On Petition for Review of an Order of The National Labor Relations Board.
Fairchild, Chief Judge, Pell, Circuit Judge, and Noland, District Judge.*fn* Pell, Circuit Judge, dissenting.
These companion cases are before the Court on the petition of Kable Printing Company to review separate orders of the National Labor Relations Board dismissing charges asserting unfair labor practices by the individual local unions herein. In the first case (hereinafter Kable 1) the petitioner disputes the Board's finding that the economic pressure asserted by the intervening union, Local No. 245, Graphic Arts International Union, against the secondary employer, Graphicscans Corporation, was not prohibited by the secondary boycott provisions of the National Labor Relations Act because Graphicscans was an "ally" of Kable.*fn1 In the second case (hereinafter Kable 2), petitioner contests the Board's conclusion that the alliance between Kable and S & M Rotogravure Service, Inc., a secondary employer, insulated the intervening union, Local No. 245, Graphic Arts International Union, from charges that it likewise violated Section 8(b)(4) of the Act.
An explanation of Kable's production capabilities and the dispute which gave rise to the strike of Kable's G.A.I.U. affiliate rotogravure pressmen, Local 91-P, were set forth in Blackhawk Engraving Co. v. National Labor Relations Board, 540 F.2d 1296 (7th Cir., 1976), and need not be recounted here. The strike posed immediate contract problems for petitioner, i.e., Kable faced the loss of several major accounts unless it could find an alternative means of producing the rotogravure press work required by those customers including American Home, the customer involved in Kable 1, and Oklahoma Tire and Supply Company (OTASCO), the customer involved in Kable 2.
The Board found Kable's solution was to devise an arrangement whereby American Home placed an order for the front-end rotogravure work with Graphicscans Corporation of Schiller Park, Illinois and OTASCO likewise placed a similar order for pre-press rotogravure work with S & M Rotogravure Service Inc. of New Berlin, Wisconsin. The Board concluded that the Graphicscans-Kable relationship and the S & M-Kable relationship went beyond the neutrality demanded of secondary employers in primary labor disputes. As allies both Graphicscans and S & M were found to be subject to their respective rotogravure union's pressure to induce them not to perform Kable's struck work.
The sole issue presented on appeal of both cases herein is whether substantial evidence on the record as a whole supports the Board's dismissal of the unfair labor practice charges against the unions. For the reasons set forth hereinbelow, we hold the Board correctly found petitioner arranged alliances with Graphicscans and S & M thereby insulating the intervening unions from the secondary boycott provisions of the Act.
In Blackhawk we fully discussed the standard applied on review of National Labor Relations Board orders, the ally defense to the secondary boycott prohibitions of the Act, and a customer's right to resort to self-help without benefiting the primary employer when the latter is confronted by striking employees. To briefly review, the ally doctrine permits a union to utilize economic pressure against a neutral or secondary employer not a party to the primary labor dispute whenever the secondary has entangled himself in the vortex of the primary's labor dispute. National Woodwork Manufacturers Assn. v. National Labor Relations Board, 386 U.S. 612, 627, 87 S. Ct. 1250, 18 L. Ed. 2d 357 (1967). Applying the classic formula derived in Douds v. Metropolitan Federation of Architects, etc., 75 F. Supp. 672 (S.D. N.Y. 1948) and National Labor Relations Board v. Business Machine and Office Appliance Mechanics, etc. (Royal Typewriter), 228 F.2d 553 (2nd Cir. 1955), cert. denied, 351 U.S. 962, 76 S. Ct. 1025, 100 L. Ed. 1483 (1956), we held the ally doctrine applies (1) where the secondary employer performs work which but for the strike would have been completed by the striking employees and (2) the work assists the primary employer in avoiding the economic impact of the strike just as though the primary employer had imported strikebreakers onto his own premises. We recognized, however, that a secondary employer does not enter into an alliance with the struck primary when the impetus for the arrangement whereby the secondary performs the work comes solely from the customer of the struck primary and the otherwise struck work is not performed for the benefit of the primary employer.
Kable rests its contention that the Board erred in finding alliances with Graphicscans and S & M on two theories: First, no evidence of a direct arrangement between Kable and the two secondary employers can be found in the record; second, Kable's customers, American Home and OTASCO, resorting to self-help, engaged and paid for the services of Graphicscans and S & M respectively.
We do not agree with the petitioner. As we stated in Blackhawk, direct evidence of an arrangement between a primary and secondary employer will almost always be wanting in ally cases. Each case turns on its own facts and the Board may properly infer the existence of an alliance from indirect evidence. Who pays for the work is only one factor to be considered by the Board. Otherwise, a well-counseled struck primary could avoid the strictures of the ally doctrine through the simple ruse of customer payment for the performance of struck work.
After reviewing the evidence in both cases, which is summarized below, we conclude the Board properly found the existence of an alliance between Kable and Graphicscans in Kable 1 and between Kable and S & M in Kable 2.
In Kable 1, petitioner at the time of the strike had engaged in contract renewal negotiations with the American Home Publishing Company for the production of American Home magazine. By late June 1974, the parties had agreed in principle to a five-year contract commencing with the October 1974 issue of American Home. The entire magazine was to be rotogravure printed with Kable responsible for all services required for production.
Faced with the prospect of losing a major account due to the strike of its rotogravure pressmen, petitioner attempted to directly negotiate with Graphicscans for performance of the rotogravure work on the American Home job. Graphicscans refused the work because of the struck work clause in its collective bargaining agreement with Local 245 (G.A.I.U.).*fn2
Undaunted by this setback, Kable decided to devise an arrangement whereby its customer would place the order for the rotogravure work directly with a secondary employer thereby permitting Kable to reap the financial benefits of its production contract. The existence of this scheme was confirmed by a June 14, 1974 memo from the ...