McCormick Steamship Co.

In the Matter of MCCORMICK STEAMSHIP COMPANY and NATL. ORG. OF MASTERS, MATES & PILOTS OF AMERICA, LOCAL No. 17, INC. In the Matter of MCCon [Icic STEAMSHIP COMPANY. AGENTS FOR PA- CIFIC-ARGENTINE-BRAzIL LINE and NATL. ORG. OF MASTERS, MATES & PILOTS OF AMLPICA, Loo r, No. 17, INC. Cases Nos. R-1828 and R-1829.-Decided July 1 '7, 1940 Jurisdiction : water transportation uidnstry Investigation and Certification of Representatives : existence of question where employer denies employment relationship; election ininecessary : certification upon stipulation of the parties Unit Appropriate for Collective Bargaining : all pilots engaged in piloting the Companies' vessels from-Astoria to Portland and Vacouver, Washington, and from Vancouver, Washington, and Portland to Astoria on the Columbia and Willamette Rivers and its tributaries and uitermedt.rte points Definitions Employei-employee relationship held to exist between Companies and pilots engaged in piloting their vessels, who are members of an association contracting for their services, where the Companies retain the ultimate power of selection or rejection of the pilots proffered by the pilots' associa- tion and the sole direction and control of the pilots while at work, and in fact pay their wages Mr. Thomas P. Graham, Jr., for the Board. Mr. Gunther F. Krause and Mr. William Y. Powell, both of Port- land, Oreg., for the Company. Mr. James Landye, of Portland, Oreg., for Local No. 17. Mr Ben Anderson, of Portland, Oreg., for the Intervenor. Mr. Edwin L. Swope, of counsel to the Board. DECISION AND CERTIFICATION OF REPRESENTATIVES STATEMENT OF THE CASE Oil December 1, 1939, Nation, ii Organization, Masters, Mates & Pilots of America, Local No. 17, Inc.,' herein called Local No. 17, 'Incorrectly designated in some of the pleadings as Nat'l Org Masters , Mates & Pilots of America, Local No. 17, Inc 25 N. L R B No 67 587 588 DECISIONS OF NATIONAL LABOR RELATIONS BOARD filed with the Regional Director for the Nineteenth Region (Seattle, Washington), separate petitions alleging that questions affecting commerce had arisen concerning McCormick Steamship Company, agents for Pacific-Argentine-Brazil Line, both of Portland, Oregon, herein called the Companies. The petitions requested an investiga- tion and certification of representatives pursuant to Section 9 (c) of the National Labor Relations Act, 49 Stat. 449, Herein called the Act. On April 10, 1940, the National Labor Relations Board, herein called the Board, acting pursuant to Section 9 (c) of the Act and Article III, Section 3, and Article III, Section 10 (c) (2), of Na- tional Labor Relations Board Rules and Regulations-Series 2, as amended, ordered an investigation and authorized the Regional Di- rector to conduct it and to provide for an appropriate hearing upon due notice, and further orderec4 that the cases be consolidated for purposes of hearing and that one record of the hearing be made. On April 17, 1940, the Regional Director issued a notice of hearing, copies of which were duly served upon the Companies and upon Local No. 17. Pursuant to notice, a hearing was held on May G, 1940, at Portland, Oregon, before Thomas E. Wilson, the Trial Examiner duly designated by the Board. At the commencement of the hearing, the Trial Examiner granted, over the objection of Local No. 17, a petition to intervene filed by Licensed Marine Deck Officers L. I. Union, Local No. 998. herein called Local No. 998, a labor organization which claimed to iepresent employees of the Companies. The Board, the Companies, Local No. 17, and Local No. 998, appeared and each was represented by counsel. All participated in the hear- ing. Full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing on the issues was af- forded all parties. During the hearing Local No. 17 made and there- after renewed a motion to disallow the intervention of Local No. 998 and to strike all evidence adduced by that organization. At the end of the hearing it developed that no members of Local No. 998 were working for the Companies, and the Trial Examiner granted the motion to disallow Local 998's intervention but did not grant the motion to strike. During the course of the hearing the Trial Examiner made several other rulings on motions and objections to the admission of evidence. The Board has reviewed all the rulings of the Trial Examiner and finds, that no prejudicial errors were committed. The rulings are hereby affirmed. After the hearing the Companies and Local No. 17 filed briefs with the Board. Upon the entire record in the case, the Board makes the following : \MIc'CORD'IICK SITS 1_AlSHIP COMPANY FINDiNGD OF FACT 1. TEE BUSINESS OF THE COMPANIES 2 589 McCormick Steamship Company and Pacific-Argentine-Brazil Line, both California corporations authorized to do business in the State of Oregon, are engaged in the general steamship business, acting as common carriers of cargo with filed tariffs. McCormick Steamship Company operates about 25 vessels in 2 trade routes, 1 of which is the coastwise trade on the Pacific Coast and the other the intercoastal trade between the west and east coasts of the United States. Pacific-Argentine-Brazil Line is a wholly owned subsidiary of the McCormick Steamship Company,' and did operate, but is not at present operating, vessels in the trade route from the Pacific Coast, of the United States to the east coast of South America.4 In the conduct of such business a number of vessels are operated into the Columbia River carrying cargo between Oregon and Wash- ington ports and ports of other States and foreign countries. No intrastate cargo is carried between any two ports of Oregon. Both Companies admit and we find that they are engaged in inter- state commerce. A. The contention of the Companies The basic issue in this case is whether the pilots are employees of the Companies or of the Columbia River Pilots, herein called the Association, an organization of men engaged in piloting ocean-going vessels upon the Columbia and Willamette Rivers and its tributaries. The Association was established about 50 years ago by certain pilots on the Columbia Rivers who set up a dispatching office for the steam- ship companies to call when they desired the services of a pilot.6 It now has about 30 members and is governed by certain rules and regu- lations which were adopted by its members on December 1, 1928. 2 The findings in this section are based upon a stipulation of facts between counsel for the Board and counsel for the Companies 'Petitioner Exhibit No 7 shows that McCormick Steamship Company also is the agent of Pacific-Argentine-Brazil Line and, accordingly , will be so treated herein. 4 There is no further showing in the record concerning the discontinuance of these opera- tions and there was no motion to dismiss as to the Pacific -Argentine-Brazil Line. Under these circumstances we construe the language of the stipulate--n to mein that there has been a temporary cessation of the operations in question 6 There is no compulsory pilotage law in the State of Oregon , as ui some jurisdictions ; nor does Oregon law require membership in a pilots' association 6 The pilot's work is irregular in nature and a lob usually does not last more than a day. 590 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Under these rules and regulations the Association has the power to select, discipline, and suspend its members.7 Local No. 17 was organized in 1917 and is composed of masters, mates, and pilots of river vessels, operators of gas boats and pilots of ocean-going vessels navigating the Columbia and Willamette Rivers and its tributaries. It has about 150 members, of which about 30 are engaged in piloting ocean-going vessels. On November 19, 1935, the Association and Local No. 17 entered into an agreement providing that all pilotage be done exclusively by members of the Association and that all members of the Association be members of Local No. 17. The Companies have no agreement with the Association, but they use the Association exclusively for their pilotage service. The Asso- ciation fixes and furnishes the Company with its rate schedules based upon the tonnage and draft of the vessels; s when the Companies need a pilot, they call the Association dispatcher and advise him where they desire the pilot to board their ship and where he is to take the ship. The Association dispatcher sends the pilots out in rotation but the Companies may request the services of a particular pilot or reject those of any pilot proffered.s After the trip is made the Association bills the Companies for the service and the Companies then send the Association a check in payment executed in the name of the Associa- tion. The check is deposited in a bank by the Association's treasurer, the Association's expenses are paid, and at the end of the month the remaining fends are divided among the members according to the time worked.", ° These rules and regulations also provide aniong other things that the Association be governed by three directors with full authority to handle all its business , that it have a treasurer and a secretary ; that its net earnings be divided among the pilots each month that new members, when required, be selected by ballot from all applications on file, and be required to receive a majority vote of the active membership and serve 1 year on pro- bation ; that all members be entitled to 1 day's vacation, with full pav, for each 12 days worked during the preceding year; that pilots losing both their Federal and State licenses be carried on full pay for a period of 30 days; and that pilots guilty of certain infractions of the rules be penalized. 'The laws of the State of Oregon establish maximuni pilotage rates but not minimum pilotage rates. 9 The Companies have on occasion requested that they be furnished a named pilot, and the Association has honored the request. w The precise method used by the Association In dividing the funds is set forth In its rules and regulations as follows 1. The bank balance at the end of the month shall be considered the gross earnings for the month 2 All expenses for the month shall be deducted from the gross earnings and the remainder shall be considered the net earnings Division shall be made of this amount among all members according to the time worked 3 The net earnings divided by the number of active pilots and the number of days in the month, shall be the net earnings per month, per day. 4 To arrive at the share of each pilot the earnings per man, per day, will be multi- plied by the number of days on duty. 5 All money lost by pilots off duty shall be handled as net earnings (paragraph 3) and division made in the same manner 0 The division at the end of each month shall be considered as payment in full for all past business, whether or not collection has been made, except in case of per- manent retirement in which case a full settlement shall be made on all unpaid collectible accounts McCORD'MICh STEAMSHIP COMPANY 591 The Companies contend that the Association is a partnel;ship 11 with which the Companies contracted for the professional services of its members who are in its employ; and, in the alternative, assert that, even if it is conceded that the Association is not an independent contractor, each of the pilots is an independent contractor rendering professional services to the Companies. The Companies argue that the Association is the employer because, by virtue of its power to select and discipline its members, it has the power to select, to control, and to discharge the pilots, and also because it actually pays their wages. We find no merit in this contention. While it is true that member- ship in the Association is a prerequisite for selection for pilotage service obtained through the Association, this fact is not controlling upon the issue since the ultimate power of selection or rejection of any pilot proffered by the Association remains solely with the Com- pany. Similarly, it is specious to argue that the Association pays the pilots' wages because, with their consent, it collects and distributes their wages which are, in fact, paid by the Company. Further, the pilots are not independent contractors since, while engaged in the per- formance of their duties, they are under the Companies' sole direction and control and do not act in an independent capacity. The Com- panies also direct our attention to facts that on July 10, 1937, in announcing an increase in pilotage rates, the Association sent cards, addressed "To Our Patrons," to owners and operators of vessels, including the Companies' and that pursuant to regulations of the Federal Government requiring employers to make information returns regarding the wages, salaries, and commissions paid to their employees, the Association has annually made a report to the Government stating the amount of money, received by each of its members during the fiscal year, and in return has named itself as the employer. Although these facts are relevant we do not, for reasons hereinafter discussed, con- sider them controlling upon the issue of whether or not the pilots are employees of the Companies within the meaning of the Act. Although the pilots' affairs are handled through the Association in the manner heretofore described, the Companies control the essential incidents of their employment. The Companies have the power to select and hire any pilot whom they desire; they pay for the pilots' work at rates,which must be satisfactory to them ; 12 and finally they have the actual direction and control of the performance of the pilots' u It is unnecessary to pass upon this phase of the contention in order to determine the issues in this case , and we do not. z2 As we have noted above, the Oregon law establishes maximum pilotage rates but does not fix minimum rates, and the current rates are less than the maximum provided by law. While the Association announces the pilots ' rates the Companies are, of course, under no obligation to use their services unless the rates fixed are satisfactory. 592 DECISIONS OF NArIONAL LABOR RELATIONS BOARD w'ork.13 Upon these facts we are of the opinion and find that the Companies are the employers of the pilots both under applicable com- mon law principles 14 and the Act.' II. THE URGANI'/. 1TIONS IN\ OL\-1;1) National Organization, Masters, Mates R Pilots of America, Local No. 17, Inc., is a labor, organization affiliated with the American Federation of Labor. It admits to membership masters, mates, and pilots of river vessels, operators of gas boats, and pilots of ocean- going vessels navigating the Columbia and AVillaniette Rivers an([ its tributaries. "'While engaged in the performance of their duties, the pilots are solely under the Companies' direction and control inasmuch as the masters of the vessels on which the pilots work are in complete charge of the vessels at all tines and the pilots are not only subject to the masters' orders but can be relieved of their duties by the masters at any time 14 In Singer Manufacturing Co v Rahn, 132 U 8 518, the Court states the basic, criterion of the master-servant relationship as follows : "The relation of master and servant exists whenever the employer retains the right to direct the manner in which the business shall be done as well as the result to be accomplished, or, in other words, not only what shall be done, but how it shall be done." See also Guy v. Donald, 203 U S 399, 51 L Ed. 245, where in a libel suit brought by the owners of a steamer against the members of the Viiginia Pilots' Association to hold them liable for the alleged negligence of one Guy, a pilot who was a member of that Association, the Supreme Couit held the steamship com- pany and not the Association was the employer on the ground, among others, that the Association could not control or direct the pilots in the performance of their duties The Companies contend in their brief that the facts in the Guy case are distinguishable from the facts in this proceeding because the Virginia Pilots' Association, which apparently was iequired to adroit all duly licensed pilots to membership, dud not have the powei to select or to suspend its members while, in the present lsie, the Asroci:rtion under no simiiai iestiaint possesses that power we agree however with the position taken by the Court in The Griffdu, The Eldena, Charles Nelson Co. v United States, 25 Fed (2d) 312, where, in fol- lowing the rule laid down in the City case, it stated "that decision did not, as respondent contends, turn upon the question of the voluntary or involuntary character of the associa- tion It turned upon the primary and controlling consideration that no member of the association could control or do ect any other member of it in the performance of his duties as pilot It turned upon the entire absence there, as here, of any feature of joint manage- ment and control of a business or enterprise " In Dampscktbsselskabet Atalanta AIS et al. v United States, 31 Fed. (2d) 961 the Court also followed the rule laid down in the Guy case, stating "The fundamental principle underlying the exemption of pilots' associa- tions from liability for negligence of their members in psi foumng their duties as pilots is that the association exercises no control over the manner in which those duties are to be peiforined, and therefore a pilot cannot be said to be an agent of the association in that respect " In Ctty of Los Angeles v. Standard Transportation Co, 32 Fed (2d) 988, the court, in holding that a pilot was a servant of the steamship company, pointed out that the pilot's "duties were not completely those of the master, and the authority of the master was not superseded or suspended by the presence of the pilot Ile still iemanned master, in full charge of the vessel and crew, and upon hinn nested the responsibility of the safety of the ship and all on board " See also • Restatement of the Lard of Agency (Amer Lau; Inst ), Vol 1, p. 483, where a servant is defined as follows . A servant is a person employed to perfoim service for another in his affairs and who, with respect to his physical conduct in the perfoiinanee of the service, is subject to the other's control or right to control L5 Apart from its consonance with the established principles governing the employer- employee relationship, to hold otherwise would be to defeat the express policy of the Act to encourage the practice and procedure of collective bargaining since collective bargaining with respect to the pilots as employees must of necessity be conducted with the Companies which control all the essential incidents of their employment McCOR1LICli STEAMSEIIP COMPANY III THE QUESTION CONCERNING REPRESENTATION 593 On September 6 and 7, 1939; respectively, Local No. 17 sent letters to the Companies advising them that Local No. 17 represented all their employees engaged in piloting their vessels on the Columbia and Willamette Rivers, and requesting a collective bargaining con- ference. On September 15, 1939, the Companies replied by letter that it would be impossible for theun to bar gain collectively with Local No. 17 inasmuch as they- had no pilots in their employ. In Section L A. supra, we have discussed that position taken by the Companies. As there set forth, we find that the pilots are employees of the Companies. We find that a question has arisen concerning I epreseutation of employees of the Companies. 1V. THE EFFFCT OF TILE QUESTION CONCERNING.REPRES7:NT.AIION UPON COM MERCE We find that the question concerning representation which has arisen, occurring in connection, with the operations of the Com- panies described in Section I above, has it close, intimate, 'and sub- stantial relation to trade, traffic, and commerce among the several States, and tends to lead to labor disputes burdening and obstructing commerce and the free flow of couunerce. V. TILE APPROPRIATE UNIT Local No. 17 contends that all the pilots engaged in piloting the Companies' vessels from Astoria to Portland and Vancouver, Wash- ington, and from Vancouver, Washington, and Portland to Astoria on the Columbia and Willamette Rivers and its tributaries and intermediate points, constitute a unit appropriate for the purposes of collective bargaining. No evidence was offered at the hearing to show that such unit is inappropriate. We find that all the pilots engaged in piloting the Companies' vessels from Astoria to Portland and Vancouver, Washington, and from Vancouver, Washington, and Portland to Astoria on the Columbia and Willamette Rivers and its tributaries and intermediate points, constitute a unit appropriate for the purposes of collective bargaining and that said unit will insure to the employees of the Companies the full benefit of their right to self-organization and to collective bargaining and otherwise effectuate the policies of the Act. vL. TIIE DETERMINATION OF REPRESENTA'II\'ES The parties stipulated at the hearing that in the event the Board held that the Companies were the employers of the pilots involved 594 DECISIONS OF NATIONAL 'LABOR- RELATION'S BOARD here, and that the unit claimed by Local No. 17 was appropriate, the Board could certify Local No. 17 without an election. Since we have found that the Companies are the employers of the pilots involved and that the unit claimed by Local No. 17 is appropriate, and since the record shows that all the Companies' pilots are members of Local No. 17, we find that Local, No. 17 represents a majority of the employees in the unit found to be appropriate for the purposes of collective bargaining. Local No. -17 is, therefore, the exclusive representative of all the pilots in such unit for the purposes of collective bargaining, and we will so certify. Upon the basis of the foregoing findings of fact and upon the entire record in the case, the Board makes the following. CoNCLUSIO\S or LAW 1. A question affecting commerce has arisen concerning the rep- resentation of employees of McCormick Steamship Company and of McCormick Steamship Company, agents for Pacific-Argen- tine-Brazil Line, both of Portland, Oregon, within the meaning of Section 9 (c) ,and Section 2 (6) and (7) of the National Labor Relations Act. 2. All the pilots engaged in piloting the Companies' vessels from Astoria to Portland and Vancouver, Washington, and from Van- couver, Washington, and Portland to Astoria on the Columbia and Willamette Rivers and its tributaries and intermediate points, con- stitute a unit appropriate for the purposes Of collective bargaining, -within the meaning of Section 9 (b) of the National Labor Relations Act. 3. National Organization, Masters, Mates & Pilots of America, Local No. 17, Inc., is the exclusive representative of all the pilots in such unit for the purposes of collective bargaining, within the meaning of Section 9 (a) of the National Labor Relations Act. CERTIFICATION OF REPRESENTATIVES By virtue-of and pursuant to the power vested in the National Labor Relations Board by Section 9 (c) of the National Labor Rela- tions Act, and pursuant to Article III, Section 8, of National Labor Relations Board Rules and Regulations-Series 2, as amended, , IT IS HEREBY CERTIFIED that National Organization, Masters, Mates & Pilots of America, Local No. 17, Inc., has been designated and selected by a majority of the pilots employed by McCormick Steam- ship Company and by McCormick Steamship Company, agents for Pacific-Argentine-Brazil Line, both of Portland, Oregon, to pilot their vessels from Astoria to Portland and Vancouver, Washington, McCORMICK STEAMSHIP COMPANY 595 and from Vancouver, Washington, and Portland to Astoria on the Columbia and Willamette Rivers and its tributaries and intermediate points, as their representative for the purposes of collective bar- gaining and that, pursuant to the provision of Section 9 (a) of the Act, National Organization, Masters, Mates & Pilots of America, Local No. 17, Inc., is the exclusive representative of such employees for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment , and other conditions of employment. MR. WILLIAM M. LEISERSON took no part in the consideration of the above Decision and Certification of Representatives.