United Fruit Co.

UNITED FRUIT COMPANY 287 7. The aforesaid unfair labor practices are unfair labor practices affecting com- merce within the meaning of Section 2(6) and (7) of the Act. 8. The Respondent did not engage in unfair labor practices by requiring em- ployees to sign employment agreements. [Recommendations omitted from publication.] United Fruit Company and National Maritime Union of America, AFL-CIO. Case No. f3-RC-10379. November 15, 1961 DECISION AND DIRECTION OF ELECTION Upon a petition duly filed under Section 9 (c) of the National Labor Relations Act, a hearing was held before Jacob Lazarus, hearing offi- cer. The hearing officer's rulings made at the hearing are free from prejudicial error and are hereby affirmed. Upon the entire record in this case,' the Board finds : 1. The Petitioner seeks a single fleetwide unit of all unlicensed sea- men employed aboard certain Honduran flag vessels which it alleges are beneficially owned and controlled by the United Fruit Company, here called UFCO, through its wholly owned foreign subsidiaries, Empresa Hondurena de Vapores, S.A.z and Balboa Shipping Cor- poration. UFCO contends that it is not, as alleged, the employer of the seamen involved and neither owns nor, as a time-charterer, op- erates the ships covered by the petition. Both UFCO and Empresa argue basically that as Empresa is a foreign corporation, is the em- ployer of the seamen, and is engaged in its own business of operating and chartering the vessels, and as the vessels are of Honduran registry and the seamen of foreign nationality, the maritime operations in- volved are not within the jurisdiction of the Labor Act. Thus, the issue raised here concerns not only the effect upon the Act's jurisdic- 1 On May 31, 1960, the Board held a consolidated hearing for purposes of oral argu- ment in West India Fruit and Steamship Company, Inc, 130 NLRB 343; Peninsular & Occidental Steamship Company, 132 NLRB 10 ; and Eastern Shipping Corporation, et al, 132 NLRB 930 , on certain issues concerning the jurisdiction of the Act over ships flying the flags of nations other than the United States and concerning policy considera- tions involved in the Board's assertion of jurisdiction over such vessels similar issues are raised in this proceeding. Thus , as it appeared that United Fruit Company, the Petitioner, and Sociedad Naccional de Marines de Hondoras , a Honduran organization, might have a substantial interest in the outcome of the West India and other cases re- ferred to above, they were invited to participate as amicus curiae in the oral argument. Only the Petitioner accepted the invitation and appeared by counsel at the hearing. See, West India Fruit and Steamship Company, Inc, supra, footnote 5 As set forth in our decision in the West India case, supra, footnote 4, the Attorney General of the United States was permitted to intervene in this and the other three cases referred to above and in his brief , filed on November 18, 1960 , presented on behalf of the Department of State and Department of Defense certain considerations of inter- national law and national defense policy bearing upon issues common to the four cases. 2 Empresa Hondurena de Vapores , a Honduran corporation , moved to intervene on the ground that it was the employer of the employees covered by the petition Empresa was, without opposition , permitted to intervene at the hearing and has participated fully at all stages of this proceeding 134 NLRB No. 25. - 288 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tion of the foreign aspects adhering to Empresa's maritime opera- tions, but also a determination of the relationship of Empresa and its operations to UFCO and its shipping trade. As for the companies' arguments based upon the flag law and other International law doctrine and upon certain treaties and conventions between the United States and Honduras, such matters were dealt with at length in the Board's decision in West India. It was there concluded that the presence of such matters does not necessarily pre- clude the Act's coverage of a given maritime operations Similarly in the Peninsular and Occidental' and in the Eastern Shipping s cases it was held that the foreign incorporation of the legal owner and operator of a vessel and apparent employer of its crew did not alone take the vessel beyond the reach of the Act's jurisdiction. However, none of, these cases supports the proposition, in effect urged upon us here by the Petitioner, that underlying stock or other beneficial ownership and, thus, ultimate control of a foreign corpora- tion and its-operations by domestic United States interests necessarily bring the foreign corporation or its operations within the coverage of the Act. We do not read the Act as necessarily following United States investments abroad. It is the commerce of this Nation, not of foreign nations, with which the Act is concerned. Also we are aware that International seaborne commerce will by its very nature involve insofar as this Nation is concerned trade or transportation between foreign nations and a State. Nothing in the Act or relevant cases suggests, however, that all seaborne commerce reaching our ports on regular runs or sporadically is within the Act's coverage irrespective of other aspects of the operation." In following the Supreme Court's Lauritzen decision,' the Board has pointed out that the test of jurisdiction given commerce literally within Section 2(6) is whether there exist substantial contacts between the "foreign" mari- time operation and important United States interest.' Under such a test no single contact is decisive.' Rather the problem is one of evaluating the many aspects of the operation and determining whether or not the shipping involved is essentially that of this Nation and not that of a foreign nation which the exigencies of International trade have brought in contact with the United States.10 Such a view clearly 9 The treaty and consular conventions with Honduras are substantially the same as those with Liberia considered in the West India decision supra • 132 NLRB 10. 6 132 NLRB 930 6 See, Benz v. Compania Naviera,Hidalgo, S.A., 353 U.S. 138 (1957 ) ; also, Lau,itzen v. Larsen, 345 U.S. 571, 581 (1952) 7 Lauritzen v. Larsen, supra 9 E g, West India, supra ; Eastern Shipping Corporation, supra e West India, supra; Eastern Shipping Corporation , supra. 10 Thus, in both the Eastern Shipping case and in Hamilton Bros, Inc, 133 NLRB 868, the Board noted in finding the Act applied that the U S. contacts present were not just the result of the foreign seaborne trade of a truly foreign venture. UNITED FRUIT COMPANY 289 lends itself to the result that a foreign maritime operation can retain its essentially foreign nature and remain the commerce of a foreign nation outside the coverage of the Act despite underlying United States interests and certain commercial contacts with this country. At the same time, this view looks beyond the formal foreign aspects to determine if the maritime operation is in fact one primarily based in and operating out of the United States or essentially an adjunct of a domestic corporation's operations in the International tirade of -the United States, and, thus, is the shipping of this Nation and, con- sequently, covered by the Act. It follows, as we emphasized in our West India decision and as we reemphasize here, that the particular flag or nationality of the vessels involved, as such, plays no role in our determinations. Whether the flag or nationality be from our own hemisphere or across the seas, the controlling criteria are the same. It is in the light of these considerations that we must approach the, facts and issues before us in deciding the jurisdictional question. UFCO is a New Jersey corporation with its principal place of business. at Boston, Massachusetts. Of its approximately 8.7 million outstand- ing shares of stock, over 8.5 million are owned by citizens of the- United States. Its business interests extend worldwide and involve a rather diverse group of activities. However, it is primarily concerned with the raising of bananas, sugar, cacoa, and other tropical produce and with their transportation to market and sale. The bulk of its- trade is between Central and South American locations and United States ports, and the value of its imports into, this country exceed $1 million annually, and are carried in large part on ships either owned-, or chartered by UFCO, including those subject of the present petition. Though it is an operating company, UFCO also to a large extent carries out its operations through some 50 to 60 subsidiaries, many of which are foreign corporations such as Empresa, the subsidiary in- - volved in this proceeding. The primary purpose of UFCO's operat- ing through subsidiaries is to achieve, as its vice president explained -in his testimony, a decentralized control of the companies' many activi- ties in which the subsidiaries, more or less specializing in particular types of undertakings, deal with the day-to-day problems of their operations while overall policy and development control resides in the - parent company. The extent and nature of that control is the subject of sharp disagreement between the Petitioner and the companies. But the record shows that, though day-to-day operations are in fact handled by the subsidiaries themselves, long-range plans concerning- expansion, contraction, or other changes in the operation of subsidi-- aries are generally controlled by UFCO and its decision with respect. to such matters is based not so much upon the needs or advancement. 630849-62-vol 134-20 290 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of the subsidiaries as independent corporations, but rather upon the needs and planned development of UFCO's overall business in the production, transportation, and sale of tropical produce. . Empresa is, as noted, one of UFCO's wholly owned subsidiaries. It was organized under the laws of Honduras in 1941 by UFCO which supplied the capital for the venture. Empresa's officers are elected by its directors who are in turn elected by the sole stockholder, UFCO. There are, however, no interlocking directors with, or officers to, Empresa and its parent. Furthermore, Empresa maintains all its own records, holds real estate in its own name, and otherwise appears to function as a distinct corporate entity. It is engaged in the busi- ness of owning and operating vessels registered under the laws of Honduras. However, it does not carry passengers or cargo on its own account. Rather, since its incorporation it has time chartered all its vessels and its income from its maritime operations, which exceeds $400,000 annually is derived wholly from the charter fees. But Empresa does not, as the record shows, hold itself out to the shipping world generally as being engaged in the business of chartering vessels. On the contrary, since its formation its business has been limited with but a few possible exceptions 11 to chartering its vessels to UFCO, and the 17 ships under its control at the time of the hearing and which are the subject of the petition 12 were so chartered. As the owner and operator of the vessels under time charter, Em- presa must provide ships that are fully equipped and ready to put to sea. Thus, it is responsible not only for the physical condition of the ships 13 and for provisioning them," except for fuel, but also for hir- ing the officers and crews 15 and handling all matters concerning terms 11 It was stated in the record by several company witnesses that Empresa chartered its vessels to UFCO and no other company However, an exhibit shows that certain of the vessels had , on relatively rare occasions , been under chaster to companies unrelated to UFCO , but, whether Empresa itself had so chartered the vessels or whether they were in fact rechartered by UFCO to the stranger companies does not appear In either event, it remains clear that Empresa does not look to the general shipping market but rather to UFCO for the chartering of its vessels is Empresa owned 14 of these vessels Three were owned by Balboa Shipping Corpora- tion, a Panamanian corporation wholly owned by UFCO. Empresa is the managing agent of such vessels which, like its own ships, fly the Honduran flag Balboa is not at this time directly involved with the operation of its three vessels which are, for all practical purposes , as fully under Empresa's control as are its own vessels As Empresa's control over the vessels of Balboa appears to be the same as that over its own vessels, it is un- necessary for the purposes of this decision to distinguish between the two groups of vessels We note, moreover, that it is not contended that jurisdiction over Balboa's vessels turns on factors other than those also applicable to Empresa and its vessels. is Empresa is responsible not only for day-to -day upkeep of the vessels but also for having the ships drydocked and repaired . Both are usually done in the United States. However, betterments for vessels or the purchase and scrapping of vessels are matters usually falling within the overall policy control of UFCO. 14 Supplies are purchased both in foreign nations and the United States Most of what it buys in this country is purchased from Maratrop Trading Corporation , a wholly owned UFCO subsidiary "The crews are hired in Honduras , are composed almost wholly of citizens of that country, and sign Honduran shipping articles. UNITED FRUIT COMPANY 291 and conditions of employment including, payment of wages and disci- pline of the personnel.16 There is nothing in the record to suggest that Empresa does not in fact carry out these typical responsibilities of the owner of a vessel under a time charter. UFCO, as the time charterer of the vessels, determines what voyages they shall make, their ports of call, their length of stay in various ports, and what cargos they shall carry. In exercising its control, UFCO deals directly with the captain of the vessel involved. If it is dissatisfied with the handling of a vessel by its officers or crew or with its mechanical or other condition, it directs its complaints directly to Empresa, which is responsible for making any necessary changes. The ships are used, for the most part, to carry produce of UFCO's Latin American operations," and on any given trip may call at ports in various Central and South American countries including those of Honduras. As the bulk of the trade is between such countries and the United States, the vessels regularly call at the ports of this Nation. On their return trips to Latin America the ships carry cargo for various UFCO subsidiaries and also general cargo for shippers and consignees outside the UFCO organization. The record further shows that the Empresa vessels are wholly in- tegrated in UFCO shipping operations. Thus, UFCO bareboat char- ters from one of its United States subsidiaries or owns outright a num- ber of cargo ships registered under the laws of the United States. These ships, like Empresa's, are under the jurisdiction of UFCO's marine division, and two groups of vessels are used interchange- ably, carrying the same types of cargoes and calling at the same ports, both domestic and foreign. In assigning a vessel to a particular run, the determination as to which vessel to use is based on its availability, size, and speed, not on its ownership or flag. The facts, outlined above, show that the maritime operations before us come literally within the Act's definition of commerce as they en- compass, in large part, transportation and trade between foreign countries and States of this Nation. They further demonstrate that the relationship between UFCO and Empresa is one in which the affairs of the subsidiary are designed essentially to further the ship- ping operations of the parent and not one in which Empresa is con- sidered an independent undertaking whose success or failure is gauged by its role in the open market. Supporting this conclusion are, inter alia, (1) that Empresa's capital expenditures and other • substantial changes in operations are tied to UFCO's seagoing transportation needs, both present and projected, (2) that Empresa, with but few 19 Empresa, as part of its control over personnel , has bargained with a Honduran organization as the representative of the crews of its vessels. See below, footnote 22 27 Some, if not all , of the ships also carry passengers. 292 DECISIONS OF NATIONAL LABOR RELATIONS BOARD possible exceptions, time-charters its vessels to UFCO only and does not look to the open market for business, and (3) that Empresa's vessels are utilized by UFCO as an integral and necessary part of its fleet of vessels and not chartered. as an altern ative to acquiring vessels elsewhere or only to meet particular contingencies that may arise:", Thus, the record shows that Empresa's maritime operations are a part of a single integrated maritime operation under the continuous, direct control and either direct or ultimate ownership of UFCO and are an essential part of a seagoing enterprise located in and directed from the United States and engaged in the commerce of this Nation as described in Section 2(6) of the Act. It is also evident, and we find, that Empresa through its immediate authority and control over hiring and other terms and conditions of employment and UFCO, through its control of Empresa and of the vessels and their operations are joint employers of the employees covered by the petition."B We find, further, under the circumstances here that the maritime- operations before us possess those substantial United States contacts, which, under our decision in West India 121 bring them within the juris- dictional coverage of the Act, despite the foreign registry of the vessels, Empresa's foreign incorporation, and the other foreign aspects present 21 Accordingly, we conclude that Empresa and UFCO and their maritime operations subject of the petition are in, and affect,., commerce within the meaning of Section 2 (6) and (7) of the Act, and that it will effectuate the policies of the Act to assert jurisdiction in this proceeding. Thus, the companies' motions to dismiss on jurisdic- tional grounds are denied. 2. The labor organizations involved claim to represent certain-em- ployees of the Employers 22 18 In the situation where it or its subsidiaries ' vessels cannot meet its need s, UFCO' charters vessels from outside its family of companies . Also, it might be noted here that, in its annual reports, UFCO refers to the vessels involved in this proceeding as its own vessels and notes that certain vessels for foreign flag operations were built to its specifi- cations , and so forth . There is nothing in such reports to indicate that UFCO considers the foreign flag vessels to be other than its own or to be otherwise than completely under its control. za In so finding, we are not holding that a time -charterer of a vessel is necessarily a joint employer of the vessel 's crew irrespective of the other attendant facts. As Balboa Shipping Corporation does not operate its three vessels time-chartered to UFCO and does not hire or otherwise deal with the seamen on such vessels or affect their terms and conditions of employment and as Empresa has, as noted, authority over such matters, Balboa is not under the present arrangement an employer of the seamen on its vessels. 20130 NLRB 343. Clearly , the United States contacts derive from the fact that the maritime operations involved are those of a domestic corporation . They are not the re- sult of the international operations of a truly independent foreign maritime venture n See, also , Peninsular & Occidental Steamship Company, supra ; Eastern Shipping, Corporation, et at., supra ; and Hamilton Bros., Inc., supra 22 Following the close of the hearing in this case , Sindicato Maritimo Naccional de Hondoras " Sindimar" sought to intervene in this proceeding on the basis of a card show- ing of interest The Petitioner contends the request for intervention was not timely. We disagree , for the cards submitted in support of intervention were dated prior to the MICRO METALIZING COMPANY, INC., ETC. 293 3. A question affecting commerce exists concerning the representa- tion of certain employees of the Employers within Section 9(c) (1) and Section 2 (6) and (7) of the Act .21 4. The following employees of the joint employers constitute a unit appropriate for the purposes of collective bargaining within Section 9 (b) of the Act : all seamen employed upon the vessels owned or managed by Empresa Hondurena de Vapores, S.A., and jointly oper- ated by the Employers, excluding guards, masters, other licensed officers, and all other supervisors 24 [Text of Direction of Election omitted from publication.] MEMBER RODGERS dissenting : For the reason stated in my dissenting opinions in West India Fruit and Steamship Company, Inc., 130 NLRB 343, and Hamilton Bros., Inc., 133 NLRB 868, I would dismiss the petition herein. time of the close of the hearing . As we find that " Sindimar" Is a labor organization, the motion to intervene is hereby granted . See Hamilton Bro8., Inc., 133 NLRB 868. Sociedad Naccional de Marineros de Hondoras was listed in the petition as the bargain- Ing representative of the employees in the alleged appropriate unit and the record shows that, at the time of the hearing, a contract between Sociedad Naccional and Empresa covering the employees was then in effect. Copies of the petition, of the notice of hear- ing, and other formal papers were not served on Sociedad Naccional . However, on June 7, 1961, the Board issued a notice, served on the parties and Sociedad Naccional, In which, inter alia, it accorded that organization a right to intervene and state its position on the issues by filing within 25 days a statement of intervention and a brief . As Sociedad Naccional did not reply to the notice, we conclude it is not interested in being a party to this proceeding, and we therefore do not consider it to be one. 28 We find contrary to the contention of Empresa that its contract with Sociedad Naccional in effect at the time the petition was filed but expiring in April 1961 is not a bar to this proceeding , assuming it would otherwise be so effective , because the decision herein is issuing after the expiration date of that contract . See St. Louis Independent Packing Company, 122 NLRB 887, 889. 24 The unit appears substantially as requested by the Petitioner. Empresa and UFCO did not contend the unit is inappropriate in either scope or composition , but object to the unit on the grounds considered above and found without merit, i.e., that UFCO is not an employer of the employees and that the Board is without jurisdiction in this case. Micro Metalizing Company, Inc., and White Rod Metalizing Corporation and Local 819, affiliated with International Brotherhood of Teamsters, Petitioner. Case No. 2-RC-11263. November 15, 1961 DECISION AND DIRECTION OF ELECTION Upon a petition duly filed under Section 9 (c) of the National Labor Relations Act, a hearing was held before Haywood E. Banks, hearing officer.' The hearing officer's rulings made at the hearing are free from prejudicial error and are hereby affirmed .2 1 The parties' names appear as amended at the hearing. 2 We grant the Petitioner' s unopposed motion to amend its petition as described below in this Decision. 134 NLRB No. 30.