Hyman-Michaels Co.

In the Matter of HYMAN-MICHAELS COMPANY, UNITED COMMERCIAL COMPANY DIVISION and INTERNATIONAL UNION OF MINE, MILL AND SMEIIrER WORKERS, LOCAL No. 50, C. I. O. Case No. R-1119.-Decided February 28, 1939 Scrap Iron Industry Investigation of Representatives : controversy concern- ing representation of employees : controversy concerning appropriate unit; rival organizations ; petition for, dismissed, where no question concerning representa- tion has arisen in a unit which is appropriate for the purposes of collective bargaining-Unit Appropriate for Collective Bargaining : controversy as to whether employees of a single employer constitute an appropriate unit in an industry where most employers belong to an association which carries on col- lective bargaining for them and administers their labor relations generally ; history and functioning of employee organization : single union representing practically all employees in industry ; employer organization : group of em- ployers belonging to Association which bargains collectively for its members ; history of contractual relationships : contract between single union and asso- ciation of employers ; standardized wages, hours, and working conditions ; condi- tions prevailing throughout industry in accord with such contract. Mr. John Paul Jennings, for the Board. - Cooley, Crowley c€ Supple, by Mr. H. Rowan Gaither, Jr., of Sall Francisco, Calif., for the Company. Gladstein, Grossman & Margolis, by Mr. Ben Margolis, of San Francisco, Calif., for the International. Mr. C. E. McGovern, and Mr. Angelo Colapietro, of San Francisco, Calif., for Local 965. Mr. Francis V. Paone, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE On May 27, 1938, International Union of Mine, Mill and Smelter Workers, Local No. 50, C. I. 0., herein called the International, filed with the Regional Director for the Twentieth Region (San Francisco, California) a petition alleging that a question affecting commerce had arisen concerning the representation of employees of United Commer- 11 N. L. R. B., No. 60. 796 HYMAN-MICHAELS COMPANY ET AL. 797 cial Company,' San Francisco, California, herein called the Company, and requesting an investigation and certification of representatives pursuant to Section 9 (c) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. On September 14, 1938, the National Labor Relations Board, herein called the Board, acting pursuant to Section 9 (c) of the Act and Article III, Section 3, of National Labor Relations Board Rules and Regulations-Series 1, as amended, ordered an investigation and authorized the Regional Director to conduct it and to provide for an appropriate hearing upon due notice. On October 22, 1938, the Regional Director issued a notice of hear- ing, copies of which were duly served upon the Company, the Inter- national, and Scrap Iron and Metal Workers Union, Local 965, a division of the International Hod Carriers, Building and Common Laborers Union of America, A. F. of L., herein called Local 965, a labor organization claiming to represent employees directly affected by the investigation. Pursuant to notice, a hearing was held on November 1, 2, and 3, 1938, at San Francisco, California, before William R. Ringer, the Trial Examiner duly designated by the Board. At the commencement of the hearing Local 965 filed a motion to inter- vene which was granted by the Trial Examiner. The Board, the Company, and the International were represented by counsel, and Local 965 by its local representative. All the parties participated in the hearing and were afforded full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bear- ing on the issues. During the course of the hearing the Trial Ex- aminer made several rulings on motions and on objections to the admission of evidence. The Board has reviewed these rulings and finds that no prejudicial errors were committed. The rulings are hereby affirmed. At the close of the hearing, the International and Local 965 filed with the Board briefs on the issue of the appropriate unit. Upon the entire record in the case, the Board makes the following : FINDINGS OF FACT I. THE BUSINESS OF THE COMPANY Hyman-Michaels Company, an Illinois corporation, is engaged in the business of buying and selling scrap iron and used railroad equip- ment and machinery, such as steel rails, track accessories, and switch materials. Under the name of United Commercial Company, the Company maintains a divisional office and plant in San Francisco, At the hearing it was stipulated that the correct name of the Company is Hyman- Michaels Company, and by agreement the captions in the pleadings were amended accord- ingly. United Commercial Company is the name applied to a division of Hyman -Michaels Company. 798 DECISIONS OF NATIONAL LABOR RELATIONS BOARD California, which makes purchases and sales for the Company in the States of California, Washington, Oregon, Nevada, Utah, and Arizona. Only the United Commercial Company Division is involved in this proceeding. During 1937, the total purchases made by the United Commercial Company Division were valued at approximately $3,400,000, of which about 20 per cent were acquired outside the State of California. Approximately 50 per cent of such purchases were shipped to the San Francisco plant, the balance being reshipped without coming to rest in said plant. The total sales of materials shipped outside Califor- nia were valued at $3,517,749.14, of which 50 per cent were shipped from the San Francisco plant. II. THE ORGANIZATIONS INVOLVED International Union of Mine, Mill and Smelter Workers, Local No. 50, is a labor organization affiliated with the Committee for Industrial Organization, admitting to membership all the production employees of the Company except foremen, `superintendents, and clerical employees. Scrap Iron and Metal Workers Union, Local 965, International Hod Carriers, Building and Common Laborers Union of America, is a labor organization affiliated with the American Federation of Labor, admitting to membership all production employees in scrap-iron, plants in San Francisco, including foremen, and excluding superintendents and clerical employees. III. EMPLOYEE ORGANIZATION AND THE SAN FRANCISCO SCRAP IRON DEALERS ASSOCIATION The International was organized in October 1934, and secured its first collective bargaining agreement in January 1935, with Federated Metals Division of American Smelting and Refining Company, a plant dealing exclusively in non-ferrous scrap metals. During 1935, and the greater part of 1936, the organizational efforts among the em- ployees in the ferrous-and non-ferrous scrap metal plants in San Francisco and vicinity under the direction of the International proved unsuccessful. In 1937, however, it secured agreements with several companies which deal principally in non-ferrous scrap metals and other "scrap" of various kinds, such as rope, rags, and paper. Local 965 was chartered in February 1937, and immediately began an organization drive in the San Francisco area. Within a few weeks Local 965 succeeded in enlisting a majority of the employees in the scrap-iron (ferrous metals) industry, including the United Com- mercial Company Division. It then served notice on the scrap-iron HYMAN-MICHAELS COMPANY ET AL. 799 dealers individually that it represented a majority of their employees and requested recognition as exclusive bargaining representative thereof. Following the request of Local 965 for bargaining recognition the San Francisco Scrap Iron Dealers Association was organized for the purpose of "the regulation of labor conditions in the scrap iron and metal industry" through the joint efforts of its members and "by means of collective bargaining" with Local 965. At the time of the hearing the Association was composed of about 13 members com- prising over 90 per cent of the employers engaged in the purchase and sale of scrap iron in San Francisco and its environs. The Company became a member of the Association in May 1937.2 The record shows that over 75 per cent of the total tonnage handled by members of the Association is scrap iron and that in excess of 75 per cent of the employees of such members work exclusively on scrap iron. At the hearing Roy Nevis, executive secretary of the Association, testified that the main reason for organizing the Association was to administer the labor relations of its members. The "Agreement of Association" provides for the appointment of an adjustment com- mittee composed of three members elected by the members of the Association. The agreement further provides "that the Adjustment Committee shall have full power to act without calling a meeting of the members of the Association; and there shall be no limitation on the powers of the Adjustment Committee." Members of the Asso- ciation consent to be bound by the agreement and thus to be bound by the actions of the adjustment committee. Since April 1937, the Association, through its adjustment com- mittee, has bargained collectively on behalf of its members with Local 965. On April 7, 1937, the Association and Local 965 executed a 6 months' contract which in effect recognized Local 965 as the exclusive bargaining representative, of the employees of Association members and granted a preferential shop to this labor organization. The contract further provided for the selection of an adjustment com- mittee consisting of three members of Local 965 and three members of the Association to decide all disputes arising thereunder. The April 7 contract was renewed on November 30, 1937, and on June 2, 1938, the Association and Local 965 entered into a similar contract to be effective until May 1, 1939. Following the execution of this latter contract the Association, in accordance with its usual custom, sent copies to its members with the direction "to conduct all relations with your employees in accordance therewith." 2 The Company never executed the "Agreement of Association " and never formally joined the Association It paid dues, however, sent representatives to Association meetings, and in May 1937 , signed a contract with Local 965 identical to the contract signed by the Association the month before. 800 DECISIONS OF NATIONAL LABOR RELATIONS BOARD It is evident from the foregoing that Local 965 has successfully organized the employees on an industry-wide basis and that the Asso- ciation has taken over practically all the employer functions of col- lective bargaining normally exercised by the individual members of the Association. IV. THE PRESENT CONTROVERSY The present controversy arises from a conflict between the Interna- tional and Local 965 over the representation of employees of the Company. As described above, the Company became a member of the Association in May 1937, and was thereafter bound by the con- tract between the Association and Local 965 as renewed on November 30, 1937. On May 5, 1938, following the expiration of this contract, a majority of the Company's employees voted to affiliate with the International which, on May 9, 1938, requested exclusive bargaining recognition from the Company. Pursuant to the advice of the Re- gional Director, the Company notified the Association that, pending the outcome of this proceeding, it could not be considered as having authorized the Association to represent it in the negotiations which culminated in the contract of June 2, 1938, between the Association and Local 965. V. THE APPROPRIATE UNIT The International claims that the production employees of the Com- pany, excluding foremen, superintendents, and clerical employees, constitute a unit appropriate for the purposes of collective bargaining. In urging the dismissal of the petition filed by the International, both Local 965 and the Company contend that the appropriate unit con- sists of all the production employees in the scrap-iron industry in San Francisco who are employed by members of the Association, including employees of the Company. In opposition ' to this contention the In- ternational points to several contracts it has secured from employers in the scrap industry and maintains that the Association represents no homogeneous group of employers in the industry. The record shows that the dealers in and about San Francisco who' are engaged in the purchase and sale of used material fall into two classes. One class consists of general junk dealers who regularly pur- chase every type of used material such as batteries, rope, rubber, bottles, sacks, and non-ferrous scrap metals which include such metals as brass and copper. While these dealers also handle ferrous scrap metal (scrap iron) such purchases are merely incidental to and com- prise but a small proportion of their general business. The second class consists of dealers whose business consists primarily in the pur- chase and sale of ferrous scrap metal or scrap iron. All the members HYMAN-MICHAELS COMPANY ET AL. 801 of the Association, including the Company, fall into this latter cate- gory of dealers. Although the members of the Association also pur- chase non-ferrous scrap, such purchases are incidental to their busi- ness. None of the members handles rags, bottles, sacks, or kindred scrap. As noted above, over' 90 per cent of the scrap-iron dealers are members of the Association, and it is apparent that they constitute a separate and distinct branch of the scrap industry. Moreover, it would appear that the International has been successful, for the most part, in organizing only the employees of the first class of dealers described above. While under ordinary circumstances the unit claimed by the Inter- national might be deemed appropriate for the purposes of collective bargaining, the past history and functioning of both employee and employer organization bar such determination. The organization of the employees on an industry-wide basis has been attended by a similar organization of employers who have delegated the essential employer functions of fixing wages, hours, and working conditions to the Asso- ciation. The effectiveness of collective bargaining on an industry-wide basis in and around San Francisco, with the Association represent- ing the employer members and Local 965 representing all the em- ployees of such employers, is established by the material gains ob- tained for the employees and the orderly functioning of the collective bargaining process that has prevailed in the industry since 1937. Wages and hours have been standardized; low wages, long hours, and other evils prevalent in the industry prior to the negotiation of the 1937 contract have been eliminated; and a system of arbitration has been established which has led to a peaceful solution of the labor problems arising in the industry. Under these circumstances and in view of the entire record we are of the opinion that the unit claimed by the International does not constitute a unit appropriate for the purposes of collective bargaining.s We shall therefore dismiss the petition of the International. VI. THE QUESTION CONCERNING REPRESENTATION Since, as stated in Section V above, we are unable to find an appro- priate unit within the scope of the petition filed in this case, we find aMatter of Admiar Rubber Company and American Federation of Labor on behalf of Employees of Company, Matter of Ideal Novelty & Toy Company, Inc. and American Fed- eration of Labor on behalf of Employees of Company, 9 N. L. It. B. 407; Matter of Mobile Steamship Association et at. and International Longshoremen and Warehousemen's Union, 8 N. L. It. B. 1297; Matter of Shipowners' Association of the Pacific Coast, et at. and International Longshoremen's and Warehousemen's Union, District No. 1, 7 N. L. It. B. 1002. Cf. Matter of F. E. Booth & Company et at. and Monterey Bay Area Fish Workers Union #23, C. I. 0., 10 N. L. It. B. 1491; Matter of Aluminum Line, et at. and International Longshoremen and Warehousemen's Union, 8 N. L. R. B. 1325. 802 DECISIONS OF NATIONAL LABOR RELATIONS BOARD that no question has been raised concerning the representation of employees of the Company in an appropriate bargaining unit. Upon the basis of the above findings of fact and the entire record in the case, the Board makes the following : CONCLUSION OF LAW No question concerning representation of employees of Hyman- Michaels Company, United Commercial Company Division, San Francisco, California, in a unit which is appropriate for the purposes of collective bargaining has arisen, within the meaning of Section 9 (c) of the National Labor Relations Act. ORDER Upon the basis of the foregoing findings of fact and conclusion of law, the National Labor Relations Board hereby dismisses the peti- tion for investigation and certification filed by the International Union of Mine, Mill and Smelter Workers, Local No. 50, C. I. O.