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BYGOTT v. LEASEWAY TRANSP. CORP.

November 22, 1985

BERNARD F. BYGOTT, JR., John Mahalis, John O'Toole, Gregory Patton, Joseph Snyder
v.
LEASEWAY TRANSPORTATION CORP., Terminal Personnel, Inc., Signal Delivery Service, Inc., Highway Truck Drivers and Helpers Local 107



The opinion of the court was delivered by: BECHTLE

LOUIS C. BECHTLE, J.

 MEMORANDUM

 In the above captioned case, on September 23, 1985, the court denied motions for summary judgment by defendants Highway Truck Drivers and Helpers Local 107 ("Local 107" or the "union"), Leaseway Transportation Corporation ("Leaseway"), Signal Delivery Service, Inc. ("Signal"), and Terminal Personnel, Inc. ("TPI"). The court found then that there were genuine issues of fact as to whether Local 107 fairly investigated and considered the possibility that TPI was an alter-ego of Leaseway or Signal, and that Signal and TPI were single employers.

 In this memorandum, the court takes the opportunity to explain the reasoning underlying its September 23, 1985, Order.

 FACTS:

 Plaintiffs *fn1" are members of Local 107 and employees of Signal. Local 107 is the collective bargaining representative for the truck drivers and platform workers employed by Signal and for the truck drivers and platform workers employed by TPI in Philadelphia, Pennsylvania. Signal and TPI are subsidiaries of Leaseway. Eighty percent of Signal's stock shares is owned by Leaseway and twenty percent is owned by Sears, Roebuck & Company ("Sears"). All of TPI is owned by Leaseway.

 At all times relevant to this case, Leaseway, Signal and TPI had several overlapping members on their Boards of Directors. *fn2" Charles Marcoux, President and Chief Operating Officer of Leaseway, was Chairman of the Boards of Directors of both Signal and TPI. Robert F. Weber was a member of the TPI and Signal Boards, Treasurer of both TPI and Signal, and a Vice-President at Signal. Robert M. Moss ("Moss") was on the TPI and Signal Boards. Moss was also a member of the Signal Board in 1979 when he directed for Leaseway the formation of TPI.

 Leaseway created TPI in 1979. Since that time, TPI has provided only freight handling services for Terminal Freight Handling Company ("Terminal"). Terminal's only customer has been Sears.

 Until December 31, 1982, most of the freight handling at Terminal's 2nd Street and Erie Avenue, Philadelphia facility ("Terminal's facility" or the "Terminal facility") was performed by employees of Joseph Tropiano ("Tropiano"). Signal provided the rest of the contract carrier services *fn3" to the Terminal facility. For several years, Signal had been attempting to displace Tropiano from Terminal's facility and to secure the freight handling for itself. In the early fall, 1982, Signal's, Maurice Ferraro ("Ferraro"), the regional manager and operating director, hoping that a new collective bargain agreement might make Signal more competitive for obtaining the Terminal facility work, contacted Local 107 to negotiate a new collective bargaining agreement between Signal and Local 107. At the several meetings which followed, in the fall, 1982, Ferraro told the persons attending the meetings, members of Signal's management personnel, the union's Mike Facchiano ("Facchiano") and Joseph Murphy ("Murphy"), and Signal's stewards, that in order to displace Tropiano the union would have to agree to an hourly rate less than that set by the National Master Freight Agreement and to a seniority list separate from the Master Line Haul Seniority List. Ferraro's proposal was discussed by the union members at a ratification meeting held in the first week of December, 1982. The union members did not consider the proposal to be worthy of a vote, and no vote was taken.

 After the meeting, several union members, hoping that Signal could still secure the Terminal facility contract carrier work, urged Local 107 to continue negotiations with Signal. Signal and union officials continued to negotiate and the negotiations concluded with a second proposal. This proposal provided that the hourly wage rate would be higher than the rate proposed in the first proposal, but it would still be lower than the rate authorized by the National Master Freight Agreement. The second proposal also called for a separate seniority list, but unlike under the first proposal, Local 107 members would be permitted to bid annually in and out of positions covered by the seniority list. The second proposal was ratified by the union membership, and Signal and Local 107 entered into a collective bargaining agreement, effective from January 1, 1983 through March 31, 1985. *fn4"

 Meanwhile, Signal displaced Tropiano and secured the contract carrier services at the Terminal facility.

 Local 107's members on Signal's seniority list, which included plaintiffs John Mahalis ("Mahalis") and John O'Toole ("O'Toole"), were given the opportunity to bid for positions at Terminal's facility. The union members who were not on the seniority list were permitted to sign a "preference" slip to work at the Terminal's facility.

 Both Mahalis and O'Toole bid into positions at Terminal's facility, but both bid out of the jobs prior to May 1, 1983. Plaintiffs Bernard Bygott ("Bygott"), Gregory Patton ("Patton") and Joseph Snyder ("Snyder"), who were in Signal's labor pool and not on Signal's seniority list, chose not to sign a "preference" slip.

 Signal employees began handling the freight at Terminal's facility on January 1, 1983. In April, 1983, Terminal notified Signal that productivity, as measured in pounds per man hour, was unsatisfactorily low and that the workforce's turnover rate was unacceptably high. Signal, in turn, informed Local 107 of Terminal's dissatisfaction. The union responded that the bid ...


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