N.L.R.B. v. Sure-Tan, Inc.

• Decision Date: 05 April 1978
• Docket Number: SURE-TA,No. 77-2020,INC,77-2020
• Citation: 583 F.2d 355
• Parties: 99 L.R.R.M. (BNA) 2388, 47 A.L.R.Fed. 899, 84 Lab.Cas. P 10,794 NATIONAL LABOR RELATIONS BOARD, Petitioner, v.and Surak Leather Company, Respondent. . Heard
• Court: U.S. Court of Appeals — Seventh Circuit

Page 355

583 F.2d 355

99 L.R.R.M. (BNA) 2388, 47 A.L.R.Fed. 899,

84 Lab.Cas. P 10,794

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. SURE-TAN, INC. and Surak Leather Company, Respondent.

No. 77-2020.

United States Court of Appeals Seventh Circuit.

Heard April 5, 1978.

Decided Aug. 25, 1978.

Lawrence Blatnik, Atty., N. L. R. B., Washington, D. C., for petitioner.

John A. McDonald, Chicago, Ill., for respondent.

Before CUMMINGS and WOOD, Circuit Judges, and VAN PELT, Senior District Judge. ^*

CUMMINGS, Circuit Judge.

In this case the National Labor Relations Board has asked us to enforce its order requiring respondent Company to bargain with the Union. ¹ The Company opposes enforcement on the ground that the Board's certification of the Union was invalid.

Before January 1973, brothers J. V. and S. S. Surak and a third person were partners in the business of purchasing, tanning and selling hides under the name National Rawhide Manufacturing Company, with its facility at 1470 West Webster Avenue in Chicago. In its last full year of operation, the partnership's gross volume of business was about $210,000, of which over $50,000 represented out-of-state sales. When the partnership terminated on January 5, 1973, the Surak brothers formed Sure-Tan, Inc., an Illinois corporation engaged in the business of tanning hides at the same facility. They also formed Surak Leather Company, a partnership engaged in the business of purchasing and selling hides at the same address and with no employees. The brothers worked six days a week, twelve hours a day, performing work for both businesses during that time. Different desks and filing cabinets are designated for each company, but otherwise the brothers use their office space at the facility to perform work for both companies. Sure-Tan performs 100% Of its work for Surak Leather Co. and 92% Of the hides purchased by Surak Leather are tanned by Sure-Tan. Sure-Tan, Inc. employs 11 persons, including its two corporate officers. Because the partnership and the corporation were integrated, the Labor Board has treated them as a single employer (the Company).

On August 12, 1976, the Union filed a petition seeking certification as the bargaining representative of an appropriate unit of the Company's employees. After pre-election hearings in September and October 1976, the Board's Regional Director for Region 13 issued his decision and direction of election. He found that the corporation and the partnership constituted a single integrated enterprise that was an employer engaged in commerce within the meaning of the National Labor Relations Act because the Company's "combined direct and indirect outflow of goods across state lines exceeds $50,000," which is the Board's discretionary standard for jurisdiction over non-retail enterprises (Board App. 4). In accordance with a stipulation between the parties, the appropriate unit was described as: "all production and maintenance employees employed at the Employer's facility now located at 1464-1470 West Webster Avenue, Chicago, Illinois, but excluding office clerical employees, guards, professional employees and supervisors as defined in the Act" (Board App. 1). He ordered an election to be held on December 10, 1976 (see Board App. 14). The Company filed a request for review of his decision, challenging its jurisdiction, but the Board denied the request as insubstantial on December 3, 1976.

The election was conducted on December 10, 1976, showing six ballots for the Union and one against it. ² The Company filed objections to the election on the ground that six of the seven eligible voters were illegal aliens and that a Union representative had told them he could secure clearance from the Immigration and Naturalization Service of the Department of Justice so that they and their families could reside and work in the United States. The Regional Director overruled the Company's objections because one of the employee witnesses in support of the objections denied he had ever met with a representative of the Union, and the other two denied that the Union representative made the above statement. The Regional Director found that the employees were entitled to the protection of the Act despite their lack of valid working papers and consequently certified the Union on January 17, 1977. A month later, the Board denied the Company's request for review of his ruling and on the next day the Union requested the Company to bargain collectively but it refused to do so.

Because of the Company's refusal to bargain collectively, the Union filed a charge on March 1, 1977, prompting the Board's General Counsel to issue a complaint and an amended complaint alleging that the Company was violating Section 8(a)(5) and (1) of the Act (29 U.S.C. § 158(a)(5) and (1)). After the Company filed an answer and an amended answer which noted that the aliens had been deported after the election, the General Counsel requested the Board to grant summary judgment, which the Board did on August 4, 1977.

In its accompanying decision and order, the Board found that Surak Leather Company and Sure-Tan, Inc. were co-partners constituting a single integrated enterprise and that the Company sold goods in interstate commerce and also sold goods to an Illinois customer meeting the Board's jurisdictional standards, so that the total value of direct and indirect outflow of goods across state lines exceeded $50,000. Therefore, the Board found that the Company was engaged in commerce within the meaning of Section 2(6) and (7) of the Act (29 U.S.C. § 152(6) and (7)).

The Board found that the appropriate unit for collective bargaining purposes within the meaning of Section 9(b) of the Act (29 U.S.C. § 159(b) consisted of all the Company's "production and maintenance employees" and that a majority of them had designated the Union as their collective bargaining representative on December 10, 1976, resulting in its certification on January 17, 1977. The Board also found that commencing on February 18, 1977, the Union requested the Company to bargain collectively but that the Company refused to do so in violation of Section 8(a)(5) and (1) of the Act. Consequently, the Board ordered the Company to bargain with the Union and to post appropriate notices at its Chicago facility. ³ See 231 NLRB No. 32.

Jurisdiction of Board

The Company first argues that its business did not meet the Board's jurisdictional requirement of $50,000 worth of annual interstate activity. However, it is well settled that the Board can treat separate corporations as a single entity where the firms are highly integrated with respect to ownership and operation (Radio Union v. Broadcast Service, 380 U.S. 255, 85 S.Ct. 876, 13 L.Ed.2d 789), and that the Board's finding that two firms constitute a single enterprise is essentially a factual determination. See National Labor Relations Board v. R. L. Sweet Lumber Co., 515 F.2d 785, 793 (10th Cir. 1975), certiorari denied, 423 U.S. 986, 96 S.Ct. 393, 46 L.Ed.2d 302, National Labor Relations Board v. M. P. Building Corp., 411 F.2d 567, 568 (5th Cir. 1969). The facts and the accepted criteria whether a single enterprise exists, as found by the Regional Director in his November 10, 1976, decision and direction of election (Board's App. 2-4) and in the Board's decision and order (231 NLRB No. 32 at pp. 6-7), satisfy us that the Board was justified in treating the partnership and the corporation as a single employer. It is not significant that in the manner in which the enterprise was divided the partnership was allocated no particular employees. See generally Insulated Building Material Co., 162 NLRB 1105, 1109 (1967). Therefore, the Board was entitled to consider the combined commerce data for both operations. Here the Company's combined indirect and direct outflow of products across state lines exceeded the jurisdictional requirement of $50,000 because its direct interstate outflow was $29,000 and its indirect outflow through its customer Nationwide Glove Company amounted to $31,000 to $32,000. National Labor Relations Board v. Marlboro Food Service, Inc., 366 F.2d 477 (10th Cir. 1966), certiorari denied, 386 U.S. 912, 87 S.Ct. 862, 17 L.Ed. 785; National Labor Relations Board v. Cross Poultry Company, 346 F.2d 165 (4th Cir. 1965), certiorari denied, 382 U.S. 918, 86 S.Ct. 290, 15 L.Ed.2d 232 establish that in such circumstances the Board had jurisdiction.

Alienage of Voting Employees Does Not Taint Election

The Company's objection to the certification and bargaining order rests on the facts that six of the seven eligible voters were aliens working and unlawfully residing in the United States, and that the aliens have been deported. Based on those facts, the Company argues that certification is improper because it would be inconsistent with federal immigration laws, particularly 8 U.S.C. § 1182(a)(14). ⁴ We have considered this issue, which apparently is one of first impression, as well as the argument that a bargaining order is improper due to employee turnover, and agree with the Board that the certification and the bargaining order need not be withdrawn.

In determining whether an illegal alien can vote in a Board election, it is important to begin by referring to the definition of "employee" in the Act. Section 2(3) of the Act (29 U.S.C. § 152(3)) defines the term broadly, ⁵ and despite some contrary hints about the legislative history in distinguishable Supreme Court opinions, ⁶ the longstanding and consistent interpretation by the Board has been that aliens are employees under the Act, and therefore are fully eligible voters. See Cities Service Oil Co., 87 NLRB 324, 331 (1949); Seidmon, Seidmon, Henkin & Seidmon, 102 NLRB 1492, 1493 (1953); Lawrence Rigging, Inc., 202 NLRB 1094, 1095 (1973); Handbilling Equipment Corp., 209 NLRB 64, 65 n. 5 (1974); Amay's Bakery & Noodle Co., 227 NLRB 214 (1976). Because the Act does not exclude aliens but rather is written...