National Labor Relations Bd. v. Howell Chevrolet Co.

• Decision Date: 18 May 1953
• Docket Number: No. 13140.,13140.
• Parties: NATIONAL LABOR RELATIONS BOARD v. HOWELL CHEVROLET CO.
• Court: U.S. Court of Appeals — Ninth Circuit

204 F.2d 79 (1953)

NATIONAL LABOR RELATIONS BOARD v. HOWELL CHEVROLET CO.

No. 13140.

United States Court of Appeals Ninth Circuit.

February 26, 1953.

Writ of Certiorari Granted May 18, 1953.

George J. Bott, Gen. Counsel, N.L.R.B., David P. Findling, A. Norman Somers, Asst. Gen. Counsel, Marcel Mallet-Prevost, William J. Avrutis, Attys., N.L.R.B., Washington, D. C., for petitioner.

Findlay A. Carter, Frederick A. Portruch and James M. Nicoson, Los Angeles, Cal., for respondent.

Before STEPHENS and POPE, Circuit Judges, and HARRISON, District Judge.

Writ of Certiorari Granted May 18, 1953. See 73 S.Ct. 940.

POPE, Circuit Judge.

Respondent is a California corporation which operates an automobile agency and repair and service shop at Glendale, California. It operates under a non-exclusive agreement with General Motors Corporation to sell Chevrolet cars and trucks. It is supplied with new cars and trucks from an assembly plant maintained at Van Nuys, California, where all of the new cars and trucks purchased by respondent were assembled and the process of manufacture completed. Approximately 43 per cent of the component parts of automobiles and trucks which were shipped to the Van Nuys plant and used in the assembling and manufacturing process there carried on, were obtained from points located outside of California. All of the respondent's sales were made within California.

Upon the threshold we are confronted with the contention that the respondent is not subject to the jurisdiction of the Board. We think that the record requires an affirmance of the Board's findings of jurisdiction. In National Labor Relations Board v. Townsend, 9 Cir., 185 F.2d 378, this court found jurisdiction in respect to the activities of a local Hudson automobile dealer where it appeared that while the respondent, operating at Santa Maria, California, purchased all of his new automobiles from the Hudson Sales Corporation at Los Angeles, yet the latter organization shipped all of such automobiles into the State from outside points. The difference here, of course, is that the Van Nuys assembly plant does not bring into the State completed automobiles but completes the assembly and manufacture there of cars and trucks but 43 per cent of whose component parts are shipped in from outside points.¹

We think that the difference between this and the Townsend case is one of degree only and not of substance. Another aspect present here, a circumstance not disclosed in the Townsend case, is that respondent operated under a dealer's agreement with General Motors Corporation pursuant to which the latter exercises control over the respondent's capital requirements, places of business, hours, service facilities, personnel, signs and local area advertising. The findings of the Board recite: "The Respondent is one of a limited number of dealers selling Chevrolet products, and, by virture of its contractual relationship with Chevrolet Motor Division-General Motors Corporation, is an integral part of that corporation's national system of distribution. Under the foregoing circumstances and on the basis of the entire record, we find, as did the Trial Examiner, that the respondent is engaged in commerce within the meaning of the Act, and that it will effectuate the policies of the Act to assert jurisdiction over the Respondent." The contractual relationship thus referred to is substantially the same as the automobile sales agreement described in National Labor Relations Board v. Ken Rose Motors, 1 Cir., 193 F.2d 769, 771, which the court said "ties the respondent into a vast national network of an integrated distribution system which affects commerce."

However, on January 20, 1953, the Court of Appeals for the Sixth Circuit handed down its decision in National Labor Relations Board v. Bill Daniels, Inc., 202 F.2d 579, which expressly disapproved the Ken Rose Motors decision. Speaking of the Board's contention based on the Ken Rose case, the court said: "In order to be an integral part of Ford these dealers would have to be either employees or agents of Ford. It is not contended that they are employees and there is no evidence in the record that the dealers are agents of Ford. The contracts in essence are contracts between vendor and purchaser. * * * The fact that they cooperate to avail themselves of the privilege of national advertising is so small an element in the operation that it does not affect the conclusion that the work done is local."

We think that this is not an answer to the real question here posed. For in our view the final inquiry must be whether the employer's activities bear such "a close, intimate and substantial relation to trade, traffic and commerce among the states" that "any widespread application of the practices here charged might well result in substantially decreasing the influx of materials"² into the state. We think that the impact of automobile sales agreements of the kind here involved upon that question is not dependent upon whether those agreements square with common law concepts of principal and agent, or employer and employee. Rather, it seems to us, the important matter is, how does the arrangement work? Is the tie-up between respondent and General Motors Corporation, accomplished by this agreement, regardless of what it would be called under the traditional nomenclature used by lawyers, nevertheless such that the Board's finding that respondent "is an integral part of that corporation's national system of distribution", has "`warrant in the record' and a reasonable basis in law". Labor Board v. Hearst Publications, 322 U.S. 111, 131, 64 S.Ct. 851, 861, 88 L.Ed. 1170.³ We think the answer is yes.

Both because this court's decision in the Townsend case, supra, controls us here, and because the Board's finding on the effect of this contractual relationship on the flow of interstate commerce is one which we should not disturb, we hold that the Board's finding that the respondent was engaged in commerce within the meaning of the act must be affirmed by us.

In January, 1950, the International Association of Machinists, here called the Union, initiated efforts to secure members from among the respondent's employees. Meetings were held at which Claude Leonard, one of the employees, was selected as shop steward or senior chairman. By January 31, 1950, 15 of the 28 employees in the bargaining unit⁴ had signed cards designating the Union as their collective bargaining representative. The Union under that date wrote to the respondent claiming to be the majority representative of the employees, and asked for recognition and for a conference to discuss an agreement. On the same day the Union filed a representation petition with the Board. Respondent received the Union letter on February 1, 1950, but did not answer it because, as it now says, it in good faith doubted the Union's majority claim.

Following the incidents just mentioned, there occurred the acts which the Board has found constituted a violation by the respondent of § 8(a) (1), (3) and (5) of the National Labor Relations Act as amended.⁵ With respect to the claimed restraint and coercion and interference with the employees in the exercise of their right of self-organization, guaranteed in § 7,⁶ the Board asserts that the respondent's president, its attorney, its service manager and the foreman of its body shop, "all acted to bring home to the employees the futility of their supporting the union and the advantage which would accrue to them if they kept away from it." More specifically, the Board found that respondent's president, Jackson Howell, before the election which the Board ordered on the Union's petition mentioned above, urged an employee to "vote in favor of the plant", and said to him that if the employee would do so, Howell would see that the employees "got a raise in time." The Board also found that Howell had promised to other employees that if the Union were defeated the employees would receive a raise.

The Board also found that one Bordeau, respondent's service manager, likewise promised a raise in pay for the employees if the Union were defeated, and that he had stated in the presence of two employees that if the Union were victorious at the election, respondent would shut down its operations.

Other statements along the same line with which the Board has charged the respondent, and on which it has made findings against it, are those of one Ogen who bore the title of "body shop foreman" in the respondent's organization. The testimony before the Board disclosed that when employee Leonard, who, as above stated, had been selected as an officer of the Union, showed up wearing his Union button, Ogen commented upon the button and made remarks to the effect that president Howell had told Ogen that the former was going to fire anybody who joined the Union; that Ogen did not want to be near Leonard while the latter wore the button because he did not want to get fired. There was also much evidence as to a number of talks which the respondent's attorney Potruch made to the employees, first when they were all assembled in one body, and later to separate groups. In these talks Potruch undertook to state at considerable length the views of respondent with regard to the Union's organizing activities and the forthcoming election.

In the course of his address to the employees, the attorney stated that it was the view of the respondent that because the Company was one operating solely within the State, the Board had no jurisdiction; that the respondent would contest the jurisdiction of the Board, and that perhaps it would be found that in order to get the issue before a court, the respondent would have to do something which would cause it to be cited for an unfair labor practice. The attorney's speech to the employees contained a lengthy discussion of the rights of the Union and of the employer under the Act; statements that there could not be any changes in...