Local 140

318 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 2. By refusing and continuing to refuse to bargain collectively with the said Local 943 as the exclusive representative of all its production and maintenance employees, excluding office clerical employees, watchmen and guards, and professional and supervisory employees as defined in the Act, the Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (a) (5) of the Act. 3. By refusing and continuing to refuse to bargain with Local 943, as aforesaid, the Respondent has interfered with and continues to interfere with the rights guar- anteed to its employees under Section 7 of the Act, and thereby has engaged in and is engaging in an unfair labor practice within the meaning of Section 8 (a) (1) of the Act. 4. By unilaterally, and without consultation with Local 943, on or about September 10, 1954, revoking the preferential seniority granted to the officers and members of the bargaining committee of the Union, and by denying to the Union the use of a bulletin board, the Respondent has interfered with and continues to interfere with the rights guaranteed to its employees under Section 7 of the Act, and thereby has engaged in and is engaging in an unfair labor practice within the meaning of Section 8 (a) (1) of the Act. 5. The above-described labor practices are unfair labor practices affecting com- merce within the meaning of Section 2 (6) and (7) of the Act. (Recommendations omitted from publication.] Local 140, Bedding, Curtain & Drapery Workers Union , United Furniture Workers of America, AFL-CIO i and Cenit Noll Sleep Products, Inc. Case No. 2-CC-340. February 3,1956 DECISION AND ORDER On November 9, 1955, Trial Examiner William F. Scharnikow issued his Intermediate Report in the above-entitled proceeding, find- ing that the Respondent had not engaged in the unfair labor practices alleged in the complaint and recommending that the complaint be dis- missed, as set forth in the copy of the Intermediate Report attached hereto. Thereafter, the General Counsel filed exceptions to the Inter- mediate Report and a supporting brief. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Inter- mediate Report, the exceptions and brief, and the entire record in the case, and hereby adopts the findings, conclusions, and recommenda- tions of the Trial Examiner. We agree with the Trial Examiner that it would not effectuate the policies of the Act to assert jurisdiction in this proceeding. If the Company had not had any operating experience its prediction of the volume of business it would do might have served to meet our jurisdic- tional standards. Actual sales experience, however, during the first 3 months of its operations fall so far short of prediction that this cir- cumstance, among other things, makes unwarranted, in our opinion, 1 As the AFL and the CIO merged subsequent to the hearing in this ease, we are taking notice thereof and amending the name of the Respondent herein. 115 NLRB No. 54. LOCAL 140 319 a finding that there is a reasonable expectancy that the Company's annual interstate sales will satisfy the Board's jurisdictional require- ment of $50,000. Accordingly, we shall dismiss the complaint herein 2 [The Board dismissed the complaint.] 2 In view of our disposition of the case on jurisdictional grounds, we find it unneces- sary to pass on the other issues in the case. INTERMEDIATE REPORT AND RECOMMENDED ORDER 1. A GENERAL STATEMENT OF THE CASE The complaint in the present case was issued by the General Counsel on a charge filed by Cenit Noll Sleep Products, Inc., herein called the Company. Using the pertinent language of the National Labor Relations Act, as amended (61 Stat. 136), the complaint alleges in substance that since June 1, 1955, the Respondent, Local 140, Bedding, Curtain & Drapery Workers Union, United Furniture Workers of America, CIO, has committed unfair labor practices affecting commerce within the meaning of Sections 8 (b) (4) (C) and 2 (6) and (7) of the Act, by induc- ing and encouraging employees of the Company and employees of other employers doing business with the Company, to engage in a strike or a concerted refusal to perform services for their respective employers, with the object of coercing the Company to recognize and bargain collectively with the Respondent as the rep- resentative of an appropriate unit of the Company's employees, although, on June 1, 1955, the Regional Director for the Second Region of the National Labor Re- lations Board, acting under Section 9 of the Act, had certified that Local 422, International Jewelry Workers Union, AFL, herein called Local 422, was the ex- clusive bargaining representative of the Company's employees in this unit. The Respondent filed an answer which in substance amounted to a general denial of the allegations of the complaint. The complaint, the charge, and notice of hearing were duly served upon the Com- pany and the Respondent. At the hearing, conducted by the duly designated Trial Examiner in New York City on July 20, 21, 22, 25, and 27, and September 15, 1955, it appeared from uncontradicted evidence submitted by the General Counsel that: (1) Pursuant to a consent-election agreement between the Company and Local 422 in Case No. 2-RC-7481 (not reported in printed volumes of Board Decisions and Orders), an election by secret ballot held thereunder by the Regional Director for the Second Region, and the consequent authority vested in him by the agreement and the Board's Rules and Regulations, the Regional Director certified on June 1, 1955, that Local 422 was the exclusive bargaining representative of the Company's employees in an agreed appropriate unit; i and (2) by picketing from June 1 to July 13, 1955, and by picket signs and statements made by the pickets during this period to company employees and employees of trucking companies who appeared at the plant to make deliveries, the Respondent induced and encouraged the Com- pany's employees and the employees of other employers to engage in a strike or a concerted refusal to perform services for their respective employers, with the object of coercing the Company to recognize and bargain collectively with the Respondent as the exclusive bargaining representative of the Company's employees in spite of the certification of Local 422.2 It In the representation case, the Company appeared by the name, "Lifetime Sleep Prod- ucts, Inc." By amendment of its corporate charter on or about May 11, 1955, its name was changed to "Cenit Noll Sleep Products, Inc." f Harvey Noll, the Company's vice president, testified that on two occasions in the last part of March and early April 1955, Bernard Minter, the Respondent's representative, asked Noll to discuss a contract with the Respondent ; that Noll told Minter a contract with the Respondent was impossible because the Company had not yet hired any em- ployees and that, in any event, the Company intended to hire only inexperienced em- ployees who were local residents ; that on May 17, 1955 (after the election in the repre- sentation case but before the certification of Local 422), Minter informed the Company "that the time had come to sign a contract" and that otherwise the Respondent was "go- ing to be very, very difficult on us"; that Cenit, the Company's president, then told Minter, '.'You do what you think is best, and we will do what we think is best" ; that the Respond- ent immediately began picketing the employee and delivery entrances of the Company's plant and continued picketing, on and off, until July 13, 1955; that, after the certifica- 320 DECISIONS OF NATIONAL LABOR RELATIONS BOARD During the course of the hearing , the Respondent asserted two principal defenses under its general denial: (a) That the certification of Local 422 was invalid because, as known by the Company and concealed from the Board through a collusive scheme between the Company and Local 422, the Company was not engaged in commerce ; the Respond- ent, as well as Local 422, was interested in the representation of the Company's employees ; and the Company's employees who voted in the election were temporary, and not bona fide permanent employees, since most of them were replaced after the election. (b) That, in any event, the Board should not now assert jurisdiction in the present complaint case because the Company is not engaged in commerce to the extent which would satisfy the jurisdictional minima established by the Board as a matter of policy. The General Counsel and the Company objected to the reception of any evidence for the purpose of attacking the validity of the certification but, in the course of argument, suggested that such evidence , and all rebuttal evidence, might be pro- visionally taken, and ruling upon the objection be ultimately made by the Trial Examiner in his Intermediate Report. The Trial Examiner at first accepted this suggestion but, after receiving some of the evidence during the balance of that day, reopened the question on his own initiative . Upon reconsideration, and after inviting further argument from counsel, the Trial Examiner sustained the objection and thereafter excluded all evidence relating to the validity of the certification.3 tion of Local 422, pickets told company employees as they were going to work, "You shouldn't cross the picket line ; it is a company union in there ; you shouldn't work there" ; and that on June 6 and other occasions , pickets also asked drivers employed by trucking companies not to cross the picket line to make deliveries because "this was an organiza- tional strike and there was a company union in the factory." Abraham Cenit, the Com- pany's president , also testified without contradiction that on June 3, 1955, and thus dur- ing the Respondent's picketing , he had a conversation with Minter in which Minter said, "Well, if I were you, I would sign a contract with us , and if not , we will put you out of business," and that he did not care whether there was a certification or not. It was stipulated that the pickets carried signs which stated : "Lyftime, Cenit-Noll's Sleep Prod- ucts unfair to organized labor. Please give your support to Local 140 , UFWA, CIO, 80-11th Street, New York City." 3 The Trial Examiner made his ruling and stated his reasons upon the record , in the fol- lowing language : For the reasons stated by me to you gentlemen at our last session on Friday after- noon , I have reconsidered my decision provisionally to receive evidence bearing upon the validity of Local 422 's certification , and to defer ruling upon the General Coun- sel's objection to such evidence until the issuance of my intermediate report. I am now sustaining the objection and, in accordance with this ruling , will exclude such evidence. The grounds for my ruling are the following: First , Local 422 is a necessary party to any proceeding affecting its certification and its rights thereunder . It is not a party to the present proceeding. Second, under the general substance and arrangement of the provisions of the Act, questions affecting the certification of exclusive bargaining representatives by the Board, are to be raised before the Board and decided by it In representation pro- ceedings , under Section 9 of the Act and not in unfair labor practice proceedings under Sections 8 and 10 of the Act. The respondent union did not exhaust its remedies in objecting to the certification in the representation proceeding, since it failed to apply to the Board for permission to appeal the Regional Director 's denial of its application to set the election aside. Third, In any event, unless specifically directed by the Board to do so, a Trial Examiner conducting a Section 8 (b) (4) (C ) proceeding for the Board may not prop- erly entertain a collateral attack in that proceeding upon the validity of a Board certification since, under the language of Section 8 (b) (4) (C), unlike that of Sec- tion 8 ( a) (5), the mere existence of the Board 's certification , rather than its validity, or the facts upon which it is based , or the facts which it purports to certify, Is the critical element of the unfair labor practice forbidden by that subsection. I should say that the first of these three grounds has impelled me to sustain the General Counsel's objection at the present time, rather than to take the evidence and later rule on the objection in my intermediate report, for consideration of this ground alone has now made it clear to me that there is no point In taking the testimony. But since this ruling is final so far as I am concerned, I felt it desirable to consider LOCAL 140 321 On July 27, 1955, the Respondent filed a petition with ,the Board for leave (1) to intervene, and to procure the reopening of the record, in the representation case for the purpose of attacking and testing the validity of the certification; and (2) to pro- cure the consolidation of the present complaint case with the reopened representa- tion case, for purposes of further hearing. Alternatively, the Respondent petitioned the Board for leave to appeal the Trial Examiner's ruling excluding an attack upon the certification of Local 422 in the present complaint proceeding. On August 19, 1955, during a recess of the hearing in the present case, the Board denied the appli- cations thus made by the Respondent, without prejudice, however, to a review of the Trial Examiner's ruling after the issuance of the Intermediate Report. On the last day of the hearing, the Company moved for leave from the Trial Examiner to withdraw its charge, asserting, in substance, that the Respondent had not only ended its picketing, but had promised not to resume it, that the Company was content to rely upon this promise, and that the purposes and policies of the Act had been, and would continue to be, effectuated by the present proceeding with- out the issuance of a Board cease and desist order. The Respondent supported this motion. Upon opposition by the General Counsel, however, the Trial Examiner denied the motion. The issue of whether the Board should assert jurisdiction in the present case was fully litigated in the hearing. Upon the evidence in this connection, and from his observation of the witnesses, the Trial Examiner makes the findings of fact, con- clusions, and recommendation set forth in section 11, below. II. THE BUSINESS OF THE COMPANY The Company is engaged at its plant in Amityville, New York, in the manufacture, sale, and distribution of mattresses, box springs, studio sofas, convertible sofas, and related products. Since it was incorporated under the laws of the State of New York on March 4, 1955, it could furnish information as to the amount of its out-of- State sales only for a period of a few months, and not for an entire year. The General Counsel and the Company contend, but the Respondent denies, that (1) an arithmetical, full-year projection of the actual volume of the Company's interstate business for this short period 4 and (2) the Company's reasonable expectation as to the total volume of interstate business for its first year,5 satisfy the Board's applicable jurisdictional requirement of a minimum annual total of $50,000 in direct out-of-State sales .6 The Company sold and delivered its first mattresses and box springs on May 31, 1955, and began an advertising and sales campaign on June 6, 1955. At the end of 3 months (that is, up to the last day of the hearing on September 15, 1955) the Company had sold and delivered mattresses and box springs of an approximate total value of $50,000, of which no more than $5,000, by value, was sold and delivered to customers at points outside the State of New York. On September 15, 1955, it had additional outstanding orders for future delivery in the approximate amount of $35,000, of which approximately $3,500 or $4,000, by value, represented orders contemplating ultimate shipment to points outside the State of New York. Although 3 additional orders, aggregating $25,514, had been placed by a Miami, Florida, purchaser, these orders had been cancelled by this purchaser before September 15, 1955. Even if we include the Company's outstanding out-of-State orders at the end of the 3-month period after the opening of its sales campaign, it is clear (and the Trial Examiner finds, contrary to the General Counsel' s argument ) that a 12-month projection of the Company's out-of-State business would not satisfy the $50,000 minimum established by the Board as a condition of its asserting jurisdiction in the present case. Immediately and to set forth the two additional grounds which, in my opinion, also support the ruling against a collateral attack upon the certification in the present proceeding. A See C. & A. Lumber Go., 91 NLRB 909; Calera Mining Company, 97 NLRB 950, at 952; Essex County Carpenters' Council, 95 NLRB 969; Sunset Lumber Products, 113 NLRB 1172, footnote 1. 6 The General Counsel relies upon Delta Match Co., 102 NLRB 1400. See also William Fargo (London Mills), 91 NLRB 1003, at 1004, footnote 2 and related text; and General Seat and Back Mfg. Corp., 93 NLRB 1511, at 1512. 6 Jonesboro Grain Drying Cooperative, 110 NLRB 481. 390609-56-vol. 115-22 322 DECISIONS OF NATIONAL LABOR RELATIONS BOARD There remains the further question whether the Board should assert jurisdiction because of a reasonable expectation or expectancy on the part of the Company that its out-of-State sales for the year will exceed $50,000. The General Counsel makes this argument upon estimates given by Abraham Cenit and Harvey Noll, the Com- pany's president and vice president, and also upon the basis of their uncontradicted testimony concerning the development of the Company 's production and sales fa- cilities and its advertising-all of which the General Counsel asserts show the reason- ableness of. the Company's estimates and the Company's reliance upon, and con- fidence in, them. Operation of the Company's business is generally divided between President Cenit and Vice-President Noll. Noll, who is in general charge of the Company's production and personnel, had been employed for 7 years by a large New York City department store as its buyer of mattresses and other sleeping equipment, and, in this capacity, had been responsible for the placement of over $50,000 a year in advertisements and from $700,000 to $1,250,000 in annual sales. Cenit, who is primarily in charge of the Company's sales, had previously been employed for 16 years in the mattress industry and, as the general manager of the New York plant of a large mattress company with plants in 27 States, had been responsible for the New York plant's production and its sales, merchandising, and advertising in the New York metropolitan area which embraced 4 of the 5 boroughs of New York City; Westchester County, and Long Island, all of which are in New York State. The Company took possession of its plant at the end of March 1955 under a lease calling for a rental of $9,000 a year . Between that time and May 20, 1955, it purchased and installed "machinery and equipment at a cost of approximately $20,000. It hired a foreman on March 25, 1955, and 7 nonsupervisory employees between April 14 and 25, 1955. Since none of these nonsupervisory employees had previous experience in manufacturing box springs or mattresses, the Company trained them and, by May 31, after experimentally making and remaking a number of mattresses and box springs and securing the necessary sanitary labels approving their sale in the States of New York, New Jersey, Massachusetts, Connecticut, and Pennsyl- vania, produced an initial sales stock of 50 sets of mattresses and box springs. By July 22, 1955, the Company had increased its working force to 12 employees, the number it intends regularly to employ. Noll and Cenit both testified concerning the sales promotional campaign which the Company has entered into and which it expects to bring a substantial volume of sales from outside the State of New York. Up to the time of the hearing, 1,500 brochures describing the Company's product had been mailed to furniture dealers in New York, Connecticut, and New Jersey and, according to Noll's testimony, the Respondent intended to add to its mailing list the names of dealers in the State of Pennsylvania and in Baltimore, Maryland, and Washington, D. C. In addition, the Company on one occasion, ran a three-quarter page advertisement in a nationally distributed trade journal. And, on June 6, 1955, at a luncheon and radio program broadcast from a hotel in New York City, the Company showed its line to "key merchandise people in the area, people who have stores locally and outside the State." The luncheon thus launched the Company's participation for 6 months as- I of a number of sponsors of a week-nightly, 1-hour-and-l0-minute radio broadcast, in which the entertainment feature is broadcast over a national radio hookup, al- though the spot commercial announcements of the Company's product (of 1i min- utes, 3 or 4 times a week) are themselves broadcast only from the New York City station. Moreover, at the time of the hearing, the Company had an option (though it apparently had not yet exercised it) to participate in a similar multisponsorship of a weekly television program from New York City. Cenit himself is apparently the Company's principal salesman, although there_ are also 6 others who act in that capacity, that is, 3 salesmen in the State of New York, and 3 general manufacturers' representatives operating on a commission basis in Pennsylvania, Connecticut, and New Jersey, respectively. All three of these out- of-State agents started their representation of the Company in mid-July 1955. Just what portion of the Company's out-of-State sales and orders as of September 15, 1955, were attributable to the efforts of these agents, is not shown by the record, for the only testimony on the point was that of Cenit and was merely to the effect that they "had gotten some business." In his testimony, Noll estimated that the "total possible production capacity" of the Company's plant was 25,000 units per year, which would sell at an average of from $20 to $22 per unit. On this basis, Noll (and apparently Cenit, too) estimated that the Company's total annual gross sales will amount to $500,000 to $550,000 a year. Proceeding further, Noll testified that , from his knowledge of what their advertising would do, he believed that 30 percent of this gross volume of sales LOCAL 140 323 <or from $150,000 to $165,000) would be interstate sales. And Cenit, in his testimony, was even more hopeful and estimated that interstate sales for the first year would be 35 percent of gross sales, or from $175,000 to $192,500. These estimates, it will be noticed, are quite out of line with the disproportionately low figures of actual gross and interstate sales and the similarly low percentage of gross sales represented by interstate sales, during the short period of the Company's operations prior to the hearing. But Cenit and Noll explained that they reached their general annual estimates because the gross sales volume and the percentage represented by interstate sales would increase as the Company's operations got under way and that the heavier seasonal demand had not yet been reached. However, Cenit also testified that the season for heavy wholesale orders, which normally began in September or October, had apparently shifted this year, and August had proved to be "a strong season" and that "September slowed up." The test adopted by the Board as to whether it will assert jurisdiction over a new business which has been in existence for less than a year, is whether there is a reasonable expectancy that its interstate business for the current year will equal the minimum fixed by the Board as a matter of policy.7 Upon the evidence in this case, the Trial Examiner does not believe that such an expectancy on the part of the Company is reasonahle. Even if we consider the Company's outstanding out-of-State orders at the time of the close of the hearing, as sales attributable to the first 3 months of its opera- tions, the out-of-State sales for that quarter would amount only to $9,000. At that rate, the Company's interstate business for the first year would amount only to $36,000 and would be $14,000, or 28 percent, short of the required $50,000. In order to close this gap during the last 9 months of its first year, the Company would have to fill all of the $4,000 worth of out-of-State orders which were still outstand- ing on September 15, 1955, and, in addition, would have to increase its quarterly rate of out-of-State sales by slightly more than 50 percent. Certainly, for jurisdictional purposes, this is by far the most optimistic view that can be taken of the Company's short-term experience. For, if only completed sales are counted and not outstanding orders, the volume of the Company's in- terstate sales for the first 3 months falls hopelessly short of the Board's annual stand- ards. Thus, if the Company's volume of out-of-State completed sales for this 3 months is projected, it yields an annual figure of only $20,000 which is 60 percent less than the required $50,000. And, to make up this deficiency during the last 9 months of the first year, the Company would not only have to fill all of its $4,000 in outstanding orders as of September 15, 1955, but, in addition, would have to in- crease its quarterly rate of actually completed out-of-State sales by approximately 173 percent. Accordingly, during the last 9 months of the year, the Company would have almost to triple its rate of completed interstate sales for the first 3 months in order to meet the Board's jurisdictional requirement. Of course, if Cenit's and Noll's estimates of the Company's gross sales and in- terstate sales should be fulfilled by the end of its first year, the Company will have either tripled or almost quadrupled the required $50,000 in interstate sales. But the question of whether the Board shall take jurisdiction must be decided now, on the basis of whether the Company's present expectancy is reasonable, and not in June 1956. And, at the present time, the Company's estimates seem to be ques- tionable, not only because, on a pro rata basis, the actual figures for the first 3 months of the Company's existence are so very much less, but also because the record fur- nishes no other counterbalancing indication that the Company's estimates for the entire year have any substantial or reasonable basis. Noll's and Cenit's basic estimates start with what seems to the Trial Examiner to be the unsupported and unreasonable assumption that the Company 's gross sales for the first year will equal the full production capacity of the plant. Apparently equally unwarranted are their secondary estimates of the percentage of gross sales which will be interstate. Both Noll and Cenit testified that these estimates were founded upon their past experience as to what advertising and sales promotion of the type employed by them, would bring in the form of interstate business. And yet, so far as the Trial Examiner can see from the evidence, neither Noll nor Cenit had any prior experience which would indicate the interstate sales yield of advertising. In their former positions, neither had been concerned with, nor had he apparently had the opportunity to appraise the results of, advertising for the purpose of out-of- State wholesaling. Noll's experience was limited to buying for a New York City department store, and Cenit, according to his testimony, was responsible only for the advertising and marketing of the product of a New York plant in a territory 7 See cases cited in footnote 5, supra. 324 DECISIONS OF NATIONAL LABOR RELATIONS BOARD limited to New York State. Indeed, even if Cenit and Noll had previous comparable and pertinent experience with interstate advertising and its results, it is questionable whether mere reference to the effort expended by them in advertising and promoting the Company's product would enable them even to approximate the percentage of out-of-State sales-much less the dollar figure of such sales-which would result during the first year of the Company's operations. The General Counsel contended in his oral argument that the reasonableness and reliability of Cenit's and Noll's expectancy of annual out-of-State sales ranging from $150,000 to $192,500 (and certainly of more than $50,000) are also shown by the substantial investments which they, as reasonable, prudent business men, made through the Company: i. e., in the $9,000 annual rental for the plant, in the $20,000 expended for machinery and equipment, and in the development of advertising and the procurement of sales agents reaching potential out-of-State customers. This argu- ment, essentially, is that the Company, organized and operated as it has been by Cenit and Noll, would not have made this investment unless these 2 men felt certain that, in addition to sales within the State of New York, they would secure at least $50,000 of out-of-State business each year. Not only does this not appear from the evidence, but the volume of the Company's intrastate sales during the initial period of 3 months suggests the contrary and more likely possibility that the New York market alone was a sufficient lure for the investment and that the interstate market was merely an addi- tional attraction which might perhaps be developed in time and at but little, if any, increase in cost. Upon all the evidence, upon the facts found thereon, and upon consideration of the arguments of counsel, the Trial Examiner concludes that, although the Com- pany's operation of its business is not wholly unrelated to commerce, there is no basis in the record for holding either that an annual projection of the Company's business indicates that the Company will attain a volume of $50,000 in direct sales out of the State during the current year of its operations, or that there is otherwise a reasonable expectancy that it will do so. Accordingly, because of the failure of any proof showing that the Company's business will meet this or any of the other policy standards promulgated by the Board in the Jonesboro Grain Drying Cooperative case (110 NLRB 481), the Trial Examiner believes that the Board should not assert jurisdiction in the present case and should therefore dismiss the complaint. [Recommendations omitted from publication.] Martin Aircraft Tool Company, Petitioner and International Union, United Automobile, Aircraft and Agricultural Imple- ment Workers of America, Local No. 811, AFL-CIO.1 Case No. 31-R,31-363. February 3,1956 SUPPLEMENTAL DECISION AND DIRECTION Pursuant to a Decision and Direction of Election issued by the Board on August 29, 1955, an election by secret ballot was conducted on September 20, 1955, under the direction of the Acting Regional Director for the Twenty-first Region, among employees in the unit found appropriate by the Board. At the close of the election, the parties were furnished a tally of ballots. The tally shows that of approximately 62 eligible voters, 28 cast ballots for, and 23 cast ballots against, the Union, and 5 cast challenged ballots. In accordance with the Board's Rules and Regulations, the Acting Regional Director investigated the challenges, which were sufficient I The AFL and CIO having merged, we amend the identification of the Union 's affiliation. 115 NLRB No. 55.