JA-CE Co., Inc.

578 DECISIONS OF NATIONAL LABOR RELATIONS BOARD JA-CE Company, Inc. and Local Union No. 462, a/w International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America, Peti- tioner. Case 22-RC-5657 August 16, 1973 DECISION AND DIRECTION OF ELECTION BY CHAIRMAN MILLER AND MEMBERS FANNING AND PENELLO Upon a petition duly filed under Section 9(c) of the National Labor Relations Act, as amended, a hearing was held before Hearing Officer Margaret Berkowitz of the National Labor Relations Board. Following the close of the hearing the Acting Regional Director for Region 22 transferred this case to the Board for deci- sion. Thereafter, the Employer and the Petitioner filed 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 au- thority in this proceeding 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 proceeding, the Board finds: 1. The Employer, a New Jersey corporation head- quartered in the city of New Brunswick, is engaged in the food-service management business and has con- tracts to operate cafeteria programs for 19 school dis- tricts within the State of New Jersey. The Employer's gross volume of business during the year preceding the hearing held herein exceeded $3 million. During the same period, the Employer purchased materials and supplies valued in excess of $50,000, which were shipped into New Jersey from outside the State. The parties concede, and we find, that the Employer is engaged in commerce within the meaning of the Act. However, there remains a question as to whether the Board should assert jurisdiction over the Employer herein, in view of its relationship to the several school districts for whom it provides the aforementioned food services. At the outset, it is clear that the several school districts, and their respective boards of education which act in their behalf, as part of the public school system of the State of New Jersey are not employers within the meaning of the Act. Whether this Board will assert jurisdiction over an enterprise under con- tract with these boards of education depends upon the relationship of the contractor's services to the activi- ties of the several district boards of education, institu- tions which are excluded from the Act's jurisdiction. That relationship depends in larger part upon the de- gree of control exercised by the several boards of education over the labor relations policies of the Em- ployer.' The Employer contends that it provides food serv- ices to the several school districts as an independent contractor, exercising complete control over, and as- suming responsibility for the direction of, its employ- ees. Accordingly, the Employer urges this Board to assert jurisdiction herein. The Petitioner does not contend otherwise. More- over, like the Employer, the Petitioner urges that even if this Board should deem it inappropriate to assert jurisdiction in this case, it should nevertheless de- termine the unit question presented herein. As previously stated, the Employer has entered into 19 separate food-service contracts with school boards representing their respective districts. Under these contracts, which only become operative after approv- al by the New Jersey State Department of Education, the Employer operates a food-service program at 93 schools, and mans some 60 cafeteria units. The capital equipment and food-service facilities used in provid- ing these services is owned by the several school dis- tricts. Under the contract, the districts assume the responsibility for maintenance of dining room areas, and for the cleaning of windows, walls, ceilings, and light fixtures. The Employer is responsible for the routine cleaning of kitchens, serving areas, dishrooms, storerooms, and the like. These contracts further pro- vide that the Employer, on its own credit, shall pro- vide, prepare, and serve to the students, faculty, and visitors such foods and milk, including "type A" lunches, defined by the National School Lunch Pro- gram, at such prices and at such hours and days as the school districts shall direct. In this respect, the Em- ployer is required to consult with each of the school districts respecting food and menu requirements. The Employer is required to prepare and submit to a school representative a proposed menu 2 weeks in advance of its anticipated use. In furtherance of its contractual responsibilities, the Employer is also re- quired to provide expert administrative, dietetic, pur- chasing, engineering consulting, and personal advice and supervision. The Employer is also obliged to em- ploy only persons acceptable to the various school districts. The Employer alone, however, is responsible for carrying workmen's compensation insurance, and also assumes the entire responsibility for any and all damages and injuries of any kind or nature arising out of the operation of the cafeterias and lunch areas. As consideration for these services, the Employer re- Servomanon Mathias Pa, Inc, 200 NLRB No 136 205 NLRB No. 92 JA-CE CO. ceives a sum equivalent to 8 percent of gross sales. In order to monitor the contractor's performance, each of the school districts has a right to full access at all times to the cafeteria premises and equipment with or without notice. The Employer is also required to keep full and accurate accounts and records in connection with the food-service programs undertaken pursuant to these several agreements, which are subject to audit by the school districts during regular working hours and at reasonable places. The foregoing contractual provisions are deemed necessary to allow each of the school districts to retain control over the general operation of the school food- service program, consistent with the policies and pro- cedures set forth by the New Jersey State Department of Education. In fulfilling its responsibilities under the contract here involved, the Employer maintains the following organizational structure. Each of the 60 cafeteria units is supervised by a manager who is responsible for day-to-day operations. These managers, in turn, report directly to 10 area supervisors, each of whom is assigned to cover one or more school districts. These area supervisors maintain contact directly with the cafeteria managers and with employees operating the "satellite" schools serviced by cafeteria units. The area supervisors, in turn, report to one of two regional supervisors. The regional supervisors report to the Employer's director of operations, who, in turn, re- ports directly to the president. Communications be- tween the Employer and the several school districts are not undertaken below the regional level. Although the school districts reserve the right to remove JA-CE employees who are not deemed ac- ceptable, hiring is done exclusively by the Employer, and no cafeteria employee has ever been discharged by the Employer as a result of the operation of this provision. In "99 percent" of the cases, employees are recruited locally. They are generally hired by the area supervisors on recommendation of the cafeteria man- agers and following applicant interviews held either by the managers, the area supervisors, or both. Under the applicable agreements, prospective employees are required to submit to, and pass, physical examina- tions. Wage rates and fringe benefits for employees are established by the Employer, and payment of wages is, of course, made by checks of the Employer, which are distributed by its supervisors. While the days during which the Employer is re- quired to furnish services differ in the several districts, depending upon each district's vacation schedule, or for other reasons peculiarly applicable to the several districts, the Employer, at its discretion, determines the working hours and the length of the workday, as well as granting or denying requests for time off from 579 work. In this respect, among other things taken into consideration are the number of individuals to be fed and the layout of the food service facilities. The Em- ployer publishes its own rules and regulations for the conduct of employees. From the foregoing it is clear that the school boards involved have incorporated sufficient controls in their respective contracts with the Employer to insure satis- factory performance by the Employer. The assump- tion of these controls to assure contract compliance by a "cost plus" contractor, however, is not inconsis- tent with a factual finding that the degree of control over labor relations retained by that contractor is suf- ficient to preclude the merger of that contractor's identity as an "employer" with an enterprise exempt- ed from the provisions of our Act. Indeed, we find on the record evidence that the contractor, the Employer, here involved is a profitmaking entity independent of the school system, and that it has retained virtually full control over the labor relations policies governing its employees, in the same manner as any other busi- ness concern would do. As to its business indepen- dence, we note that the Employer prepares the menus used in the food-service program employing the ex- pertise of its own dieticians. While these menus are submitted in advance for approval by the several school boards, we note that such approval has never been withheld and, indeed, is not likely to be withheld unless those menus fall short of compliance with the rules and regulations governing Federal and state food programs. Further, the Employer alone is res- ponsible for all dealings with food vendors and sup- pliers, and exercises complete discretion with respect to the selection of food products and the terms and conditions of payment therefor. The various school boards take no part in this selection process and are not responsible for the purchases made. Further, un- der the contracts involved, the Employer assumes full responsibility for damages arising out of his opera- tions. With respect to labor relations, we note that the Employer herein is alone responsible for the recruit- ment of satisfactory employees. Thus, the Employer advertises for needed personnel, interviews them, and, on the basis of such interviews, selects those candi- dates it deems best qualified for the positions avail- able in each of the 19 school districts? The fact that the school boards may under the contract require the removal of an occasional objectionable employee does not require a different conclusion. There is no showing in the record that this reserved right has played any significant role in the composition of the 2 Cf Servomation Mathias Pa, Inc, 200 NLRB 136, where the exempt institution maintained control over both the structure of the respondent's managerial organization and substantial areas of its labor relations policies 580 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Employer's work force. It is also clear that the condi- tions under which employees work are determined by the Employer. While the school boards determine the days on which the cafeterias are to be open, the Em- ployer determines the hours which employees shall work and the length of the workday. Nor does any school board representative have any authority to su- pervise or direct the employees in the performance of their food-service tasks. In sum, we find that the only significant control manifest by the several school boards over the Employer's operations is budgetary, in that the Em- ployer, in the event its contract proves less profitable than anticipated, may have to justify to the boards certain costs for which it is entitled to reimbursement. Such budgetary control as may result from these pro- visions of the contracts between the Employer and the schools is too remote, in our view, to justify a "single employer" finding. Accordingly, we find that the Em- ployer is engaged in commerce within the meaning of the Act and that it will effectuate the purposes of the Act to assert jurisdiction herein.3 2. The labor organization involved claims to repre- sent certain employees of the employer. 3. A question affecting commerce exists concern- ing the representation of certain employees of the Employer within the meaning of Section 9(c)(1) and Section 2(6) and (7) of the Act. 4. The Petitioner seeks a unit of approximately 105 catering service employees employed by the Employ- er in the Edison, New Jersey, public school system, including cooks, dishwashers, cashiers, cakemakers, sandwichmakers, food preparers, and kitchen work- ers, but excluding managers, office clerical employ- ees, guards, and supervisors as defined in the Act. The Employer contends that the only appropriate unit is one composed of individuals employed in all 19 school districts. In the alternative, the Employer as- serts that those employees working in the 10 districts comprising the Employer's southeast administrative region constitute the smallest unit appropriate for the purposes of collective bargaining. Ultimate responsibility for the Employer's food- service activities rests with its president. He is assisted by a director of operations. All of the Employer's food-service activities are grouped within either its northwest or southeast regions. The regional supervi- sors, who report directly to the director of operations, have working under them 10 area supervisors, each of whom is responsible for the day-to-day operations of one or more school districts. Within the school dis- 3 Howard Johnson Co., 135 NLRB 1260, enfd. 317 F.2d I (C.A. 1), cert denied 375 U S 920, Herbert Harvey, Inc , 171 NLRB 238, enfd 424 F 2d 770 (C.A D.C). tricts, there are some 60 cafeteria units, each super- vised by a cafeteria manager, and satellite facilities manned by personnel who report to their appropriate area supervisor. There are approximately 600 employ- ees throughout the Employer's system. Within the Edison school district, with which we are here concerned, the Employer employs approxi- mately 105 employees who work at the 5 schools with cafeteria units or at the 16 satellite food-service facili- ties. The Employer serves approximately 13,485 stu- dents in the Edison school system. The area supervisor responsible for the Employer's day-to-day operations within this school system works exclusive- ly in that capacity, having no responsibility for the activities within any other school district. Geographically, the 19 school districts are widely scattered throughout the State of New Jersey, the longest straight-line distance between 2 being approx- imately 50 miles. Some of these school districts are located in large urban areas and others are located in distinctly rural areas of the State. As previously mentioned, hiring for the various school districts is undertaken at the local level, and employees generally live in close proximity to their places of work. Employment interviews are normally conducted by a cafeteria manager, the area supervisor of the district involved, or by both. The manager may effectively recommend that an individual be hired, but ultimate authority for that decision rests with the area supervisor. Area supervisors also make the final decisions with respect to transfers between schools in a given district, have the discretion to grant time off to employees, and impose discipline when appropri- ate. Conditions of employment vary in each of the school districts, largely because of the different re- quirements for food service expressed by the several districts. Although starting rates of pay are uniform throughout the several districts, subsequent rates of pay employees receive may vary. The number of days and hours of work are not uniform within the various school systems. Temporary transfers of employees between districts appear nominal, amounting to only 68 man days of the 160,000 man days worked during the approxi- mately 2 academic years under consideration. There is no history of bargaining for employees in any of the districts here involved, and no labor organi- zation is seeking the Employer's overall operation. It may well be that the optimum unit for collective bar- gaining would be districtwide in scope, but this does not preclude the Petitioner from seeking representa- tion in a smaller unit if, as we find here, the smaller unit, standing alone, is under all the circumstances also appropriate for the purposes of collective bar- JA-CE CO. gaining .4 Upon consideration of the entire record in this case, including particularly the substantial degree of autonomy exercised by the area supervisor for the Employer's Edison school district operation , the mini- mal interchange of employees , the absence of any bargaining history, and the fact that no labor organi- zation is seeking a larger unit , we are satisfied that the requested unit constitutes an appropriate unit which will assure to employees the fullest freedom in exercis- ing the rights guaranteed by the Act. 4 Dixie Belle Mills, Inc, a wholly owned subsidiary of Belle Industries, Inc, 1389 NLRB 629, 631 581 Accordingly, we find that the following employees of the Employer constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. All catering service employees employed by the Employer in the Edison, New Jersey, public school system, including cooks, dishwashers, cashiers, waitresses, cakemakers, sandwichmak- ers, food preparers, and kitchen workers, but ex- cluding managers, office clerical employees, guards, and supervisors as defined in the Act. [Direction of Election and Excelsior footnote omit- ted from publication.]