Encino Shirt Co.

National Labor Relations Board - Board Decisions

Jan 9, 1957

117 N.L.R.B. 48 (N.L.R.B. 1957)

48 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Jack Glaser and Milton Glaser, Individually , d/b/a Encino Shirt
Company, Petitioner and Los Angeles Joint Board, Amalga-
mated Clothing Workers of America , AFL-CIO. Case No. &1-
RM-398. January 9,1957
DECISION AND DIRECTION OF ELECTION
Upon a petition duly filed under Section 9 (c) of the National Labor
Relations Act, a hearing was held before Fred W. Davis, hearing of-
firer. The hearing officer's rulings made at the hearing are free from
prejudicial error and are hereby affirmed.
Upon the entire record in this case, the Board finds :
1. The Employer i is engaged in commerce within the meaning of
the Act.2
2. The labor organization involved claims to represent certain em-
ployees of the Employer.
3. The question of representation.
The Los Angeles Joint Board, Amalgamated Clothing Workers of
America, AFL-CIO herein called the Union, contends that an existing
associationwide collective-bargaining contract with the Amalgamated
Group of the Pacific Coast Garment Manufacturers Association, here-
in called the Association, is a bar to this proceeding. The Petitioner-
Employer contends that the contract is not a bar.
The record discloses the following : On October 1, 1953, the Pacific
Shirt Corporation, one intervenor herein, signed the Association con-
tract for 2 plants in Los Angeles and 1 plant in San Fernando, the
plant involved herein. This contract was tr --un for 3 years with the
usual 60-day automatic renewal clause.
In the spring of 1954, Pacific ceased its manufacturing operations
and became an investment company. As the result thereof, two new
corporations, Amigo Shirt and Don Juan, respectively, were formed to
take over the manufacturing operations of Pacific. The Don Juan
Corporation operated one of the Los Angeles plants, while the Amigo
operated the other Los Angeles plant and the San Fernando plant.
Pacific stock is owned in equal shares by Sam Glaser and his brother-
in-law, Barenfeld. Two-thirds of the stock of Amigo and Don Juan,
respectively, is owned by Pacific and its two stockholders, Sam Glaser
I The Amigo Shirt Corporation, herein called Amigo, and the Pacific Shirt Corporation,
herein called Pacific , were permitted to intervene
2 The Union urges that the petition be dismissed on the ground that the Petitioner's
operations do not satisfy the Boaid's jurisdictional requirements. The evidence shows
that Petitioner 's service to Amigo, which is found herein to constitute a separate entity,
amounted to over $171,000 in the past year Although Petitioner 's operations are en-
tirely within the State, it is uncontradicted that Amigo's direct outflow from the State
is over one million dollars . We therefore find that Petitioner 's operations satisfy the in-
direct outflow requirements for the assertion of jurisdiction See Jonesboro Grain ,Dry-
tng Cooperative, 110 NLRB 481.
117 NLRB No. 10.
ENCINO SHIRT COMPANY 49
and Barenfeld; the balance by others. Notwithstanding this change
in the corporate ownership of the 3 plants, management continued to
recognize and deal with the Union, under the Association contract, as
the majority representative of all 3 plants.
Amigo has continued to operate the Los Angeles plant, which was
transferred to Amigo upon its formation. However, on December
5, 1955, it leased, with an option to purchase, the equipment and all
machinery in the San Fernando plant to Sam Glaser's two nephews,
operating under the name of Encino Shirt Company, the Employer-
Petitioner herein. The lease provides that Encino is to maintain all
equipment in good condition, that Encino is to pay and be responsible
for all its own expenses of operation including maintenance costs,
workmen's compensation insurance, labor costs, payroll taxes, and any
and all other costs of doing business as a partnership, corporation, or
otherwise. There is also a provision that should Encino act as a sub-
contractor for Amigo at Encino's plant, the contract prices for such
work shall, by mutual understanding, be determined by the parties
from time to time and prior to the manufacturing. Finally, the lease
recites that it shall not be deemed an agreement of joint venture,
copartnership, or association between the parties, each of whom is to
be deemed and treated as an independent operator. There is nothing
in the lease reserving to Amigo the right to control the hiring, firing, or
supervision of Encino's employees.
Following the lease agreement, Encino became one of several subcon-
tractors for Amigo. The procedure was for Amigo to deliver to
Encino materials which Encino manufactured into shirts of specific
design at an agreed price and returned to Amigo. Although the
evidence shows that the same procedure is followed by Amigo's other
subcontractors, the latter have,no lease agreements with Amigo.3
In January 1956, when the Union contacted Encino for the purpose
of having it execute a contract as a member of the Association, the
Union was referred to Sam Glaser, one of the main stockholders of
Amigo. Sam Glaser requested the Union, and the Union apparently
agreed, to give Encino a chance to get established in its operation before
requiring it to sign a contract. Encino apparently sought to comply
with the Association contract, by transmitting payments for union dues
collected from union members to the Union and making employer
contributions, as required by the contract. The Union, however, re-
turned to Encino the checks covering these payments, upon the ground
that, as Encino was not a signatory to the contract, the Union could
not accept the payments from Encino. Thereafter, Encino made these
payments to Amigo, which in turn transmitted them to the Union.
3 Amigo does, however, lend to several of its subcontractors certain pieces of equip-
ment and machinery to assist them in carrying out the contract.
423784-57-vol. 117-5
50 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
This arrangement was continued until July 1956, when the instant
petition was filed.
Although Amigo advanced funds to Encino to meet the first and
second payroll requirements and Amigo still has title to Encino's
assets which Amigo carries on its own books and for which it takes
current depreciation, there is no evidence that Amigo exercises any
control over the actual operation of Encino's plant. Encino apparently
hires its own labor force and supervisors, makes its own payroll de-
ductions, keeps its own books, and pays all Federal and State taxes.
Apart from the fact that Encino operates the equipment under a lease
agreement with an option to buy and the further fact that Amigo sup-
plies practically all of Encino's additional equipment, there appears
to be no major difference between the operation of Encino's plant and
those of the other subcontractors which have contracts with Amigo.
The Union urges that Pacific and Amigo together with Encino
constitute a single employer still subject to the Association contract of
October 1, 1953, which was automatically renewed on August 1, 1956,
and that therefore the present proceeding is barred. Encino, on the
other hand, urges that it is an independent entity, having only a busi-
ness relationship with Amigo.
While it is true that there is a common ownership of the stock of
Amigo and Pacific and that the former owns the physical assets used
by Encino, we view the relationship of Amigo to Encino as being es-
sentially that of lessor to lessee and contractor to subcontractor. Thus,
the record clearly establishes that under the lease and subcontract ar-
rangement, Encino functions as a separate entity with Amigo having
no right to control Encino's labor relations or the wages or working
conditions of the latter's employees. The fact that the Union's refusal
to accept Encino's checks for the transmission of employees dues re-
quired Encino, as a matter of temporary expediency, to enlist the co-
operation of Amigo for that purpose, does not destroy the otherwise
independent status of Encino, as indicated by the control which it
exercises over its own employees. Nor is such status affected by the
almost complete economic dependence of Encino upon Amigo for the
continuance of its operations. Under all the circumstances, we find
Encino to be a separate and independent employer of its employees.4
Although it may be contended that Encino had adopted and become
bound by the Association contract, the filing of the present employer-
petition by Encino near the termination date of the contract and
prior to the automatic renewal date thereof, is a sufficient indication
that Encino no longer desires to bargain on a multiple-employer
* See Swanson Brothers Logging Company , 71 NLRB 614, 615, 616; Consolidated Gas
Company of Savannah , 107 NLRB 148; Chemical Tank Lanes , Inc, 115 NLRB 221, 225;
Electronics Circuits, Inc., 115 NLRB 940; Central Dairy Products Co., 114 NLRB 1189.
WALTON-YOUNG CORP. 51
basis .5 Accordingly, we find that the Association contact is no bar
to this proceeding.'
We find that a question affecting commerce exists concerning the
representation of certain employees of the Employer within the mean-
ing of Section 9 (c) (1) and Section 2 (6) and (7) of the Act.
4. The appropriate unit :
The parties agreed as to the composition of the unit except that
the Petitioner would include the shipping and receiving employees,
while the Union would exclude them on the ground that the area prac-
tice in the industry is to exclude these clerks at the specific request
of the employers. The evidence shows there are two shipping and
receiving clerks whose duties are to check in bundles of piece goods
and check out all finished products. They are supervised by the part-
ners of the Petitioner in contrast to the production employees who
are under separate immediate supervision. These clerks are paid on a
straight hourly basis. On the basis of the above, we find that these
shipping and receiving clerks are plant clericals such as those we
customarily include in the unit, unless the parties agree to their
exclusion . Accordingly, we shall include them in the unit.
We find that the following employees at the Employer-Petitioner's
San Fernando, California, plant,' constitute a unit appropriate for
the purposes of collective bargaining within the meaning of Section
9 (b) of the Act :
All production and maintenance employees including the receiving
and shipping employees, but excluding executives , office clerical em-
ployees , administrative employees, salesmen , designers , watchmen,
guards, and all supervisors as defined in the Act.
[Text of Direction of Election omitted from publication.]
6 Vaughn & Taylor Construction Co., Inc., 115 NLRB 1404, 1405, footnote 4.
6 Everett Auto Company, 107 NLRB 1449.
7In view of the withdrawal of the Employer-Petitioner from the Association bargaining
as indicated by the filing of the present petition, we find a single-employer unit appropri-
ate. Economy Shade Company, 91 NLRB 1552, 1553; Owens-Illinois Glass Company, 112
NLRB 172, 177.
Walton-Young Corp. and International Association of Machin-
ists, AFL-CIO , Petitioner. Case No. 3-RC-1771. January 9,
1957
DECISION AND DIRECTION OF ELECTION
Upon a petition duly filed under Section 9 (c) of the National
Labor Relations Act, a hearing was held before John M. Shea, Jr.,
117 NLRB No. 13.