F.H.E. Services, Inc.

National Labor Relations Board - Board Decisions

Apr 30, 2003

338 N.L.R.B. 1095 (N.L.R.B. 2003)

F.H.E. SERVICES 1095
F.H.E. Services, Inc., a wholly owned subsidiary of
KONE, Inc. and Local Union No. 3, Interna-
tional Brotherhood of Electrical Workers, AFL–
CIO and Local Union No. 1, International Union
of Elevator Constructors, AFL–CIO, Party to
the Contract. Case 29–CA–23753
April 30, 2003
DECISION AND ORDER
BY CHAIRMAN BATTISTA AND MEMBERS LIEBMAN
AND ACOSTA
On July 20, 2001, Administrative Law Judge Howard
Edelman issued the attached decision recommending
dismissal of the complaint. The Charging Party, Local
Union No. 3, International Brotherhood of Electrical
Workers, AFL–CIO (Local 3), filed exceptions and a
supporting brief, and Local Union No. 1, International
Union of Elevator Constructors, AFL–CIO (Local 1),
filed a brief as an Intervenor.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the exceptions and briefs and has decided to
affirm the judge’s rulings, findings, and conclusions and
to adopt the recommended Order.
Respondent KONE, Inc., is a consolidated nationwide
elevator business engaged in the construction, moderni-
zation, service, and repair of elevators in commercial and
industrial buildings. In New York City, Respondent
KONE maintained three separate and distinct operations.
These operations used separate established trade names:
Armor New York, Curtis Elevator Construction, Inc.,
and Respondent F.H.E. Services, Inc. Armor New York
and Curtis performed new construction, modernization,
and repair work, and F.H.E. performed modernization,
service, and repair work. In August 2000, Local 1 was
the bargaining representative of the employees of Armor
New York and Curtis, and Local 3 was the bargaining
representative of the employees of F.H.E. Curtis and
F.H.E. shared a physical plant on Long Island.
In early August 2000, Respondent KONE decided that,
effective September 1, 2000, it would merge the produc-
tion units of F.H.E. and Curtis and relocate Armor New
York to the Long Island facility, creating a single KONE
enterprise in New York. As a result of the consolidation,
the formerly separate routing and assignment structures
and systems applicable to Armor New York, F.H.E., and
Curtis came under the control of a unified management
structure. Following consolidation, the formerly separate
units performed new construction, modernization, repair,
and service work.
In mid-August, Respondent KONE sent letters to both
Local 1 and Local 3 advising them of its intention to
consolidate. The letters also informed the Unions that
Local 1 would represent the newly consolidated unit.
Local 3 responded to this letter by requesting a meeting
with KONE, but never requested recognition as the col-
lective-bargaining representative for the consolidated
unit, never requested bargaining over the effects of the
consolidation, and made no proposals at any time to
KONE. Local 3 never filed an unfair labor practice
charge alleging that the Respondent’s withdrawal of rec-
ognition from Local 3 as the bargaining representative
for the former employees of F.H.E. was unlawful.
On August 31, 2000, Local 3 filed unfair labor practice
charges alleging that the Respondent’s recognition of
Local 1 as the exclusive bargaining representative vio-
lated Section 8(a)(2) and (3) of the Act. A complaint
issued on January 26, 2001, and a hearing was held on
April 24 and 25, 2001. At the start of the hearing, the
Respondent contended, for the first time, that it was en-
gaged in the construction industry within the meaning of
Section 8(f) of the Act. After the hearing, the General
Counsel moved to withdraw the complaint on the basis
that the Respondent was primarily engaged in the con-
struction industry. The judge denied the motion.
Judge’s Decision
Relying on Carpenters (Rowley-Schlimgen), 318
NLRB 714, 715–716 (1995), and C.I.M. Mechanical Co.,
275 NLRB 685, 691 (1985), and the definitions of con-
struction contained therein, the judge determined that the
Respondent was primarily engaged in the construction
industry within the meaning of Section 8(f). In support
of his decision, the judge noted that the work performed
by the newly formed unit covered new construction,
modernization, repair, and service. The judge specifi-
cally noted that the Respondent projected that new con-
struction work for the year 2001 would gross $14 mil-
lion, modernization work would gross $7 million, and
repair work would gross $7 million. Given the projec-
tion of new construction and modernization work, the
judge determined that the Respondent was engaged in the
building and construction industry within the meaning of
Section 8(f) and that the Respondent’s recognition of
Local 1 was lawful. On that basis, the judge dismissed
the complaint.
Analysis
We agree with the judge’s recommendation of dis-
missal of the complaint. Thus, we adopt the judge’s
finding—for the reasons stated by him—that the Re-
spondent is primarily engaged in the building and con-
struction work within the meaning of Section 8(f).
338 NLRB No. 168
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1096
We also find that, when Respondent KONE merged the
previously separate bargaining units, the result was the
formation of a new operation and the creation of a new
bargaining unit. The old bargaining units no longer sur-
vived, nor did Local 3’s role as bargaining representative
of one of those units. Thus, notwithstanding that Local 3
was at one time the 9(a) representative of certain em-
ployees of F.H.E., because the September 1, 2000 merger
created a new entity primarily engaged in the building
and construction industry, the Respondent was entitled,
pursuant to Section 8(f), to recognize any labor organiza-
tion, even absent a showing of majority status. Central
Illinois Construction, 335 NLRB 717 (2001) (Sec. 8(f)
permits unions and employers in the construction indus-
try to enter into collective-bargaining agreements without
the union’s having established that it has the support of a
majority of the employees in a covered unit.).
The merger and creation of a new operation and new
bargaining unit make this case like National Carloading
Corp., 167 NLRB 801 (1967). There, the employer de-
cided to consolidate its Chicago area freight handling
activities. Prior to consolidation, the Brotherhood of
Railway and Steamship Clerks [Freight Handlers, Ex-
press and Station Employees, AFL–CIO] (Railway
Clerks), was the exclusive bargaining representative of
the clerical employees in the employer’s 47th Street fa-
cility. Teamsters Local 710 was the exclusive bargaining
representative for the clerical workers at the Halsted
Street terminal. Upon consolidation, the Halsted Street
employees were transferred to the 47th Street facility.
Local 710 filed a petition seeking an election to deter-
mine the exclusive bargaining representative of the cleri-
cal employees. Railway Clerks opposed the petition,
arguing, inter alia, that the Halsted Street employees
were an accretion to the existing unit at the 47th Street
facility. Railway Clerks also argued that its current con-
tract with the employer barred any election petition.
The Board rejected those arguments and directed an
election. In doing so, the Board held that moving the
Halsted Street employees to the 47th Street facility was
more than a relocation. Id. at 802. Rather, noting that
the employees worked side by side, had similar job clas-
sifications, used the same equipment, and performed
similar functions, the Board determined that the consoli-
dation resulted in a totally new operation at the 47th
Street terminal. Id. The Board further noted that neither
group of affected employees was sufficiently predomi-
nant to remove any real question as to the overall choice
of representative. Id. Thus, an election was necessary to
resolve the conflicting representational claims.
Likewise, in the case at hand, the evidence shows the
creation of a new operation consolidating previously
separate units. The employees, formerly of separate bar-
gaining units and performing different tasks, now work
at the same facility, share equipment, engage in the iden-
tical tasks of elevator construction, modernization, ser-
vice, and repair, and operate under the control of a uni-
fied management structure. Thus, the consolidation, like
that in National Carloading, supra, created a new opera-
tion and a new unit.
As National Carloading illustrates, the creation of a
new operation and a new unit typically raises a question
concerning representation between the unions represent-
ing the formerly separate bargaining units, especially
when neither group of affected employees is sufficiently
predominate to determine the exclusive bargaining repre-
sentative. However, in this case, no such question exists
because, as the judge properly found, the Respondent is
engaged primarily in the building and construction indus-
try within the meaning of Section 8(f) of the Act. There-
fore, the Respondent is entitled, pursuant to Section 8(f),
to recognize any labor organization, even absent a show-
ing of majority status.1
ORDER
The recommended Order of the administrative law
judge is adopted and the complaint is dismissed.

Sharon Chau, Esq., for the General Counsel.
Ronald Castle, Esq. (Arent, Fox, Kitner, Plotin, and Kahn,
LLC), for the Respondent.
Norman Rothfeld, Esq., for the Charging Party.
Richard Markowitz, Esq. (Markowitz & Richman), for Party
to the Contract.
DECISION
STATEMENT OF THE CASE
HOWARD EDELMAN, Administrative Law Judge. This case
was tried before me on April 24 and 25, 2001, in Brooklyn,
New York.
On January 26, 2001, the complaint in this case issued based
upon an unfair labor practice charge filed by Local Union No.
3, International Brotherhood of Electrical Workers AFL–CIO
(Local 3), against KONE, Inc. (KONE), and F.H.E. Services,
Inc., a wholly owned subsidiary of KONE, Inc. (F.H.E.).
The two Respondents (collectively referred to as the Re-
spondent). The complaint charged Respondent with rendering
unlawful assistance and support to Local Union No. 1, Interna-
tional Union of Elevator Constructors, AFL–CIO (Local 1), in
violation of Section 8(a)(1) and (2) of the Act and of encourag-
ing membership in Local 1, in violation of Section 8(a)(1) and
(3) of the Act.

1 Inasmuch as the Respondent is primarily engaged in the construc-
tion industry, there is a presumption that its recognition of Local 1 was
pursuant to Sec. 8(f), rather than Sec. 9(a). See John Deklewa & Sons,
282 NLRB 1375, 1385 fn. 1 (1987).
F.H.E. SERVICES 1097
A trial was held on April 24–25, 2001. On April 25, the trial
was recessed sine die, so that the General Counsel could con-
sider counsel for Respondent’s contention made the morning of
the first day of the trial, that Respondent was engaged in the
construction industry within the meaning of Section 8(f) of the
Act.
On May 8, 2001, counsel for the General Counsel wrote to
counsel for the Charging Party asking for his position should
the General Counsel request withdrawal of the complaint based
upon its conclusion that Respondent was engaged in the con-
struction industry within the meaning of Section 8(f) of the Act.
In reply, counsel for the Charging Party took the position that
Respondent was not engaged in the construction industry and
that the case should be decided on the merits.
On May 21, 2001, counsel for the General Counsel filed a
motion to withdraw the complaint “based on a reading of the
relevant cases and statutes, it appears that Respondent is pri-
marily engaged in construction” within the meaning of Section
8(f). (Emphasis added.)
On May 30, I denied the General Counsel’s motion in view
of the Charging Party’s objection, and the complex legal issue
presented.
Based upon the entire record in this case and the brief in
support of the General Counsel’s motion, and briefs submitted
by Respondent, the Charging Party, and Party to the Contract, I
make the following
FINDINGS OF FACT
At all material times, Respondent KONE, a domestic corpo-
ration, with its principal office and place of business located at
1 Kone Court, Moline, Illinois, and at various locations
throughout the United States, including, inter alia, until on or
about September 1, 2000, a branch facility in New York, New
York, has been engaged in the construction, modernization,
service, and repair of elevators for commercial and industrial
buildings. During the past 12-month period, which is represen-
tative of its annual operations generally, Respondent KONE, in
conducting its business operations, purchased and received at
its facilities in various States, supplies and materials valued in
excess of $50,000, which were shipped directly across State
lines.
At all material times, Respondent F.H.E., a domestic corpo-
ration, with its principal office and place of business located at
47-36 36th Street, Long Island City, New York (called the LIC
location), has been engaged in the modernization, service, and
repair of elevators and escalators for commercial and industrial
buildings. During the past 12-month period, which period is
representative of its annual operations generally, Respondent
F.H.E., in conducting its business operations, purchased and
received at its LIC location, supplies and materials valued in
excess of $50,000, which were shipped directly from firms
located outside the State of New York.
It is admitted that Respondents KONE and F.H.E. are em-
ployers engaged in commerce within the meaning of Section
2(2), (6), and (7) of the Act.
It is also admitted that Local 1 and Local 3 are labor organi-
zations within the meaning of Section 2(5) of the Act.
The undisputed facts in this case are based upon a stipulation
of facts, and the credible and uncontradicted testimony of Re-
spondents and Local 1’s witnesses.
In August 2000, Respondent KONE decided that, effective
September 1, 2000, it would consolidate the operations of two
of its subsidiary corporations—Respondent F.H.E. and Curtis
Elevator into the operations of KONE’s New York branch. In
August 2000, Local 1 was the bargaining representative of the
employees of KONE and of the employees of Curtis. Local 3
was the bargaining representative of the employees Respondent
F.H.E. Respondent KONE then sent letters in mid-August to
both Local Unions and the affected employees advising them of
its intention to consolidate and that the newly consolidated unit
would be represented by Local 1.
In response to the communications it received in mid-
August, Local 3 requested a meeting with Respondent KONE,
which was held on August 27. During the meeting Local 3
asked certain questions about the consolidation. Local 3 did
not at any time request bargaining over the effects of the con-
solidation and made no proposals at any time to KONE about
such effects. Local 3 never requested recognition as the collec-
tive-bargaining representative for the consolidated unit. Local
3 never undertook picketing for recognition in connection with
the consolidated unit. Local 3 never filed a grievance under its
collective-bargaining agreement relating to the consolidated
unit. Local 3 never filed an unfair labor practice alleging that
KONE’s withdrawal of recognition from Local 3 as the bar-
gaining representative for the former employees of F.H.E. was
unlawful. On August 31, 2000, Local 3 filed the unfair labor
practice underlying this proceeding, alleging that KONE’s ex-
tension of the Local 1 collective-bargaining agreement to the
consolidated unit violated Section 8(a)(1), (2), and (3) of the
Act.1
Under the Local 1 collective-bargaining agreement, KONE
is not required to, and does not in fact, deduct union dues or
union fees from employees’ paychecks. KONE has collected
no union dues or fees from any member of the consolidated
unit. No employee has objected to KONE about his or her
payment of dues to Local 1.
With respect to the issue of whether Respondent is primarily
engaged in the construction industry, Section 8(f) of the Act
provides that “[i]t shall not be an unfair labor practice under
subsections (a) and (b) of this section for an employer engaged
primarily in the building and construction industry to make an
agreement covering employees engaged . . . in the building and
construction industry with a labor organization of which build-
ing and construction employees are members . . . because (1)
the majority status of such labor organization has not been es-

1 The facts set forth in the above paragraph are relevant to Local 1’s
contention that, Local 1 did represent a clear majority of the employees
in the consolidated unit. Moreover, there were no conflicting claims
for recognition in this case. Local 3 never claimed recognition of any
or all of the consolidated unit, and thus, there can be no finding of a
violation in this case without the existence of competing claims for
recognition. Hudson Berlind Corp., 203 NLRB 421 (1973), enfd. F.2d
1200 (2d Cir. 1974), and its progeny; McKesson Drug Co., 257 NLRB
468 (1981).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1098
tablished under the provisions of section 9 of this Act . . . prior
to the making of such agreement . . . .”
Further, Section 8(e) provides that this section is not appli-
cable to “an employer in the construction industry relating to
the contracting or subcontracting of work to be done at the site
of the construction, alteration, painting, or repair of a building,
structure, or other work . . . .”
It is insignificant that “alteration, painting, or repair” appear
in Section 8(e) of the Act, but not in 8(f). See South Alabama
Plumbing, 333 NLRB 242 (2001), citing Carpenters (Rowley-
Schlimgen), 318 NLRB 714, 715–716 (1995) [8(e) case]; U.S.
Abatement, Inc., 303 NLRB 451, 451 fn. 1, 455–456 (1991)
[8(f) case]; C.I.M. Mechanical Co., 275 NLRB 685, 691 (1985)
[8(f) case]; and Painters Local 1247 (Indo Paint), 156 NLRB
951, 957–961 (1966) [8(f) case].
Counsel for Local 1 contends that with respect to the General
Counsel’s motion to withdraw the complaint, I must either
withdraw the complaint or dismiss the complaint, but that I
cannot sustain the complaint. Counsel for Local 1 cites the
Boards’ field manual with respect to formal proceedings which
states:

10275.3 Withdrawal After Opening of Hearing But Prior to
Transfer of Case to the Board: Withdrawal of the complaint
is conditioned on the granting of leave by the administrative
law judge during this stage.
a. On in-hearing discovery of lack of merit, the trial at-
torney (after clearance by the regional attorney) should
make a motion to the administrative law judge to withdraw
the complaint (sec. 10388). As there pointed out, however,
the administrative law judge may dismiss instead of per-
mitting withdrawal . . . .

10388.4 Failure of Proof: Where, at the end of the General
Counsel’s case, there has been an unquestionable failure of
proof as to an allegation of the complaint, the trial attorney
should move to strike the allegation or to amend the com-
plaint to drop the allegation. (Where some doubt exists, as to
whether the allegation has been proved, the regional attorney
should be consulted; if after this consultation doubt still exists,
the motion should not be made). With respect to a complete
failure of proof of the allegations of the complaint, a motion
to withdraw complaint would be in order. If, however, the
administrative law judge treats the motion as one to dismiss,
and does dismiss it, no appeal should be taken. [Emphasis
added.]

In this case the trial was fully completed and evidence was
taken as to all the allegations of the complaint. The General
Counsel’s motion was made, based upon a complex issue of
law, and the conclusion of the General Counsel and the Re-
gional Director upon a review of cases submitted to him by
Local 1 that “it appears that Respondent is primarily engaged
in construction” within the meaning of Section 8(f) of the Act.
(Emphasis added.)
In view of the trial being complete, the Charging Party, Lo-
cal 3’s objection to the General Counsel’s motion, and of the
complex legal issues raised, I conclude the above-cited provi-
sions set forth in the Board’s field manual, are not applicable in
this case.
The Board in Carpenters (Rowley-Schlimgen), 318 NLRB at
715–716, cited the Standard Industrial Classification (SIC)
Manual for 1957 and 1987 to define “construction” to include
“new work, additions, alterations, reconstruction, installations,
and repairs.” Id. at 715. The Construction Review, volume 3,
was similarly referred to in C.I.M. Mechanical Co., 275 NLRB
at 691, and construction was defined as follows:

Construction covers the erection, maintenance and repair (in-
cluding replacement of integral parts), of immobile structures
and utilities, together with service facilities which become in-
tegral parts of structures and are essential to their use for any
general purpose. It includes structural additions and altera-
tions, Structures include buildings . . . and all similar work
which are built into or affixed to the land . . . . Construction
covers those types of immobile equipment which, when in-
stalled, become an integral part of the structure and are neces-
sary to any general use of structure. This includes such ser-
vice facilities as plumbing, heating, air-conditioning and light-
ing equipment . . . . In general construction does not include
the procurement of special purpose equipment designed to
prepare the structure for a specific use.

C.I.M. Mechanical Co., 275 NLRB at 691. The Board in
that case affirmed the administrative law judge’s finding that
the employer was in the building and construction industry,
although some of its business was in service and repair at exist-
ing sites. Id. at 691. See also Painters Local 1247 (Indio Paint
& Rug Center), 156 NLRB 951 (1966); U.S. Abatement, Inc.,
303 NLRB 451, 455–456 (1991).
The credible and uncontradicted testimony of witnesses, Neil
Mullane, Respondent’s branch manager of its New York opera-
tions and Anthony Orrigo, secretary treasurer of Local 1 estab-
lish as follows:
Prior to September 1, 2000, Respondent KONE employees
and the Curtis employees were represented by Local 1, and
covered by a collective-bargaining agreement between Local 1
and the Elevator Manufacturers’ Association of New York, Inc.
of which, KONE was member. Those employees performed
new construction, modernization and repair work.
After September 1, KONE consolidated its operations, and
the operations of Curtis and F.H.E. into a single bargaining unit
of employees.
The work performed by this single bargaining unit covers
new construction, modernization, repair, and service.
The credible testimony and the Association collective-
bargaining agreement establish that a new construction is an
elevator and other related lifts that are installed in the erection
of new buildings. This involves all the components which
make the elevator or other lifting devises run. Such installation
takes place while other building trades are working an other
aspects of the new construction.
The term “construction” is defined in the above-described
Association collective-bargaining agreement, section IV(A) as
follows:

F.H.E. SERVICES 1099
(A) Definition of “Construction Work”

It is agreed by the parties to this Agreement that all
work specified in this Paragraph shall be performed
exclusively by Elevator Constructor Mechanics and
Elevator Constructor Apprentices in the employ of the
Employer. This section shall also include Paragraph 2
(except for 2 (a), Paragraph 3, and Paragraph 9 of Arti-
cle IV of the Standard Agreement and Joint Industry
Committee decisions.
Construction work is defined as follows:
1. The erection of complete new or used elevators, es-
calators, dumbwaiters, elevettes, parking garage ele-
vators, stage lifts, curtain lifts, console lifts, moving
sidewalks, Trav-O-Lators, speed ramps or the like.
2. The removal or dismantling of old elevators, escala-
tors, dumbwaiters, elevettes, parking garage eleva-
tors, stage lifts, curtain lifts, console lifts, moving
sidewalks, Trav-O-Lators, speed ramps or the like
except as noted under the definition of service work,
Section VI of this Agreement.

Modernization is the refurbishing, adding onto, working an
elevator or other vertical lift, equipment installed in an existing
building for the purpose of making it last longer or perform
better. It could and often does involve the installation of new
machinery, cables, elevator cables, etc.
Sometimes other building trades are working on the building
with Respondent, sometimes not.
The definition of “modernization” is defined in the Associa-
tion collective-bargaining agreement, section IV(A) as follows:
New Construction and Modernization Work
in Existing Buildings
(A) Definition

1. The addition, replacement, refurbishing or reloca-
tion of control, drive, generating equipment, hoist-
way or pit equipment, including work involving a
structural rise in the elevator shafts in an existing
building and other elevator work in the machine
room, hoistway or pit.
2. Changes in design and appearance of basic escala-
tor equipment.

Repair work is that service work which is a result of normal
wear and tear outside of the normal service scope, outside of
oiling and greasing, or something which maintains the need to
be repaired because the equipment is no longer working prop-
erly. It often involves the replacement of parts.
Generally, other building trades are not present during such
repair work.
Respondent projects new construction work for the consoli-
dated unit for the year 2001 to gross $14 million, modernization
work to gross $7 million, and repair work to gross $7 million.
Given the projection of new construction and modernization
work, I conclude Respondent is engaged in the building and
construction industry within the meaning of Section 8(f) of the
Act. If, hypothetically the repair work represented 90 percent
of the total gross revenue, my conclusion might be different.
In view of my conclusion, I recommend dismissal of the
complaint.
In view of this conclusion, I need not consider Local 1’s con-
tentions concerning conflicting claims for recognition.
CONCLUSIONS OF LAW
1. Respondent KONE and F.H.E. are employers engaged in
commerce within the meaning of Section 2(2), (6), and (7) of
the Act.
2. Local 1 and Local 3 are labor organizations within the
meaning of Section 2(5) of the Act.
3. Respondent did not violate Section 8(a)(1), (2), and (3) of
the Act as alleged.
On these findings of fact and conclusions of law and on the
entire record, I issue the following recommended2
ORDER
Accordingly, I recommend the complaint be dismissed in its
entirety.

2 If no exceptions are filed as provided by Sec. 102.46 of the Board’s
Rules and Regulations, the findings, conclusions, and recommended
Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses.