424 F.2d 770 (D.C. Cir. 1969), 22040, Herbert Harvey, Inc. v. N. L. R. B.

Docket Nº:22040.
Citation:424 F.2d 770
Case Date:September 19, 1969
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit

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424 F.2d 770 (D.C. Cir. 1969)




No. 22040.

United States Court of Appeals, District of Columbia Circuit.

Sept. 19, 1969

Argued Jan. 14, 1969.

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Mr. Stanley R. Strauss, Washington, D.C., with whom Mr. Kenneth C. McGuiness, Washington, D.C., was on the brief, for petitioner.

Mr. Gary Green, Attorney, N.L.R.B., with whom Messrs. Arnold Ordman, General Counsel, Dominick L. Manoli, Associate General Counsel, Marcel Mallet-Prevost, Asst. General Counsel, and Mrs. Abigail Cooley Baskir, Attorney, N.L.R.B., were on the brief, for respondent.

Before WRIGHT, McGOWAN and ROBINSON, Circuit Judges.


In what marks a reappearance of the controversy in this court, the petitioner, Herbert Harvey, Inc., renews its challenge to the National Labor Relations Board's assertion of jurisdiction over it as an employer of service and maintenance workers in buildings in the District of Columbia owned by the International Bank for Reconstruction and Development, commonly known as the World Bank. When the litigation was here previously, we reversed an order of the Board directing Harvey to bargain with the certified representative of those employees, and remanded the proceeding for determinations calculated to resolve the jurisdictional problem. 1 On remand, the Board rendered a supplemental decision 2 reaffirming its earlier decision, 3 and the case is back for further review. We are satisfied, after careful study of the record, that the Board did not err in assuming jurisdiction over Harvey, and the order to bargain will be enforced.


The complexity of the jurisdictional issue prompts us to retrace the procedural history of the dispute as a preface to an expression of our reasons for sustaining the Board. Government Service Employees' Union, Local 536, Building Service Employees' International Union, AFL-CIO, petitioned the Board for an election to ascertain its status as bargaining representative of certain service and maintenance employees 4 in three buildings 5 housing the principal office of

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the World Bank at which Harvey, by contract with the Bank, manages the operation and maintenance. Harvey opposed the petition on the grounds that the Bank, and not Harvey, is the employer and that, in any event, the Bank is exempt from regulation by the Board and Harvey's relationship with the Bank is such that the Board should decline jurisdiction over Harvey. 6

The Board, after a hearing, directed a representation election, finding that Harvey is 'an employer' whose service and maintenance activities are 'not so intimately connected with the purposes or operations of the World Bank as to warrant withholding the exercise of jurisdiction over the business of the Employer.' 7 Harvey moved for reconsideration on averments that those findings are inconsistent with Board precedents, and that the Board had failed to determine the Bank's status as an employer. The motion was denied without opinion.

In the Board-conducted election, the Union amassed a majority, and the Board formally certified it as the exclusive bargaining representative of the employees. When Harvey subsequently refused to bargain, the Board's General Counsel issued an unfair labor practice complaint alleging that the refusal infringed provisions of the National Labor Relations Act. 8 The Board deemed the decisive question to be essentially that resolved in the representation proceeding, and perceived no triable issue requiring a hearing. Consequently, it awarded a summary judgment that Harvey had violated the Act as charged, and ordered Harvey to bargain with the Union upon its request. 9

Harvey then petitioned this court to review and set aside the Board's decision and order, raising only the jurisdictional point, and the Board cross-petitioned for enforcement of the order. Commenting upon an apparent inconsistency between that decision and prior holdings of the Board, 10 we held that the Board had 'erred in failing to find the Bank to be a joint employer with Harvey, in failing to make findings as to the Bank's status--whether exempt or not-- and in failing to decide whether the Bank's status, if exempt, would require it to refuse to assert jurisdiction over Harvey.' 11 We accordingly remanded the cause to the Board for further consideration in the light of our opinion. 12

On remand, the Board issued a supplemental decision 13 reaffirming its prior decision and elucidating the basis upon which it predicated the bargaining order against Harvey. The World Bank, the Board held, enjoys immunity from its jurisdiction, 14 and our view that the Bank and Harvey are joint employers was accepted as the law of the case. 15 But, the Board held further, Harvey has sufficient control over the working conditions of the service and maintenance employees at the World Bank as to enable it to bargain effectively with the Union. 16 The Board also reviewed the previous decisions that had troubled us and, overruling one, 17 considered them to be compatible with the result achieved here. 18

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The effect of the Board's supplemental decision is, of course, to reinstate its bargaining order.

The parties now return to this court, Harvey in an effort to annul the decision and the Board to obtain enforcement of the order. Harvey insists that the evidence shows that it is incapable of meaningful collective bargaining, and that the Board's assumption of jurisdiction is so much at war with Board precedents as to reach the point of administrative arbitrariness. To these and other facets of the Board's adjudication we now proceed.


Although the World Bank is not a target of the Board's bargaining order, the status of that institution, as we signified in our opinion preceding the remand, 19 bears vitally on the contest at hand. The Board, on remand, held that the Bank lay outside the ambit of the Act, and that holding Harvey readily accepts. The Board was influenced to that end by the Bank's genesis in an agreement ratified by many countries, its situation as a specialized agency of the United Nations, and the unique advantages it enjoys. 20 From these factors, 'it (was) manifest' to the Board 'that the World Bank is an international organization which enjoys the privileges and immunities from the laws of the sovereignty in which it is located customarily extended to such organizations.' 21 Recognizing that to sustain jurisdiction in the 'delicate field of international relations there must be present the affirmative intention of the Congress clearly expressed, ' 22 the Board could 'find nothing in the language of the statute or in its legislative history that would lead us to conclude that Congress intended the Board to exercise its jurisdiction over the operations of the World Bank.' 23

Like Harvey, we approve the Board's determination in this regard, but that determination is not the finale, but only the prelude. The Board, it seems patent, has statutory jurisdiction over Harvey, qua Harvey, 24 and Harvey does not urge the contrary. The Board, however, has traditionally reserved a discretion to decline

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jurisdiction in particular cases where it believes the policies of the Act will not be effectuated by an exercise of its authority, 25 and Harvey does press for a declination. It may be expected that in the consideration and resolution of that contention in each of its argumentative aspects, the role of the World Bank will loom large.


The Board read our previous decision as holding that Harvey and the World Bank are joint employers of the workers in question. 26 And the Board felt that it must, as we feel that we should, take that holding as the law of the case. 27 The issue then arising before the Board, as it stated, 28 was whether, in this alliance of exempt and nonexempt employers, Harvey is vested with enough autonomy over the employment arrangements and working conditions to enable it to bargain efficaciously with the Union. 29 For Harvey is not required 'to do

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the impossible' 30 or to engage in 'a mere 'exercise in futility;" 31 rather, 'the purpose of collective bargaining is to produce an agreement and not merely to engage in talk for the sake of going through the motions.' 32 And 'the doing of a useless and futile thing is no more required in collective bargaining between an employer and a labor union than in other activities.' 33

On the record, the Board concluded, however, 'that (Harvey) is fully capable of bargaining effectively with the Union regarding the wages, hours, and other conditions of employment of its employees.' 34 In reaching that conclusion, the Board looked first to the contract 35 which for many years has particularized the rights and liabilities of the parties, 36 an initiation point it was free to select. 37 To the Board it was 'plain that the contract * * * contemplated a completely independent relationship between the parties.' 38 and to us an examination of the agreement discloses ample foundation for that interpretation.

The contract obligates Harvey to 'furnish to the Bank complete operating and maintenance service' and to 'provide and supervise all personnel necessary for' that service. As the Board emphasized, the contract states that Harvey affords the service 'as an independent contractor, ' specifies that Harvey 'will be solely responsible for the conduct of its employees, ' and binds Harvey to indemnify the Bank against liability or loss 'arising out of the conduct of the Company' or 'its employees.' 39

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It was 'obvious' to the Board, and upon a reasonable reading nearly so to us, that these stipulations were 'intended to make clear that as between...

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