Tri-Service Drilling Co.

284 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Tri-Service Drilling Company and Local 826, International Union of Operating Engineers, AFL-CIO. Case 16-CA-3440 Upon a consideration of the briefs of the parties and the entire record in this case, I make the following FINDINGS OF FACT June 2, 1969 DECISION AND ORDER BY CHAIRMAN MCCULI OCH AND MEMBERS BROWN AND JENKINS On March 20, 1969, Trial Examiner Fannie M. Boyls issued her Decision in the above-entitled proceeding, finding that the Respondent had engaged in and was engaging in certain unfair labor practices 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 filed exceptions to the Trial Examiner's Decision and a supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with this case to a three-member panel. 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 exceptions, the brief, and the entire record in this case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the Recommended Order of the Trial Examiner, and hereby orders that the Respondent, Tri-Service Drilling Company, Midland, Texas, its officers, agents, successors, and assigns, shall take the action set forth in the Trial Examiner's Recommended Order. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE FANNIE M. BoYLs, Trial Examiner: This case was heard before me in Odessa, Texas, on January 23, 1969. The complaint, issued on October 15, 1968 and based upon a charge filed on September 30, 1968, alleges that Respondent, Tri-Service Drilling Company, violated Section 8(a)(5) and (1) of the Act by unlawfully refusing to bargain with Local 826, International Union of Operating Engineers, AFL-CIO, herein called the Union. Respondent filed an answer, admitting that it had refused to bargain with the Union but denying, for reasons hereinafter set forth, that its refusal to bargain was unlawful. After the conclusion of the hearing counsel for the General Counsel and for Respondent filed briefs which have been carefully considered. 176 NLRB No. 35 1. THE BUSINESS OF RESPONDENT Respondent is a Texas corporation having its principal office and place of business in Midland, Texas, from which headquarters it is engaged in the business of drilling oil and gas wells in the Permian Basin area in Texas and Mexico. During the 12-month period preceding the issuance of the complaint, Respondent, in the course and conduct of its business, performed services valued in excess of $50,000, of which amount services valued in excess of $50,000 were performed in states other than Texas. Respondent concedes and I find that it is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. I further find that it will effectuate the policies of the Act to assert jurisdiction herein. II. THE LABOR ORGANIZATION INVOLVED Local 826, International Union of Operating Engineers, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. III. POSTURE OF THIS CASE AND ISSUES PRESENTED Following certification by the Board on September 4, 1968 of the Union as the exclusive bargaining representative of Respondent's employees in a concededly appropriate bargaining unit, Respondent has refused requests by the Union to bargain with it, contending that the Board in the representation case improperly overruled some of its objections to the election. Normally issues which were or could have been litigated in a representation proceeding may not be litigated or relitigated in refusal-to-bargain unfair labor practice proceedings based, as this case is, on the underlying representation proceeding. The Trial Examiner would be bound by the Board's decision in the representation case and would be in no position to overrule the Board, regardless of whether he agreed or disagreed with the Board.' Both Respondent and the General Counsel in this case, however, assert that because of a special reservation in the Stipulation for Certification upon Consent Election in the representation case, Respondent is entitled in this unfair labor practice case to present evidence in support of its contention that the Board's requirements for voter eligibility as set forth in Hondo Drilling Company, N.S.L., 164 NLRB No. 67, and Carl B. King Drilling Co., 164 NLRB No. 68, are not applicable to Respondent.' 'Pittsburgh Plate Glass Co. v. N.L.R.B., 313 U.S. 146, 162; Rules and Regulations, National Labor Relations Board , Series 8, as amended July 8, 1968, Sections 102.67 (f) and 102.69 (c). 'In those companion cases involving employment patterns of employees of oil well drilling companies in the Permian Basin area (in which Respondent is also located ), the Board fashioned a formula, described infra, for compiling voter eligibility lists which it believed would fairly and realistically resolve the question of voter eligibility in representation elections for employees similarly situated. See also, Moran Oil Producing and Drilling Corporation , 174 NLRB No. 26; Wek Drilling Co, Inc. 174 NLRB No. 92: Brahaney Drilling Company, inc., Case 16-CA-3443, Trial Examiner's Decision issued March 6, 1969; and 32nd Annual Report of the NLRB, p. 66-67. TRI-SERVICE DRILLING CO. The special reservation in the Stipulation for Certification Upon Consent Election to which the parties refer, consists of the following provision: Hearing and notice thereof, Direction of Election, and the making of Findings of Fact and Conclusions of Law by the Board prior to the election are hereby expressly waived ; provided, however, that this Stipulation for Consent is without waiver of or prejudice to the Employer's right to contest and litigate through objections to the election , Section 8(a)(5) procedures or otherwise the validity of or applicability of the particular voter eligibility rule followed by the Regional Director for the employees of this Employer in this election , pursuant to direction of the National Labor Relations Board in Hondo Drilling Company, N.S.L., 164 NLRB No. 67 and Carl B. King Drilling Co., 164 NLRB No. 68. Although I have some misgivings as to whether the General Counsel and Respondent have properly interpreted this provision to permit Respondent to adduce in this complaint case evidence which it was afforded an opportunity to adduce but failed to adduce in the underlying representation case, I have accepted that interpretation for the purpose of this case and have received all evidence proffered on the issue as to the propriety of applying to Respondent the voting eligibility rule applied by the Board in the Hondo and King cases cited above. This rule or formula , which will herein be referred to as the Hondo-King rule or formula,3 provides that the unit employees eligible to vote should include not only those appearing on the employer's payroll immediately preceding the issuance of the Regional Director's Notice of Election (subject to the normal qualifications pertaining to eligibility ), but also those employed by the employer for a minimum of 10 working days during the 90-calendar day period preceding the issuance of the Direction of Election, who have not been terminated for cause or quit voluntarily prior to the completion of the last job on which they were employed.' Respondent also sought to litigate in this case the validity of the Board 's rulings on two other objections to the election in the representation proceeding. As pointed out to Respondent at the hearing , however, its right to litigate those objections in the complaint case was not 'For the sake of brevity, this has sometimes been referred to as the Hondo rule and apparently for that reason Respondent , in its brief, has compared the evidentiary facts concerning Respondent's operations and employment data solely with those of Hondo , a company operating smaller rigs than its own, rather than with King, the size of whose rigs more nearly corresponds with Respondent's. The Hondo and King cases were companion cases before the Board and the differing rig sizes and experiences of the two companies were considered by the Board in formulating a single voting eligibility rule which it believed appropriate for both those companies. 'The applicability of the Hondo-King voting eligibility formula to another employer , Brahaney Drilling Company, Inc., was similarly litigated before me in Case 16-CA-3443, just 2 days before the hearing in this case. My decision in the Brahaney case was issued on March 6, 1969. Where, as in this case, no credibility issues involving the eligibility rule are involved, it would seem the more orderly and logical procedure to have the facts stipulated and presented to the Regional Director or Board in the representation proceeding. I see no reason why a formal hearing to receive the evidence should have been necessary . Nevertheless, so long as the Sti pulation for Certification provides for a right to litigate this issue in the complaint case and, the Employer signed this stipulation in reliance on his right to a hearing on the eligibility issue , as Respondent contends it did, it appears only fair, as the General Counsel apparently recognized, that Respondent be permitted to present its evidence in the unfair labor practice case. 285 reserved in the Stipulation for Consent and, as to those objections, the Trial Examiner would be in no position to overrule the Board, even if she disagreed with the Board's rulings. Respondent, however, was permitted to preserve its objections, for purposes of appeal or reargument before the Board, by making proffers of affidavits, which have been placed in a rejected exhibit file, and by being given an opportunity to proffer testimony of any witness whose testimony it might consider as attacking the credibility of evidence relied upon by the Regional Director in his Report on Objections to the Election. Respondent did not avail itself of the latter opportunity. IV. THE REPRESENTATION PROCEEDING Pursuant to a Stipulation for Certification Upon Consent Election entered into by Respondent and the Union and approved by the Board's Regional Director on March 21, 1968, an election was held on April 16. The Tally of Ballots showed that of 61 eligible voters, 36 (including two whose votes were challenged) cast ballots - 22 for and 12 against the Union. Respondent thereafter filed timely Objections to the Election, contending, inter alia, that the so-called Hondo-King formula for determining eligibility of employees to vote was inapplicable to Respondent's operations. The Regional Director on July 8 issued his Report on Objections overruling all the objections and recommending that the Board certify the Union. With•espect to t he Hondo-King eligibility formula, he recited that Respondent had been requested to furnish evidence in support of its objections based upon the use of that formula but that no such evidence had been received. On July 19, Respondent filed with the Board its exceptions to the Regional Director's report. The Board, on September 4, 1968, issued its Decision and Certification of Representatives, finding that Respondent's exceptions raised no material issues of fact or law warranting reversal of the Regional Director's recommendations, adopting the Regional Director's recommendations and certifying the Union as the bargaining representative of Respondent's employees in the agreed upon appropriate bargaining unit , namely: All derrickmen, motormen and floorhands, otherwise referred to as roughnecks, employed by Respondent in drilling operations in the Permian Basin area, excluding all tool pushers, drillers, office employees, technical employees, guards, professional employees and all supervisors as defined in the Act.' 'It would appear to me, from the face of the exhibits in the representation case which were introduced in this case that the number of employees voting solely by reason of the application of the Hondo-King formula were insufficient to effect the results of the election In its Exceptions to the Regional Directors Report on Objections, Respondent mentions only two men whose votes were challenged and three more who voted without challenge but whose votes would have been challenged by reason of the application of the Hondo-King formula had the Board agent not erroneously prevented Respondent from using a previously prepared list of men whose votes it intended to challenge . A subtraction of these five voters from the total of those eligible and from the total number of votes for the Union would still leave the Union with a majority. However, the General Counsel did not contend in the hearing before me that the challenges or possible challenges could not have affected the results of the election and I shall accordingly make no finding on that subject. 286 DECISIONS OF NATIONAL V. THE EVIDENCE RELATING TO APPLICATION OF THE HONDO-KING FORMULA Respondent contracts to drill oil wells in the Permian Basin area within a radius of about 150 miles from its headquarters in Midland, Texas.' It owns seven rigs and drills to depths of between 5,000 and 20,000 feet. Once Respondent spuds a well it normally must operate the rig used on that well 24 hours a day, 7 days a week, until the drilling of the well has been completed. The drilling operation requires the services of a driller (who is a supervisor) and four roughnecks on each of the three tours or shifts. This means that 12 roughnecks are required for each 24-hour day. The driller is responsible for hiring his own crew and may also fire them. The number of days required to drill a well depends in large part upon the depth of the well. During the period between April 1, 1967 and March 31, 1968, it took Respondent a minimum period of 10 days for one well and a maximum period of 178 days for another.7 The average time for drilling a well during this period was 59.5 days.' Respondent as well as other oil well drilling contractors in the Permian Basin area have difficulty in recruiting and keeping all the roughnecks needed in the drilling of wells. As shown by the record in this case, and as pointed out by the Board in the Hondo and King cases, there is a high turnover in the employment of roughnecks in that area. Some roughnecks stay in the industry for only a brief period of time but many others follow the industry for most of their lives. Their job tenure with each drilling Company, however, tends to be unstable. As explained by N. B. Dortch, who has been a driller in the Permian Basin area for 18 years and who drilled for Respondent on three separate occasions in 1968 , the long distances which many of the roughnecks frequently have to travel between their homes and the situs of the wells is a major factor in the brevity of their job tenure. On one of the drilling jobs Dortch started for Respondent in 1968 he and his roughnecks had to travel about 130 miles each way to and from the well and their homes. Aside from the roughnecks who quit to find work closer to their homes , some may quit to work on a deeper well which will assure them longer employment. Others may quit to rest up from their arduous 7-day workweek schedule or for various personal reasons. Some may even be bumped from their j ohs by crews who have greater seniority with the particular drilling company - as happened to driller Dortch and his crew on one of Respondent's wells. There exists in the Permian Basin area a large labor pool of roughnecks who follow their trade for many years or all their lives. Not many of them work for any single company long enough to earn a living working only for that company. However, many become rehires for one or more companies and they work several times for one company during the year. As an inducement to encourage more permanency in employment for its roughnecks , Respondent furnishes a The Permian Basin area. as the Board found in the Hondo and King cases, comprises about 95,000 square miles in the western part of Texas and the eastern part of New Mexico. 'Resp. Exh. 3 would indicate that one well took a minimum of 4 days to drill, but I have accepted the explanation made by Respondent in its brief that this well had not been completed on March 31 , 1968, and have eliminated that well from consideration. 'This compares with a normal of 60 to 70 days for King. whose rigs drill to about the same depth as Respondent's. and with an average of 18 days for Hondo, whose rigs drilled more shallow wells. LABOR RELATIONS BOARD 1-week paid vacation to employees who have remained in its employ for more than a year and contributes to an insurance program for its employees who have been continuously employed for more than 6 months.' This does not mean, as Respondent's Secretary-Treasurer Branham explained, that an employee will be disqualified for the insurance or vacation benefits merely because he does not work for Respondent during the qualifying periods while there is no work available during brief periods of time even though he may receive a time order (a termination slip). If, upon the completion of one well, there is an expectation that the rig will be used and the roughnecks needed on another well within 30 days, the roughnecks will continue to be covered under the insurance program. Similarly, there is no particular number of days a roughneck must work for Respondent during a 1-year period to qualify for the vacation benefits. Respondent uses its discretion in each case to decide whether a roughneck's breaks in employment should disqualify him for the vacation and employment elsewhere during breaks in employment with Respondent would not necessarily disqualify him for his vacation benefits.10 Despite efforts by Respondent to encourage permanency of employment of roughnecks, it has experienced a large turnover in employment among these employees. If all 7 of Respondent's rigs were operating at one time, it would need the services of 84 roughnecks, but Respondent's records (Respondent's Exhibit 3) show that during the period between April 1, 1967 and March 31, 1968 a maximum of 6 of its 7 rigs, and an average of only 4 rigs, were being operated at any one time." This would mean that Respondent actually would need a maximum of 72 and an average of 48 roughnecks at one time. Nevertheless, as the parties stipulated (G. C. Exh. 3), during the period of slightly more than 1 year prior to April 7, 1968, Respondent employed 384 roughnecks. It took this large number to perform the work of the 48 to 72 roughnecks who were needed in a 24-hour day. In other words, Respondent had to employ eight times as many roughnecks as it would have needed had all of them been steadily employed." Of these 384 roughnecks, 22 had worked for Respondent long enough to qualify for a vacation under Respondent 's vacation plan and 38 long enough to qualify under its plan for insurance benefits." The record does not show how many of those qualifying for these benefits were employed by Respondent at the time of the election. 'King, likewise, had insurance and vacation benefits for its employees. Hospitalization benefits were provided for roughnecks working at least a 180 days over a 2-year period and a paid vacation was given to those accumulating 350 days of accrued time . About 12 of the 174 roughnecks employed by King in I year received these benefits . The Board's decision in the Hondo case does not disclose whether that Company had any insurance or vacation benefits for its employees. "Even where Respondent has a 2-well contract for a certain rig there may be about a 3-week interval between the completion of one well and the spudding of the next one. Title examinations , getting the location surveyed and staked, and other preparatory steps necessarily preclude immediate employment of the roughnecks on the second well. "The average of 4 has been ascertained by dividing by 365 the total of 1,457 operating days for Respondent's 7 rigs as shown on Resp Exh. 3 "King likewise had to employ about 8 times as many roughnecks during a 1-year period as it would have needed had all of them been steadily employed . Hondo employed between 8 and 12 times as many. "A breakdown of the 384 roughnecks working during the approximately 1-year period above referred to shows that 17 worked for 301 days or more; 13 between 201 and 300 days ; 24 between 100 and 200 days; 19 between 51 and 100 days; 50 between 26 and 50 days; 67 between I I and 25 days, and 194 between I and 10 days (G.C.Exh 3). TRI-SERVICE DRILLING CO. It is thus apparent in this case, as in the King and Hondo cases, that there exist competing considerations of a high turnover in employment and a continued interest in employment with Respondent demonstrated by a significant portion of the work force. A comparison of the operations and employment pattern of Respondent with those of King and Hondo, in my view, shows no significant differences which would warrant the application of a different voting eligibility rule for roughnecks employed by Respondent. This comparison shows a particularly striking similarity between the facts in this case and those found by the Board in the King case. It is accordingly found that the formula for voting eligibility established by the Board in the Hondo and King cases was properly applied in this case and that the Union was validly certified on September 4, 1968 as the representative of Respondent's employees in the appropriate bargaining unit. Since Respondent concedes that on or about September 9, 1968 and thereafter it has refused the Union's request to bargain, it must be found that such refusal to bargain was in violation of Section 8(a)(5) and (1) of the Act. CONCLUSIONS OF LAW 1. All derrickmen, motormen and floorhands, otherwise referred to as roughnecks, employed by Respondent in the drilling of oil wells in the area known as the Permian Basin , but excluding all tool pushers, drillers, office employees, technical employees, professional employees, guards and all supervisors as defined in the Act constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 2. Since September 4, 1968 , Local 826, International Union of Operating Engineers , AFL-CIO, has been the certified and exclusive representative of all employees in the aforesaid appropriate unit for the purposes of collective bargaining within the meaning of Section 9(a) of the Act. 3. By refusing on or about September 9, 1968 and at all times thereafter to bargain collectively with the above-named labor organization as the exclusive bargaining representative of all its employees in the appropriate unit, Respondent has engaged in and is engaging in an unfair labor practice within the meaning of Section 8(a)(5) and ( 1) of the Act. 4. The aforesaid unfair labor practice affects commerce within the meaning of Section 2 (6) and (7) of the Act. 287 A. For the purpose of determining the effective period of the certification, the initial year of certification shall be deemed to be begin on the date Respondent commences to bargain in good faith with the Union as the recognized bargaining representative in the appropriate unit described herein below.' B. Tri-Service Drilling Company, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain collectively with Local 826, International Union of Operating Engineers, AFL-CIO, as the exclusive bargaining representative of the employees in the following appropriate unit: All derrickmen, motormen and floorhands, otherwise referred to as roughnecks, employed by Respondent in the drilling operations in the area known as the Permian Basin, but excluding all tool pushers, drillers, office employees, technical employees, professional employees, guards, and all supervisors as defined in the Act. (b) In any like or related manner interfering with, restraining, or coercing employees in the exercise of their rights guaranteed under Section 7 of the Act. 2. Take the following affirmative action designed to effectuate the policies of the Act: (a) Upon request, bargain collectively with Local 826, International Union of Operating Engineers, AFL-CIO, as the exclusive representative of the employees in the aforesaid appropriate unit with respect to rates of pay, wages, hours of work, and other terms and conditions of employment, and embody in a signed agreement any understanding reached. (b) Post at its Midland, Texas, headquarters copies of the attached notice marked "Appendix."" Copies of said notice, on forms to be furnished by the Regional Director for Region 16, after being duly signed by an authorized representative of Respondent, shall be posted by Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (c) Notify the Regional Director for Region 16, in writing, within 20 days from the receipt of this Recommended Order, what steps it has taken to comply herewith. 11 THE REMEDY It having been found that Respondent has engaged in and is engaging in an unfair labor practice within the meaning of Section 8(a)(5) and (1) of the Act, my Recommended Order will require that it cease and desist therefrom and, upon request, bargain collectively with the Union as the exclusive representative of all employees in the appropriate unit and, if an understanding is reached, embody such understanding in a signed agreement. RECOMMENDED ORDER Upon the foregoing findings of fact and conclusions of law and the entire record in this case , and pursuant to Section 10(c) of the National Labor Relations Act, as amended, it is hereby ordered: "The purpose of this provision is to insure that the employees in the appropriate unit will be accorded the services of their selected bargaining representative for the period provided by law See M,-Jac Poultry Co., Inc., 136 NLRB 785; Commerce Co. d/b/a Lamar Hotel, 140 NLRB 226, 229, enfd . 328 F.2d 600 (C A. 5), cert . denied 379 U.S. 817, Burnett Construction Co., 149 NLRB 1419, 1421 , enfd. 350 F.2d 57 (C.A. 10). "In the event that this Recommended Order is adopted by the Board, the words "a Decision and Order" shall be substituted for the words "the Recommended Order of a Trial Examiner " in the notice In the further event that the Board's Order is enforced by a decree of a United States Court of Appeals, the words "a Decree of the United States Court of Appeals Enforcing an Order " shall be substituted for the words "a Decision and Order." "In the event that this Recommended Order is adopted by the Board, this provision shall be modified to read: "Notify the Regional Director for Region 16, in writing, within 10 days from the date of this Order, what steps Respondent has taken to comply herewith." 288 DECISIONS OF NATIONAL APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to the Recommended Order of a Trial Examiner of the National Labor Relations Board and in order to effectuate the policies of the National Labor Relations Act, as amended , we hereby notify our employees that: WE WILL NOT refuse to bargain collectively with Local 826, International Union of Operating Engineers, AFL-CIO, as the exclusive representative of the employees in the bargaining unit described below. WE WILL NOT in any like or related manner interfere with , restrain, or coerce our employees in the exercise of the rights guaranteed them by Section 7 of the Act. WE WILL, upon request, bargain with the above-named Union, as the exclusive representatives of all employees in the bargaining unit described below with respect to wages, hours, and other terms and conditions of employment , and, if an understanding is reached, embody such understanding in a signed agreement. LABOR RELATIONS BOARD The bargaining unit consists of- All derrickmen, motormen and floorhands , otherwise referred to as roughnecks, excluding tool pushers, drillers, office employees, technical employees, professional employees, guards and supervisors as defined in the Act. TRI-SERVICE DRILLING COMPANY (Employer) Dated By (Representative ) (Title) This notice must remain posted for 60 consecutive days from the date of posting , and must not be altered, defaced, or covered by any other material. If employees have any question concerning this notice or compliance with its provisions they may communicate directly with the Board's Regional Office, 8A24 Federal Office Building, 819 Taylor Street , Forth Worth, Texas 76102, Telephone 817-334-2921.