Cherry Lane Farms, Inc.

CHERRY LANE FARMS, INC. Cherry Lane Farms, Inc. and Local 247, Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, Petitioner. Case 19-RC-5281 May 7, 1971 DECISION ON REVIEW AND DIRECTION OF ELECTION BY CHAIRMAN MILLER AND MEMBERS BROWN AND JENKINS On February 18, 1970, the Regional Director for Region 19 issued a Decision and Direction of Election in the above-entitled proceeding. Thereafter, pursuant to the National Labor Relations Board Rules and Regulations, the Employer filed a timely request for review, in which it contended that the Board lacks jurisdiction because the individuals whom the Peti- tioner seeks to represent are "agricultural laborers" and therefore specifically excluded from the definition of "employee" in Section 2(3) of the National Labor Relations Act, as amended. By telegraphic order dated March 19, 1970, the Na- tional Labor Relations Board granted the request for review and stayed the election pending decision on re- view. Thereafter, the Employer filed with the Board the brief and supplemental brief it had previously filed with the Regional Director. The Petitioner filed a brief and a supplemental letter memorandum in support of the Regional Director's decision, and the Employer then filed another supplemental brief. On July 15, 1970, having been advised that, since the date of the original hearing and the Regional Director's Decision, there had been changes in the Employer's operations and organizational structure, the Board re- manded the case to the Regional Director for the pur- pose of reopening the hearing in order to secure evi- dence as to such changes. An additional hearing was held before Hearing Officer Dale C. Perman on August 17, 1970. Subsequent to the second hearing the parties filed additional briefs. 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 rulings made at the second hearing and finds that they are free from prejudicial error. They are hereby affirmed. The Board has considered the entire record in this case, including the briefs, and makes the following findings: The Employer, Cherry Lane Farms, Inc., is a divi- sion of National Food Company, a recently merged corporate entity engaged in several States of the Pacific Northwest in the production, processing, and sale of eggs to retailers. The Employer has egg farms at 190 NLRB No. 57 299 Marysville and Stanwood, Washington. At Marysville it operates an egg processing plant, where eggs are washed, sanitized, dried, treated with oil, candled, weighed and sorted, and packaged. The processed eggs are delivered by the Employer to Northwest Egg Sales, Inc., another division of the parent company, which buys them from the Employer and sells them to retail- ers. Gerald A. Bookey is president and chief operating officer of both the Employer, in which he owns 50 percent of the stock, and Northwest Egg Sales, Inc., in which he owns 62 1/2 percent of the stock. The Em- ployer sells most of its eggs to Northwest, but some eggs are sold to Northwest Egg Sales of Portland, another affiliate, and some are delivered directly to retail stores. The Employer 's sales to Northwest Egg Sales are presently valued at approximately $1,500,000 annually. In its original petition for representation, the Peti- tioner requested a unit of all production and mainte- nance employees at the Marysville egg processing plant. After the first hearing, an addition was con- structed to the building housing the egg processing plant, which addition is also occupied, under a 10-year lease, by Pacific Egg Products Northwest, a separate corporation (not part of National Food Company) which is described as an egg breaking enterprise. Pacific Egg Products Northwest purchases, from various egg packing plants, eggs that are unsatisfactory for table use. Pacific breaks the eggs and separates them into yolks and whites, or processes them as whole eggs, pasteurizes them, and sells them in the form of various products, some with salt or sugar added, in liquid or frozen form, for use in such foods as bakery goods, mayonnaise, and macaroni. The Petitioner now seeks to include in the unit the production and maintenance employees of Pacific Egg Products Northwest. At the time of the second hearing the Employer, Cherry Lane Farms, Inc., was processing both eggs that were produced on its own farms and eggs which it obtained from other sources. Approximately 60 per- cent of its eggs were obtained from its own chickens. Another 27 percent came from Pacific Egg Producers, which may be another division of National Food Com- pany' and is "in the farming business to produce eggs for the shelling market."' The remaining 13 percent of ' Gerald A Bookey, also president of National Food Company, testified that National Food Company was the result of the merger of eight separate corporate entities. In naming the merged firms, at various points in the record, Mr Bookey included the following (1) Cherry Lane Farms, Inc, (2) Northwest Egg Sales, Inc , (3) Northwest Egg Sales of Portland, (4) North- west Egg Sales of Spokane, (5) Bookey Investment Company, (6) Relmar Company, and (7) Cherry Lane Farms of Montana, Inc Pacific Egg Produc- ers, Inc , was referred to by Bookey in giving the sources of Cherry Lane's eggs Having thus referred to it, Bookey may inadvertently have omitted it when, later in his testimony, he attempted to complete the list of the merged firms ' At another point in the record, Pacific Egg Producers is described as being "in the business of producing eggs, shelling " Pacific sells the eggs (Cont.) 300 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the eggs processed by the Employer was obtained from various farmers and egg producers in the area. The Employer states that this division of the Em- ployer's egg sources was temporarily weighted toward a greater reliance on outside sources because many of its own chickens were "out of production" at the time of the hearing, either molting or being replaced.3 Ac- cording to the Employer, it had been, producing 84 percent of its own eggs 2 months prior to the second hearing; within 30 to 45 days after the hearing it would be producing 75 to 80 percent of the eggs going through the processing plant; and additional production facili- ties due for completion in the spring of 1971 are ex- pected to increase the percentage of "inside" eggs to very close to 100 percent.4 Approximately 90 percent of the eggs processed are sold under "private labels," e.g., eggs destined for Safeway or I.G.A. retail stores are packed in cartons bearing the store's private brand name. The Employer's own label is "Cherry Lane" and eggs marketed under this name are sold to some of the same stores that also stock eggs processed by the Em- ployer under the store's private label. The label under which the eggs are packed depends upon the orders from retailers, not upon the source of the eggs. Thus, eggs produced by the Employer and eggs produced by independent farmers are intermingled during process- ing. The Employer's egg processing plant is located be- tween 500 and 600 feet from the nearest chicken house at the Marysville farm. The entire employee comple- ment of the processing plant is separate from the em- ployee complement of the farms. They do not work together, they are separately supervised, and there is no evidence of transfer or interchange between the plant and the farms. Upon the facts existing at the time of the first hear- ing, the Regional Director concluded that the process- ing plant employees were not "agricultural laborers." The two principal facts he relied on were the integra- tion of the operations of the Employer with those of Northwest Egg Sales and the fact that up to a month before the first hearing the Employer had purchased one-half of the eggs it processed from other farmers.' He concluded that, viewing the "totality of the situa- tion," the Employer's egg processing operations were handled by the Employer directly to Northwest Egg Sales but sends them to the Employer to be processed and then shipped to Northwest Egg Sales. ' The chickens are brought to the Employer's egg laying cages at 20 weeks of age, and kept there, for some unspecified time, until replaced by new 20-week-old chickens. At the time of the first hearing, in February 1970, the Employer had approximately 175,000 chickens at its Marysville farm. (The record does not show how many chickens the Employer had at Stanwood.) The new facilities, when completed, will be capable of housing an additional 108,000 chickens. ' At the time of the first hearing the Employer was producing virtually all the eggs it was processing, most of its former suppliers having ceased to supply it with eggs, and had just begun to.expand its production facilities. not performed as part of the farm operation, but rather as part of a distinct business activity; namely, the wholesale egg distribution network of Northwest Egg Sales, Inc. While part of the factual basis for the Re- gional Director's conclusion has changed, we view the present record as supporting his conclusion. In McAnally Enterprises, Inc., 152 NLRB 527, on which the Employer relies, the Board looked at the "totality of the situation" and found that the em- ployer's egg processing plants operated "as an incident to or in conjunction with" the farming operations, and that the individuals employed in those plants were ex- empt agricultural laborers. The significant differences between McAnally and the instant case are (1) that it is apparent here but not in McAnally that the process- ing operation is tied into a wholesale distribution and sales system; and (2) that here, but not in McAnally, the plant was, at the time of the hearing, processing other producers' eggs and was contemplating doing so for some time in the future. Regarding (1), Northwest Egg Sales, Inc., now part of the same corporate structure as the Employer, is a wholesale sales and distribution organization which buys processed eggs from the Employer and from other sources, and which also processes eggs at its own plant. As far as the record shows, it does no egg farming. To meet its requirement for processed eggs, it utilizes the facilities of the Employer and its own processing plant interchangeably. Thus, Northwest Egg Sales, Inc., might fill a sales order with some eggs from its own processing plant and some from the Employer. The Employer, therefore, is part of a marketing and distri- bution system which is not limited to eggs processed and sold by anyone who in even the broadest sense could be called a farmer. With respect to (2), the purchased eggs are intermin- gled with the Employer's own eggs, so that the em- ployees spend part of their time working on purchased materials. In such circumstances, if the purchased materials represent a substantial part of the employer's regular business, the Board has held that the employees involved are not "agricultural laborers." For example, in Kelly Brothers Nurseries, Inc., 140 NLRB 82, the Board found that the exemption did not apply to an employer 28 percent of whose gross annual income was derived from the resale of purchased items. And in The Garin Company, 148 NLRB 1499, 15 percent was con- sidered a substantial amount of packing of asparagus grown by a farmer other than the packer. In contrast, the Board held in John C. Maurer & Sons, 127 NLRB 1459, that a celery grower who packed his own produce and some grown by others, the latter constituting only 8 percent of his packing business, was entitled to the exemption where the packing employees also spent 35 percent of their time harvesting in the fields. In such circumstances we found that the packing operation was CHERRY LANE FARMS, INC. "an incident to or in conjunction with" the farming operation and was not a separate commercial enter- prise. We cannot make a similar finding in the instant case. The Employer has not substantiated its claim that it will produce all or substantially all its own eggs after its new production facilities are completed. Shortly before the first hearing, the Employer had been pur- chasing about one-half of its eggs from outside sources. The other half was produced in the Employer's own facilities, which housed 175,000 chickens at the Marys- ville farm plus an undisclosed number at Stanwood. The Employer's new facilities, which are supposed to replace the outside sources, will house only 108,000 chickens. Although the new facilities thus apparently cannot produce an amount of eggs equal to the old and thereby replace the one-half formerly purchased from outside, the Employer expects to process at least the same volume of eggs as formerly, and does not in any way account for the apparent discrepancy. In short, the Employer has not supplied corroborative details as to the expected replacement of the entire egg supply for- merly, and at the time of the second hearing, provided by outside producers.' Considering the entire record, we cannot find that the Employer comes "plainly and unmistakably within [the] terms and spirit'17 of the agricultural exemption. Accordingly, we find that the employees of this Em- ployer are "employees" within the meaning of the Act. We deal now with the question of the appropriate- ness of including the employees of Pacific Egg Products Northwest in the bargaining unit. While there is some overlap in ownership and management between the Employer and Pacific Eggs Products Northwest, the two enterprises are not economically interdependent, and except for one employee who does occasional part- Cf The Garin Company, supra at 1501 Phillips v Walling, 324 U S 490, 493. 301 time work for the Employer and is also employed by the egg breaking firm, there is no interchange of em- ployees between the two.' Employees do, however, share the same lunchroom facilities. Pacific Egg Pro- ducts Northwest was operating only 1 or 2 days a week at the time of the second hearing, while the Employer ran full time. The Employer has a fringe benefit pro- gram in which the employees of Pacific Egg Products do not participate. In short, the record does not show a sufficient community of interest between the em- ployees of the two enterprises to warrant the inclusion of the employees of Pacific Egg Products Northwest in the unit originally requested by the Petitioner. We find that the following employees of the Em- ployer constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act: All egg processing and cleanup employees em- ployed by the Employer at its egg processing plant near Marysville, Washington, excluding office clerical employees, guards, and supervisors as defined in the Act. [Direction of Election9 omitted from publication.] ' Gerald Bookey, president and shareholder of National Food Company, and 50 percent owner of Employer, owns 25 percent of the stock of Pacific Egg Products Northwest His brother, Vincent Bookey , manages the latter and the Employer Pacific Egg Products Northwest purchases between 2 and 4 percent of its eggs from the Employer 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 ad- dresses which may be used to communicate with them Excelsior Underwear Inc., 156 NLRB 1136, NLRB v Wyman-Gordon C o . , 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 19 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 extraordi- nary circumstances Failure to comply with this requirement shall be grounds for setting aside the election whenever proper objections are filed