of the shoe manufacturing operation in Hanover. This question is further complicated by the fact that the business entity conducting the Philadelphia manufacturing operation was terminated when that operation ceased, and a new corporation was formed to conduct the Hanover manufacturing operation. This change in business entities has a double significance. It is related to the question of whether the Philadelphia shop was 'removed' to Hanover. It is of significance also in determining which business entities and which individuals, if any, are liable for any breach of paragraph 21.
The defendants contend that paragraph 21 can only be interpreted to mean that the making of better grade shoes shall not be removed from Philadelphia during the life of the agreement. The defendants' interpretation is based on the fact that the Philadelphia shop had made only better grade shoes from its inception until 1956, or thereabouts, and the Hanover shop had made lower grade shoes during this period. Therefore, argue the defendants, paragraph 21 merely manifests the intent of the parties to prevent the removal of the manufacture of the better grade shoes traditionally made in Philadelphia to Hanover.
Our interpretation of paragraph 21 is broader than this. We note at the outset, that paragraph 21 states only that the shop shall not be removed from Philadelphia during the life of the agreement. We interpret paragraph 21 as prohibiting the removal of substantially the same shoemaking operation from Philadelphia to another location.
The basic purpose of the runaway shop provision in the collective bargaining agreement was, of course, to provide job security for the Philadelphia employees. The Labor Management Relations Act has been interpreted as prohibiting the removal by an employer of his business operations from one location to another when that removal has as its purpose interference with union activities (see T. A. Tredway, et al., and International Ladies Garment Workers Union, 109 NLRB 1045 (1954); Klotz, 13 NLRB 746 (1939); Schieber Millinery Company, 26 NLRB 937 (1940); Tennessee- Carolina Transportation, 108 NLRB 1369 (1954); N.L.R.B. v. Tennessee-Carolina Transp., 6 Cir., 226 F.2d 743). Thus, it is clear that even without a runaway shop provision in a collective bargaining agreement, an employer may not move his business operation if that move is made for certain 'anti-union purposes.'
In the case at bar, the runaway shop provision in the collective bargaining agreement places an additional restriction on the employer in that it prohibits his moving his business away from Philadelphia for any reason. The question remaining is how nearly identical must the old manufacturing operation and the newly located operation be in order that we may validly conclude that there was a 'removal'?
It seems to us that the answer to that question lies in the fact that the men and women who worked in the Philadelphia shop could have, since the move to Hanover, and could now perform in Hanover the same work they did in Philadelphia. Michael Goldenberg himself testified that he could have continued operating the Philadelphia shop through the new corporation (NT145-147). There is nothing in the record indicating that a new kind of worker was needed to perform the work done at Hanover. The record indicates that the shoemaking process at Hanover is exactly the same as was the Philadelphia process. That is, athletic shoes are made by cutting patterns from leather, stitching together these cuttings into fittings and making these fittings into shoes. Whether the leather used at Hanover shop is of a lesser grade than that formerly used at the Philadelphia shop could make no difference in the skills required of the workers.
Much has been made of the fact that Michael Goldenberg desired to produce cheaper shoes because there was more of a market for these. We can well understand why the cheaper labor at Hanover was sought by Mr. Goldenberg. But cheaper labor in this case means nonunionized labor paid at a lower wage scale. As we have noted above, even in the absence of a runaway shop provision in a collective bargaining agreement, an employer may not move his business operation in order to obtain such labor. We think the record here reveals a design on the part of the employer Michael Goldenberg to avoid his duties and responsibilities to his unionized Philadelphia employees by moving his manufacturing operation to the nonunionized shop at Hanover. We find that substantially the same manufacturing operation as was carried on in Philadelphia has been 'removed' to Hanover within the meaning of paragraph 21 of the collective bargaining agreement.
Conclusions of Law
1. The Brooks Shoe Manufacturing Company, partnership, breached paragraph 14 of the collective bargaining agreement and is liable for that breach for the years 1955 and 1956.
2. The Brooks Shoe Manufacturing Company, Inc., is the alter ego of the Brooks Shoe Manufacturing Company. N.L.R.B. v. Auto Ventshade, Inc., 5 Cir., 276 F.2d 303; N.L.R.B. v. Baldwin Locomotive Works, 3 Cir., 128 F.2d 39; Dickey v. N.L.R.B., 6 Cir., 1954, 217 F.2d 652; Southport Petroleum Co. v. N.L.R.B., 1942, 315 U.S. 100, 62 S. Ct. 452, 86 L. Ed. 718, and N.L.R.B. v. Colten, 6 Cir., 1939, 105 F.2d 179.
3. Paragraph 21 of the collective bargaining agreement was breached by the removal of the partnership's shoemaking operation from Philadelphia to Hanover.
4. The Brooks Shoe Manufacturing Company is liable for the breach of paragraph 21 under the theory of successor-liability.
5. The personal liability, if any, of Michael Goldenberg, the right of the individual plaintiffs to recover, and the proper relief to be awarded are reserved for future hearing, argument and decision.
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