NLRB v. Pan American Petroleum Corporation

• Decision Date: 21 June 1971
• Docket Number: No. 287-70.,287-70.
• Citation: 444 F.2d 328
• Court: U.S. Court of Appeals — Tenth Circuit
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. PAN AMERICAN PETROLEUM CORPORATION, Respondent.

444 F.2d 328 (1971)

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. PAN AMERICAN PETROLEUM CORPORATION, Respondent.

No. 287-70.

United States Court of Appeals, Tenth Circuit.

June 21, 1971.

Lawrence H. Pelofsky, Atty., N. L. R. B. (Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, and Herman M. Levy, Atty., N. L. R. B., Washington, D. C., were with him on the brief), for petitioner.

J. W. Howard, Tulsa, Okl., (J. P. Hammond, Tulsa, Okl., of counsel with him on the brief), for respondent.

Before LEWIS, Chief Judge, and McWILLIAMS and DOYLE, Circuit Judges.

LEWIS, Chief Judge.

The National Labor Relations Board seeks enforcement of an order issued October 16, 1969, which would require respondent to bargain collectively with the Independent Oil Workers Union, Local 16, as the exclusive bargaining representative of the company's production, operating and maintenance employees, including gas technicians, in the producing department of the employer's Farmington Area at Farmington, New Mexico. Respondent admits its refusal to bargain, but denies the commission of an unfair labor practice under section 8(a) (1) and (5) of the National Labor Relations Act, 29 U.S.C. § 151 et seq., by asserting that the Board did not validly determine and certify an appropriate bargaining unit.

Section 9(b) of the Act provides that "the Board shall decide in each case whether, in order to assure to employees the fullest freedom in exercising the rights guaranteed by this subchapter, the unit appropriate for collective bargaining shall be the employer unit, craft unit, plant unit, or subdivison thereof * * *." The courts have uniformly recognized that this section gives the Board wide discretion in determining the appropriate bargaining unit in each case and that such determination will not be set aside by the reviewing court unless it is arbitrary or capricious. See, e.g., Packard Motor Car Co. v. N. L. R. B., 330 U.S. 485, 491, 67 S.Ct. 789, 91 L.Ed. 1040; Mountain States Tel. & Tel. Co. v. N. L. R. B., 10 Cir., 310 F.2d 478, 479-480.

Pan American Petroleum Corporation, formerly Stanolind Oil and Gas Company, is engaged in the exploration for and production of oil and gas. The company's operations are divided into four geographical and organizational divisions, which are subdivided into districts and then into areas containing groups of producing fields and facilities. The Farmington Area, with which we are primarily concerned, maintains an office at Farmington, New Mexico. It embraces Nevada, Arizona, the western half of New Mexico, and parts of Colorado and Utah. Organizationally, it is a part of the Denver Division.

The evidence in this case shows that operations are largely centralized on a division basis with the division manager exerting overall control from the division headquarters in Denver, Colorado, including the authority to bargain collectively and make final decisions in matters of grievance. The division headquarters authorizes the drilling of wells throughout the division; selects the drilling contractors and awards the contracts for such operations; and handles the legal work, financing, programming and purchasing for the entire Denver Division. Labor policies, job classifications and employee benefits are uniform throughout the division, and job opportunities and job security are division-wide.

The stability of the Denver Division is reflected in its existence as a continuing organizational entity for more than thirty-four years. In contrast to this stability, area boundaries are frequently changed depending on operating problems and efficient use of personnel, and areas may be discontinued entirely through consolidation with other organizational entities. Employees are frequently transferred between areas within the Denver Division.

Pan American contends that the above evidence, especially that showing centralized control, compels the finding that the only unit appropriate for collective bargaining is one which includes employees throughout the Denver Division. Cf. NLRB v. Pinkerton's, Inc., 6 Cir., 428 F.2d 479; NLRB v. Davis Cafeteria, Inc., 5 Cir., 396 F.2d 18; NLRB v. Frisch's Big Boy Ill-Mar, Inc., 7 Cir., 356 F.2d 895. But in NLRB v. Stanolind Oil & Gas Co., 10 Cir., 208 F.2d 239, 242, we rejected a similar argument made by this same company:

Stanolind contends that functional integration and centralized management found only in its defined geographical divisions are the rationally acceptable factors for determining the bargaining unit. And pointing to the Board\'s historical acceptance of these factors in the determination of appropriate bargaining units, it earnestly insists that the Board cannot ignore them in this case. See the Sixteenth (1951) and Seventeenth (1952) Annual Reports of the Board enumerating principal factors considered by the Board in cases of this kind.

But, in determining Stanolind\'s plant employees to be an appropriate unit, the Board relied upon other determining factors which it has likewise utilized in these cases. The Board found the plant employees to be a relatively stable, integrated, cohesive group, with distinctive work functions, separate supervision from the field employees, with different employment and working conditions; that the plant partook of the nature of a manufacturing plant; and that there was little interchange of employees between the field and the plant except in emergencies. In addition, the Board noted that there had been no bargaining for employees of the Rocky Mountain Division, and no other unit sought to represent the division-wide unit.

The record in this case establishes that the designated unit consists of a stable, identifiable group of unrepresented employees who work in a rather isolated geographic location, and however much the evidence points to the desirability of division-wide collective bargaining, it is nevertheless within the broad discretion of the Board to determine that the lesser unit is also appropriate. See NLRB v. Groendyke Transport, Inc., 10 Cir., 417 F.2d 33; Banco Credito y Ahorro Ponceno v. NLRB, 1 Cir., 390 F.2d 110; Mountain States Tel. & Tel. Co. v. NLRB, supra.

The Farmington Area has remained a relatively stable administrative and geographic subdivision of the company's operations since its creation as a district on January 1, 1961. Up to the time of the proceedings before the trial examiner on November 8, 1968, the Farmington Area was affected by only one of some sixty-three organizational and geographic...