Cosmopolitan Shipping Co., Inc.

National Labor Relations Board - Board Decisions

Apr 2, 1937

2 N.L.R.B. 759 (N.L.R.B. 1937)

In the Matter of COSMOPOLITAN SHIPPING COMPANY, INC. and
NATIONAL MARINE ENGINEERS' BENEFICIAL ASSOCIATION, LOCAL
No. 33
Case No. R-117.-Decided April 2, 1937
Water Transportation Ind iistry-Employer: managing and operating com-
pany-Strike: provoked by employer's refusal to bargain with union-Employee
Status: during strike-Investigation of Representatives: controversy concern-
ing representation of employees-refusal by employer to negotiate with union;
strike-question affecting commerce : current strike of employees directly en-
gaged in interstate commerce-Unit Appropriate for Collective Bargaining:
licensed personnel ; no controversy as to-Representatives : proof of choice :
membership in union; participation in strike called by union-Certification of
Representatives : after investigation but without election.
Mr. David A. Moscovitz for the Board.
Mr. Horace M. Gray, of New York City, for the Company.
Mr. William E, Collins, District Counsel, for the United States
Maritime Commission.
Mr. William Gallagher, of New York City, for International
Union of Operating Engineers.
Mr. Herbert J. De Varco, of New York City, for United Licensed
Officers.
Mr. Edward P. Trainer, of New York City, for National Marine
Engineers' Beneficial Association.
Mr. Aaron W. Warner, of counsel to the Board.
DECISION
STATEMENT OF CASE
On October 9, 1936, ' National Marine Engineers' Beneficial Asso-
ciation, Local No. 33, hereinafter. referred to as M. E. -B. A., filed
with the Regional Director for the Second Region (New York City)
it petition alleging that a question affecting commerce had arisen
concerning the representation of the licensed • engineers employed on
the vessels operated by Cosmopolitan Shipping Company, Inc., New
York City, hereinafter referred to as the Company, and requesting
an investigation and certification of representatives pursuant to Sec-
tion 9 (c) of the National Labor Relations Act, 49 Stat. 449, here-
inafter referred to as the Act.
Subsequent to the filing of the petition, a question arose as to
whether the Company is the "employer" as defined in Section 2,
759
760 NATIONAL LABOR RELATIONS BOARD
subsection (2) of the Act, of the licensed engineers employed on the
vessels referred to in the petition, or whether the United States of
America, hereinafter referred to as the Government, which is the
owner of the vessels, is in fact the "employer" as so defined. On
December 5, 1936, the National Labor Relations Board, hereinafter
referred to as the Board, issued a notice of a hearing to be held in
Washington, D. C., on December 14, 1936, for the sole purpose of
hearing argument on this question. Copies of the notice of hearing
were duly served upon the Company, M. E. B. A., the United States
Maritime Commission, hereinafter referred to as the Maritime Com-
mission, and on the International Union of Operating Engineers,
Local No. 3, hereinafter referred to as I. U. O. E., and the United
Licensed Officers of the U. S. A., hereinafter referred to as U. L. 0.,
both of which organizations had been named in the petition as pur-
porting to represent the engineers. With the exception of M. E.
B. A., none of these parties appeared at the hearing. As a conse-
quence of the failure of the parties to appear, the question raised
was not resolved at this hearing.
On December 23, 1936, the Board duly authorized the Regional
Director for the Second Region to conduct an investigation and to
provide for an appropriate hearing. On December 30, 1936, the
Regional Director issued a notice of a hearing upon the question of
representation, as well as upon the question of whether the Company
or the Government is the employer in this case, to be held in New
York City on January 11, 1937. Copies of the notice of hearing
were duly served upon the aforementioned parties. Pursuant to the
notice, a hearing was held in New York City on January 11, 1937,
before Robert Gates, duly designated by the Board as Trial Ex-
aminer. All of the parties served with notice were represented and
participated in the hearing. Full opportunity to be heard, to ex-
amine and cross-examine witnesses and to introduce evidence bearing
on the issues was afforded all parties. The Board has reviewed the,
rulings of the Trial Examiner at the hearing and finds that no
prejudicial errors were committed.- The rulings are hereby affirmed.
Upon the evidence' adduced at the hearing and from the entire
record now before it, the Board makes the following :
FINDINGS OF FACT
I. THE COMPANY
Cosmopolitan Shipping Company, Inc., a Delaware corporation
having its principal office and place of business at 42 Broadway,
New York City, is engaged in the management and operation of
vessels for the transportation of freight and passengers for hire
DECISIONS AND ORDERS 761
between United, States Atlantic ports and French Atlantic and
French Channel ports.
The Company, which is privately owned and controlled, operates
five vessels, all of which are owned by the Government, under the
name of the American France Line. An Operating Agreement 1 be-
tween the Government and the Company designates the latter as
managing agent for and on behalf of the Government.
The Company operates as a common carrier, transporting freight
for private interests, as well as for the Government. Freight which
is carried for the Government is paid for in the same manner as other
freight. The Company is engaged in no business other than the
operations described above.
A chief and three assistant engineers are employed on each of the
five vessels.
We find that the Company is engaged in transportation and com-
merce between the States and between the United States and foreign
countries, and that the marine engineers employed on the vessels
operated by the Company are directly engaged in such transportation
and commerce.
H. THE UNION
M. E. B. A. is a national labor organization, with a membership of
approximately 7500. Of this number, approximately 1100 members
operate out of the Port of New York. The membership of the
organization is limited to licensed marine engineers.
III. THE COMPANY AS THE EMPLOYER
In determining whether M. E. B. A. may be certified as the exclusive
representative for collective bargaining, a question arises as to the
relation of the Company to the licensed engineers employed on the
vessels which it operates. The Company has contended that the
Government, and not itself, is the employer of these engineers.
Under the terms of the Operating Agreement between the Govern-
ment and the Company, the latter undertakes to man, equip, victual,
supply, and operate the vessels, the actual costs and expenses to be
paid by the Government with the exception of overhead, for which
the Company receives a fixed sum per month. In addition to over-
head expenses, the Company receives as compensation, three per cent
1 The agreement , dated October 4, 1935, was entered into between the United States of
America, represented by the Secretary of Commerce , acting by and through the United
States Shipping Board Merchant Fleet Corporation , and Cosmopolitan Shipping Company,
Inc. See Board 's Exh No. 2. The agreement , as modified in an addendum , remains in
effect until June 29, 1937. The United States Shipping Board Merchant Fleet Corpora-
tion was dissolved by act of Congress ( 49 Stat. 1246 , June 29, 1936 ), its contractual
obligations assumed by the United States, and its records , books, papers and corporate
property taken over by the newly created Maritime Commission.
762 NATIONAL LABOR RELATIONS BOARD
of all gross revenue and a sum equivalent to 25 per cent of the net
profits earned during the period of the Agreement . To insure faith-
ful performance of its obligations under the Agreement , the Company
is required to furnish a bond in the amount of $50 ,000. The Agree-
ment provides further that the licensed officers and chief steward are
to be subject to the approval of the Government , and that the Gov-
ernment shall have the right to require their removal if it shall have
reason to be dissatisfied . It is also provided that the vessels shall be
manned by crews obtained so far as possible through the Shipping
Service of the Department of Commerce.
Section 2 , subdivision ( 2) of the Act provides as follows : "The
tern `emplever ' includes any person acting in the interest of an em-
ployer, directly or indirectly , but shall not include the United States,
or any State or political subdivision thereof ..."
It appears to us that the Government , in turning over the operation
and management of its vessels to a private corporation under the
existing Agreement , has avoided , rather than assumed, the responsi-
bilities of an employer . It has established the American France
Line as a commercial venture, operating in competition with other
lines. In the conduct of the business of the line, the Company is in
full charge , receiving compensation based on the results of its own
efforts. The Company , under the nominal supervision of the Gov-
ernment, does the actual hiring of the employees and has the sole
direction of their 'activities while engaged in their duties on board
the vessels . Under these circumstances , we do not feel that the Gov-
ernment can be said to be the employer of the, engineers on its vessels.
Furthermore , we are satisfied that the exemption of the Government
from the operation of the Act was not meant to apply in the case of
a commercial venture of this nature . We find, therefore, that the
Company, in hiring the licensed engineers employed on the vessels
which it operates, is an employer under the provisions of the Act.
IV. THE QUESTION CONCERNING REPRESENTATION ,
The question concerning representation was -raised at' the hearing'
through the contention of the Company that none of the engineers'
who claim representation by M. E. B. A. in the petition are employees
of the Company any longer . However, Colonel G. Bartlett , the oper-
ating manager of the Company , testified that 17 of the 20 engineers
employed before the end of October, 1936-prior to the labor dispute
in this case-had been members of M. E. B. A., and that all of them
had gone on strike during the subsequent months of November and
December, 1936, and during the early part of January, 1937. Some
of these engineers, according to Bartlett, broke their shipping articles
on instructions from M . E. B. A. Bartlett testified that these engi-.
DECISIONS AND ORDERS 763
neers were still on strike at the time of the hearing, ,and that they
had been replaced by employees unaffiliated with M. E. B. A. It was
conceded that each of the striking engineers had a good record, and
had been employed on the vessels operated by the Company from six
to 12 or more years.
Edward P. Trainer, business manager of M. E. B. A., testified that
prior to the filing of the petition in this case he had requested officials
of the Company to deal with M. E. B. A., and had been informed
that the Shipping Board was the proper party with which to nego-
tiate regarding wages, hours, and working conditions. Trainer then
interviewed Captain Conway, a representative of the Shipping
Board. Conway declared that before negotiations could be under-
taken, it would first be necessary for Trainer to determine whether
the Company or the Shipping Board was the party with which to
deal, and suggested that Trainer file a petition with the National
Labor Relations Board in order to resolve this question. Trainer
then filed the petition.
Shortly thereafter the D1. E. B. A. engineers on the vessels oper-
ated by the Company went out on strike. Trainer testified that
about the third week in November he made a further unsuccessful
attempt to negotiate with the Company on behalf of the striking
engineers.
Under these circumstances, we must reject as unsound the con-
tention of the Company that none of its striking engineers are em-
ployees. Section 2, subdivision (3) of the Act provides that the
term "employee" shall include "any individual whose work has ceased
as a consequence of, or in connection with, any current labor dis-
pute or because of any unfair labor practice, and who has not ob-
tained any other regular and substantially equivalent employment".
In accordance with this provision, we have consistently held that an
employee who has struck as the result of an "unfair labor practice"
is still an employee. The facts in this case bring it within the terms
of the provision. The Company admittedly refused to bargain with
the representative of its employees, but has based this refusal on its
inability at the time to determine its status as employer. Assuming
-that the Company was acting in good faith in making this conten-
tion, its refusal to bargain with its employees was an unfair labor
practice within the meaning of the Act. The Act has numbered the
refusal by an employer to bargain with employees as one of the
causes of industrial strife to be eliminated through the enforcement
of its provisions. The mistaken judgment of an employer in refusing
to carry out the mandate of the Act cannot be permitted to stand in
the way of the fulfillment of its expressed purpose. The employees
who struck :because of the Company's refusal to bargain therefore
ceased work because of an unfair labor practice, and are still em-
764 NATIONAL LABOR RELATIONS BOARD
ployees within the meaning of Section 2, subdivision (3) of the Act.
Aside from the language of the Act, this conclusion is logical. As-
suming the employer's good faith, the removal of the 'imagined
obstacle in the way of its consenting to bargain must necessarily
result in its acquiescence to deal with the representative of those
employees whom it has unwittingly wronged.
But even if we did not find that the Company in this case; had en-
gaged in an unfair labor practice, the employees who struck would
still be employees within the meaning of Section 2, subdivision (3)
of the Act. The conflict between the claims of the striking engineers
and the Company unquestionably constitutes a "labor dispute" within
the meaning of Section 2, subdivision (9) of the Act. This dispute
was followed by a strike which was in progress at the time of the
hearing,'and is therefore a "current labor dispute" for the purposes
of this decision. In Matter of Columbian Enameling and Stamping
Co. and Enameling and Stamping Mill Employees Union No. 19694,
Case No. C-14, decided February 14, 1936 (I. N. R. L. B. 181), we
held that a striking employee whose work has ceased in connection
with a labor dispute remains an employee as long as the strike is
current. This principle is applicable here.
Since nothing has occurred to deprive the strikers of their status
under the Act as employees, it remains the duty of the Company
to negotiate with- them as such. The claim by the Company that
it has replaced its striking employees is of no consequence since no
act of the employer short of bargaining collectively with, these em-
ployees can relieve it of its obligation under the Act.
We find, therefore, that a question has arisen concerning the repre-
sentation of the licensed marine engineers employed on the, vessels
of the Company and that this question has led and tends' to lead'to
labor disputes burdening and obstructing commerce and the free
flow of commerce.
V. THE APPROPRIATE UNIT
No question was raised at the hearing as to,the appropriateness of
the licensed marine engineers as a unit for the purposes of collective
bargaining. In the absence of any evidence which would indicate
'hat the situation is in any wise different from that existing in other
cases where we found the licensed engineers to be an appropriate
unit,2 we find that the licensed chief and assistant engineers em,
ployed on the vessels operated by the Company constitute a unit
appropriate for the purposes of collective bargaining in respect to
2 See: In the Matter of Panama Rail Road Company and Marine Engineers Beneficial
Association, Case No R-108, decided October 21 , 1936 (supra, p 290), and cases cited
therein.
DECISIONS AND ORDERS 765
rates of pay, wages, hours of employment and other conditions of
employment.
VI. CONCLUSION
In view of the admission by the Company at the hearing that 17
of the 20 engineers employed on the vessels operated by the Com-
pany had participated in the strike as members of M. E. B. A., and
in view of the uncontradicted evidence submitted by Trainer to the
effect that these employees are still on strike and have authorized
M. E. B. A. to represent them for the purposes of collective bar-
gaining,' we find that M. E. B. A. has been designated as their repre-
sentative for the purposes of collective bargaining by a majority of
the licensed engineers employed on the vessels operated by the Com-
pany, and, pursuant to Section 9 (a) of the Act, is the exclusive
representative of all the licensed engineers so employed.
CONCLUSIONS OF LAW
Upon the basis of the above findings of fact, the Board makes
the following conclusions of law :
1. The strike of the licensed chief and assistant engineers em-
ployed on the vessels operated by the Cosmopolitan Shipping Com-
pany, Inc., is a labor dispute, within the meaning of Section 2,
subdivision (9) of the Act.
2. The licensed chief and ' assistalt engineers employed on the
vessels operated by the Cosmopolitan Shipping Company, Inc., who
are on strike are employees of the Cosmopolitan Shipping Company,
Inc., within the meaning of Section 2, subdivision (3) of the Act.
3. A question affecting commerce has arisen concerning the repre-
sentation of the licensed chief and assistant engineers employer by
Cosmopolitan Shipping Company, Inc., within the meaning of Sec-
tion 9 (c) of the National Labor Relations Act.
4. The licensed chief and assistant engineers employed by Cosmo-
politan Shipping Company, Inc., constitute a unit appropriate for
the purposes of collective bargaining, within the meaning of Sec-
tion 9 (b) of the National Labe Relations Act.
5. National Marine Engineers' Beneficial Association, Local No.
33, having been designated by a majority of the licensed chief and
assistant engineers employed by Cosmopolitan Shipping Company,
Inc:, as their representative for the purposes of collective bargaining,
is, by virtue of Section 9 (a) of the Act, the exclusive representative
'Trainer submitted in evidence 17 signed authorization cards , bearing dates which
ranged from September 30, 1936, to January 11, 1937. Board's Exhibits Nos. 3 to 7.
766 NATIONAL LABOR RELATIONS- BOARD
of all * such engineers for the purposes of collective , bargaining in
respect to rates of pay, wages , hours of employment and other con-
ditions of employment.
CERTIFICATION OF REPRESENTATIVES
By,virtue of and pursuant to the power vested in the National
Labor Relations Board by Section 9 (c) of the National Labor Rela-
tions Act, 49 Stat. 449, and pursuant to Article III, Section 8 of
National Labor Relations Board Rules and Regulations-Series 1,
as amended,
° IT IS HEREBY CERTIFIED that National Marine Engineers ' Beneficial
Association , Local No. 33 , has been designated by a majority of the
licensed chief and assistant engineers employed by Cosmopolitan
Shipping Company, Inc., New York City, as their representative for
the purposes of collective bargaining with Cosmopolitan Shipping
Company, Inc., and that, pursuant to the provisions of Section 9 (a)
of the National Labor Relations Act, National Marine Engineers'
Beneficial Association , Local No. 33, is the exclusive representative of
all such engineers for the purposes of collective bargaining in re-
spect to rates of pay, wages, hours of employment and other condi-
tions of employment.
MR. DONALD WAKEFIELD SMITH took no part in the consideration
of the above Decision and Certification of Representatives.