212 F.2d 465 (9th Cir. 1954), 13844, N. L. R. B. v. Wemyss

Docket Nº:13844.
Citation:212 F.2d 465
Case Date:April 20, 1954
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 465

212 F.2d 465 (9th Cir. 1954)




No. 13844.

United States Court of Appeals, Ninth Circuit.

April 20, 1954

Rehearing Denied May 24, 1954.

Page 466

George J. Bott, General Counsel, David P. Findling, Associate General Counsel, A. Norman Somers, Asst. General Counsel, Washington, D.C., David Karasick, San Francisco, Cal., Arnold Ordman, Alan R. Waterstone, Attorneys, N.W.R.B., Washington, D.C., for petitioner.

Ray L. Johnson, Jr., Carl M. Gould, Hill, Farrer & Burrill, Los Angeles, Cal., Lafayette J. Smallpage, Francis X. Vierira, Stockton, Cal., for respondent.

Before HEALY, BONE and POPE. Circuit Judges.

BONE, Circuit Judge.

This is a petition by the National Labor Relations Board for enforcement of an order issued by it against respondent Edwin D. Wemyss, d/b/a Coca-Cola Bottling Company of Stockton. The order was based upon findings that respondent formed, dominated, interfered with and contributed support to the Stockton Beverage Employees Association (herein the 'Association'), a labor organization, in violation of § 8(a)(1) of the National Labor Relations Act, as amended, 29 U.S.C.A. § 158(a)(2); that respondent entered into and gave effect to bargaining agreements with the Association containing unlawful union security provisions, in violation of § 8(a)(1) of the Act; and that respondent interfered with, restrained and coerced his employees in the exercise of their rights under § 7 of the Act, in violation of § 8(a)(1) of the Act, 29 U.S.C.A. §§ 157, 158(a) (1). The Board's order requires respondent to cease and desist from the unfair labor practices found, to cease recognizing the Association as bargaining representative of his employees, to disestablish the Association as such representative, and to post the usual notices. In its decision and order the Board adopted in full the findings conclusions and recommendations set out in the Trial Examiner's Intermediate Report.

Respondent resists enforcement of the order on the grounds (1) that his operations do not affect interstate commerce, and the Board therefore lacked jurisdiction; (2) that the charge filed with the Board alleging that respondent instigated the formation of, dominated and controlled the formation of the Association was withdrawn, and so much of the Board's complaint as alleged such activity should therefore have been dismissed; (3) that the Board's finding that respondent formed, dominated, interfered with and contributed support

Page 467

to the Association is not supported by substantial evidence on the record considered as a whole; and (4) that the record shows at most that respondent merely assisted the Association, and the Board's order is therefore improper insofar as it directs the disestablishment of the Association. The third and fourth contentions will be taken up together.


Respondent is engaged in bottling, selling and distributing at wholesale bottled Coca-Cola, the well-known soft drink, in Stockton, California. He operates under a royalty agreement with Coca-Cola Bottling Company of Stockton, Ltd. (herein 'the Corporation'), of which respondent is president and sole shareholder except for qualifying shares held by two other persons who serve ads officers and directors. The Corporation has no employees. It owns a building which it leases to respondent where he conducts his Coca-Cola business and other enterprises.

The essence of the drink Coca-Cola is the Coca-Cola syrup. This syrup is manufactured by the Coca=Cola Company, a Delaware corporation, in plants owned by that company all over the United States. One of these plants is located in San Francisco. This plant supplies syrup to Pacific Coast Coca-Cola Bottling Company (herein 'Pacific'), in which the Coca-Cola Company of Delaware owns an undisclosed amount of stock. Pacific, in turn, supplies respondent with Coca-Cola syrup pursuant to a franchise agreement between Pacific and the Corporation and the royalty agreement between the Corporation and respondent. Respondent receives advertising material through about the same channels.

In 1951, the year of the unfair labor practices found by the Board, respondent purchased supplies and materials valued at $192, 699.66, of which amount $6, 340.54 was shipped directly to respondent's plant from outside the State of California and $22, 522.94, although secured locally, originated from points outside the state. All respondent's sales were made within the state.

The franchise agreement between Pacific and the Corporation recited that Pacific had received from the Coca-Cola Company of Delaware certain rights with respect to the bottling and selling of Coca=Cola, that Pacific wished to convey such rights to the Corporation for a certain described territory, and that the Corporation was desirous of obtaining such rights. Under the agreement the Corporation obtained the exclusive right to bottle and distribute the drink Coca-Cola within the described territory, but was subjected to a very substantial amount of supervision and control by Pacific and the Coca-Cola Company of Delaware in the exercise of such rights. The franchise agreement, among other things, prohibited bottling or selling Coca-Cola syrup except in the carbonated soft drink form; prescribed the manner of bottling the drink and the kind of bottle and cap which were to be used; required maintenance of satisfactory plant and equipment, and required the Corporation to permit Pacific or the Coca-Cola Company of Delaware to make inspections thereof to see that the provisions of the agreement were being complied with; prohibited the bottling or selling of Coca-Cola outside the described territory; required the Corporation to 'vigorously push' the sale of bottled Coca-Cola; and prohibited assignment of the franchise agreement in whole or in part without the consent of Pacific and the Coca-Cola Company of Delaware. Other provisions of the agreement emphasized the interdependence of the Corporation's Local and the Coca-Cola Company's national activities. Below the signatures of the parties to the agreement was the signature of the vice-president of the Coca-Cola Company of Delaware, under a statement reading: 'Consented to: but pursuant to, and not altering, amending or changing, the contract between the Coca Cola Company (of Delaware) and Pacific Coast Coca-Cola Bottling Company.' The royalty agreement between the Corporation and respondent conferred upon respondent all the rights and privileges of the Corporation

Page 468

under its franchise agreement with Pacific and subjected him to all the obligations and restrictions imposed by the latter agreement.

The above facts, we think, establish that respondent's business is an integral part of the Coca-Cola Company's national system of distribution and is therefore subject to the Board's jurisdiction under the rationale of the recent Supreme Court decision in Howell Chevrolet Co. v. National Labor Relations Board, 346 U.S. 482, 74 S.Ct. 214; See American Bottling Co., 99 N.L.R.B. 345, enforced 5 Cir., 205 F.2d 421, certiorari denied 346 U.S. 921, 74 S.Ct. 306; cf. N.L.R.B. v. Seven-Up Bottling Co., 5 Cir., 196 F.2d 424, reversed on other points, 344 U.S. 344, 73 S.Ct. 287, 97 L.Ed. 377. Respondent's business being within the Board's jurisdiction, it was for the Board to determine, in its discretion, whether to exercise such jurisdiction, and we cannot say that the Board abused its discretion in determining to do so.


The original unfair labor practice charge which initiated this proceeding was filed with the Regional Director for the Board by International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local No. 439, AFL (herein 'Local 439') on August 21, 1951. The charge alleged that respondent instigated the formation of, dominated, controlled and supported the Association. M. C. Dempster, an investigator for the Board...

To continue reading