George Schuwirth

GEORGE SCHUWIRTH 459 of proof, and the-exhibits, in the instant case, and concludes on this additional basis that the prior denial of the request for review was proper. In these circumstances, and as the motion for reconsidera- tion raises no other matters not previously considered by the Board, we shall reaffirm the Decision and Order in the present case. [The Board' granted the motion for reconsideration and, upon re- consideration, reaffirmed the original Decision and Order.] MEMBER JENKINS took no part in the consideration of the above Supplemental Decision and Order. George Schuwirth and International Union of United Brewery, Flour, Cereal, Soft Drink and Distillery Workers of America, AFL-CIO, Local Union No. 110, Petitioner. Case No. 23-RC- 1197. March r 23, 196/ 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 Hearing Officer C. • L. Moser.' 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 Employer, an individual, doing business in San Antonio, Texas, is engaged in selling spent grain, the residual byproduct of brewing, to dairymen in the San Antonio area, including Bexar County and adjoining counties in Texas. During 1962, he purchased approximately $93,000 worth of this spent grain from the Lone Star Brewing Company in San Antonio, Texas, and his purchases during 1963 were running ahead of that year. The Employer makes no sales or purchases from outside the State of Texas. The Brewing Com- pany, during 1962, purchased barley and corn grain in the amount of $1,970,227 that was shipped directly from outside the State of Texas. The Employer employs approximately nine drivers, who comprise the unit sought by the Petitioner. These drivers pick up the spent grain at the Lone Star Brewing Company, where it- appears in mush- like form after having been processed through Lone Star's brew kettles into its tanks. It is estimated that this brewing process re- moves approximately 80 percent of the food value from the grain, leaving a residue unfit for human consumption.. The spent grain is 'This case was transferred to the Board by the Regional Director for the Twenty-third Region. 146 NLRB No. 51. 460 DECISIONS Or, NATIONAL LABOR RELATIONS BOARD then delivered by the Employer to some 50 dairymen customers -in the San Antonio area. These dairymen use the spent grain for dairy feed. . The Employer moved to dismiss the instant petition on jurisdic- tional grounds, contending, inter alia, that it is strictly a local and re- tail business and that its operations do not affect commerce in any manner; that irrespective of the nature of such business, it does not sell to customers who meet the jurisdictional tests prescribed by the Board; and that whether it be retail or nonretail, its business has no impact or effect on commerce except in a most insubstantial manner. The Petitioner contends that Employer's business is subject to and satisfies the Board's jurisdictional standards for nonretail enterprises. We agree with the Petitioner that the Employer's operations are wholesale, and not retail, in nature. The dairy farmer purchases spent grain not "to satisfy his own personal wants or those of his family or friends" but to use in his "commercial" operations as a milk producer.2 We do not believe the processes to which the grain was subjected by the Lone Star Brewing Company involved such an altera- tion in the grain's form or content as to take the sales of the spent grain out of the,stream of commerce sand thus render the Board's in- direct inflow standard inapplicable.' Accordingly, we find that the Employer annually purchases in ex- cess of $50,000 worth of goods or merchandise which originate out- side the State of Texas; that the Employer's operations therefore are such as affect commerce within the meaning of the Act,4 and that it will effectuate the policies of the Act to assert jurisdiction herein s 2. The labor organization named herein claims to represent certain employees of the Employer. 3. A question affecting commerce exists concerning the representa- tion of certain employees of the Employer within the meaning of Section 9(c) (1) and Section 2(6) and (7) of the Act. 4. The following employees of the Employer constitute a unit ap- propriate for the purposes of collective bargaining within Section 9(b) of theAct:6 2 See J S Latta d Son, 114 NLRB 1248; Treasure State Equipment Company, 114 NLRB 529; Bussey-Williams Tire Co, Inc, 122 NLRB 1146. See also 'Southern Dolomite, 129 NLRB 1342, 1344, footnote 7. 3 Combined Century Theatres, Inc., et al, 120 NLRB 1379. We do- not deem the spent grain to be a material alteration or part of an entirely different product within the meaning of Kenneth Chevrolet Company, et al., 110 NLRB 1615, and hence , contrary to the inter- pretation of the dissent , we are not departing from the rule stated in that case. d N.L.R.B. v. Reliance Fuel Oil Corporation, 371 U.S. 224. See also Wickard v. Filburn; 317 US 111. - - 5 Siemens Mailing Service, 122 NLRB 81 , 85 As the indirect inflow test is met, it is immaterial that the record does not reflect whether or not the Employer' s customers sell produce to customers outside the State of Texas. 6 The unit description appears substantially as amended at the hearing. GEORGE SCHUWIRTH 461 All -drivers, excluding office employees, office clerical employees, guards and/or watchmen, all other -employees, and supervisors as defined in the Act. [Text of Direction of Election omitted from publication.] MEMBER LFEDOM, dissenting : Unlike the majority, I would not assert jurisdiction in this proceeding. The jurisdictional facts are not in dispute. The Employer is engaged in selling spent grain, a waste product, to dairymen in the San Antonio, Texas, area.' He makes no sales directly across State lines; nor do the dairymen to whom the Employer sells the spent grain make any sales across State lines. It is clear, therefore, that the Employer meets neither the direct nor indirect outflow standards of the Board. While the Employer makes no purchases directly from outside of Texas, he purchases more than $50,000 worth of spent grain from the Lone Star Brewing Company. Lone Star itself pur- chases, from out of State, barley and corn in the amount of approxi- mately $2 million. This barley and corn is processed by Lone Star and made into beer. After the brewing process, a residue, the spent grain, is sold to the Employer. On the basis of the foregoing facts, the majority concludes that since the Employer purchased in excess of $50,000 worth of "goods or merchandise which originated outside of the State of Texas," it would effectuate the policies of the Act to assert jurisdiction over his operations. I believe that this result is contrary to clear and compelling precedent and would have the effect of subjecting a purely local enterprise to the Board's jurisdiction. Initially, I think it is important to emphasize that the Employer patently does not meet the Board's indirect inflow test as stated in Siemo,s Mailing Service, 122 NLRB 81, 85. There the Board defined indirect inflow as the "purchase of goods or services which originated outside the employer's State but which he purchased from a seller within a State who received such goods or services from outside the State." [Emphasis supplied.] Here, in asserting jurisdiction, the majority relies on the Employer's purchases of spent grain. How- ever, the spent grain does not originate outside of Texas. It is the barley and corn which originated outside of Texas. Further, it is apparent that barley and corn grain are not the same "goods" as the spent grain. The fact is recognized by the majority which explicitly finds that the grain is processed by Lone Star through brew kettles and that approximately 80 percent of the food value of the grain is 7I agree with the majority that the Employer's operations are wholesale and not retail in nature. 462 DECISIONS OF NATIONAL LABOR RELATIONS BOARD removed; that the grain ends up as a mushlike form, containing no whole grain ; that, as such, it is unfit for human consumption ; and that it is this residue mushlike product which is the spent grain pur- chased by the Employer. It is clear that the Employer does not pur- chase "goods" originating from out of State and therefore does not meet the Board's indirect inflow test as stated in Siemons. This result is also required by the Board's decision in Kenneth Chevrolet Company, et al., 110 NLRB 1615, not alluded to by the majority. The Board there expressly held that it would consider "a product as being part of the indirect stream of inflowing commerce only when it is delivered to the ultimate purchaser in the, same form as when it entered the State." [Emphasis supplied.] In that case, the Board refused to assert jurisdiction over retail automobile dealers who purchased automobiles from assembly plants within the State where the component parts of the automobiles originated from out- side the State. Applying the Kenneth Chevrolet rule in the instant case, I would find that since the spent grain delivered to the Em- ployer is obviously not "in the same form" as when it entered the State, the Employer does not satisfy the Board's indirect inflow re- quirements.' Indeed, the case before us is an even stronger case than Kenneth Chevrolet for not asserting jurisdiction. Thus, as the Board there noted, the automobile components sold across State lines, albeit maintaining to some extent their original identity, became "part of an entirely different product," and therefore were not "in the same form" when they were sold to the ultimate employer. Here, however, as the majority concedes, the original products, the barley and corn, no longer exist after the brewing process. It goes through a chemical process and is transformed into several entirely different products. Surely, in these circumstances, the spent grain purchased by the Employer should not be deemed to be ""in the same form" as those goods which were in the stream of commerce. Nor do I believe that the Board's decision in Combined Century Theatres, Inc., et al., 120 NLRB 1379, relied on by the majority, is to the contrary. There, a majority of the Board 9 asserted jurisdiction over a chain of movie theaters on the basis of the inflow standard. 8 while it is difficult to find precise analogies to this somewhat peculiar problem, I be- lieve that the Supreme Court decisions relating to the definition of "imports" under the United States Constitution might be instructive . Under article I, par. 10, clause 2, of the Con's'titution, a State may not levy a tax on imports. However, the Supreme Court has repeatedly held that a State may tax goods that have been imported if they have been so altered from their physical form in'which they arrived that they had lost their character as foreign imports. See Gulf Fisheries Co. v. Maclnerney, 270 U.S. 124: cf. Youngstown Sheet & Tube Co. v. Bowers, 358 U.S. 534 , 501 (dissenting opinion ). By the same token, if goods, although brought from across State lines, have been so altered from " their physical form in which they crossed State lines , they change their character and no longer may be considered to be in the stream of interstate commerce. Member , Rodgers and I dissented. GEORGE SCHUWIRTH 463 The master negatives in that case were made in California and were a different product from the positive prints purchased within New York by the motion picture theaters for exhibition . The Board ma- jority made it perfectly clear that it was asserting jurisdiction only because these employers were paying more than $50,000 to local distributors who were acting for out-of-State producers for the right temporarily to exhibit to paying audiences spectacles created aid received from out of State. This basis for, asserting jurisdiction is, of course, not present in the instant case. Moreover, the majority in Combined Century Theaters 'distinguished Kenneth Chevrolet on the ground that a positive film print in an exact duplicate of the negative, but in reverse, and therefore it is not an "entirely different product" in the sense that anautomobile is different from the parts of which it is made. Accordingly, since the spent grain is an entirely different product from the barley and corn which cross State lines, it. would appear to follow, even under the majority opinion in Com- bined Century, that the Board should not assert jurisdiction over the instant Employer. I note, too, that in Combined Century the substance of the Board's reasoning was that since the master negatives which are made in Cali- fornia are exported to New York for the purpose of being made into positives which will be leased to the theaters in New York and ex- hibited to the public, if the theaters were to stop buying the positives, the film makers in California presumably would stop shipping the negatives to New York.10 In the instant case , however, Lone Star pur- chased grain from out of State in order to brew beer. The Employer does not purchase beer; he purchases the waste product from the brew- ing process. It is highly unlikely, therefore, that even if the Em- ployer stopped buying spent grain from Lone Star, Lone Star's pur- chases from out of State would be affected . It is therefore clear that the Employer's purchases of spent grain do not affect commerce either directly or indirectly." Iam concerned 'by the result reached by the majority because, taken to its logical conclusion, it would mean that many purely local enter- prises would Abe subjected to the Board's jurisdiction. For example, would the Board assert jurisdiction over a neighborhood junk dealer 10A similar argument was made in Kenneth Chevrolet . See Member Murdock's dissent, 110 NLRB at 1617. 11 The majority also relies on the decision in N.L R.B. v. Reliance Fuel Oil Corporation, 371 U.S. 224, in which the Supreme Court affirmed the Board's assertion of jurisdiction over Reliance, which purchased within the State fuel oil from Gulf 011, an enterprise engaged in interstate commerce . But there, unlike here, the product purchased by Reliance from Gulf, the fuel oil , was the very same product purchased by Gulf from out of State. Nor, obviously, is Wxckard v. Filburn, 317 U.S. 111, which dealt with the issue whether Congress' power to regulate interstate commerce included the power to enact the wheat- marketing quota provisions of the Agriculture Adjustment Act, in point: 744-670-65-vol. 146-31 464 DECISIONS OF NATIONAL LABOR RELATIONS BOARD who makes only local purchases and sales because the items, before they became junk, were sold across State lines? Or, would it assert jurisdiction over the employer who purchased the manufactured prod- uct locally, for sale locally, solely because the raw materials for that end product were originally sold across State lines? The majority de- cision here, I fear, requires an affirmative answer to these questions. As the Employer is a wholly local enterprise which does not meet the applicable Board jurisdictional standards, I would not assert jurisdiction. I would accordingly dismiss the petition herein. MEMBER FANNING 'took no part in the consideration of the above Decision and Direction of Election. Ore-Ida Foods, Inc. and Teamsters Food Processing Employees Local No. 943, affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of Amer- ica. Case No. 36-CA-1271. March 24, 1964 DECISION AND ORDER On December 9, 1963, Trial Examiner James R. Hemingway issued his Decision in the above-entitled proceeding, finding that the Re- spondent had engaged in and was engaging in certain unfair labor practices within the meaning of the Act, and recommending that it cease and desist therefrom and take certain 'affirmative action, as set forth in the attached Trial Examiner's Decision. Thereafter, the Respondent and General Counsel filed exceptions to the Decision and supporting briefs. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, the Board has delegated its powers in connection with this case to a three-member panel [Members Leedom, Fanning, and Brown]. 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 Trial Examiner's Decision, the exceptions and briefs, and the entire record in the case, and hereby adopts the findings, conclusions, and recom- mendations of the Trial Examiner.' ' In light of the Trial Examiner 's finding as to the absence of evidence to support the Respondent's contention that it had subcontracted the work of the unit of over -the-road drivers prior to the organizational activities of the Union, the Board deems it unnecessary to pass on the Trial Examiner's subsequent dicta regarding the effect of the alleged sub- contract in the event that it had been proven. 146 NLRB No. 60.