Hychem Constructors, Inc.,

274 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Hychem Constructors, Inc., Texas Eastman Com- pany, Division of Eastman Kodak Company, and Hudson Engineering Corporation and Plumbers and Steamfitters Local No. 301 , United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States of America, AFL-CIO. Case 16-RC-4475 January 23, 1968 DECISION ON REVIEW AND DIRECTION OF ELECTION BY MEMBERS FANNING, JENKINS, AND ZAGORIA On March 14, 1967, the Regional Director for Region 16 of the National Labor Relations Board issued his Decision and Order in the above-entitled proceeding, in which he dismissed the petition on the ground that the unit requested was inap- propriate. Thereafter, in accordance with Section 102.67 of National Labor Relations Board Rules and Regulations and Statements of Procedure, Se- ries 8, as amended, the Petitioner filed a. timely request for review of the Regional Director's Deci- sion, contending that, in finding the unit requested to be inappropriate, the Regional Director departed from established Board policy. Texas Eastman Company, Division of Eastman Kodak Company, filed a timely request for review of the Regional Director's conclusion that Texas Eastman and Hychem Constructor, Inc., are joint employers of the requested employees.' By telegraphic Order dated May 16, 1967, the National Labor Relations Board granted the requests for review. Thereafter, Texas Eastman Company filed a timely brief on review and Petitioner filed a statement of position on the joint employer question. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its powers in connection with this case to a three- member panel. The Board has reviewed the entire record in this case with respect to the issues under review, includ- ing the briefs of the parties, and makes the following findings: The Joint Employer Question The Employer whose employees are sought is Hychem Constructors, Inc., which is a subcontrac- tor of Hudson Engineering Corporation, Inc. Pur- suant to Hychem's subcontract with Hudson and the latter's contract with Texas Eastman Company, Division of Eastman Kodak Company, Hychem is ' The Regional Director also found that Hudson Engineering Corpora- tion was a joint employer . Hudson has not filed a request for review of this finding. I As Hudson has not requested review of the Regional Director's find- performing construction work at Texas Eastman's plant in Longview, Texas, where Texas Eastman has a manufacturing plant. The Regional Director found that Texas Eastman was a joint employer of Hychem's employees because, under the provisions of its cost-plus contract with Hudson2 and the latter's subcontract with Hychem, Texas Eastman retains the power of prior approval of Hychem's wage rates and overtime assignments, may require Hychem employees to abide by its plant rules, and also has the power of removal of Hychem em- ployees. In its request for review, Texas Eastman con- tends that it is not a joint employer of Hychem's employees. It argues that Hudson and Hychem are independent business entities, that Eastman has no ownership or management interest in either, that Hudson and Hychem keep their own books and records, that they independently hire and direct their own employees, and that they are engaged in a different operation from that of Texas Eastman. It further argues that employees of Texas Eastman do not interchange with employees of Hudson and Hychem and that Texas Eastman has no control over the labor relations policies of either Hudson or Hychem. Texas Eastman avers that those controls which it does retain over Hychem relate only to the policing of Hychem's costs and of its compliance with Texas Eastman's plant safety and security regulations. Finally, Texas Eastman argues that in view of all the above and since it does not retain or exercise any control over the day-to-day operations of Hudson and Hychem, its relationship to them is not that of a joint employer. We find merit in these contentions. The prime construction contract between Texas Eastman and Hudson was entered into in 1952 and has continued in effect since that time. The contract provides that Hudson be reimbursed for labor costs and be paid a fee based on a percentage of such costs. That contract provides in relevant part that all work must meet with the approval of Texas Eastman, that Hudson employees will abide by and comply with all the plant rules of Texas Eastman, and that Hudson must carry workmen's compensa- tion insurance and withhold social security and Federal taxes for construction employees. The con- tract further requires that Hudson will obtain the prior written consent of Texas Eastman before per- forming overtime work, that Hudson will not em- ploy or continue to employ any person who is un- desirable in the opinion of Texas Eastman, and that Hudson's wage rates are to be established by con- sultation with and obtaining the prior approval of Texas Eastman. This contract forbids Hudson from subcontracting any work without obtaining the ap- ing that it is also a joint employer, and in view of the controls which Hud- son exercises over the labor relations of Hychem and the further fact that Hudson and Hychem have common owners and officers, we adopt the Regional Director's finding as to Hudson. 169 NLRB No. 38 HYCHEM CONSTRUCTORS, INC. proval of Texas Eastman. In 1960, with the agree- ment of Texas Eastman, Hudson contracted to Hychem, also on a labor cost plus fixed-percentage- fee basis, the performance of Hudson's prime con- tract with Texas Eastman. Hychem's contract with Hudson is substantially the same as Hudson's con- tract with Texas Eastman and under its terms Texas Eastman retains essentially the same con- trols over Hychem concerning work performance, overtime, removal of undesirable employees, etc., as Texas Eastman retains over Hudson under the provisions of the prime contract. In 1962, Hychem's contract was amended to provide that Hychem's wage rates and any changes therein will be established by consulting with and obtaining the prior approval of both Hudson and Texas Eastman. While the corporate structures of Hychem and Hudson are interrelated, they are entirely separate from that of Texas Eastman. Thus, Hychem is a wholly owned subsidiary of Hudson and Hudson is a closely held corporation. Both these corporations have common officers. Hychem's sole activity is the performance of the construction work at Texas Eastman's Longview plant which, as stated above, was subcontracted to Hychem by Hudson. Texas Eastman, on the other hand, is a division of Eastman Kodak Company. The latter has over 153,000 holders of common stock, no one of whom owns more than one percent of all shares. There is no evidence that any director, officer, or employee of Eastman Kodak or Texas Eastman owns stock in Hudson or Hychem. Nor does any director or of- ficer of Eastman Kodak or Texas Eastman hold any office or directorship in,the Hudson or Hychem or- ganizations. Texas Eastman, unlike Hudson and Hychem, is engaged in manufacturing petrochemi- cals at its Longview plant. Hudson and Hychem keep their own books and records independently of Texas Eastman, and Hud- son and Hychem are solely responsible for paying their operating expenditures. Texas Eastman ad- vances no funds to either of these companies and makes payments to them only on the basis of in- voices received. Although Eastman has authority to audit reimbursable costs, it otherwise has no authority to audit the general books of either Hud- son or Hychem. The earnings statements, in- surance, and income tax records for Hychem em- ployees are maintained by Hudson at its own office at Houston, Texas. The Hychem payroll is also prepared at Hudson's Houston office and is made up on the basis of timesheets submitted by Hychem. Hychem employees are paid on Hychem checks drawn against ai Hychem account. Hychem and Hudson have no authority to draw checks on the accounts of Texas Eastman. Under the terms of its contract, Hychem 3 These rules are described in the contract as dealing primarily with "carrying matches, smoking and other acts which would create a hazardous condition " 275 furnishes only the labor force for the Texas East- man project. Texas Eastman provides engineering services, drawings, plans, and specifications, as well as materials and equipment. Hychem's super- visors direct all the work of its crews and make the work assignments to them. These crews do not in- terchange with any employees of Texas Eastman. Texas has no day-to-day control over the regular hours worked by the Hychem employees except in- directly through its accounting procedures. Thus, at the inception of each job, Hychem makes esti- mates of the amount of time required to complete the construction operations involved. These esti- mates are then submitted to Texas Eastman and, after the latter has approved them, it establishes ac- count numbers to which the work will be charged. While the job is in progress, Hychem foremen keep timesheets, log the employees time under the as- signed account numbers, and then forward the timesheets to Texas Eastman for recording, Overtime work, on the other hand, must be specifically approved by Texas Eastman. Further, when a job is approaching completion and Texas Eastman anticipates that part of Hychem's work force will become idle, it has proposed layoffs to Hychem in order to hold down labor costs. How- ever, there is also evidence that Texas Eastman al- lows some latitude to Hychem in these situations and has acquiesced in Hychem's suggestions to keep its crews intact until Texas Eastman approves estimates for the next project to which such crews will be assigned. Hychem and Hudson have also suggested wage increases on a number of occasions for the Hychem crews in order that their wages remain on a par with prevailing rates in the Long- view, Texas, area. Pursuant to the construction agreements with Texas Eastman, these wage in- creases, which necessarily affect reimbursable costs, must likewise be approved by Texas East- man. Texas Eastman does - not have any authority to determine the labor policies of Hudson or Hychem, and the employee benefits and labor policies for the Hychem crews are dissimilar to those which obtain for Texas Eastman's employees. Thus, the labor policy for Hychem employees is established and implemented by Hudson without consultation with Texas Eastman. Hudson alone establishes wage dif- ferentials and work classifications for Hychem. Hychem does its own recruiting, interviewing, and hiring without any assistance from Texas Eastman. Although the contract provides that every Hychem employee must be acceptable to Texas Eastman and that all Hychem employees must abide by Texas Eastman's plant safety and other plant rules,3 Texas Eastman, significantly, has never exercised its authority to remove a Hychem employee from 350-212 0-70-19 276 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the job. While Texas Eastman employees receive such benefits as holidays, vacations, life and hospitalization insurance, retirement, and sick leave, the Hychem employees have none of these benefits. Moreover, the construction agreement specifically excludes from the definition of "reim- burseable costs" any contributions made by Hychem "to employees stock purchase, group life insurance , pension, profit sharing, retirement and all other benefits." It is apparent from the foregoing that the controls over hiring, job classification, hours, fringe benefits, supervision, and all other matters directly affecting Hychem's employees are lodged with Hudson and Hychem, notwithstanding Texas Eastman's renten- tion of the right to approve wage increases and overtime and its policy of consulting with Hudson and Hychem on proposed layoffs. The latter con- trols, in our opinion, are consistent with Texas Eastman's right to police reimbursable expenses under its cost-plus contract and do not warrant the conclusion that Texas Eastman has thereby forged an employment relationship, joint or otherwise, with the Hychem employees.4 Such a conclusion would likewise be unwarranted with respect to the other controls retained by Texas Eastman over the Hychem employees, that is, Texas Eastman's requirement that Hychem employees observe plant safety and other plant rules , and Texas Eastman's as yet unexercised prerogative to remove an un- desirable Hychem employee. The promulgation of such rules, which seek to insure safety and security, is a natural concomitant of the right of any property owner or occupant to protect his premises. Ac- cordingly, we find, upon the entire record, that Texas Eastman does not exercise joint control over the Hychem employees and is therefore not a joint employer 5 of the employees here involved.6 The Unit Question The Petitioner requests a unit of Hychem's pipefitters, helpers, and welders on a craft or de- partmental basis. Hudson and Hychem took the position that the requested unit was inappropriate and that only a unit of all of Hychem's construction employees is appropriate. The Regional Director found, in essential agreement with Hudson and Hychem, that the requested unit was inappropriate 4 Petitioner primarily argues , on review, that Texas Eastman's authori- ty to approve wage increases gives it a veto power over any collective bar- gaining in which Hudson and Hychem may engage . We disagree. The authority of Texas Eastman to control its costs in this manner seems to us no different from the right of any commercial client to continue to accept, or to reject, a supplier of goods or services based on the consideration of price . While a determination by the client to continue the business ar- rangement, because the price is favorable to him, might remotely benefit the supplier's work force, the exercise of this right by the client would not establish an employment relationship between the client and the supplier's employees. ' Westinghouse Electric Corporation, 163 NLRB 914; Space Services International Corporation, 156 N LRB 1227. and he dismissed the petition. In reaching this con- clusion the Regional Director relied on his findings that: (1) the pipefitting employees regularly spend a "not unconsiderable" portion of their time on non- pipefitting work; (2) employees in other skilled groups regularly spend a "not inconsiderable" por- tion of their time in doing pipefitters work; (3) Hychem has no pipefitting apprenticeship program; and (4) pipefitters and welders are frequently supervised by the supervisors of the other skilled groups when working on nonpipefitting assign- ments. The Petitioner, on the other hand, primarily ar- gues that the skilled trade unit it seeks is ap- propriate under the Board's construction industry standards and that these standards do not require that the employees in such a unit exercise pure craft skills nor that they progress in their trade on the basis of an apprenticeship program. Petitioner further argues that these same standards do not require the maintenance of strict jurisdictional in- tegrity within the skilled grouping sought and that some interchange of functions with other skilled groupings will not render the requested unit inap- propriate. We find merit in these contentions. As Petitioner argues, the Board has recently held in R.B. Butler, Inc.,7 that a "clearly identifiable and homogeneous group of employees with a communi- ty of interest separate and apart from other em- ployees" may constitute an appropriate unit of tradesmen in the construction industry. And, as the Board further held in that same decision, the fact that some employees may perform duties not strictly within their job description or that other em- ployees may perform some of these tasks is not suf- ficient in and of itself to render the requested unit inappropriate. Applying these principles to the present case we are satisfied that the unit sought by Petitioner is appropriate. At the time of the hearing, Hychem's entire crew consisted of about 300 nonsupervisory employees divided into some 9 skilled groupings or depart- ments.8 The largest of these departments is the pipefitting department sought by Petitioner, com- posed of 53 pipefitters, 47 helpers, and 34 welders, who have their own general foremen and 12 im- mediate foremen. The pipefitters are hired on the basis of ability and experience in pipefitting work. Every welder is 6 In view of our finding herein that Texas is not a joint employer of the employees in the requested unit, we deem it unnecessary to rule on its request to reopen the record for the purpose of permitting it to litigate the appropriateness of the bargaining unit. 160 NLRB 1595. Also see cases cited in fn . 8 thereof. 8 While the Employer objected throughout the proceedings to the Peti- tioner's use of the term "department ," it is apparent from the record that Hychem's skilled groups are segregated one from the other along depart- mental lines and that each department has its own foreman or foremen. The departments or groupings respectively include carpenters , structural steelworkers, electricians, millwrights, cement finishers, insulators, laborers, reinforcing steelworkers , and the pipefitters. HYCHEM CONSTRUCTORS , INC. 277 required to pass a test in pipewelding. The pipefit- ters assisted by their helpers practice the skills nor- mally associated with the pipefitting trade, includ- ing the cutting, threading, and installation of metal pipe. All of Hychem's pipewelding work is per- formed by the welders. Pipefitters use the tools of their trade such as wrenches and threaders, have their own toolboxes, and are furnished with pipefitter's manuals. Pipefitters and welders are among the highest paid of Hychem's employees. While Hychem has no formal apprenticeship pro- gram, it provides on job training to helpers who use pipefitting tools and do pipefitting work under the direction of the pipefitters. A helper may, after 1 to 3 years of this training, advance to the position of pipefitter. Pipefitter foremen have been promoted to their position from the ranks of the pipefitters. Although the record is clouded by obviously ex- aggerated testimony9 with respect to employee in- terchange among the various skilled groups, it sup- ports the conclusion that pipefitters have some- times performed nonpipefitting work and that other groups have on a number of occasions undertaken work normally done by the pipefitters. Thus, struc- tural steelworkers have hung and installed pipe which is more than 15 feet above ground, and struc- tural steelworkers and millwrights have installed steam-tracing pipe. For their part, pipefitters have constructed catwalks and have been assigned the work of removing wood frames from concrete. The welders, in addition to pipewelding, perform all the other welding at the jobsite including the welding needed by the structural steelworkers. The record further indicates, however, that many of these out- of-department assignments have been in emergency situations involving construction deadlines or when there has been a slack period for a particular group- ing who, if they had not been assigned out-of-de- partment, would have been laid off. Documentary evidence10 and the testimony of in- dividual pipefitters indicate that pipefitters and their helpers spend the majority of their time in pipefitting duties, a fact which is also conceded by Hychem in its brief. It is undisputed that the weld- ers perform all pipewelding work and that such as- signments account for at least 60 percent of their time. From the record as a whole it also appears that a substantial majority of the most skilled and difficult of pipefitting work - cutting and fabrication of pipes - is performed by pipefitters and their helpers.11 Each other skilled group of employees spends significantly less than half of its time per- forming pipefitting duties and these assignments, in large measure, relate to the moving and storing of pipe and the less difficult pipe installation work.12 In view of all the foregoing, particularly the separate organization of the pipefitting department under its own supervision, the high wages, the on- job training, the departmental progression, the skills required, the fact that the employees sought clearly spend more than half of their time in pipefitting du- ties including the great majority of the most difficult pipefitting assignments and all pipe welding, and the fact that other skilled groups spend significantly less than half of their time in pipefitting work (usually in the lower skilled pipefitting assignments and this, frequently, in abnormal circumstances), we are satisfied that the pipefitters, pipefitter helpers, and the welders sought by Petitioner are a readily identifiable and homogeneous grouping of construc- tion tradesmen with a community of interest separate and apart from other employees. There- fore, and inasmuch as there is no bargaining history and no other labor organization seeks to represent these employees on any other basis, we conclude that they constitute an appropriate unit for collec- tive bargaining.13 Accordingly, we find that a question affecting commerce exists concerning the representation of certain employees of Hychem within the meaning of Sections 9(c)(1) and 2(6) and (7) of the Act, and we shall direct an election among the following em- ployees which, we have found, constitute a unit ap- propriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act: All pipefitters, pipefitter helpers, and welders em- ' We are unable to credit the testimony of Hychem witnesses, Area Su- pervisor Ables and General Pipefitter Foreman Brown, with respect to the percentage of time spent by pipefitting employees at nonpipefitting work, because the testimony of these witnesses was offhand , exaggerated, and improbable and for the further reason that they sharply contradicted one another See Supreme, Victory and Deluxe Cab Companies, 160 N LRB 140, and cases cited at In 14 thereof For example, Ables testified that pipefitting employees spent 88 to 94 percent of their time at various nonprofiting duties except for insulation work and an additional undis- closed portion of their time at the latter nonpipefitting assignment Brown's estimate of the amount of time by pipefitters at nonpipefitting work was about half of that estimated by Ables Included among non- pipefitting duties at which pipefitters have spent large portions of their time, according to Ables, are carpentry (15 percent), common laboring (10 percent), and millwright work (25-30 percent). Since it is undisputed that pipefitters always earn the full pipefitter rate ($4.00 per hour) regardless of their assignment, it is highly improbable in a cost-plus arrangement such as that present herein that pipefitters would be engaged more than half of their time in duties calling for a lower rate of pay (i.e , $3 50 per hour for carpenters and millwrights, $1 75 for common laborers). In any event, as will appear, more competent evidence refutes the testimony of Ables and Brown. Summaries of timesheets submitted by Hychem foremen 11 There is little evedence that any other group has ever performed this work. 12 Thus, even accepting as true, certain other exaggerated and offhand estimates by Hychem in regard to the pipefitting assignments of these other groups, only the steelworkers allegedly spend more than 30 percent of their time in pipefitting work (one Hychem witness said that these steel- workers spend 25-30 percent of their time at pipefitting , another 33 per- cent, and still another 45 percent.) One Hychem witness admitted that most of the pipefitting work of steelworkers involved the hanging of pipe at high levels or general assistance to pipefitters 13 R B. Butler, Inc., supra, Del-Mont Construction Company, 150 NLRB 85, and see The Heating Piping and Air Conditioning Contrac- tors, 110NLRB261 278 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ployed by Hychem Constructors, Inc., at the Long- view, Texas, plant of Texas Eastman Company, a Division of Eastman Kodak Company, excluding office clerical employees, professional employees, all other employees, watchmen, guards, and super- visors as defined in the Act. [Direction of Election 14 omitted from publica- tion.] 14 An election eligibility list, containing the names and addresses of all granted by the Regional Director except in extraordinary circumstances. the eligible voters, must be filed by the Employer with the Regional Failure to comply with this requirement shall be grounds for setting aside Director for Region 16 within 7 days after the date of this Decision and the election whenever proper objections are filed. Excelsior Underwear Direction of Election. The Regional Director shall make the list available Inc., 156 NLRB 1236. to all parties to the election. No extension of time to file this list shall be