Lillybrook Coal Co.

In the Matter of LILLYBRO0K COAL COMPANY and UNITED CONSTRUCTION WORKERS, AFFILIATED WITH UNITED MINE WORKERS OF AMERICA Case No. 9-R-1497.-Decided January 15, 1945 Scherer, Bowers d File, by Messrs. L. L. Scherer and K. D. Bowers, of Beckley, W. Va.; and Mr. E. S. Pugh, of Lillybrook, W. Va., for the. Company. Richardson and Kemper , by Albert S. Kemper, Jr., of Bluefield, W. Va.; and Senator Edward R. Burke and Mr. John C. Gall, of Wash- ington, D. C., for the S. C. P. A. Messrs. Luke Brett and C. H. Moran, of Beckley, W. Va., for the Union. Mr. William R. Cameron and Mrs. Augusta Spaulding , of counsel to the Board. DECISION AND DIRECTION OF ELECTION STATEMENT OF THE CASE Upon a petition duly filed by United Construction Workers, affil- iated with United Mine Workers of America, herein called the Union, alleging that a question affecting commerce had arisen concerning the representation of employees of Lillybrook Coal Company, Lillybrook, West Virginia, herein called the Company, the National Labor Rela- tions Board provided for an appropriate hearing upon due notice before Melton Boyd, Trial Examiner. Said hearing was held at Beckley, West Virginia, on July 14, 1944. The Company and the Union appeared, participated, and were afforded full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing on the issues. The Trial Examiner's rulings made at the hearing are free from prejudicial error and are hereby affirmed. On August 18, 1944, Southern Coal Producers Association, herein called the S. C. P. A., filed a motion to intervene in this proceeding. On August 23, 1944, the Board granted the motion and ordered that the record be reopened and that the case be remanded to the Regional Director for further hearing. Further hearing was held on October 3, 1914, at Bluefield, West Virginia, before Louis S. Penfield, Trial 60 N. L. R. B., No. 6. 31 32 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Examiner. The Company, the Union, and the S. C. P. A. appeared, participated, and were afforded full opportunity to be heard, to ex- amine and cross-examine witnesses, and to introduce evidence bearing on the issues. The Trial Examiner's rulings made at the reopened hearing are hereby affirmed. The S. C. P. A. requested opportunity for oral argument and the Board granted the request' On November 21, 1944, a hearing was held before the Board at Washington, D. C., for the purposes of oral argument. The Company, the Union, and the S. C. P. A. appeared and participated. All parties were afforded opportunity to file briefs with the Board. Upon the entire record in the case, the Board makes the followilig : FINDINGS OF FACT 1. THE BUSINESS OF THE COMPANY Lillybrook Coal Company, a West Virginia corporation, has its principal office at Beckley, West Virginia. It is principally engaged in the operation of coal mines located near Lillybrook, Killarney, Af- finity, and Big Stick in Raleigh County, West Virginia, in a region commonly known as the Winding Gulf Coal Field, which includes parts of Raleigh and Wyoming Counties, West Virginia. In operat- ing its mines, "the Company employs normally approximately 1,500 employees and, in operating general stores located in towns varying in distance from less than 1 mile to less than 8 miles from its mining' operations, approximately 65 employees. During the current year, purchases and sales of merchandise and the production of coal are, respectively, substantially equal in volume and proportion to those of the calendar year of 1943. In 1943, the value of merchandise and commodities purchased for resale at the Company's stores, was in excess of $700,000, of which approximately 23.15 percent was received at the stores from sources outside West Virginia, and the amount of retail sales of merchandise and commodities at the Company's stores was in excess of $900,000. No sales were made to points outside West Virginia. During this period, the volume of coal produced and sold by the Company at its mines exceeded 1,750,000 tons, of which ap- proximately 98 percent was delivered to points outside West Virginia. The Company concedes that, it is engaged in commerce within the meaning of the Act, so far as it is engaged in the production and sale of coal. The Company contends that it is not engaged in commerce, within the meaning of the Act, with respect to the operations of its stores, urging that, while originally the mines were in isolated loca- i For the purposes of oral argument, Matter of Pocahontas Fuel Company, Incorporated, 60 N. L R . B. 41, Case No . 9-11-1550, was consolidated with the instant case. LILLYBROOK COAL COMPANY 33 tions and the express purpose of the stores was to provide facilities for miners and thus offer all inducement for employment with the Company, the growth of mining locations with settled communities and the improvement of roads and means of transportation have altered the relation between its mines and stores and that the present purpose of its stores' operation is the profit obtainable from them as a separate merchandising enterprise . We find no merit in this contention. The Company is one of the 2 largest coal operators in the Winding Gulf Coal Field and is 1 of 25 or 30 coal mine operators constituting the membership of Winding Gulf Operators' Association, a district association holding membership in the S. C. P. A., the intervenor herein. The Company operates a system of company -owned stores, as do practically all other producers in the Winding Gulf Coal Field, catering principally to their own respective employees, and selling a varied assortment of fresh and staple groceries, drugs, dry goods, hardware, furniture , and other general merchandise , including arti- cles of personal clothing and equipment used particularly in mining operations . All but 2 of the Company's stores occupy company- owned buildings and each is situated in a closely built-up residential community , commonly alluded to as a mining camp . In all except 2 such communities , the Company owns most of the houses . Approxi- mately 40 percent of the Company 's mining employees live with their families in company-owned houses. Other mining employees live in company-owned dormitories. In communities near its mine locations, the Company has pay offices adjacent to its stores, where mining employees are paid twice each month. Between pay dates, the Company issues to employees en- gaged in mining operations scrip in the form of metal coins and paper drafts honored by the Company at face value for purchases made at company stores and redeemed through such trade. Scrip is issued in fixed denominations comparable to the denominations in silver currency. During a typical month, scrip is issued in varying sums to more than two-thirds of the Company's mining employees, redeem- able by them and their immediate families. Other classes of employees, such as store and office employees and non-employees who have estab- lished credit at the Company's stores, are permitted to buy on open charge accounts. All classes of employees, and also non- employees, may purchase costly items on deferred payment plans under con- ditional leases and conditional sales contracts. Some trade at the stores is in cash. In five communities where no pay office is estab- lished the Company issues scrip to mining - employees at its stores when they come to trade . Store clerks issue the scrip thus applied for and make appropriate entries on duplicate cards, one of which is 625503-45-vol. 60-4 34 DECISIONS OF NATIONAL LABOR RELATIONS BOARD carried by the mining employee, and the other retained for company records, ascertaining before issuing this scrip that the applicant has sufficient credit in unpaid wages from which the deduction for scrip issued may be made. During the first 6 months in 1944, total retail sales at all stores exceeded $500,000, of which 53 percent was sales made to mining employees and their families through the use of scrip, 211/2 percent was sales made through open charge accounts, 13 percent was sales made by deferred payment contracts, and 121/2 per- cent was sales made through cash transactions. Not only all scrip transactions, but an undetermined part of the remaining transactions were with mining employees and their immediate families? Accord- ing to the estimate made by the general stores manager, approximately 80 percent of all sales is made to the Company's employees. Store clerks employed at the Company's stores live in mining com- munities and many are members of miners' families. They work under the supervision of the store manager, and under the general direction of the general stores' manager, who is in charge of all store purchasing and retailing operations. The general stores' manager is under the supervision of the Company's general manager, responsible for all its operations. Personnel records of store employees, pre- pared by the general stores' manager, are kept and maintained in the principal office of the Company. Issuance of scrip and extension of credit to employees are controlled by the accounting office of the Com- pany. Matters of policy and practice in store operations are subject to the unified control of the Company's principal executives. We find, contrary to the contention of the Company, that the Com- pany's merchandising operations are a part of its integrated business enterprise and that, in the operation of its stores, the Company is engaged in commerce within the meaning of the Act.3 II. THE ORGANIZATION INVOLVED United Construction Workers is a labor organization affiliated with United Mine Workers of America, admitting to membership em- ployees of the Company. III. THE QUESTION CONCERNING REPRESENTATION By letter to the Company, dated May 5, 1944, the Union requested a bargaining conference, alleging that it represented a majority of the Company's store clerks. The Company, by letter dated May 15, 1944, acknowledged receipt of the Union's letter and stated that it would 2 At one community adjacent twits mine, a store clerk issues to miners the mining supplies which are provided at company cost, and this clerk is paid by the Company for this employ- ment In his capacity as store clerk At other mine locations , such mining supplies are issued by employees of the supply department of the Company's operations 3 Matter of Junior Mercantile Stores Division, West Virginia Coal & Coke Corporation, 58 N. L. R. B. 1. LILLYBROOK COAL COMPANY 35 not bargain with the Union for the employees in question, unless it was obliged to do so, pursuant to State or Federal law. The Company maintains that it cannot legally recognize the Union as the bargaining representative of its store employees. The Com- pany is a member of Winding Gulf Operators' Association, and, as such, a member of Southern Coal Producers Association, the inter- venor herein, and a party to an agreement between these organiza- tions and United Mine Workers of America, District 29, and the International Union, herein collectively called the U. M. W., covering mining employees of their several operator members. The contract contains a recognition clause of the U. M. W. as bargaining represent- ative for employees of the mine operators and a subsequent provision that covered thereunder are "mine workers," a term defined therein as excluding "mine foremen, assistant mine foremen, fire bosses, or bosses in charge of any classes of labor inside or outside of the mine, or coal inspectors or weigh bosses, watchmen, clerks, or members of the executive, supervisory, sales, and technical forces" of the several mine operators. The Company takes the position that the exclusion of store clerks from coverage in the contract for mining employees bars the U. M. W. and also the petitioner, its affiliate, from represent- ing store clerks during the life of that contract. The U. M. W. does not oppose the petition filed by the Union or otherwise share the Com- pany's position regarding their contract. We find that the exclusion of store clerks from coverage in the contract between the Company and the U. M. W. for mining employees does not preclude the repre- sentation of store clerks by the petitioner, an affiliate of the U. M. W., in an appropriate separate bargaining Unit .4 Under these circum- stances, we conclude and find that the contract between the coal op- erators and the U. M. W. constitutes no bar to a determination of representatives for store employees of the Company. A statement prepared by the Trial Examiner and read into the rec- ord at the hearing indicates that the Union represents a substantial number of employees of the Company in the unit hereinafter found appropriate.,' We find that a question affecting commerce has arisen concerning the representation of employees of the Company, within the meaning of Section 9 (c) and Section 2 (6) and (7) of the Act. IV. THE APPROPRIATE UNIT At the original hearing in this proceeding, the Company and the Union agreed that all regular and extra employees employed at the * Matter of Budd Wheel Company, et al , 59 N. L. R. B. 420. 5 The Union submitted 49 cards, of which ] 8 were undated and the remaining dated In 1944, and of which 32 bear apparently genuine original signatures of employees listed on the Company's pay roll of May 30, 1944. There are approximately 65 employees in the appropriate bargaining unit. 36 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Company's stores at Lillybrook, Lego, Sullivan, Affinity, Coal City, Killarney, Fireco, Pemberton, and-Big Stick, West Virginia, exclud- ing store managers, assistant store managers, other supervisory em- ployees, and office clerical employees, constitute an appropriate bar- gaining unit. Extra employees are those who substitute for regular employees and who are employed in addition to regular employees on days of increased business.. These extra employees are, for the most part, high school girls and miners' wives, who desire only part- time employment. They are employed repeatedly, when their serv- ices are required and when they are available. During the pay-roll period ending May 30, 1944, there were 36 regular employees working full time and 29 extra employees who had worked 1 or more days during the pay-roll period. Since the Company and the Union agree to the inclusion of extra employees, and such employees have reason- able expectancy of continued employment, we agree that they are to be included in the same bargaining unit with regular store employees. Subsequent to the original hearing in this proceeding, as noted above, the S. C. P. A. intervened, and a new hearing was held, at which the S. C. P. A. set forth its contentions with respect to the bargaining unit for the Company's store employees. The S. C. P. A. contends that the appropriate unit should be a multiple-employer unit, district-wide or association-wide in scope, rather than a unit limited to employees of a single employer operator like the Company. The sole basis- for the contention of the S. C. P. A. for a multiple- plant unit is that mining employees of the Company have bargained on a multiple-employer basis over a long period of years. The S. C. P. A. was incorporated in October 1941, and began func- tioning on March 17, 1942, for the purpose of conducting wage negotiations on behalf of employer members, and includes in its mem- bership the majority of coal producers in the Southern Appalachian Area, consisting of contiguous portions of Virginia, West Virginia, Kentucky, and Tennessee. The S. C. P. A. is composed of 14 district associations of coal operators and 4 individual members. The Wind- ing Gulf Operators' Association, of which the Company is a member, is one of the district associations, which are joined in the S. C. P. A.6 Collective bargaining on a multiple-employer basis in the coal mining industry began in 1898, at which time there was formed the Central Competitive Area, comprising primarily the States of Illinois, Indiana, Ohio, and western Pennsylvania. That organization nego- tiated agreements with the U. M. W. continuously until 1938, the out- lying districts following the lead thus set and negotiating their agree- ments by districts or by States. In the period from 1928 to 1933, a 6 Pocahontas Fuel Company, Incorporated, similarly is a member of Pocahontas Oper- ators' Association, one of the district associations joined in the S. C. P. A. See Matter of Pocahontas Fuel Company, Incorporated, supra. LILLYBROOK COAL COMPANY 37 according to the testimony of Edward R. Burke, although somewhat "disrupted," negotiations were, in general, carried on upon some multiple-employer basis. In 1933, following the setting up of an industry-wide code under the N. I. R. A., the Appalachian Wage Con- ference was formed, covering both the Northern and Southern Ap- palachian Areas, and negotiations with the U. M. W. were carried on by the producers jointly in this region until 1941, after which time the Southern Appalachian Area negotiated its own agreements. The present basic agreement affecting mine workers in this area was executed on July 5, 1941, effective as of April 1, 1941, to March 31, 1943, by the U. M. W. and 13 associations of operators, including Winding Gulf Operators' Association, covering substantially the same territory as that presently covered by the S. C. P. A., the intervenor herein. Subject to the basic Southern Wage Agreement and contain- ing identical provisions as to recognitions and exemption of certain employees formerly covered by the contract, the Smokeless Wage Agreement was executed by the U. M. W., and 4 of the above 13 oper- ators' associations, also including Winding Gulf Operators' Associa- tion. On February 10, 1943, an amendment to the Southern Wage Agreement was executed by the U. M. W. and by the S. C. P. A., Virginia Coal Operators' Association, and Southern Appalachian Coal Operators' Association. Under date of December 17, 1943, a supplemental agreement, extending the 1943-1944 contract with cer- tain modifications to March 31, 1945, was signed by the U. M. W. and by the S. C. P. A. The S. C. P. A., as noted above, relies on the foregoing history of bargaining for mining employees in the bituminous coal industry in support of its contention that the appropriate unit for store employees of these coal operators should include either the entire area covered by the S. C. P. A., or at least the area covered by the constituent dis- trict association to which the Company belongs. The bituminous coal industry is, in normal times, a highly competitive industry and this constitutes the principal basis for the desirability of a multiple-em- ployer unit for mining employees. These coal operators do not com- pete in the operations of their retail stores, and the reasons deemed controlling for a multiple-employer unit for mining employees are, therefore, not controlling with respect to the store employees. Even conceding that a multiple-employer unit for store employees of opera- tors would be desirable, and the Board has frequently favored follow- ing a collective bargaining pattern established for some categories of employees in setting up units appropriate for employees in other categories, the Board has not held, in the absence of organization in the broader unit, that the broader pattern established for employees in one category necessarily precludes immediate bargaining for em- ployees in other categories on a narrower basis. The Union has not 38 DECISIONS OF NATIONAL LABOR RELATIONS BOARD extended its-organizational activities among store employees of coal operators beyond the confines of stores of a few individual com- panies. At the original hearing in this proceeding, the Company con- ceded the appropriateness of the proposed unit. Some individual operators have contracted with labor organizations covering their store employees in units limited to those of each individual operator.' We are not convinced that the company-wide unit sought by the Union is an inappropriate bargaining unit. We find that a unit- for store employees limited to employees of the Company is appropriate, but such conclusion will not preclude the find'ng of a multiple-em- ployer unit for store employees upon an appropriate petition later filed.8 We find that all regular and extra employees at all the Company's stores at Lillybrook, Lego, Sullivan, Affinity, Coal City, Killarney, Fireco, Pemberton, and Big Stick, West Virginia, excluding office clerical employees, store managers and assistant managers, and other employees having authority to hire, promote, discharge, discipline, or otherwise effect changes in the status of employees, or effectively recommend such action, constitute a unit appropriate for the purposes of collective bargaining, within the meaning of Section 9 (b) of the Act. V. THE DETERMINATION OF REPRESENTATIVES We shall direct that the question concerning representation which has arisen be resolved by an election by secret- ballot among the em- ployees in the appropriate unit who were employed during the pay- roll period immediately preceding the date of the Decision and Di- rection of Election herein, subject to the limitations-and iidditions set forth in the Direction.' DIRECTION OF ELECTION By virtue of and pursuant to the power vested in the National Labor Relations Board by Section 9 (c) of the National Labor Relations Act, and pursuant to Article III, Section 9, of National Labor Relations Board Rules and Regulations-Series 3, as amended, it is hereby DIRECTED that, as part of the investigation to ascertain representa- tives for the purposes of collective bargaining with Lillybrook Coal ° Matter of Junior Mercantile Stores Division , West Virginia Coal & Coke Corporation, supra 8 See Matter of Glen Alden Coal Company , 45 N. L R B 738, where the Board found that certain non-underground craftsmen employed by a coal mining company, which was a party to the anthracite coal operators' agreement with the U . M. W., might constitute an appropriate unit , despite the contention of the employer and the U M W that only an industry-wide unit was appropriate See also Matter of Pacific American Fisheries, Inc , 28 N L R B . 244, 247; Matter of Mobile Steamship Association, et al, 8 N. L R . B. 1297, 1316-1317. 9 The Union requests that its full name appear on the ballot as "United Construction Workers, affiliated with United Mine Workers of America " We shall grant the request. LILLYBROOK COAL COMPANY 39 Company, Lillybrook, West Virginia, an election by secret ballot shall be conducted as early as possible, but not later than thirty (30) days from the date of this Direction, under the direction and supervision of the Regional Director for the Ninth Region, acting in this matter as agent for the National Labor Relations Board, and subject to Article III, Sections 10 and 11, of said Rules and Regulations, among the employees in the unit found appropriate in Section IV, above, who were employed during the pay-roll period immediately preceding the date of this Direction, including employees who did not work during the said pay-roll period because they were ill or on vacation or tem- porarily laid off, and including employees in the armed forces of the United States who present themselves in person at the polls, but exclud- ing those employees who have since quit or been discharged for cause and have not been rehired or reinstated prior to the date of the election, to determine whether or not they desire to be represented by United Construction Workers, affiliated with United Mine Workers of Amer- ica, for the purposes of collective bargaining. MR. GERARD D. REILLY, dissenting : The question presented by this case is not free from difficulty. As the brief summary contained in the majority opinion indicates, col- lective bargaining in the bituminous coal industry has developed from company bargaining to multiple employer bargaining conducted by regional associations with the principal labor organization of coal miners, viz., the United Mine Workers. This Board has recognized these associations as appropriate bargainig agencies on the employer side. and has dismissed petitions from rival coal mining trade.unions which sought certification on the basis of representing the majority of workers in a single company.1' The decision, as the majority opinion recognizes, was based not only upon prior bargaining history, but also upon economic factors." The highly competitive character of the coal industry with its resultant hardships upon marginal pro- ducers and mine workers has long been a subject of Congressional concern. The code of fair competition promulgated under the National Industrial Recovery Act 12 and the two Bituminous Coal Conservation Acts 11 were predicated in large part upon the theory that the condition of the workers could be improved by encouraging stabi- lization of costs. 10 Matter of Alston Coal Company, 13 N L R B 683 33 In Matter of Alston Coal Company, 13 N. L R B. 683, the Board said • "Bargaining and making contracts on such a ( association ) basis has helped to stabilize the coal mining industry and place the mines on a fair competitive basis, a condition which would be very difficult of achievement if separate contracts were negotiated with each operator." 12 Act of June 16, 1933 , C 90, 48 Stat 195, 196 ; 15 U S C. 703 13 Act of August 30, 1935, C 824 , 49 Stat. 991; 15 U. S. C. 801 ; and Act of April 26, 1937, C. 127 , 50 Stat. 90 ; 15 U. S. C. 828. 401 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In this case, the petitioning union seeks a unit confined to a certain occupational group (the clerks in the company store ) employed by an individual corporation, even though this employer belongs to an association to which it has delegated its collective bargaining func- tions. Had the petition been seeking an occupational group covered in the past by the association 's collective agreement, I assume we would have dismissed the petition . It is argued here, however, that in view of the exclusion from the agreement of this group of em- ployees, the considerations which would normally compel us to give effect to the association bargaining unit are not present. In this con- nection it is pointed out that since the retail stores of the union asso- ciation members do not compete with one another , the reason for a more comprehensive unit of mine employees is not applicable to the store employees. It seems to me that this is an observation of doubtful economic validity, since it ignores the fact that prices in these company stores are an important element in the biennial wage negotiations between the association and the mine workers. Under other circumstances the factors found in the instant case would apparently warrant a denial of the most comprehensive unit on the basis of the "extent of organization " doctrine.14 However, I am of the opinion that here the considerations relating to the desir- ability of an association bargaining unit outweigh those upon which that doctrine is based. Moreover, there is nothing in this record that hints at any insuperable difficulties in organizing store employee§ on a regional basis. While it is true that the mines are widely scattered, it is well known that there are locals of the United Mint Workers, throughout the southern Appalachian region, which are available for organizational activities if the curernt membership drive among store employees should be decentralized . It is true that the petitioner has asked to be placed on the ballots as "United Construction Workers affiliated with the United Mine Workers of America". rather than "United Mine Workers. " But the case cannot be viewed as one in which the latter organization is not primarily involved. We have already noted the absorption of the construction workers, formerly a separate C. I. 0. union, into the United Mine Workers,15 and the fact that this integration persists was made clear at oral argument by the statement of petitioner 's counsel to the effect that the United Con- struction Workers would withdraw from the case if the association was willing to bargain with the United Mine Workers for the store employees. Having due regard for these aspects of the record, there- fore, as well as the peculiar problems of the coal industry , I feel that it would be wiser policy to dismiss the petition in the instant case. 14 See Matter of Wheeling Steel Corporation, 59 N L. R. B. 1313 , Cases Nos. 9-R-1490, 1491. 25 See Matter of Harbison-Walker Refractories Company, 44 N. L.R. B. 816.