C.I.M. Mechanical Co.

- 'C.1 M. )MECHANICAL CO. . C.I.M. Mechanical Co., formerly known - as Egan Mechanical Co. and United Association ,- of Journeymen and Apprentices - of the Plumbing and Pipefitting Industry of the United ,States and Canada, Local. Union No. -469, AFL-CIO and United Association of Journeymen and Ap- prentices of the Plumbing and Pipefitting Indus- try of the United States " and. Canada, Local Union No. 741, AFL-CIO: Case:28-CA-7075 14 June 1985 DECISION AND ORDER'- BY CHAIRMAN DOTSON ANDr MEMBERS" HUNTER AND DENNIS On 8 September 1983_ Administrative Law Judge Russell L. , Stevens issued the attached decision. The Charging Parties filed exceptions, and the General Counsel ` filed exceptions` and' a-, supporting brief. The Respondent filed ' cross-exceptions and a supporting brief and an answering brief.' i The Board has considered the decision and the record in light-of the exceptions and briefs and has decided to affirm the judge's rulings, findings, 2 and conclusions and to adopt the recommended Order. The Respondent's cross-exceptions include a motion to reopen the record to receive records relating to the distribution of the Respondent's stock The General Counsel filed a response to the Respondent's motion to reopen the record and moved that the Board reject and return to the Respondent the proposed exhibits offered in support of the motion to reopen The Respondent also filed a motion to consider errata to,its an- swering,brief The Charging Parties filed an opposition to the motion, and the Respondent filed a response to the Charging Parties' opposition We deny the Respondent's motion to reopen the record for failure to sat- isfy the requirements of Sec 102 48(d)(l) of the Board's Rules and Regu- lations We grant the Respondent 's motion to consider the errata to its answering brief 2 In finding that the. Respondent' signed" a memorandum agreement with the Unions on 8 October 1980, the judge stated that the agreement bound the Respondent to the Unions-Association' s 1978- 1981 agreement and all successor agreements until proper notice of termination was given to the Unions and the Association Chairman Dotson notes that the memorandum agreement also contained language authorizing the Asso- ciation to act as the Respondent's bargaining representative However, the agreement required that notice of termination be provided only to the Unions In view of all the surrounding , circumstances, particularly the memorandum agreement 's failure to require that the Association be pro- vided with notice of termination , and the clause in the bargaining agree- ment providing that "[I]n accordance with traditional practices in'the area, [the] parties realize that this contract in fact may be utilized by the Union and contractors not members of the Association," Chairman Dotson agrees with the judge's finding that the Respondent did not indi- cate a clear and unequivocal intent to become part of a multiemployer bargaining unit Member Hunter agrees that the Respondent did not indicate an intent to engage in multiemployer bargaining and thus finds it unnecessary to address the existence of a multiemployer bargaining unit In addition, as there is no evidence that any of the Respondent's em- ployees designated the Unions as their collective-bargaining representa- tives, Member Hunter finds NLRB v Iron Workers Local 103, 434 U.S. 335 (1978), dispositive of the issue regarding the Unions' majority status 685 ORDER ' The recommended Order. of the . administrative law judge is adopted and the complaint is dis- missed. . MEMBER DENNIS, concurring. I disagree with my' colleagues' analysis of wheth- er the Respondent expressed a clear-and unequivo- cal intent to become .part of the` Association's mul- tiemployer bargaining unit. L agree with my col- leagues, however, that the Respondent's employees never became part of the' multiemployer unit, solely for the following reasons. An employer cannot bind its employees to repre- sentation in a multiemployer unit without the em- ployees' express or implied consent. Mohawk Busi- ness Machines, 116 NLRB 248, 249 (1956). Typical- ly, a, union -gives such consent, but to ' do, so, the union, must be the .employees' statutory. bargaining' representative. Otherwise, employees could become part of a preexisting multiemployer unit without in any way having expressed a desire to select the union as their collective-bargaining representative, and would be unable to challenge the union' s status except in the multiemployer unit. If, however, a union attains majority support among an employ- er's own employees, it will have gained the author- ity to give the employees' consent and to merge. them into the multiemployer unit. In the instant case, the relationship between the Respondent and the Unions is governed by Section 8(f) of the Act, and the memorandum of agreement does not give rise to a presumption of majority status. R. J. Smith Construction Co., 191 -NLRB 693 (1971), order set aside and remanded 480 F.2d 1186 (D.C. Cir. 1973); NLRB v. Iron Workers Local 103, 434 U.S. 335 (1978). Because the Unions have failed to establish that they ever obtained majority support among the- Respondent's employees, they have failed to show that they are the statutory col- lective-bargaining `representatives of these employ- ees. Thus, the Unions never obtained the authority to give the employees"iz:onsent to multiemployer bargaining, and the unit remains the Respondent's own employees. 'In all other respects, I agree with my colleagues' adoption of the judge's decision. He therefore finds it unnecessary to-rely on the other cases cited by the judge In sec III(b) of the judge's decision the employment dates for Bradley M Swanson and Edward Wilson should read " 10/1/80 to 12/31/81" and "4/1/81 to 4/2/81," respectively 275 NLRB No. 100 686 DECISIONS OF NATIONAL LABOR RELATIONS- BOARD DECISION STATEMENT OF THE CASE RUSSELL L. STEVENS, Administrative Law Judge. This case was tried in Phoenix, Arizona, on July 6 and 7,` 1983.1 The complaint issued April 13 and the amended complaint issued June 14 are based on a charge filed August 20, 1982, 'by United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Indus- try of the United States and Canada, Local Unions Nos.' 469 and 741 (the Unions). The complaint, as amended, al- leges that C.I.M Mechanical Co., formerly known as Egan Mechanical' Co. (Respondent) violated Section 8(a)(5), (3), and (1) of the National Labor Relations 'Act (the Act). - ' All parties were given full -opportunity to participate, to introduce relevant evidence,--to examine and cross-,ex- amine witnesses,to argue orally, and to file briefs.--Briefs, which have been carefully considered, were filed by the General Counsel and Respondent. . - On the entire record,2 and from my observation of the witnesses and their demeanor, I make -the following - . FINDINGS OF FACT . 1. JURISDICTION Respondent is, and at all times material has been, a corporation duly organized under, and existing by virtue of, the laws of the State of Arizona. About June 9, 1983, Respondent changed its corporate name from Egan Me- chanical Co. to C.I.M. 'Mechanical Co. Respondent maintains its-principal place of business in Tempe , Arizo- na, and isis now, and at all times material - has been, en- gaged in business as a' contractor. During the past `calen- dar year, a period representative 'of its operations gener- ally, Respondent,- in the course and conduct of its oper- ations, purchased and received at its Tempe, Arizona fa- cility and at, its work' `project's in the' State of Arizona products,. goods, and - materials - valued in ' excess of $50,000 from other Arizona enterprises; including Payne Air 'Conditioning, Tenaire, Inc., Pennington Mechanical Equipment Co., 'and others, each of _ which enterprises had received , products, goods,,- and materials directly from points outside the State of Arizona. I 'find that Respondent is, and at all times material has been, 'an, employer engaged in commerce within the meaning of Section 2(2), (6), an d (7) of the Act: ' - II. THE LABOR" ORGANIZATIONS'IINVOLVED'• - United -Association of-Journeymen and Apprentices of the .Plumbing and Pipefitting Industry : of the United States and Canada, Local Unions Nos. 469 and' 741 are, and each of them is, labor, organizations within the mean- ing of Section 2(5) of the Act., .. All dates hereinafter are within 1983, unless otherwise stated 2 The General Counsel filed a motion to correct record dated August 8, and Respondent filed a motion to correct transcript dated August 4, as well as a motion to clarify record dated ,July 25 None of these three mo- tions was opposed, and all are granted. , . III. THE-ALLEGED-UNFAIR LABOR PRACTICES A. Background 3 - Plumbing and Air Conditioning Contractors of Arizo- na (Association)" is an association of -contractors that, among other"activities, is a- collective-bargaining agent fo'r its members and nonmembers who designate it as their bargaining agent. The'Association's executive direc- tor since -March 1980 has been Vincent Doyle The As- sociation presently has 45 dues-paying members; Re- spondent is not such a member. Approximately 220 non- member contractors are signatory to the present agree- ment negotiated between the Association and the Unions (the Red Book), effective July -1,_ 1981, to June 30, 1984.4 The Red Book's, predecessor (the Brown Book) was ef- fective July 1, -1978, to June 30, 1981. A metal trades supplemental agreement 5' was negotiated between the Association and -the Unions •tb permit some variations from the Red Book, effective July 1, 1981, to June 30, 1984. The. supplemental agreement is not automatically effective on a contractor becoming. bound by the Red Book; it becomes, effective only on.acceptance by a con- tractor as indicated by signing.a detachable card inserted in the supplemental agreement. That card is sent to the Unions in order that appropriate accounting''procedures can be instituted, to'reflect variations in funds submitted to the Unions' trust accounts. Doyle also is executive director of the Arizona Pipe Trades Industry Program (PIPE), which is a public rela- tions'agent for the plumbing and air conditioning indus- try. PIPE is funded from monthly payments contributed by contractors signatory to the-Red Book. Monthly pay- ments are -made by all such signatories, 'whether or not they 'are members of the ' Association. Those payments are, devoted, ' in part, to' keeping , Red Book signatories abreast of developments in the plumbing and air condi- tioning -industry, and they, also 'are used to defray ex- penses involved in the prenegotiation -solicitation of ideas, and .in general correspondence of interest to all Red Book signatories.6 All contracts negotiated by the Association are subject to -ratification by all signatory contractors,, whether or not they are dues-paying mem- bers of the Association. - Egan -and ' Sons is a large mechanical contractor based in • Minnesota, but has facilities also in North Dakota. One of its principal- owners is William Egan. Their busi- ness is contracting for plumbing, ventilation, air condi- tioning, insulation, Sand sprinkler work. - Wayne Biirrell 'formerly -Was a department head for Egan and Sons. His department consisted of plumbing, service, .and air conditioning installation. In 1973, while an employee of Egan and Sons, Burrell came to Phoenix, where he obtained a C-39 license' which- authorized him to perform sheet metal, hot 'water ! boiler, and. steam boiler -work:. Sometime later", he came to ' Phoenix to 3 This background summary is based on stipulations of counsel, and upon credited testimony and evidence not in dispute 4 G C Exh 2 5 G C Exh 14 9 G C Exh 18 is an example of such correspondence, relating to the impending negotiations for the Red Book C I M MECHANICAL CO. 687 survey business possibilities and found them to be quite depressed, which resulted in his negative recommenda- tion to Egan and Sons. In 1979 Burrell made another survey of the area, and recommended that Egan and Sons expand into the area. - Egan Mechanical Co.' was organized September 12, 1980. The shareholders were Brad Swanson, Robert Moore, Jerry Wahl, Burrell, and Egan and Sons, who owned 51 percent of the stock. Burrell had 25 percent of, the stock until he became president of Respondent Sep- tember 8, 1981, as successor to Swanson,8 at which time Burrell became owner of 49 percent of the stock. Re- spondent opened for business October 1, 1980, under Burrell's contractor's license, which he had transferred to Respondent on September 23, 1980. On October 8, 1980, Respondent signed a union memorandum agreement, whereby it became bound by the Brown Book and all successor agreements until proper termination notice was given to the Union and the Association. At that time Respondent had only three employees, Burrell, Swanson, and Swanson's son, ' and only rudimentary tools, equipment, and work space. They started with no business, and immediately com- menced solicitation of jobs. They accepted any job that they successfully bid, without regard to size. On Decem- ber 31, 1980, Burrell was authorized to take the State of Arizona examination for a supplement to his C-39 li- cense, which, if he was successful, would authorize Re- spondent to engage in installation of solar facilities. The accompanying bond was in the sum of $375,000 for the remainder of the fiscal year (a 9-month,period). Respondent commenced active operations the latter part of 1980, and after early. 1981 was fairly busy. Re- spondent's first employee, other than -the three. men- tioned above, was dispatched from the union- hiring hall April 9. He was a refrigeration service mechanic. There-, after, Respondent regularly obtained employees,through the Unions' hiring halls, and they were paid union wage rates. Their classifications were refrigeration servicemen, keyman, fitter, and welder.9 From November 1980, through 'May 1982 Respondent regularly submitted monthly reports to the Unions' trust funds, showing names of employees, remittance amounts, and other per- tinent information,' including payments into PIPE. Re- spondent earned gross income the first year of its , oper- , ation, totaling approximately $35,000. Stephen Brooks, a business representative for -Local 469, met Burrell the first. time in January, 1982, at a job Respondent was doing for Williams Air Force Base out-- side Phoenix They talked about a minor problem. and engaged in some small talk, and- Brooks, gave Burrell :a copy of the supplemental agreement,to look over.. They then agreed to meet at a later date for lunch. They :met again iii February, and talked about the supplemental: agreement. Burrell replied to Brooks' questioning that he 7 There is no dispute concerning the fact that C I M Mechanical 'Co. and Egan Mechanical Co are one and the same business organization 8 There is no dispute concerning the supervisonal status of Burrell and Swanson at all times relevant 9 Referral slips are G C Exhs 6 through 12 would have to discuss the matter with his partners before deciding whether or not to sign it. 10 On March 24; 1983, Egan wrote a letter to Martin Ward of the Unions' International, in-which he stated, inter alia: - Several months ago we formed a small air condi- tioning and refrigeration service shop in Phoenix, Arizona.- At -the present time we have one refrigera- tion journeyman and two sheet metal men. Much to our surprise we find we cannot compete with the local talent. I have been informed that at least 90% of the shops we are bidding' against' are non-union operations and paying their people approximately one-half of what we are paying. We must have help from your office if we are going to survive-under this type of a circumstance, and request that you give our, plea your earliest possible consideration. Ward's office sent a copy of the letter to the Unions, and the subject was discussed on- April 29- at a meeting at- tended by Brooks, Burrell, Egan, and Don Mattern of the International, and Bernie McBride of Local 469. The union representatives asked Egan why Respondent had not signed the supplemental agreement if it needed assist- ance, and Egan said he would leave the matter with Bur- rell. The Union asked Egan to review the agreement, and Egan said 'he would do, that, and get back to the Union later."' Egan later read the Blue Book several times, and he and Burrell decided that it did not give enough relief to be of value in meeting the bids of com- petitors. 12 Egan and Burrell therefore decided to "go non-union," and to hire nonunion employees. On July, 7, ' 1982, Burrell wrote the following letter to the Unions:' Re: Arizona Pipe Trades Agreement .effective July - ' 1, 1981. . , Gentlemen:' As, you know, Egan Mechanical. Co. does not consider, itself bound by the 'above agreement„since it is . n of signatory thereto. Nevertheless, to the extent of the. agreement or any other prehire, agree- ment ,-with your,locals (including the memorandum, agreement dated October 8, 1980, signed ' by J. 'BC Swanson), it is deemed to be 'in effect between your locals,and Egan Mechanical at this time, this is to constitute notice to. you, , that ' Egan Mechanical hereby cancels, terminates;' .and 'repudiates said agreement and any 'and all obligations under said agreements, effective immediately. , .. Further, to the extent any of said agreements 'constitute an effective delegation-'of the ,bargaining rights, of'Egan°:Mechanic'aPCo to'the Plumbing and. "'10 T 'ere'are'discrepancies°ii the testimony-of Brooks and Burrell con- cerning these two meetings, but those -discrepancies do not affect any finding or conclusion Burrell's versions of the meetings are credited i i There are discrepancies among the versions of Brooks, Egan, and Burrell relative to'this'ineetin ',' but those discrepancies do hot'affect any finding or conclusion Brooks and Egan generally, agree on the facts stated in the textual summary above 12 The'supplemental agr'eement'pro"vides for lower wage rates for 'the' metal trades, and a different ratio of'dppientices to journeymen ' ' ' 688 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Air Conditioning Contractors of Arizona (which Egan Mechanical denies), this is to constitute notice to your locals and to said association that said dele- gation of bargaining rights is hereby terminated and cancelled, effective immediately. Although Respondent had adhered to the Red Book's provisions prior to July 7, 1982, including submission of monthly employee reports to the Union, Respondent did not, after that, date, adhere to those provisions or use the Unions' hiring halls. Nor did Respondent after July 7 make any payments into the Unions' trust funds, or pay employee wages in amounts equal to or as much as those required by the Red Book. Approximately 2 weeks after Burrell's letter of.July 7, Brooks. learned that John Cole had been employed by Respondent as a plumber supervisor,13 without his refer- ence through the Unions' hiring halls and at a wage less than that provided by the Red Book. B. The Unit The General Counsel argues that Respondent was a member of a multiemployer unit, by.reason of its signing the memorandum agreement on October 8, 1980, and its subsequent adherence, to the Brown and Red Book pro- visions. . There is no dispute concerning the fact that Respond- ent was not, at any time relevant herein, a member of the Association. Neither Respondent nor the Unions ever has contended otherwise. Further, there is no evidence that Respondent ever participated in group collective-bar- gaining negotiations , either personally or through the As- sociation, in any manner. The General -Counsel argues that there was such participation when the Association sent out a form letter to all employers, allegedly includ- ing Respondent, asking for information and suggestions relative to impending negotiations, 14 but Burrell denied ever receiving such correspondence. There is no evi- dence that it was received, and since it was a form letter, there is no- basis upon which to find that Burrell did not testify honestly Burrell testified that he never has been contacted concerning collective bargaining, and that he never has participated in bargaining with the Unions. Much testimony, was elicited from witnesses by Re- spondent, in an attempt to show that Respondent bar- gained. individually with the Unions relative to Respond- ent's possible use of the metal trades supplemental agree- ment, described above._" That testimony, is; given no weight. The supplemental , agreement did 'not have to be negotiated. It already had been negotiated by the Asso- ciation aind:;the Unions as an option for Red Book signa- tories and association members who might use it. It has been long established that multiemployer bar- gaining is consensual in- nature, and that such consent must be expressed in clear and unequivocal terms.15 It is 's Cole's supervisorial status is immaterial , since that status is included within the provisions of the Brown and Red Books '4GC Exh 18 is Morgan Linen Service, 131 -NLRB 420.(1961), Raymond O Lewis, 148 NLRB,249 (1964) possible to show such expression through actions, as well as words, but no such expression is shown herein. Re- spondent designated the Association as its bargaining agent, but there is no evidence that, by so doing, Re- spondent intended to or did submit itself as part of a multiemployer bargaining unit Until the controversy arose, neither the Unions nor Respondent ever discussed the possibility that Respondent was within a multiem- ployer bargaining unit. The only evidence that remains is the fact that Respondent adopted the Red Book and its predecessor, the Brown Book, through execution of the memorandum agreement on October' 8, 1980. That fact, alone, does not support a conclusion that Respondent became part of a multiemployer unit.16 Further militating against the possibility that, by sign- ing the memorandum agreement, Respondent automati- cally became a part of a multiemployer unit is certain language of the basic contract itself, i.e., the Red Book, which is the same as that of the Brown Book. The Red Book preamble states- ' THIS AGREEMENT entered into this 1st day of July, 1981, by and. between Plumbing and Air Conditioning Contractors of Arizona in behalf of all of its members, hereinafter referred to as the Con- tractors, . and Local Union 469 and Local Union 741 'of the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada, in behalf of their mem- bers, hereinafter referred to as the Union. Article XXI states: SIGNATURES A. Any employer becoming a member of.the Plumbing and Air Conditioning Contractors of Ari- zona at a time subsequent to the execution of this Agreement shall as a condition of membership auto- matically be bound by, and party to, this Agree- ment B. Whenever utility or specialty contractors are signatory to this Agreement, they may sign a sepa- rate form designed for utility-or specialty contrac- tors agreeing that the men furnished will be limited to performing work for this speciality. C In accordance with traditional practices in the area, parties realize that this contract in fact may be utilized by the Union and contractors not'members of the Association, the Plumbing and Air Condi- tioning Contractors of Arizona. If this contract is so utilized, then all of its terms will be equally applicable to users. The General Counsel cites several cases for the propo- sition that signature on a short-form contract such as the 16 Mackey Plumbing Co, 228 NLRB 298 (1977), Gordon Electric Co, 123 NLRB 862 (1959) C 1 4 MECHANICAL CO. memorandum agreement here involved makes the signer a part of the multiemployer unit. Those cases have been reviewed, and they do not support such a broad conclu- sion. The language 'of those cases, as well as that of other cases "on this point not cited, is inexact and ambiguous. The terms "multiemployer bargaining and multiemployer unit" often are used 'interchangeably In some cases 17 there are findings and conclusions that the respondents did not effectively withdraw from multiemployer bar- gaining units. In other cases it was clear from the evi- dence that there was, in fact, a multiemployer unit, either named or apparent, such as 'through association bylaws when association members were involved.18 Central New Mexico Chapter, NECA,19 involved a petition to the Na- tional Labor Relations Board for certification of a multi- employer unit. There being no clear and unequivocal evidence that, by signing the memorandum agreement, Respondent in- tended thereby to become part of a multiemployer bar- gaining unit, the finding of such a unit cannot be made as requested by the General Counsel. However, that does not conclude the matter. Respondent contends that the agreement it signed was an.8(f) contract, which could be repudiated by it without violating the Act. The General Counsel argues that the agreement was a 9(a) contract that could not be repudiated by Respondent under the circumstances involved herein. C. The Contractual Relationship of the Parties As of the time Respondent opened its doors for the first time, on October 1, 1980, and as of the date Re- spondent signed the memorandum agreement on October 8, 1980, Respondent had only three employees. Two of the employees, Burrell and Swanson, were part owners of Respondent,' and one employee was the son of Swan- son. Between October 1, 1980, and July 7, 1982, Re- spondent had the following employees in the plumbing and pipefitting department:20 Bradley M. Swanson 10/1/80 to 12/31/82 Fred Jacobson 4/13/81 to 10/8/81 James R. Keggerreis. 7/1/82 to 5/83 John T. Cole 4/15/82 to 4/20/83 Paul F. Mudd 5/17/82 to 5/28/83 Edward Wilson 4/1/82 to 4/2/82 John Jackson 5/6/81 to 5/29/81. , Daniel Sabath 1/19/82 to 2/7/82 Jesse Chatterton 1/19/82 to 2/7/82 Ralph Douglas 3/1/82 to 3/3/82 Counsel stipulated that Swanson, Cole, and Mudd-.were statutory supervisors at all times relevant herein: 17 E g, Hayden Electric, 256' NLRB 601 (1981), Amado Electric, 238 NLRB 37 (1978): Nelson Electric, 241 NLRB 545 (1979), enfd 638 F 2d 173 (6th Cir 1981), H S Brooks Electric, 233 NLRB 889 (1977) 18 Wayne Electric, 226 NLRB 409 (1976), G & M Lath & Plaster Co, 252 NLRB 969 (1980), Authorized Air Conditioning, 236 NLRB 131 (1978), enfd 606 F 2d 899 (9th Cir 1979) 689 Counsel stipulated that, after July 1, 1982, Respondent was engaged primarily in the building and construction industry.' Respondent contends that it has been engaged in the building and construction industry since October-1, 1980; that the memorandum agreement it signed on October 8, 1980, was a, valid prehire agreement; and that its repudi- ation of the agreement on July 7, 1982, was not a- viola- tion of the Act because of the existence of Section 8(1) of the Act. Section 8(f) provides, in pertinent part: It shall not be an unfair labor practice under sub- sections (a) and (b) of this section for an employer engaged primarily in the building and construction in- dustry to make an agreement covering employees en- gaged (or who, upon their employment, will be en- gaged) in the building and construction industry with a labor organization of which building and construction employees are members (not established, maintained, or assisted by any action defined in section 8(a) of this Act as an unfair labor practice) because (1) the majority status of such labor organization has not been established under'the provisions of section 9 of this Act prior to the making of "such agreement, or (2) such agreement requires as a condition of employment, membership in such labor organization after the seventh day following the beginning of such em- ployment or the effective date of the agreement, whichever is later . . . Provided further, That any agreement which would be' invalid; but for' clause (1) of this subsection, shall not be a bar to a 'petition filed pursuant to section 9(c) or 9(e). [Emphasis added.] The term "building and construction industry'.' is very general in nature, and is susceptible of various interpreta- tions. The Red Book includes many references to its cov- erage of the building and constriction industry. Case in- terpretations of the phrase create as many questions as they answer. However, it is apparent that the phrase has outer limits For example, a -general contractor who builds high rises obviously is in the industry, yet_ one who merely -manufactures material or equipment that is incorporated by' someone else into the high rise is not within the industry. 21 Certain other questions raised by the phrase have been answered by the Board and courts. 'It is clear, for in- stance, that a respondent's entire business 'must be consid- ered when analyzing its nature, rather than just consider- ing a single department. or section of, the business. 22 It is equally clear that,: even though' material or equipment may be manufactured or gold by the same company that installs it, that fact- does not alter, the'basic''principles, in- volved. Put another way, -in assessing the portion of a company's business that is within the building and con- struction industry, it would be incorrect to include only 19 152 NLRB 1604 (1965) 21 See, e g ; Forest City, 209 NLRB 867 (1974) 20 Sheet metal workers were in another department 22 Frick Co, 141 NLRB 1204 (1963) 690 DECISIONS OF NATIONAL LABOR RELATIONS BOARD installation costs . The cost of materials and equipment_in- stalled,, whatever their source , must be included.23 The reason for Section 8(f) is summarized in Forest City, supra at 871: ,There is no question that the intention of the leg- islature was to deal with the special problems ' of .ob- taining help in an industry where the'workers either did not work for the same 'employer .and where nor- mally they would work at a jobsite for a variety of different employers on different projects of relative- ly short duration or at least if they worked for, the same employer such would be at a jobsite on nu- merous projects, each of relatively short duration. It was necessary to have a source ' of 'help, usually through trade unions, in order to carry out this ob- - jective and as part thereof for the employer to assure tht he could obtain the necessary help and know the approximate cost thereof. It 'is also neces- sary that an employer be able - to obtain help through specified sources ' so as to complete 'a project .within a specified time . A further valid con- sideration was that 'if the normal representation pro- ceedings applicable- to other ' industries were fol- lowed, a project would .be completed before there would be any representation . It is true that persons employed in the-various contracting operations do usually maintain_ regular staffs. However, these are generally skilled persons , as electricians, plumbers, sheet metal' workers, carpenters, 'carpet layers,' and so-forth, and-in addition they work on a number of different projects and at the jobsite or the buiding site in order to ' complete their functions. ' ' - It is clear from ,the list of employees, set forth above, that RRespondent's"work 'force ' was not permanent and stable; which is, one, factor ._often looked at,when assess- ing whether or,not.a-company is, in the building 'and, con- structioh industry. This :matter-•is further discussed infra.- As noted above; Respondent;is the extension of an out- of-state contractor , -albeit in. somewhat different form- size. Based on Egan's testimony, credited on this point, the originating company in Minnesota is the second.larg- est employer, in. that State, "so: far -as mechanical work, is concerned, -and clearly is- engaged in the building and construction industry in-Minnesota . Egan and Burrell tes- tified that , the idea of the parent company was to estab- lish. in Phoenix an- organization that would be a :counter- -part of the one- in Minnesota ;..small-at first because of ne- cessity, but, nonetheless oriented ;toward -large projects. The ifact that -Respondent,ultimately.-accomplished-,what Egan and Burrell said they started out to do .is acknowl- edged ' by: the: General: Counsel.,. Asa previously; noted, there- is-no argumentzabouf the; fact. .that,, as of July 1, 1982;. less : than 2 years after opening - its doors Respond- ent ^.was',in ,,the building- and -,construction,, industry, ' and was doing a sizeable ,business. The General Counsel asks that the testimony of-Egan and,Burrell -relative to. the in- ception of Respondent be discredited because it is self; serving and contrary to pretrial statements they made to the Unions, as discussed above, and to NLRB agents. If there was no evidence, other than the testimony of,Egan and Burrell 'and the pretrial statements, possibly the Gen- eral Counsel's request and argument would be persua- sive. However, it is difficult to reconcile such argument with what-actually happened. Respondent grew rapidly and successfuly in the very direction Egan and Burrell said the parent corporation had wanted it to since 1973, when the first business survey of the Phoenix area was made by Burrell. Regardless of the pretrial lay state- ments .that were made by Egan and Burrell, which on their face seem damaging to Respondent's case,'the fact remains that Respondent. quickly developed into- a sub- stantial factor in the Phoenix industrial area That fact is inconsistent with the contention that Respondent came into the Phoenix area, against a background of industrial strength in Minnesota and a history of interstate expan- sion into South Dakota ,'merely to start up a small serv- ice and repair shop primarily devoted to home air condi- tioners. Clearly', Respondent's original and continuing' goal was much the-same as that testified to by Ega_n'and Burrell. 'The inquiry then presents itself: What kind of agree= ment did Respondent have with the Union at the outset of the relationship between the two of -them? As dis- cussed above, Respondent started with three employees; two were owners of the business, and one was a son of an owner: Neither then nor at any time thereafter was any appreciable ' work done on Respondent's' premises; it was done almost, entirely at jobsites, which varied from job to job. There was no work at first, all jobs developed after October 1, 1980, sometimes after bidding.24 The nature of the work force fits that described in"Forest City, supra, i.e., they worked for the same employer."at a jobsite on numerous projects, each of relatively short duration." When Respondent signed the Unions' memo- randum agreement it had no jobs but anticipated- some and,, clearly, the Union„would be a logical source of workmen needed- to assist the two owners and their son. Equally clearly, when Respondent signed the agreement, a union majority in the employee complement was not a consideration. Whether or not a majority later developed was -a question 'to be faced in the future, if at all. What was needed, and what was obtained by the agreement, was a source of labor at known cost-both of which fac- tors were necessary in order to bid on jolis' Obviously, at the time 'the agreement was signed, Respondent was not motivated by a-desire to become part of a multiem- ployer bargaining unit. Respondent was headed toward the building and construction industry and, en route, would 'take any job it could get Burrell filed a contrac- tors'license bond with Arizona State on September 17, 1980, and on September 23, 1980, applied for an upgrad- ed classification, with which he, filed a bond and an, esti- mate that Respondent would gross $375,000 for,the 9 re- maining months of the fiscal year. There is nothing in 24 The General Counsel and Respondent both refer to telephone book yellow page advertisements, placed by Respondent, as support for their 29. Painters -Local , 1247 (Indio Paint), J56.NLRB ;951 (1966),,Frick Co., contentions Those advertisements have been considered, and have been supra given weight deemed appropriate C.I.M. MECHANICAL CO. the record to show that Respondent was thinking about a small service, and, repair shop, at which it would employ one or two service and repairmen on a more or less permanent basis. The entire picture is one of a large contractor starting out small, walking before running, in an area of the country where it was a stranger That pic- ture conforms with the idea behind Section 8(f) of the Act; as described in Forest City, quoted above. What followed October 1, 1980, for the 9-month re- mainder of Respondent's • fiscal year, is consistent with the pattern of Respondent's conduct prior to that date. Respondent's jobs primarily were of three kinds: service and repair work on existing equipment (mostly air condi- tioning), installation of air conditioning units in existing buildings (mostly residences), and installation of air con- ditioning and solar units in new buildings. Respondents work orders and financial statements are in evidence, and they show for the 9-month period gross income of $34,737.10, of which more than 65 percent was derived from equipment installations in new construction.25 An- other $2300 was derived from installation of air condi- tioners in existing homes, for which state building per- mits were required. It is clear that substantially more than half of Respondent's business during its first 9 months was done in the building and construction indus- try, which brings it within the ambit of Section 8(f) of the Act. Although most was in new construction, some was in service and repair at existing sites, and that dis- tinction does not alter the legal principles involved. In Indio Paint, supra, the administrative law judge, with Board concurrence, treated the distinction in detail, and the decision partially was based upon a definition of con- struction set forth in Construction Review, vol. 3 (1957 supplement), published jointly by the U. S. Departments of Commerce and Labor:26 Construction covers the erection, maintenance and repair (including replacement of integral parts), of immobile structures and utilities, together with serv- ice facilities which become integral paris of struc- tures and are essential to their use for any general purpose. It includes structural additions and alter- ations. Structures include buildings . . . and all similar work which are built into or affixed to the land . Construction covers those types of imm o- bile equipment which, when installed, become an in- tegral part of the structure and are necessary to any general use of structure. This includes such service facilities as plumbing, heating, air-conditioning and lighting equipment . . In general, construction does not include the procurement of special purpose equipment designed to prepare the structure. for',a specific use. Heating and cooling systems are "integral, parts" "of structures in which they are placed.27 The General 25 Respondent makes no "over-the-counter" sales of air conditioners or other equipment It purchases those items from third parties for installa- tion 26 See Bay Area Sealers, 251 NLRB 89 (1980) ' 27 Voight v OTT, 86 Ariz 128, 341 P 2d 923 691 Counsel argues that Respondent's construction of plat- forms for air conditioners, which work is covered by Re- spondent's gross receipts, is of little moment,'but the fact remains that such work is within Board-accepted defini- tions of construction. Some work remains for consider- ation, i.e., service and repairs for equipment in existing structures. Such work appears to be in construction under Board law and 'Voight v. OTT, supra, and if that work is included herein, all of Respondent's gross re- ceipts for its first 9 months were derived from the build- ing and construction • industry. However, even if the more restrictive view is adopted, almost two thirds of Respondent's receipts clearly fall within the building and construction industry, which brings Respondent within the purview of Section 8(f) of the Act.28 The situation .for the period July 1, 1981,-to June, 30, 1982, shows continuing fast growth by Respondent, and its expansion in the building and construction industry. Gross revenues for that period were $415,978, all of which were within the broad definition described above. Even if service and repair work are excluded, more than 80 percent of the revenues clearly resulted from building and construction. Perhaps most important of all, the General Counsel acknowledged that,-as of July 1, 1982, Respondent was in the building and construction-indus- try, yet there is nothing in the record to 'show that Re- spondent's work was any different on that date, from any other date after October 1, 1980. At all times between those two dates Respondent did the same three types,of work outlined above. It is found that, at all times rele- vant herein, Respondent primarily was in the building and construction industry, as that term is used in Section 8(f) of the Act. D. The Question of the Union's Majority Status As noted above, Respondent's work force has been a shifting and unstable one, 'more appropriate for an em- ployer engaged in the building 'and 'construction industry, than one engaged in a stable service and repair' business. Since, -as found above, the memorandum agreement signed" by Respondent constituted a valid 8(f) contract, the Unions must prove actual. majority status in order to show a violation of Section 8(a)(5) of the Act. It cannot be presumed that the Unions were the employees' repre- sentatives.29 It is possible to convert an 8(f) contract to a 9(a) contract but, in order to do so, the Unions must show that they have obtained majority status in a perma- nent and stable complement of 'employees.30 Such 'a showing was not made-herein- Absent a'permanent and stable'.work force "the Unions could obtain 9(a) status: by showing their majority- status at a particular ijobsite;31 but that showing was not- made herein either. So far_ as a permanent and stable work force is-concerned, it:is clear, as noted' above,' that' Respondent never had+such a force. The work' force Respondent: had was tof the same general as"Foresi City, supra.'Cf Frick Co.; supra 29 NLRB Y. Iron Workers Local 103, 434 U S 335 (1978) 30 Giordano Construction Co, 256 NLRB 57 (1981); Precision Striping, 245 NLRB 169 (1979). . 31'Hageman Underground Construction, 253 NLRB 60 (1980), Davis In- dustries, 232 NLRB 946 (1977) 692 DECISIONS OF NATIONAL LABOR RELATIONS BOARD nature as that in Giordano, supra; wherein the, force was found not to be a permanent and-stable one. Respondent worked at; different • jobsites with a shifting group of em- ployees, and did no" substantial work in its own shop. -Ja- cobson testified that he -did only service work but,' as shown above, such work was within the building and construction industry so far as Respondent is concerned. Jacobson said he once applied for union membership in 1979, but that he is not a member of any union. His testi- mony does not establish a majority for the Unions. Fur- ther, there is no evidence that any of Respondent's em- ployees ever designated "thee Unions as their collective- - bargaining representatives. . It is found that Respondent did not'hive; at any time material herein, a permanent and stable work force and, further, that the Unions did not show that they -enjoyed majority status among Respondent's employees' at any time relevant herein: • • - ' CONCLUSIONS OF LAW' - 1: C.I.M. Mechanical Co., formerly- known as Egan Mechanical Co. is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. Respondent' did -not, as alleged, violate Section 8(a)(3), (5), and (1) of the Act. On these` findings` of fact and conclusions of law and on the entire record; I issue the following recommend- ed32 . ORDER - - 'The complaint is_ dismissed in its entirety. 32 If no exceptions are filed as provided by Sec 102 46 of the Board's Rules and Regulations, the findings, conclusions, and recommended Order shall: as provided in Sec 102 48 of the Rules, be adopted by the Board and all objections, to them shall be deemed waived for all pur- Pose F ;y :C I, _ 1''l. .:F' .}y x1 Lr i;'`J" :? .,.5 :A- .'i• _ -e -`-i; 10 .:ii., ' ^tl. ,. •'^.i ri! -I: l'- .ta}^' .. ?. .•.. t!i, J r. xf]- 4 _ _ _- . a of 1 •' , ...F' >;, •.•I_; I'.. K - J• I t, y ^" ^ a