Bon Hennings Logging Company v. NLRB

• Decision Date: 04 September 1962
• Docket Number: No. 17543,17599.,17543
• Citation: 308 F.2d 548
• Parties: BON HENNINGS LOGGING COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. NATIONAL LABOR RELATIONS BOARD, Petitioner, v. Clayton KNOWLES, an individual, Respondent.
• Court: U.S. Court of Appeals — Ninth Circuit

308 F.2d 548 (1962)

BON HENNINGS LOGGING COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. Clayton KNOWLES, an individual, Respondent.

Nos. 17543, 17599.

United States Court of Appeals Ninth Circuit.

September 4, 1962.

COPYRIGHT MATERIAL OMITTED

George O. Bahrs, and R. J. Scolnik, San Francisco, Cal., for petitioner Bon Hennings Logging Co.

Stuart Rothman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Melvin J. Welles, and Elliott Moore, Attys., N. L. R. B., Washington, D. C., for respondent and petitioner N. L. R. B.

Clayton Knowles, Arcata, Cal., in pro. per, for respondent Clayton Knowles.

Before HAMLIN, JERTBERG and BROWNING, Circuit Judges.

HAMLIN, Circuit Judge.

The National Labor Relations Board, after hearings before a trial examiner, found that Bon Hennings Logging Company, hereafter Company, and Clayton Knowles were guilty of certain unfair labor practices in violation of section 8 (a) (1) and (3) of the National Labor Relations Act, hereafter Act, 29 U.S.C.A. § 158(a) (1) and (3). The Company and Knowles were ordered to cease and desist therefrom and the Company (but not Knowles) was ordered to reinstate certain employees with back pay. The Company petitions this court for an order vacating and setting aside the order of the Board, and the Board cross-petitions for enforcement of its order against the Company. The Board also petitions for enforcement of its order against Knowles. We have jurisdiction of the petitions by virtue of section 10 (e) and (f) of the Act, 29 U.S.C.A. § 160 (e) and (f).

Three questions are presented by the petitions which are before us involving (1) the jurisdiction of the Board, (2) the sufficiency of the evidence to show unfair labor practices, and (3) the validity of the Board's order of reinstatement with back pay.

I. JURISDICTION OF THE BOARD

The Company is a California corporation engaged in the logging business in Humboldt County, California. During 1959, the year here in question, Company performed logging services for Roddis-Craft, Inc., for which Company was paid $324,000. Roddis-Craft is a manufacturer of plywood which ships a substantial amount of its product (a value exceeding $3,000,000 per year) to points outside California. All logging services were performed by Company on property either owned by Roddis-Craft or on which it had cutting rights. Only a portion of the timber cut by Company was suitable for the manufacture of plywood by Roddis-Craft. As a result large quantities of timber cut by Company were shipped to other lumber companies at Roddis-Craft's direction. There is no evidence that any such timber was shipped by Company to points outside California. Of the $324,000 received by Company for logging services $31,600 was the amount paid in respect of the logs actually used by Roddis-Craft.

The Board has jurisdiction to prevent unfair labor practices "affecting commerce".¹ As provided by section 2(7) of the Act, 29 U.S.C.A. § 152(7),

"The term `affecting commerce\' means in commerce, or burdening or obstructing commerce or the free flow of commerce, or having led or tending to lead to a labor dispute burdening or obstructing commerce or the free flow of commerce."

The Company concedes that Roddis-Craft is engaged "in commerce" within the meaning of the Act by virtue of its substantial shipments of plywood to points outside California. Under the standards it has developed, the Board will assert jurisdiction over firms which have a "direct flow" of goods or services in commerce of a value exceeding $3,000,000 per year. The Board determined that Company met its jurisdictional standards of "indirect flow" in that it provided more than $50,000 worth of services for a firm which met the Board's "direct" jurisdictional standard.²

Company contends that it did not meet the Board's "indirect flow" jurisdictional standard in that of the $324,000 paid by Roddis-Craft only $31,600 was paid for services rendered to Roddis-Craft and the remainder was for services rendered to the other lumber companies not engaged in interstate commerce to which Company delivered lumber. Company argues that Roddis-Craft merely acted as an intermediary or middleman for the other companies for all the timber except that actually delivered to Roddis-Craft.

We think the Company, notwithstanding its contentions, cannot escape the fact that the entire $324,000 was paid to it for services rendered to Roddis-Craft and not to any other lumber company. The lumber which Company cut and hauled came from property which was owned by Roddis-Craft or on which it held the cutting rights. Delivery of the logs not usable by Roddis-Craft was made to the other companies at Roddis-Craft's direction. These other companies paid Roddis-Craft for the lumber. Roddis-Craft paid the Company for the cutting and hauling. Company clearly came within the Board's jurisdictional standards.

Leaving the jurisdictional standards of the Board aside, we think Company "affected commerce" within the meaning of the Act. Many cases in this Circuit have decided that jurisdiction attaches to companies which purchase from or perform services for other firms which engage directly in interstate commerce even though the companies' business is conducted solely intrastate.³

The Company and Knowles rely heavily on N. L. R. B. v. Reliance Fuel Oil Corp., 297 F.2d 94 (2d Cir.1962), cert. granted, 369 U.S. 883, 82 S.Ct. 1160, 8 L. Ed.2d 285 (1962). In that case Reliance was in the business of selling fuel oil to home owners all of whom were in New York. Reliance purchased its fuel, more than $650,000 worth, from Gulf Oil Corporation which was engaged "in commerce". The fuel oil and related products purchased by Reliance was largely refined outside New York and shipped to Gulf's storage tanks in New York. The Board contended that jurisdiction over Reliance existed because its substantial purchases of goods the origin of which was outside the state affected commerce within the meaning of the Act. The Second Circuit refused to hold that these facts alone supported jurisdiction. The court remanded the case to the Board for it to take further evidence inter alia on the "volume of commerce in heating oils in the relevant market, Gulf's participation therein, Reliance's contract relationship, if any, with Gulf's national distribution system, and Reliance's proportion of Gulf's commerce in the relevant market."

Company herein contends that the facts of this case are analogous to those of the Reliance case, and that its mere de minimis relationship with Roddis-Craft (contending only $31,600 worth of services were performed for Roddis-Craft) is insufficient to support jurisdiction under the rationale of Reliance. We think the cases in this Circuit⁴ foreclose an effective contest as to the jurisdiction of the Board in this case. In view of our cases and the factual differences between Reliance and the instant case we find it unnecessary to approve or disapprove of the holding or reasoning of the Second Circuit in Reliance. And we note the lack of finality of Reliance due to the Supreme Court's grant of certiorari.⁵

We hold that the Board had jurisdiction in this case.

II. SUFFICIENCY OF THE EVIDENCE

During 1959, Company employed several truck drivers. On November 1, 1959, almost all of Company's truck drivers attended a meeting which one driver had arranged with a union organizer.⁶ After a discussion all of the drivers present signed cards applying for membership in the Union.

On the following Monday morning, November 2, 1959, Bon Hennings, the president and sole stockholder of the Company, heard about the meeting. That afternoon Hennings discussed the Union with a number of his drivers. Hennings asked one driver if he had attended the meeting and he learned that he had. Hennings then questioned this driver as to the advantages of joining the Union and then stated, "there will never be a union man on my job." Another driver who had been accused of being the instigator of the union movement had a conversation with Hennings during which the driver asked Hennings who had been spreading the story (which story was apparently correct) that he was the instigator. Hennings replied, "Well, I will not have any son-of-a-bitch on this job that is union." To still another driver with whom he had a conversation Hennings said in effect "when the union moved in on his job, his job was through."

On the evening of November 2, 1959, Hennings' truck foreman, Clayton Knowles, returned from a hunting trip and received a telephone call evidently informing him of the union activity after which Knowles stated to a companion, "Those sons-of-bitches are going union and I will fire the whole bunch of them."

On Tuesday, November 3, 1959, the Company entered into a lease agreement with Knowles whereby Knowles was the lessee of the Company's trucks and trailers. Knowles was to carry on the trucking part of Company's logging business as an independent contractor for the period of one year commencing November 4, 1959. The leased equipment was to be maintained and repaired by Company. Knowles was responsible for hiring and firing employees, but Company agreed to advance sufficient funds to cover payroll and other expenses. Company was to carry workmen's compensation insurance until Knowles was in a position to acquire his own coverage, and on similar conditions Knowles had the use of Company's fuel permit. The lease was non-assignable. Knowles could cancel the lease on 15 days notice if unable to operate due to inclement weather, and Company could cancel on similar notice if it deemed Knowles' operation to be "unsatisfactory." The financial arrangement was such that in effect Knowles would make his lease payments to Company from funds received from Company in payment for Knowles' hauling services.

On the evening of November 3, 1959,...