Greenlawn Funeral Home

National Labor Relations Board - Board Decisions

Jul 24, 1979

243 N.L.R.B. 673 (N.L.R.B. 1979)

GREENLAWN FUNERAL HOME
Greenlawn Funeral Home, Inc. and General Drivers,
Salesdrivers, Warehousemen & Helpers, Local 245,
affiliated with International Brotherhood of Team-
sters, Chauffeurs, Warehousemen and Helpers of
America, Petitioner. Case 17-RC-8650
July 24. 1979
DECISION ON REVIEW
BY MEFMBI-RS PNE I.(). MTRPHY. ANI) TRI SI)AI.E
On December 14, 1978, the Regional Director for
Region 17 of the National Labor Relations Board is-
sued a Decision and Direction of Election in this pro-
ceeding in which he found that the Employer's gross
volume of business in the computation year exceeded
the Board's jurisdictional standard governing retail
establishments, and therefore that the Employer was
engaged in a business affecting commerce within the
meaning of Section 2(6) and (7) of the National La-
bor Relations Act, as amended. Accordingly. the Re-
gional Director directed an election in a unit of li-
censed embalmers at the Employer's two locations in
Springfield, Missouri. Thereafter, in accordance with
Section 102.67 of the Board's Rules and Regulations,
Series 8, as amended, the Employer filed a request for
review, contending that the Regional Director's com-
putation of the Employer's gross income was clearly
erroneous and a departure from Board precedent.
The Petitioner filed a brief in opposition. On January
12, 1979, the Board, by telegraphic order, granted the
Employer's request for review and declined to stay
the directed election, but ordered that the ballots be
impounded pending this Decision on Review. There-
after, the election was held, and the ballots were im-
pounded.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the entire record in this
case with respect to the issues under review and
makes the following findings.
The Employer, a Missouri corporation, is engaged
in providing undertaking, crematory, and general fu-
neral services at two locations in Springfield, Mis-
souri. The Employer derives its income from furnish-
ing the above services on an immediate need basis
and from the sale of contracts for future funeral ser-
vices, otherwise known as preneed contracts. Mis-
souri state law requires that 80 percent of the rev-
enues derived from the sale of preneed contracts must
be maintained in a trust account; the remaining 20
percent immediately vests in the seller, here the Em-
ployer. The 80 percent maintained in a trust account
is paid over to the Employer when it furnishes the
service contracted or unless the customer has exer-
cised his rights to withdraw the monies placed in trust
any time before his death.
The Regional Director found that during the Em-
ployer's last fiscal year, after various subtractions to
income, the Employer had gross revenues of approxi-
mately $546,900, of which $122,230 was attributable
to preneed contracts. The Regional Director then
concluded that the Employer's gross volume of busi-
ness exceeded the Board's $500.000 jurisdictional
amount for retail enterprises, and that the Employer
was engaged in commerce and in a business affecting
commerce within the meaning of Section 2(6) and (7)
of the Act.
On review, the Employer contends that the Re-
gional Director, in computing the Employer's gross
volume of business, erroneously included as income
that 80 percent of the revenues derived from the sale
of the preneed funeral contracts. Citing Viewer Spoin-
sored Television Foundation, Inc.. d/b/a K'ST-TIV,
217 NLRB 419 (1975). the Employer contends that
only those funds that are presently available to it for
operating expenses are properly includable in gross
income. Since the Employer is prohibited from utiliz-
ing 80 percent of the preneed funds as operating in-
come, the Employer argues that the Board should de-
duct that amount from the gross volume figure of
$546,900, thereby reducing the amount of the Em-
ployer's revenue below the Board's retail jurisdic-
tional standard. The Employer further argues that to
do otherwise would lead to an inequitable result. Spe-
cifically. the Employer argues that, if the Board con-
siders preneed income in the year of receipt and not
in the year of vesting, then the same revenues could
appear twice in a computation, i.e., the year of receipt
in the trust account, and in the year of vesting in its
general cash account, thereby presenting an inflated
picture of the Employer's cash inflow and gross vol-
ume of business.
The Petitioner contends that the Employer's argu-
ment is without merit as the Board considered an
analogous assertion in Samuel A. Ellsburo Co.. 95
NLRB 276 (1951), and rejected it there. In that pro-
ceeding, the Board included in the employer's gross
outflow sales consummated in the computation year
even though delivery of the materials sold was sched-
uled for the following year.
For the following reasons. we find that all of the
revenue received by the Employer from the sale of
preneed contracts is properly includable in the com-
putation of its gross income for purposes of comput-
ing gross revenue, and, including those funds in gross
revenue, we find that the Regional Director correctly
asserted jurisdiction here.
243 NLRB No. 110
673
D6C.('ISIONS OF NATIONAL LABOR RELATIONS BOARD
According to Missouri state law,' 80 percent of the
revenues received from the sale of preneed funeral
contracts must, within 30 days from the date of re-
ceipt, be deposited in a trust account in a state or
national bank which possesses trust administrative
authority and which is located in the State of Mis-
souri. The monies deposited are to be held there until
either of the following occurs: (1) the contracted-for
funeral services are provided, and a death certificate
is presented: or (2) the customer voids the contract
and requests reimbursement.' Despite the above, we
conclude that, pursuant to state law, the Employer
exercises sufficient present dominion and control over
the trust corpus to warrant its inclusion now in the
computation involved in determining the Employer's
gross volume of business.
We note that pursuant to state statute 3 the trust
accounts are carried not in the name of the customer.
but in the name of the seller, here the Employer. The
statute also specifically provides that the seller "shall
be entitled to all income ... including interest, capital
gains and all other earnings" that may be derived
from the principal of said trust accounts.4 In essence.
the Employer is entitled by state law to invest these
funds in a financial institution of its choosing in such
a manner as to reap and enjoy the greatest return on
its investment. This factor persuades us that these
revenues, which constitute approximately 20 percent
of the Employer's gross revenues, represent more
than mere deposited sums of money in which the Em-
i Mo. Rev. State. ('hap. 436 Contractual Relations.
2 While the Regional Director did not refer to the specific Missouri statute
involved herein, we note that the Board is empowered to take administrative
notice of state and local statutes and regulations. See. e.g.. Anchor Rome
Mills, Inc. 86 NLRB 1120. 1150, n. 47 (1949).
Mo. Rev. Stat. Chap. 436.040.
'Mo. Rev Stat. Chap. 436.020.
ployer has no interest and over which the Employer
has no control.5
We reject the Employer's argument that the inclu-
sion of all preneed contract income in gross revenues
results in the same revenues being counted twice, i.e..
in the year of receipt and in the year of transfer to the
general corporate account. In any given computation
year. revenues can only appear in one account unless.
of course, the preneed contract is signed and services
are provided in the same year. In that case, the
amount in question would be deducted from one of'
the accounts (either the general account or the pre-
need account) comprising gross revenue.
For the foregoing reasons, we find that all revenue
from preneed funeral contracts is cognizable as in-
come, for purpse of determining jurisdiction, in the
year it is received, and that the Employer's gross vol-
ume thus computed exceeds our standard for retail
enterprises.6 We therefore affirm the Regional Direc-
tor's Decision and Direction of Election and direct
that the ballots which have been impounded be
opened and counted by the Regional Director, and
that thereafter he take such further appropriate ac-
tion as required by Section 102.69 of the Board's
Rules and Regulations, Series 8. as amended.?
We find that liecr Spuon.sored Televiion. upral, cited by the Employer.
involved an issue not currently before us. hat case involved the issue of
whether funds donated to a nonprofit, noncommercial television station were
properly includable as income for the purpose of asserting jurisdiction. The
language used b the Board there arose in that context The mployer here,
in contrast, is a Ibr-profit commercial enterprise which bases a substantial
part of its business resenues on the sale of preneed funeral contracts. ITo
ignore the revenues generated by the sale of these contracts would he to
ignore a substantial part iof the Emploer's business and would thus present
a distorted picture of the Emploser's true impact on commerce.
We note that, while the issue before us was not specifically raised there,
the Board in Ol Ifil I ror.mnnr (opurin, 170 NLRB 300 (1968). in-
cluded preneed revenues in determining that mortuary and cemetery's gross
volume of business.
' In view of our decision herein, we find it unnecessary ito pass on the
Petitioner's further contcntion that the Employer and Greenlawn Memorial
Gardens and Dlemer Monument (Company constitute a single. integrated
enterprise for the purposes of asserting jurisdiction herein.
674