts president Phil Reeves before he was given the job. (Id. at 9.)

Dunkin' Donuts managers frequently had a hand in hiring drivers. The record shows that Knoble, Dunkin' Donuts transportation director at the facility, occasionally personally administered road tests taken by driver applicants. On several occasions Knoble told applicants that they would be hired so long as they passed a drug test. On other occasions, Knoble expressed displeasure with an applicant and that applicant would not be hired. (Id. at 10.)

Dunkin' Donuts supervisors also played a role in hiring warehouse workers. After Frank Fisher, a previous Aldworth operations manager, finished interviewing applicants, he would routinely bring them to Dunkin' Donuts warehouse supervisor Warren Engard, who asked the applicant questions and had them perform a mock inventory selection process. Afterwards, Fisher would ask Engard what he thought of the applicant and Engard would give his opinion. Engard's involvement is tempered somewhat by evidence that Fisher did not always agree with Engard and occasionally hired an employee over Engard's objection. (Id.)

Dunkin' Donuts' influence over personnel decisions is also evident in employee Hoffman's termination from the position of field supervisor. According to Hoffman, in May 1998 he was summoned to a meeting with Dunkin' Donuts managers Knoble and Shive, and Craig Setter, who had replaced Reeves as president as president of Dunkin' Donuts. Setter informed Hoffman that the Dunkin' Donuts board had voted four to three to abolish Hoffman's position. Hoffman reminded them that he had been promised that he would be allowed to return to work as a driver if the position was abolished, and he subsequently went back to work in that capacity. There is no evidence that Hoffman dealt with any Aldworth supervisor concerning his return to the position of driver. (Id. at 11.)

Finally, the record includes evidence that Dunkin' Donuts was involved in disciplining and terminating employees at the facility. Fisher admitted that he regularly consulted with Dunkin' Donuts managers concerning termination decisions. Furthermore, the record contains evidence that Engard personally fired at least one employee. (Id.) Hoffman testified that Knoble frequently told him that employees should receive unpaid days off for infractions, and that he always carried out these instructions. (Tr. 800, 802-03, 861; GCX-40.) Knoble disciplined Leo for bad driving, and suspended employee Puig. (Tr. 567, 661-63.) Shive sent warehouseman Ron Matczak home when he refused to abide by Dunkin's dress code by wearing shorts. (ALJ Dec. at 25.; Tr. 1190.) Knoble also personally completed forms triggering discipline based on complaints by customers, retail outlets, or other driver misconduct. (Tr. 3000; GCX-58, 58A&B; ALJ Dec. at 25-27, 29-31). *fn2

The record thus establishes that Knoble and other Dunkin' managers were deeply involved in personnel matters at the Swedesboro facility. Based on this evidence, the Court finds that Dunkin' Donuts played a crucial role in hiring and firing, and a significant role in disciplining, Aldworth employees.

E. Dunkin' Donuts' Scheduling Responsibilities

The record also shows that Dunkin' Donuts plays an active role in the creation of delivery routes, the assignment of drivers to those routes, and the creation of shift times and shift sequences at the facility. For example, when a route became open after driver Leo Leo was fired, driver Farnsworth asked Knoble whether he could switch to Leo's route. Knoble told Farnsworth that he could have the route so long as he could finish the route as fast as another driver who wanted it. No Aldworth supervisors were involved in these discussions. (Id. at 13.) Generally, when a driver wanted his route or schedule adjusted, they dealt directly with Dunkin' manager Knoble. Knoble also had apparent authority to adjust the start or delivery times on routes, assigned particular tractor rigs to drivers, and gave them special assignments as business demands required. (Id. at 13-14.) These facts show that Dunkin' Donuts had a direct and significant role in determining Aldworth employees' day to day schedule and work assignments.

F. Interpretation of Government Regulations

Under relevant federal DOT regulations, Dunkin' Donuts is listed as the carrier or employer at the facility. (Id. at 8.) Dunkin' Donuts maintains the drivers' annual reviews, drivers' logs, and other data showing compliance with DOT rules and regulations. Dunkin' manager Knoble had the final word on how the DOT regulations were to be interpreted, and it was Knoble who worked with the drivers to figure out how to complete deliveries in the event that an hours-on-the-road regulation mandated that the driver return to the facility before his route was completed. (Id. at 9.) The fact that Dunkin' Donuts had the final say in keeping the drivers in compliance with the DOT regulations adds to Dunkin's status as joint employer.

G. Analysis

The respondents' arguments that they are not joint-employers are belied by copious record evidence showing that Dunkin' Donuts had a pervasive and substantial role in setting the workers' responsibilities and benefits, and controlled many day-to-day aspects of their employment.

For instance, Dunkin' Donuts in large part determined the wages and benefits of Aldworth employees, and it applied its own 401(k) plan to Aldworth employees. Further evidence of Dunkin' Donuts' involvement is seen in Dunkin' manager Knoble's significant role in deciding which driver applicants were hired, fired, and disciplined, as well as Knoble's direct involvement in assigning work and equipment to the employees.

The test for determining joint employer status, as expressed in the Supreme Court decision of Boire v. Greyhound Corp., 376 U.S. 473, 481 (1963), is whether evidence shows that the putative employers share or co-determine those matters governing essential terms and conditions of employment. If there is such a showing, then they constitute joint employers within the meaning of the NLRA. NLRB v. Browning-Morris Indus., Inc., 691 F.2d 1117, 1124 (3d Cir. 1982). As discussed above, the NLRB has pointed to abundant evidence showing that Dunkin' Donuts shared or co-determined a large number of the matters governing the essential terms and conditions of Aldworth's employees work at the facility. Based on this evidence, the Court concludes that Dunkin' Donuts and Aldworth were "joint employers" of the employees at the facility within the meaning of the NLRA. Accordingly, any 10(j) injunctive order from this Court will apply to both respondents. *fn3


In February 1998, Peg Michalowski, an organizer for United Food and Commercial Workers Union Local 1360 a/w United Food and Commercial Workers International Union, AFL-CIO ("the union"), approached her nephew, Kenneth Mitchell, about the possibility of organizing employees at the facility. Mitchell gave Michalowski a list of employees and their telephone numbers, and the union used the list to obtain the employees' addresses. (Tr. 141, 1216.)

From early March through early September 1998, Michalowski and other union organizers began visiting employees at their homes. During these visits, organizers discussed the collective bargaining process, and explained that by signing the provided election cards, the employees were authorizing the union to represent them for the purposes of collective bargaining. The organizers explained that once the union obtained a majority of the cards signed, they would file a petition with the NLRB to have the collective bargaining unit certified. (ALJ Dec. at 37.) As the organizing effort picked up steam, several of the facility's drivers and warehouse employees began actively organizing from the inside. Among the most active employees in this effort were drivers Mitchell, Leo, and McCorry. Cards were signed by drivers en route to Dunkin' Donuts stores and during union meetings with employees on Saturdays. As described more fully below, Aldworth responded to the organizing activity by holding a series of meetings with employees about the union beginning in April 1998.

By letter dated June 16, 1998, the Union formally notified Aldworth of an organizing effort in a unit comprised of truckdrivers, helpers, and warehouse employees. The letter also protested alleged unfair labor practices committed by Aldworth. By letter dated June 18, Aldworth denied committing any unfair labor practices.

On July 28, 1998, the Union filed a petition for an election indicating that it had the support of a majority of workers within a proposed bargaining unit that included drivers' helpers. This petition was withdrawn and the union then filed two new petitions on August 11, 1998. One sought to represent the drivers and warehouse workers and the second to represent the helpers. The second petition was later withdrawn.

On August 12, 1998, Aldworth and the Union entered into a Stipulated Election Agreement that provided for an election in the following unit of employees:

Included: Regular and full-time drivers, warehouse employees, yard jockey(s), maintenance employee(s) and warehouse trainees.

Excluded: All other employees, guards and supervisors as defined by the Act. (Id. at 37-38.)

This class excluded drivers' helpers as an accommodation to Aldworth's objection to their inclusion. An election was conducted on September 19, 1998, and the union lost by a vote of 45 to 48 with one challenged ballot. The union timely filed objections to the conduct of the election and filed a complaint with the NLRB in April 1999.

The Board took up the union's complaint, and alleged that the pre-election meetings were designed to intimidate the employees and to dissuade them from electing the union, thus constituting unfair labor practices within the meaning of section 8(a)(1) of the Act. The Board also alleges that respondents disciplined and/or fired several employees because of their union affiliation in violation of section 8(a)(3) of the Act. Finally, the Board alleges that respondents unlawfully refused to bargain with the employees' duly elected collective bargaining representatives, in violation of section 8(a)(5) of the Act.

Hearings on this matter took place before an NLRB administrative law judge in the Summer and Fall of 1999. After the conclusion of these proceedings, on April 20, 2000, Administrative Law Judge William G. Kocol issued an Opinion thoroughly detailing his findings of fact and conclusions of law. Judge Kocol ordered, among other things, that the election narrowly rejecting unionization be set aside, that respondents must reinstate several employees unlawfully terminated, and that respondents must bargain with the union ...

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