Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Joseph A Barker, Regional Director v. A.D. Conner Inc. and Heidenreich ) Trucking Company

July 11, 2011


The opinion of the court was delivered by: Judge Robert M. Dow, Jr.


Before the Court is a petition for injunctive relief [4] pursuant to 29 U.S.C. § 160(j) ("10(j)")*fn1 filed by the Director of Region 13 for the National Labor Relations Board ("Petitioner"), against Heidenreich Trucking Company, as an alter ego of A.D. Conner Inc. ("Respondent"). For the reasons and in the manner explained below, Petitioner's request for a preliminary injunction is granted.

I. Background

This lawsuit concerns violations of the federal labor laws that allegedly took place at A.D. Conner Inc. ("Conner"), a fuel hauling company owned by William J. McEnery ("McEnery"). In October 2010, Conner shut down and a number of drivers and a major customer transferred to another (non-unionized) company owned by McEnery, Heidenreich Trucking Company ("Heidenreich").

On October 15,*fn2 the Truck Drivers, Oil Drivers, Filling Station and Platform Workers Union Local No. 142 ("Local 142"), an affiliate of the International Brotherhood of Teamsters, filed a charge with the National Labor Relations Board ("NLRB" or the "Board"). The same day, the Truck Drivers, Oil Drivers, Filling Station and Platform Workers Union Local No. 705 ("Local 705") filed an identical charge. Both Unions*fn3 filed identical amended charges with the Board on January 19, 2011, alleging that Respondent engaged in (and continued to engage in) unfair labor practices within the meaning of Sections 8(a)(1), (3) and (5) of the Act. On January 31, 2011, the Board consolidated the cases involving the Unions.

After a period of investigation, on March 8, 9, and 10, 2011, the parties conducted an administrative hearing before an administrative law judge ("ALJ") of the NLRB. At the hearing, the ALJ heard testimony from ten witnesses and received a number of documents into evidence. On June 24, 2011 (after the instant petition was fully briefed), the ALJ issued his decision, which Petitioner then filed with the Court [75] (hereinafter "ALJ Decision"). Among other things, the ALJ concluded the following: that (1) Heidenreich and Conner were alter egos of each other; (2) Respondents' conduct in threatening to close its facilities and soliciting employees to decertify their Unions violated Section 8(a)(1) of the Act; (3) Respondents violated Section 8(a)(5) of the Act by dealing directly with union-represented employees; and (4) Respondents violated Section 8(a)(5) of the Act by refusing to bargain with the Unions about the effects of their decision to shut down Conner. The ALJ ordered Respondent to cease and desist in its violations of the Act and ordered Respondent to take a number of affirmative actions, including re-hiring terminated employees, paying employees the wages they formerly received under the Union contracts (plus back-pay), and formally recognizing and bargaining with the Unions.

The following facts are those that are relevant to the instant petition, which requests that the Court enter temporary injunctive relief prior to the Board's ruling in the pending administrative action.*fn4

A. Background of the McEnery Entities*fn5

In 1993, McEnery created The William J. McEnery Revocable Trust (the "Trust"), of which he is the sole trustee. Tr. 584. At some point thereafter, McEnery transferred ownership of his various companies to the Trust. Currently, the Trust is the sole owner of Conner, Heidenreich, Gas City Ltd. (a chain of gas stations/convenience stores), and a number of other companies including WJM Leasing, LLC, McEnery Trucking and Leasing, LLC, and McEnery Enterprises, LLC. Tr. 584-586. McEnery is the president and secretary of all of these entities. Id. None of these entities have any other officers or directors. Id. 585-586. All of the entities engage in business operations that interrelate with Gas City in some fashion.

McEnery incorporated Conner in 1982. Out of all of the companies listed above, only Conner's employees ever belonged to a union. Before it shut down, Conner operated out of two locations, Frankfort, Illinois and Porter, Indiana. The larger location was Conner's headquarters in Frankfort. The employees at the Frankfort location belonged to Local 705, and the employees at the Porter location belonged to Local 142. In 2010, Conner employed 20 drivers in Frankfort and 15 in Porter. Conner's business mainly consisted of hauling gas to stations locally. Tr. 668-69. One of Conner's principal customers was Gas City. Conner's other customers included Jewel, Marathon, Speedway, Shell, and BP Amoco. Tr. 691-92.

McEnery testified that prior to the events in question, he had essentially removed himself from day-to-day operations of any of his entities.*fn6 Instead, David Christopher ("Christopher"), who is McEnery's son-in-law, managed the day-to-day operations at Conner. Tr. 664-65. Christopher's title was vice president of operations at Conner. Tr. 590. Christopher served as the "contact person" for Conner's relations with the Unions and was authorized to sign agreements with the Unions. Tr. 590-91.

An individual named Robert Heidenreich founded Heidenreich in 1986. The McEnery Trust bought Heidenreich in 2005, but Mr. Heidenreich remained involved in managing the business. Management testified that Heidenreich operated nationwide and mainly was in the business of hauling ethanol to and from refineries. Id. However, as discussed below, Heidenreich also hauled gas to local gas stations (namely, Gas City locations) on a regular basis. Heidenreich's business consisted solely of owner-operators; that is, Heidenreich's drivers owned their own trucks and were independent contractors of the company. Heidenreich's drivers never belonged to a union and were not "employees" of the company under the Act. Heidenreich operated out of the same Frankfort location as did Conner. Heidenreich also had a Porter location that was co-located with a Gas City outlet, but it appears that Heidenreich did not share its Porter location with Conner. See infra n.10.

Robert Heidenreich and Peter Casper managed Heidenreich and were in charge of the company's labor relations. However, both Casper and Mr. Heidenreich reported to McEnery, and McEnery admitted that he "made the ultimate decisions * * * for the company." Tr. 663; see also Tr. 668. Mr. Heidenreich left the company sometime in the fall of 2010. Tr. 667.

Conner and Heidenreich had some similarities: They had common ownership, both were in the business of hauling petroleum products, and they shared the Frankfort location. (In fact, Conner, Heidenreich, Gas City, McEnery Trucking and Leasing, and McEnery Enterprises all shared the Frankfort facility. Tr. 586). Further, Lofrano testified that drivers for both companies obtained the fuel used to run their trucks from the same fuel tank on the Frankfort property. However, at least while they both were in operation, Conner and Heidenreich maintained separate drivers, equipment, and had a mostly-distinct customer base. Management testified that while Conner mostly hauled gas to local filling stations, apart from making Gas City deliveries, Heidenreich mostly hauled ethanol to and from refineries and operated nationwide.

B. Events Leading to Conner's Shutdown

By 2010, both Gas City and Conner were in financial distress. In February 2010, McEnery wrote a letter to Local 705 in an attempt to engage the Unions in negotiations about their contract. Tr. 807. Around the same time, Christopher met with a representative of Local 705 to discuss Conner's precarious situation and to attempt to obtain concessions. Tr. 807-809; Tr. 489. Christopher kept Local 142 apprised of these discussions through phone calls. Tr. 807-08.*fn7

In June, Gas City filed for bankruptcy and began procedures to restructure. Gas City lost its line of credit with Bank of America and was forced to shift to a "cash-basis," meaning that it was only able to pay for Conner's deliveries with cash that it had on hand. See Tr. 835.

On August 5, Christopher sent an e-mail to the Unions with a proposal that included wage reductions and other concessions. See Pet. Ex. 30. Neil Messino (the Union representative for Local 705) testified that on August 19, he and Christopher met to discuss the proposal. At the August 19 meeting, Messina told Christopher that the Union required an independent audit of Conner's financials in order to determine the severity of Respondent's stated economic position and whether Christopher's wage and benefits reduction proposals were fair. Tr. 551-52. The audit was completed within two weeks of that meeting. Id.

There is a heated dispute between the parties about what generally occurred between February and late September. Respondent's position is basically that the Unions stonewalled Conner-while Conner's financial position became more and more precarious, the Unions ignored Conner's pleas for help. Petitioner claims that Conner never gave the Unions an opportunity to assess their position and bargain with management. Regardless, Conner and the Unions did not agree on any concessions or enter into any new contracts during this period. It is unclear whether management and representatives from the Union even spoke to each other between early August and mid-October.

Former Conner drivers Gregory Knorr and David Pippin testified that on September 21, Christopher and McEnery held a meeting with a select group of drivers in the Frankfort facility. Knorr testified that McEnery starting the meeting by saying "guys, I've got some bad news, I fucked up, we're broke." Tr. 83. Pippin testified similarly. According to Pippin, McEnery started by meeting by saying "that he didn't have any good news for us and that he was fucking broke and he wasn't paying the union any more fucking money." Tr. 167. According to Pippin, McEnery said "if we wanted to keep working that we would have to decertify the Union and go to work for him for less money." Tr. 167. Similarly, Knorr testified that McEnery said that "[t]here will be no more fucking union, no more" and that "if the company wanted to continue on that we would have to decertify to continue as employees." Tr. 84. Pippin testified that if the workers refused to get rid of the Union, McEnery said that he would "shut the doors." Tr. 168.

At the September 21 meeting, Christopher and McEnery passed out a sheet of paper, showing the drivers how much money they would be paid once they got rid of the Union. Tr. 168; Pet. Ex. 3. It showed significant wage reductions and other concessions. After the drivers saw this piece of paper, many were "upset" and said that they "couldn't afford to work for these wages." Tr. 169. The drivers discussed going to their Union to discuss McEnery's demands. In response, McEnery told the drivers that they "were going to have to talk to everybody and decertify and let the Union know that we didn't want to be unionized anymore." Tr. 169. Knorr and Pippin gave entirely consistent accounts of the September 21 meeting. At the hearing before the ALJ, neither McEnery nor Christopher directly contradicted Pippen and Knorr's testimony. In fact, Christopher admitted that at the September 21 meeting, McEnery told the drivers that "the company was broke" and that "he needed concessions." Tr. 822-24. Christopher characterized the handout that was distributed at the meeting as "a proposal of what was being discussed with the Union." Tr. 823-24.*fn8

On September 23, Christopher wrote a memorandum addressed to "All AD Conner Drivers (Porter and Frankfort). See Pet. Ex. 5. In the memorandum, Christopher discusses the September 21 meeting and summarizes the wage and benefits proposals that were communicated to the drivers. Christopher wrote, in part:

"We tried taking [sic] a group of select senior drivers to meet with. We felt that meeting with several drivers would be more productive v. getting in front of our entire group of Frankfort and Porter drivers. During the meeting, it was reiterated to the drivers the importance of getting concessions passed through due to the financial condition of AD Conner. A proposal was also put onto the table regarding what we were looking at from a wage and benefit reduction. * * *"

Id. The memorandum also referenced Christopher's ongoing discussions with the Union. Id.

On September 28, Christopher held a meeting at the Porter facility. Heidenreich employee James McClelland and former Conner employee Darin Meadows testified that on September 28, Christopher held a meeting with approximately 12 Porter drivers. Tr. 223. According to these employees, Christopher said that "the company was losing money and that we needed to take a pay cut and [a] cut in our pension" or "the company would have to close." Tr. 223. Here again, Christopher distributed a document showing how pay and benefits would need to be reduced. Id.; Pet. Ex. 10. Christopher allegedly said that the Union's health insurance, pension, and union wages needed to be eliminated "to save the company." Tr. 268; 225. Christopher allegedly said that "disbanding the Union" so "there would be less expenses" would be one way to help the company survive. Tr. 225-26.

Pippin testified that by the beginning of October, management had decided that Conner would be shut down. Tr. 150-51. At this time, according to Pippin, Christopher began to call Conner's clients to tell them of the impending shut down and that they "probably need[ed] to look for other carriers." Tr. 151. According to Pippin, Christopher later admitted to him that he made these calls and "got rid of the accounts faster than what he should have." Tr. 150. Petitioner asserts that these phone calls possibly "hasten[ed] the demise of A.D. Conner." Pet. Reply at 7. Whether because of Christopher's phone calls, or because Conner's rates were not competitive (see Tr. 812-15), at around the time of the shutdown, Conner lost most of its major customers, including BP Amoco, Shell, Marathon, and Jewel. Tr. 691-93.

Representatives from Local 705 had scheduled their first bargaining session with Conner management for October 18. Tr. 540. Local 705 scheduled a meeting with its employees for October 9 to "make them aware of what was going on." Tr. 552. Two days after that meeting took place, on October 11, Messino testified that he called Christopher with the news that the drivers had agreed to accept the wage and benefit reductions that the Company said were necessary. Tr. 905; see also Tr. 865.

On October 13, Christopher canceled the scheduled October 18 bargaining session and told the Union that Conner would be ceasing operations. Tr. 541-42; 867; Pet. Ex. 29. October 13 was the first that the Union learned of Conner's decision to close. Union representatives did not have an opportunity to sit down to bargain with Conner's representatives before Conner closed its doors. Between June and October 18 (the date of the shut down), neither of the Unions had begun to bargain about the terms of the next collective-bargaining agreement, or had sat down to discuss Christopher's August 5 wage and benefits reduction proposal in detail. Tr. 553. After the shut down of Conner, neither Union was permitted to bargain about, for example, who would be selected to transfer from Conner to Heidenreich, what those workers' wages would be, or whether there would be any carryover of seniority at Heidenreich.

McEnery testified that he made the decision to shut down Conner. Tr. 591. McEnery never personally attempted to bargain with the Unions about the shutdown; instead he relied on Christopher's attempts to do so. Tr. 591-592.

C. Transfer of Employees and Work to Heidenreich

At the time of the shut-down, Christopher and McEnery discussed how many of Conner's drivers should be hired over to Heidenreich in order to continue servicing their customers. Immediately following the shutdown of Conner, 16 Conner drivers and two dispatchers were hired to work for Heidenreich. See Tr. 676-77.

On October 13, Christopher wrote an e-mail to Lowrey that indicated that it was intended to be passed on to the Conner drivers. Pet. Ex. 13. Lowrey had been acting as a sort of "conduit" for communications between management and the Conner drivers. See ALJ Decision at 21-25. In the e-mail, Christopher tells Lowrey that "[w]e are still determining the number of drivers that we would need to service Gas City and any other customers through Heidenreich." Pet. Ex. 13. Christopher instructed Lowrey to tell the drivers to apply online for jobs at Heidenreich and informed Lowrey what the drivers' salaries and benefits would be. Id. The e-mail concludes with the phrase: "I could not put the above into a formal letter due to union issues, but this can be verbally conveyed to them." Id. (emphasis added). The ALJ described the e-mail as "smoking gun evidence." ALJ Decision at 16 n.22 ("It has been my experience that the record rarely affords "smoking gun" evidence, particularly regarding the intent and motivation of parties to lawsuits. This e-mail represents a striking exception * * *.").

On October 12 and 13, Christopher and Lowrey (speaking at Christopher's behest) began contacting former Conner drivers, and asked them to apply for a job at Heidenreich. In an e-mail to the drivers, Christopher advised that applications were available "on the web." See Pet. Ex. 18.

Those drivers that were hired on at Heidenreich were not required to submit new tax or I-9 forms when they were initially hired and were not given any sort of orientation upon starting their new jobs. Tr. 196, 284, 485, 295.*fn9 After being rehired at Heidenreich, the 16 drivers continued to work out of the same Frankfort facility, and continued to use the same trucks, keys, and other equipment to make their deliveries. Tr. 67, 92, 178, 180, 274, 295-96.*fn10 Someone at Heidenreich had just ripped the "A.D. Conner" stickers off the former Conner trucks, and replaced them with Heidenreich stickers. Tr. 182, 275. The dispatch sheets were in the same form and format; only a Conner logo had been replaced with a Heidenreich logo. The drivers' job duties and work processes at Heidenreich were generally the same as they had been at Conner-they were still responsible for delivering petroleum products, and mostly to the same Gas City locations that they had previously serviced. See, e.g. Tr. 183; 238-39.

As noted above, around the time of the shutdown, Conner lost most of its major customers, including BP Amoco, Shell, Marathon, and Jewel. Tr. 691-93. These customers did not begin to use Heidenreich after Conner's shutdown. Respondent explains that generally, to qualify as a carrier for a particular gas station customer, there is a detailed vetting process that can take months to complete before final approval is given. For that reason, when Conner shut down suddenly, Heidenreich was not able to haul for most of Conner's customers, as it had not gone through the vetting process with them. Tr. 871. However, Conner's biggest account, Gas City, went to Heidenreich, and the 16 formerly-Conner drivers serviced this account (as they did when they worked for Conner). Tr. 183.*fn11

When they were at Conner, the driver-employees had earned $25.15 per hour. Tr. 102-04; 191. Currently, at Heidenreich, they earn $22.75 per hour. Further, drivers at Conner had had their medical and dental benefits provided through the Union. Tr. 104-105. At Heidenreich, they must pay $338 per month for medical and dental benefits. Tr. 191. Drivers at Conner had received a pension through each respective Local pension fund; while at Heidenreich employees have no retirement benefits. Tr. ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.