Sakrete of Northern California, Inc. v. NLRB

• Decision Date: 09 July 1964
• Docket Number: No. 18745.,18745.
• Citation: 332 F.2d 902
• Parties: SAKRETE OF NORTHERN CALIFORNIA, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Ninth Circuit

332 F.2d 902 (1964)

SAKRETE OF NORTHERN CALIFORNIA, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 18745.

United States Court of Appeals Ninth Circuit.

May 21, 1964.

Rehearing Denied July 9, 1964.

Graydon, Head & Ritchey, William A. McKenzie, Leslie A. Meek, Cincinnati, Ohio, for petitioner.

Arnold Orman, Gen. Counsel, Dominick L. Manoli, Assoc. Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Warren M. Davison and Peter M. Giesey, Attys., N. L. R. B., Washington, D. C., for respondent.

Leon Ardzrooni, Neyhart & Grodin, San Francisco, Cal., on behalf of amicus curiae-Freight, Construction, General Drivers & Helpers, Local 287.

Before MADDEN, Judge of the Court of Claims, and HAMLEY and JERTBERG, Circuit Judges.

HAMLEY, Circuit Judge.

Sakrete of Northern California, Inc., brought this proceeding to review certain parts of a supplemental decision and order of the National Labor Relations Board reported at 140 N.L.R.B. 765.¹ The Board decision and order adopted, with certain modifications and additions, a supplemental intermediate report of the Board's trial examiner reported at 140 N.L.R.B. 767.

In his conclusions of law, thus adopted by the Board, the trial examiner held that in five different respects petitioner had engaged in unfair labor practices. Most of these practices were deemed to be detrimental to Freight, Construction, General Drivers and Helpers, Local 287, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America ("union"). The examiner's recommended order provided that petitioner shall cease and desist from each of these practices and these recommendations were accepted by the Board. The examiner's recommended order also provided that petitioner shall take certain remedial action, and these recommendations were accepted by the Board except that provisions concerning back pay and reinstatement were modified.

In the petition for review, it is alleged that the Board erred in asserting jurisdiction over petitioner, erred in ordering petitioner to cease and desist from the five practices specified in the order, and erred with respect to two of the six kinds of remedial action ordered.

Pursuant to stipulation thereafter entered into, however, petitioner now questions only: (1) the Board's jurisdiction over petitioner under the National Labor Relations Act, as amended, 61 Stat. 136 et seq. (1947), 29 U.S.C. § 151 et seq. (1958), "Act"; (2) one of the trial examiner's findings of fact, namely the finding that petitioner had refused to bargain collectively with the union, in violation of section 8(a) (5) of the Act, 29 U.S.C. § 158(a) (5);² and (3) one of the remedial actions ordered, namely that petitioner, on request, bargain collectively with the union as the exclusive representative of all production and maintenance employees employed at petitioner's Milpitas, California plant, with exclusions not here material.

Jurisdiction. Petitioner is a California corporation engaged in the production and sale, at Milpitas, California, of concrete, mortar and plaster mixes, and the sale of an asphalt product. Employed at this plant are Philip V. Schneider, who, under the job title of executive secretary, has overall charge of the plant; Ray Freeman, whose job title is production superintendent; and a secretary, a truck driver, and two production and maintenance employees. The mixes are sacked and sold, under the trade name "Sakrete," to dealers in Northern California. Petitioner makes practically no out-of-state sales and it is conceded that its operations do not by themselves meet the Board's gross interstate inflow-outflow requirements for assertion of jurisdiction.

The "Sakrete" trademark is owned by Sakrete, Inc. (Sakrete), an Ohio corporation which, in addition to producing "Sakrete" products in the Cincinnati, Ohio area, licenses twenty-six other firms, including petitioner, to use the "Sakrete" trademark.³ Sakrete owns no interest in any of the firms which it licenses. It is itself concededly subject to Board jurisdiction by reason of the nature and amount of its interstate operations.

The Board found and determined that petitioner's operations should be considered together with Sakrete's operations as a "single employer" for jurisdictional purposes and since Sakrete was subject to Board jurisdiction, so was petitioner.

The Board often treats separate corporations as one employer for jurisdictional purposes where it is found that the firms, despite their nominal separation, are highly integrated with respect to ownership and operation.⁴ Petitioner apparently does not challenge the validity of the Board's "single-employer" concept and, in any event, that concept has been given effect by the courts. See A. M. Andrews Co. of Oregon v. N. L. R. B., 9 Cir., 236 F.2d 44.⁵ Petitioner contends, however, that the facts of this case do not warrant the conclusion that petitioner and Sakrete are a single employer for jurisdictional purposes.

In the stipulation referred to earlier in this opinion, the parties agreed that the statement of fact set forth in the Board's original decision and order reported at 137 N.L.R.B. 1220, and in its supplemental decision and order reported at 140 N.L.R.B. 765, "* * * are assumed to be true, correct and supported by substantial evidence on the record as a whole." In its opening brief thereafter filed in this court, petitioner nevertheless attacks seven specific findings of fact pertinent to the jurisdictional question, made by the Board in its original report.⁶ In view of the stipulation we will accept, as true and correct, the Board's findings of fact bearing upon the question of jurisdiction, as paraphrased below.

Throughout the period with which this case is concerned, Mr. and Mrs. Arthur C. Avril have owned the entire capital stock of Sakrete. Mr. Avril has functioned as the firm's president, Mrs. Avril as its vice president and treasurer, and George Riehl as its secretary. These officers also constitute the corporate board of directors. Mr. and Mrs. Avril likewise own all the capital stock of petitioner. Mr. Avril functions as its president, Mrs. Avril as its secretary-treasurer, and Joseph Orbangh as its vice president. These officers also constitute petitioner's corporate board of directors. Sakrete's officers and directors function in the same capacity for A. & T. Development Corporation, an Ohio corporation located in Cincinnati, which manufactures and sells the patented machinery used by "Sakrete" licensees.

Petitioner's and Sakrete's conduct of business operations are substantially parallel. Both sell the same products and use special patented equipment supplied by A. & T. Development Corporation. Petitioner, as licensee, must conform to quality standards set by Sakrete and may not sell any products not approved by that company. There is no regular interchange of employees between the two. Sakrete, however, possesses the right to dispatch a staff member or some qualified specialist employed by any licensee's firm, to petitioner's plant in order to check its operations, and in order to train or advise petitioner's personnel.

No central accounting system is employed, and no formal report is made by petitioner to Sakrete, respecting its expenditures and profits. But Avril admitted that, as president of petitioner, he presides at all of petitioner's business meetings, makes all major economic decisions, and keeps close watch over petitioner's overall operations. He is the ultimate authority for both companies, whose operating policies and procedures are thus almost identical.

Avril, as president of Sakrete, establishes all of that company's policies with regard to wage scales, hours and conditions of employment. He is also responsible for its sales, purchases of supplies, and its hire and discharge of employees. Avril establishes all the general rules with respect to wages, hours and conditions of work at petitioner's plant, and makes all major decisions with regard to contracts of purchase and sale.

While executive secretary Schneider has overall charge of petitioner's Milpitas plant and apparent authority to make local decisions, in practice the scope of his decisions has been very narrow. Avril admitted that, as president of respondent, the right of ultimate authority in all matters resides in him. In the exercise of this authority he has made decisions which were local in nature, such as hiring employees.

It was Avril who negotiated by telephone with his struck employees at Milpitas when the labor dispute developed which gave rise to this proceeding. On that occasion Avril stated that Schneider had acted outside his authority when he had "laid off" the employees who went out on strike. It therefore cannot be said that Avril does nothing more than set general policy for the Milpitas plant, or that Schneider exercises authority in regard to all local matters.

In summary, the facts show that the operations of petitioner and Sakrete are closely integrated, that their labor relations policies are almost identical and are centrally controlled, that the management of both resides virtually in one man, and that both are commonly owned and financially controlled.

Based upon these findings of fact the Board concluded that the two companies constitute a "single employer" for jurisdictional purposes.

In challenging this conclusion petitioner first argues that there is no substantial evidence in the record which supports a finding of interrelationship of operations, centralized control of labor relations, or common management except at the executive or top level. Petitioner contends that there must be interrelationship, centralized control and common management at the local level in order to apply the "single employer" concept.

It is doubtful whether petitioner is in a position to argue that there was no interrelationship, centralized control and common management on the local level, for this...