## Facts

- Adkins Transfer Co., a small interstate trucking company, operated a Nashville, Tennessee terminal with Teamsters-represented road drivers, pickup workers, and dock workers.
- The company maintained a generally cooperative relationship with the Teamsters and relied on the union hall to supply extra workers when needed.
- Adkins created a small in-house maintenance/service department and hired a mechanic ($1.25/hour) and a helper ($0.75/hour).
- Within about a month, both employees joined the Teamsters.
- A union representative informed Adkins’s president that the contract wage scale for mechanics and service workers was substantially higher than what Adkins was paying these two employees.
- Soon after the wage issue was raised, Adkins discharged both workers, stating it would not pay the union scale and would instead close the maintenance department and outsource the work.
- Testimony indicated that continuing to employ the two workers at below-union rates risked a union strike that could shut down operations because the union represented the company’s core workforce.
- The trial examiner found the terminations were not motivated by union membership and recommended dismissal, but the NLRB reversed and found violations of NLRA § 8(a)(3) and § 8(a)(1), ordering reinstatement and back pay.
- The NLRB petitioned for enforcement under NLRA § 10(e), and Adkins resisted, asserting the department closure was an economic decision.

## Issues

1. Whether substantial evidence on the record as a whole supported the NLRB’s finding that Adkins discharged the mechanic and helper because of union membership or activity, in violation of NLRA § 8(a)(3) and derivatively § 8(a)(1).
2. Whether closing the maintenance department and subcontracting the work, after the union demanded higher wages, constituted unlawful discrimination to discourage union membership or a permissible economic decision.

## Decision

- The Sixth Circuit denied enforcement of the NLRB’s order.
- The court held the Board’s finding of discriminatory motive was not supported by substantial evidence on the record considered as a whole.
- The court accepted that Adkins closed the department and outsourced maintenance because it concluded it could not operate the function profitably at union wage rates.
- The court relied in part on the absence of broader anti-union hostility and on evidence that the employer’s choice was driven by cost and operational feasibility rather than a desire to discourage union membership.

## Legal Principles

- An NLRB finding of discrimination under § 8(a)(3) must be supported by substantial evidence on the record as a whole; timing and suspicion alone are insufficient where overall evidence points to a non-discriminatory explanation.
- Discharging employees because they are union members is unlawful, but eliminating an entire operation and contracting out the work for bona fide economic reasons is not, absent substantial evidence that the action was taken to discourage union membership.
- A court may decline to enforce an NLRB order when the Board’s inference of unlawful motive is not adequately supported in light of the full record, including contrary findings by the trial examiner.

## Conclusion

The Sixth Circuit refused to enforce the NLRB’s reinstatement and back-pay order because the record, viewed as a whole, did not substantially support a finding that Adkins acted to discourage union membership; instead, the employer permissibly closed its maintenance department and outsourced the work based on economic considerations triggered by union-scale wage demands.


NLRB v. Adkins Transfer Co., 226 F.2d 324 (6th Cir. 1955)