Rheem Manufacturing Co.

436 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Rheem Manufacturing Company and United Steel- workers of America, AFL-CIO, Petitioner. Case 26- RC-3888 February 8, 1971 DECISION AND DIRECTION OF ELECTION BY MEMBERS FANNING, BROWN AND JENKINS Upon a petition duly filed under Section 9(c) of the National Labor Relations Act, as amended, a hearing was held before Hearing Officer William K. Harvey of the National Labor Relations Board. Following the hearing and pursuant to Section 102.67 of the Nation- al Labor Relations Board Rules and Regulations and Statements of Procedure, Series 8, as amended, and by direction of the Regional Director for Region 26, this case was transferred to the National Labor Rela- tions Board for decision. The Petitioner, the Employ- er, and one of the Intervenors I have filed briefs, which have been duly considered. 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 Hearing Officer's rul- ings made at the hearing and finds that they are free from prejudicial error. They are hereby affirmed. Upon the entire record in this case, the Board finds that: 1. The Employer is engaged in commerce within the meaning of the Act, and it will effectuate the purposes of the Act to assert jurisdiction. 2. The labor organizations involved claim to repre- sent certain employees of the Employer. 3. The Petitioner and the Intervenors seek to repre- sent a unit of production and maintenance employees employed by the Employer at its Fort Smith, Arkan- sas, plant. 4. The Employer has approximately 23 plants locat- ed throughout the United States, including a newly constructed plant at Fort Smith, Arkansas, which is the subject of the petition involved herein. The Em- ployer is moving its heating and air-conditioning fa- cility currently located at Kalamazoo, Michigan, to the Fort Smith plant? The Employer's Kalamazoo i Stove , Furnace & Allied Applicance Workers International Union of North America, AFL-CIO, which intervened on the basis of a collective- bargaining contract purporting to cover the employees sought in the petition, filed a brief. The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW, the International Un- ion, Allied Industrial Workers of America, AFL-CIO, and Local Union No 438 of the Sheet Metal Workers International Association all intervened, separately, on the basis of authorization cards submitted poor to the hearing At the conclusion of the move , the Kalamazoo plant's production will be confined to boilers and other hot water systems employees are represented by the Stove Workers. In January 1970, at a time when no employees were em- ployed at the Fort Smith plant, the Employer and the Stove Workers, pursuant to a Stove Worker demand during collective-bargaining negotiations relative to the impending curtailment and transfer of most of the Kalamazoo, Michigan, operations, executed a con- tract covering the production and maintenance em- ployees at the new Fort Smith, Arkansas, plant. The Stove Workers claim that the aforementioned con- tract is a bar to the instant proceedings. Hiring at the new Fort Smith, Arkansas, plant did not commence until February 2, 1970. As of Novem- ber 6, 1970, the date of the hearing, 156 or 34 percent of the total projected work force of 450 production and maintenance workers were employed at Fort Smith.3 With respect to employment classifications, as of November 6, 1970, 27 or 64 percent of the antic- ipated 42 classifications were being utilized. The record further reveals that 30 to 35 percent of the complete equipment and machinery was installed as of November 6, 1970. The remainder of the equip- ment was in the process of being moved into the plant, with completion scheduled for March 31, 1971. Despite the contention of the Stove Workers that the contract alleged as a bar to the proceedings result- ed from its attempt to protect the jobs of the Kalama- zoo employees whose jobs were being phased out, no laid-off employee of the Kalamazoo plant had trans- ferred to the new Fort Smith plant at the time of the hearing. Moreover, there were no pending applica- tions for such transfers. As noted above, the Stove Workers claim that their contract of January 1970 is a bar to an election; the Petitioner contends that the contract fails as a bar because the Employer had not hired a substantial and representative complement of employees at the time of its execution. See General Extrusion Company, Inc., 121 NLRB 1165. We find merit in the Petitioner's contention. In General Extrusion Company, Inc., supra, we set forth certain conditions which had to exist if a con- tract is to bar an election in an expanding unit situ- ation. We stated, inter alia, that: a contract will bar an election only if at least 30 per cent of the complement employed at the time of the hearing had been employed at the time the contract was executed. Inasmuch as the record before us and all the evi- dence indicate that there were no production or main- tenance employees whatsoever working at the Fort 3 According to the Employer's projections, as of December 1, 1970, there will be 250 or 44 44 percent of the work force employed These projections further indicate that on January 1, 1971, the work force will have grown to 250 or 55 55 percent of the anticipated work force . Total employment of 450 employees is scheduled for June 1, 1971. 188 NLRB No. 67 RHEEM MANUFACTURING COMPANY Smith plant in January 1970, when the contract be- tween the Stove Workers and the Employer was exe- cuted, the aforementioned General Extrusion criterion has not been met and the contract cannot therefore serve to bar an election. The Employer requests that the petition be dis- missed because its operations are in the process of extensive expansion. The Petitioner, on the other hand, asserts that an immediate election should be held since there is a representative complement cur- rently employed and that a delayed election will only serve to delay the rights of representation conferred upon them by the Act. As we stated in General Cable Corporation, 173 NLRB No. 42, the appropriate test for purposes of directing an immediate election is whether the em- ployees at the time of holding an election constitute a substantial and representative segment of the complement to be employed within the foreseeable future. Accordingly, inasmuch as the 34 percent of the contemplated work force was employed in 64 percent of the planned job classifications as of November 6, 1970, the date of the hearing, and since the Employer's projections indicate that as of January 1, 1971, the employee complement will rise to approxi- mately 250 or 55 percent of the contemplated work force, we are satisfied that the employee complement both at the present time and at the time the election will be held is representative and substantial for pur- poses of directing an immediate election.4 Accordingly, in view of the foregoing conclusions, we find that a question affecting commerce exists con- cerning the representation of employees of the Em- ployer within the meaning of Sections 9(c)(1) and 2(6) and (7) of the Act. The parties are in general agreement that the fol- lowing unit is appropriate: All production and maintenance employees ex- cluding all other employees, including quality control technicians, receiving inspectors, re- search and development engineering department employees, office clerical employees (including office clerical employees located in both the main administrative offices and the plant offices), nurses, watchmen, guards and supervisors as de- fined in the Act. There is disagreement, however, with respect to the exclusion of four quality control technicians and one receiving inspector.' The record reveals that the four 4 Cf General Cable Corp, supra, Endicott Johnson De Puerto Rico, Inc, 172 NLRB No 194 ' All parties with the exception of the Auto Workers and Allied Industrial Workers agree that the receiving inspector and the quality control techni- cians should be excluded from the unit 437 quality control technicians are responsible for insur- ing that the Employer's product meets customer re- quirements. The technicians are salaried and their fringe benefits differ from those of the rank-and-file employees 6 The quality control technicians have from one to three inspectors working under their su- pervision and they possess the authority effectively to recommend disciplinary action for such inspectors should the occasion arise. The receiving inspector is responsible for insuring that incoming materials con- form to the Employer's specifications. The receiving inspector is salaried and receives different fringe ben- efits from the rank-and-file employees. He supervises one inspector and has the power effectively to recom- mend disciplinary action. In view of the foregoing, and since the quality control technicians and the re- ceiving inspector responsibly assign and direct the work of other employees, and possess the authority to recommend disciplinary action in regard thereto, we find them to be supervisors within the meaning of Section 2(11) of the Act and shall exclude them from the unit. On the basis of the foregoing, and the record as a whole, we find that the following employees consti- tute a unit appropriate for collective-bargaining pur- poses: All production and maintenance employees ex- cluding all other employees, including quality control technicians, receiving inspectors, re- search and development engineering department employees, office clerical employees (including office clerical employees located in both the main administrative offices and the plant offices), nurses, watchmen, guards and supervisors as de- fined in the Act. [Direction of Election' omitted from publica- tion.] 6 The salaries and frings benefits applicable to the technicians and receiv- ing inspector are established at corporate headquarters as distinguished from being negotiated on local levels by management and the respective union repiresentatives In order to assure that all eligible voters may have the opportunity to be informed of the issues in the exercise of their statutory right to vote, all parties to the election should have access to a list of voters and their addresses which may be used to communicate with them Excelsior Underwear Inc, 156 NLRB 1236, N L.R B. v Wyman-Gordon Company, 394 U S. 759 According- ly, it is hereby directed that an election eligibility list, containing the names and addresses of all the eligible voters, must be filed by the Employer with the Regional Director for Region 26 within 7 days of the date of this Decision and Direction of Election The Regional Director shall make the list available to all parties to the election. No extension of time to file this list shall be granted by the Regional Director except in extraordinary circumstances Failure to comply with this requirement shall be grounds for setting aside the election whenever proper objections are filed. 438 DECISIONS OF NATIONAL LABOR RELATIONS BOARD American Oil Co. and International Brotherhood of Service Station Operators of America, Unaffiliated, Petitioner. Case 20-RC-9333 February 8, 1971 DECISION AND DIRECTION OF ELECTION BY MEMBERS FANNING, BROWN, AND JENKINS Upon a petition duly filed under Section 9(c) of the National Labor Relations Act, as amended, hearings were held before Hearing Officer Helen A. Phillips of the National Labor Relations Board. Following the hearings and pursuant to Section 102.67 of the Na- tional Labor Relations Board Rules and Regulations and Statements of Procedure, Series 8, as amended, this case was transferred to the National Labor Rela- tions Board for decision by direction of the Regional Director for Region 20. Following the hearings the Employer filed a brief and a supplemental brief in support of its position. 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 Hearing Officer's rul- ings made at the hearings and finds that they are free from prejudicial error. They are hereby affirmed. Upon the entire record in this case, the Board finds: 1. The Employer is engaged in commerce within the meaning of the Act and it will effectuate the purposes of the Act to assert jurisdiction herein. 2. The labor organization involved claims to repre- sent certain employees of the Employer. 3. A question affecting commerce exists concerning the representation of certain of the Employer's em- ployees within the meaning of Section 9(c)(1) and Section 2(6) and (7) of the Act. 4. Petitioner seeks to represent a unit of "all attend- ants at the Employer's Oakland and Danville, Califor- nia, service stations, excluding managers, supervisors, security and clerical employees." The Employer, orig- inally agreeing with the foregoing unit, had by stip- ulation agreed that its employees at these service stations constitute an appropriate unit. However, the Employer (also herein called American) now con- tends that the Danville service station has been leased to Elden Hornbacher, effective August 3, 1970, and that as lessee of the said station, Hornbacher is an independent contractor, the attendants at the Dan- ville station are his employees, and Hornbacher and whatever attendants he might have should be exclud- ed from the unit. Petitioner contends that American exercises a sufficient degree of control over the station operated by Hornbacher that it must be considered the employer of Hornbacher and any employees in that station. American either owns or leases the ground on which it constructs its service stations . The station, on being leased, is turned over to the lessee to operate as his business. In the instant case, Hornbacher's lease took effect August 3, 1970. Following execution of his lease, Hornbacher also entered into a Financial As- sistance Plan (herein called FAP) with American whereby American, under certain conditions, gave Hornbacker a guarantee of a stipulated amount of income each month during the time the FAP was in effect. The record shows that American and Hornbacher have entered into a standard lease agreement which American has with a number of other lessees in Cali- fornia, as well as throughout the rest of the country, for the operation of gasoline service stations . It deals almost exclusively with the leasing and maintaining of the leased premises . With but a few minor exceptions, the lease contains no requirements or limitations on the method or manner of operating the station. Ab- sent any such control, Hornbacher is free to set his own hours of operation, hire and fire whomever he pleases, set his employees' wage rates, and, with the exception of selling American gasoline, is free to sell either American products such as oil, tires, batteries, and other accessories, or similar products from com- petitors of American. In addition, Hornbacher is free to set his own prices for gasoline as well as the related products. Although the Petitioner does not contest Hornbacher's freedom of operation under the lease, Petitioner contends that the controls contained in the FAP agreement are such that American does exercise that degree of control over Hornbacher sufficient to constitute him an employee of American. We do not agree. American, when it leases a station to an operator, offers the operator a financial assistance plan geared to guarantee to the new operator a certain monthly income in the event the initial operations do not bring in sufficient revenues to permit the operator to make a living. The plan, like many financing arrangements, is not, however, free from restrictions. To operate un- der the FAP agreement the lessee must agree to keep his station open a certain number of hours each day,' but the decision as to when to open and when to close is left to the lessee. The lessee also agrees to exercise reasonable good faith efforts to observe at said service station during the above schedule of hours such standards as American may recom- mend for: (1) cleanliness of premises including restrooms; (2) training and cleanliness of attend- 1 There is no such requirement in the lease 188 NLRB No. 68 AMERICAN OIL CO. ants ; (3) uniforms; (4) adequacy of lighting, equipment and inventories; (5) scope of services; and (6) courtesy and thoroughness of attention to patrons. In consideration for Hornbacher's undertaking set out above, American has assured Hornbacher, each month during the life of the agreement, a net profit over and above all legitimate expenses sufficient to defray (1) current payments on Hornbacher's bus, iness notes incurred to finance the station, and (2) Hornbacher's monthly living expenses up to a maxi- mum approved by American. As noted earlier, this is not an open end agreement. Hornbacher, as well as any other dealer, in order to avail itself of this finan- cial assistance, must meet certain requirements to sat- isfy American that the assistance being rendered is being directed toward the dealer' s success at the sta- tion in question. In determining the amount of "legitimate expen- ses" the FAP limits the deductions for cash and prod- uct shortages to .25 percent of gross retail sales, deductions for supplies and tools cannot exceed I percent of gross retail sales, total payroll deductions cannot exceed 13 percent of gross retail sales, and bad debts and depreciation are not deductible items for purposes of determining the dealer's amount of finan- cial assistance . After making the above adjustments, the maximum expenses of the dealer in each calender month cannot exceed 10.5 cents per gallon of American's branded gasoline sold from the premises during that month. In addition, if the dealer's net profit during any one month the plan is in effect ex- ceeds his note payments and living expenses without the necessity of any payment under the plan, Ameri- can has agreed to pay the dealer a bonus of 1.5 per- cent of gross retail sales of all products and services. The FAP also requires the dealer to use an accoun- tant who may be of his own choosing who is equipped to maintain and furnish financial records which are the "equivalent" to the Edwin K. Williams & Compa- ny system? Further, if the dealer sells any equipment or inventory financed by business notes for which he has been reimbursed by American under the plan, he must reimburse American out of the proceeds of such sale to the extent of American's payments to the deal- er under FAP. From the above facts, and after a careful review of the record, it is clear that Hornbacher, upon leasing the Danville station, first, was free to accept or reject American's FAP without regard to his lease, and sec- ond, if he accepted the FAP, had to meet certain conditions in order to continue enjoying any benefit under the plan. That he was free to reject the plan is 2 The record shows that the Williams Company is a nationwide franchise firm specializing in service station accounting 439 clear from American's testimony. In addition, the re- cord shows that of 150 dealer-operated stations in California, only 90 stations were under financial as- sistance plans at the time of the hearings herein. As to the conditions, if Hornbacher does not meet American's limitations, he still receives his guarantee, but cost figures above American's limitations must be borne by Hornbacher out of his own pocket; i.e., if Hornbacher elected to increase his payroll costs be- yond the 13 percent allowance by hiring a manager in his stead, as he could do, this salary cost item might necessarily reduce his own actual net income for the month. The record also shows that the dealers under an FAP are free to hire and fire, establish hours of work for employees, set salaries and fringe benefits, and determine the number of employees to be hired; and that as dealers they are required to provide uniforms, withhold and pay all payroll taxes and workmen's compensation, and carry insurance on the station. The dealers are also free to set their own prices on gasoline and related products and are free to purchase their supplies (other than gasoline) from any other source including competitors of American. In addi- tion, the record shows that although American main- tains a comprehensive operating manual for company-operated service stations, there is no manu- al for the dealer stations, and replies by American to complaints lodged against dealers refer the complaint back to the dealer as an independent businessman. As to labor relations, although American maintains its own staff of labor relations consultants, this staff is involved only with company-operated stations and is not available to the dealers. As to American's recommended pricelists on gasoline and accessories, the dealers are not required to and in some instances do not follow the recommended prices? On the above facts we are unable to find that Horn- bacher as a lessee-dealer is subject to that degree of control in the operation of his service station by American to warrant finding him to be an employee of American. Accordingly, we find Hornbacher to be an independent contractor and we shall exclude his station from the unit .4 The Employer also contends that there is a tremen- dous turnover of employees at the other two stations, that American is actively seeking lessees for these sta- tions, that if they are leased they will lose their status as company-operated stations, that the employees currently employed at each of these stations have been advised that their employment could be termi- nated if a lessee is found, that their employment tenure is temporary in nature, and that they should J The testimony shows that as to three dealers in the district not following the recommended puce as to gasoline , two are under FAP and one is not. 4 The Southland Corporation, d/b/a Speedee 7-Eleven, 170 NLRB No. 159. 440 DECISIONS OF NATIONAL LABOR RELATIONS BOARD therefore be excluded from any unit and the petition Oakland, California, service stations, excluding should be dismissed. We do not agree. The record managers, security and clerical employees and shows that these employees, when hired, were in- supervisors as defined in the Act. formed of the possibility of the stations being leased. However, we do not believe that such a contingency, in and of itself, is sufficient to support a finding that these employees are only temporary employees. In addition, the record also shows that these employees work full time at regular shifts at the company-operat- ed stations. In such circumstances, we find these em- ployees to be regular employees entitled to vote in the election. Although the parties originally stipulated to the ap- propriateness of the unit including the Danville sta- tion, as we have found that the Danville station is now being operated by an independent contractor, we shall exclude that station from the unit. Accordingly, we find that the following employees of the Employer constitute a unit appropriate for the purposes of col- lective bargaining within the meaning of Section 9(b) of the Act: All attendants employed at the Employer's 461 - 8th Street and 810 West MacArthur Boulevard, [Direction of Election 5 omitted from publication.6] 5 On November 30, 1970, and December 7, 1970, the Board received com- munications from the Employer to the effect that the Employer had leased, in separate agreements, the remaining two stations Thereafter, on December 11, 1970, the Board received a letter from the Petitioner raising certain issues over the two leases in question . As the matters raised are basically issues which can best be resolved by the Regional Director, the Regional Director is hereby authorized to conduct an investigation of these issues and to resolve them in a manner consistent with out Decision, thereafter holding an elec- tion, if warranted, as directed herein. 6 In order to assure that all eligible voters may have the opportunity to be informed of the issues in the exercise of their statutory right to vote, all parties to the election should have access to a list of voters and their addresses which may be used to communicate with them Excelsior Underwear Inc, 156 NLRB 1236; N L R B v Wyman-Gordon Co, 394 U S 759. Accordingly, it is hereby directed that an election eligibility list, containing the names and addresses of all the eligible voters, must be filed by the Employer with the Regional Director for Region 20 within 7 days of the date of this Decision and Direction of Election. The Regional Director shall make the list available to all parties to the election. No extension of time to file this list shall be granted by the Regional Director except in extraordinary circumstances Failure to comply with this requirement shall be grounds for setting aside the election whenever proper objections are filed