International Air Service Co., Ltd.

National Labor Relations Board - Board Decisions

Feb 26, 1975

216 N.L.R.B. 782 (N.L.R.B. 1975)

782 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
International Air Service Company, Ltd. and Pilot
Safety Association , Petitioner. Case 19-RC-7031
February 26, 1975
DECISION AND ORDER
BY MEMBERS JENKINS , KENNEDY, AND
PENELLO
Upon a petition duly filed under Section 9(c) of the
National Labor Relations Act, as amended, on
various dates between May 13 and November 7,
1974, a hearing was held before Hearing Officers
John D. Nelson and Jerome L. Rubin. Following the
hearing, the case was transferred to the National
Labor Relations Board, pursuant to Section 102.67 of
the National Labor Relations Board Rules and
Regulations and Statements of Procedures , Series 8,
as amended. Thereafter, briefs were filed by Interna-
tional Air Service Company, Ltd., and Pilot Safety
Association.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has reviewed the Hearing Officers'
rulings made at the hearing and finds they are free
from prejudicial error. They are hereby affirmed.
Upon the entire record in this case, including the
briefs of the parties,' the Board finds:
The Employer, International Air Service Company,
Ltd., hereafter IASCO, has its principal place of
business in Burlingame , California. It is engaged in
the business of hiring commercial airline pilots,
navigators , and flight engineers , and subcontracting
their services to various domestic and international
airlines. Japan Air Lines, hereafter JAL, a Japanese
corporation , is a flag carrier of Japan engaged in
commercial air transportation of passengers and
cargo, on a regularly scheduled worldwide basis.
JAL, headquartered in Tokyo, Japan, is the only
international carrier flying out of Japan, and 50
percent of its stock is owned by the Japanese
Government. IASCO, under a contract with JAL,
supplies flight personnel to man certain JAL planes.
I We have considered the Employer's request for oral argument and the
Petitioner 's opposition thereto and hereby deny the request for oral
argument because in our opinion the record and briefs adequately present
the issues and positions of the parties.
2 In addition, at the time of the hearing, IASCO supplied 15 flight
personnel to Egypt-Air, 12 IASCO flight engineers to Al Nippon Airlines, 2
IASCO navigators to Braniff International , 10 IASCO captains to Toa
Domestic Airlines , and 8 to 10 IASCO navigators to Lufthansa.
3 The Employer contends that captains are supervisors , and the
Petitioner contends they are not. In view of our decision herein , we need not
consider that question.
4 The routes of the Anchorage-based IASCO personnel flying for JAL
are to Tokyo, Japan , over the-North Pole to various cities in Europe and/or
to San Francisco and Los Angeles, California.
216 NLRB No. 152
Thus, some 85 percent of IASCO's total flight crew
complement is contracted out by IASCO to work for
JAL.2 This represents 155 captains (pilots),3 5
copilots, 4 navigators, and 26 flight engineers
supplied to JAL. Of the total complement of
employees employed by JAL, the IASCO personnel
represents 25 percent of the pilots who fly JAL
aircraft, but only 15 percent of JAL's total number of
cockpit crews. The Petitioner seeks a unit consisting
only of the IASCO flight crews contracted to JAL
flying out of Anchorage, Alaska.4
Petitioner asserts that the Board has jurisdiction
because IASCO retains extensive control over its
flight crew personnel, consistent with that of a sole
employer within the meaning of the Act. The
Employer, IASCO, contends, inter alia, that the
Board lacks jurisdiction because the work performed
is so intimately a part of JAL, an airline which is
exempt as an agency of a foreign government and as
a foreign-flag air carrier.
IASCO has a contract with JAL under which
IASCO employs and maintains flight personnel and
assigns such personnel to JAL.S It is the responsibili-
ty of IASCO to see that the personnel assigned are
and remain qualified to perform the duties required
by JAL. All flight personnel assigned to JAL are
deemed employees of IASCO, and JAL agrees it will
not hire any IASCO employees assigned to it within
6 months from the date of termination of the JAL-
IASCO contract without written consent of IASCO.
When one of the employees involved herein wishes to
be relocated from one base to another, the request is
made to IASCO and, if it approves the request,
IASCO submits such recommendation to JAL for
approval. JAL determines the base assignment of
employees and can transfer them from one base to
another. -These companies by contract specify the
limit allowed in moving expenses that JAL will pay
IASCO flight personnel. JAL designates the moving
company and the amount JAL will pay in travel
expenses incurred by IASCO flight personnel while
relocating, and it provides free reduced air fare
transportation for vacation purposes in accord with
JAL policies.
S Under their contract, JAL pays IASCO, the Employer, a basic fixed fee
of a flat monthly payment , plus a monthly unit charge, i.e., per employee,
computed at the time the companies negotiate their contract by determining
the payroll costs to IASCO, employer's costs, and the processing charge for
each person in each category of flight personnel , adding the figures by
category and dividing the total computed for each category by the number
of flight personnel in that category . The payroll casts consist of. base pay,
flight pay, base pay differential , function allowance , and cost-of-living
allowance . Employer's costs are: the projected actual expenses for Federal
Insurance Compensation Act, Federal Unemployment Tax Act, state
unemployment and disability insurance, workmen's compensation insur-
ance, and group medical and life insurance . The processing charge is 13-1/2
percent of the above-noted payroll costs , plus $20 (per employee).
INTERNATIONAL AIR SERVICE COMPANY, LTD. 783
The employee-IASCO agreement contains a provi-
sion for termination which grants IASCO the right to
discharge the employee at any time for "cause" and
sets forth certain illustrations, but not by way of
limitation . When any person proves unsatisfactory to
JAL, it notifies IASCO and if they agree the
employee is discharged, but if they do not agree the
matter is submitted to arbitration. In the event of any
dispute between IASCO and JAL over their agree-
ment, provision is made to submit the dispute to an
arbitration panel, and the rights thereunder are to be
construed in accordance with the laws of California.
JAL agrees to hold IASCO harmless for claims
arising out of flight personnel conduct and IASCO
must hold JAL harmless for any claims of liability
which occur in the course of flight personnel's
performance of service. JAL reserves the right to
make claims against IASCO and IASCO flight
personnel assigned to JAL for damages caused by
such personnel while off duty. Flight personnel who
are assigned to JAL make all claims for work-related
illness , injury, or death against IASCO, and their
rights are determined by the workmen's compensa-
tion laws of California. All IASCO employees,
including flight personnel, are eligible to join its
credit union and to receive a medical benefit package
and life insurance policy. IASCO flight personnel
have pass privileges which differ from those of direct-
hire JAL personnel, in that the latter must progress
up the seniority list to get pass privileges, while
IASCO personnel receive such privileges immediate-
ly upon employment. JAL has a retirement plan for
its direct-hire employees in which IASCO employees
do not participate. IASCO employees have a comple-
tion-of-contract bonus plan. IASCO makes out the
paychecks to the employees and withholds U.S.
Federal income tax, and on the IRS W-2 forms
IASCO is shown as the employer and the employee
as assigned to JAL.
JAL approves the ads which IASCO uses to recruit
flight personnel and sets the specific qualifications of
such personnel. After IASCO obtains job applica-
tions and screens them, JAL interviews the candi-
dates before IASCO hires them. IASCO applicants
and personnel who fail to qualify for flight duty with
JAL but are otherwise qualified may be assigned to
other air carriers by IASCO. The flight evaluation,
by JAL, to determine qualifications is given aboard
JAL aircraft. JAL conducts the initial and periodical
physical examinations of the aircrews. Only after
JAL notifies IASCO that it has accepted the
applicant is such applicant hired.
After flight personnel are hired by IASCO for
assignment to JAL, they are put through an extensive
training program which is designed and staffed by
JAL (some instructors are IASCO flight personnel
assigned to JAL and appointed to positions, of
instructors by JAL). The jet training program is on
JAL equipment and facilities, and a part thereof is
paid for by JAL with the remaining portion being
paid for by the flight personnel themselves. After
training is completed and flight duties begin, profi-
ciency checks of IASCO personnel are conducted
every 6 months by JAL.
During the performance of their duties, IASCO
flight personnel who are assigned to JAL are under
the supervision and control of JAL even though their
immediate supervision is by IASCO personnel. These
IASCO supervisors are within the supervisory hier-
archy of JAL and are appointed to that position by
JAL; they serve primarily as a conduit for directions
from direct-hire JAL personnel to IASCO personnel.
The performance of flight personnel is required to
conform to JAL's procedures and standards, as well
as those of the aircraft manufacturer and those of the
government within whose airspace they fly.
JAL's comprehensive operations manual, prepared
by JAL, determines the duties of IASCO flight
personnel and specifies the manner in which those
duties are performed. JAL informs IASCO flight
personnel of their reporting time, assigns their flights,
and has exclusive authority to grant requested
changes in flight schedules, vacations, and time off.
JAL dispatches the aircraft flown by IASCO flight
personnel, and the JAL dispatcher prepares the flight
plan. JAL provides ground transportation between
lodging and the airport, the hotel accommodations,
and uniforms worn, and determines the maximum
time and rest period requirements.
A pilot's transition from a DC-8 to a Boeing 747 is
made on the recommendation of IASCO, after
discussion with JAL, and the pilot is thereafter
notified by IASCO of his having been selected. The
pilot thereafter undergoes training by JAL. Those
who are selected for JAL instructor jobs are named
by IASCO and the offer is communicated to the
individual by IASCO's chief pilot. Pilots assigned to
JAL by IASCO carry identification identifying them
as JAL pilots and also designates them as employees
of IASCO. The identification is necessary to allow
pilots to enter restricted areas of an airport. Flight
pass requests are made on IASCO forms through
IASCO personnel. IASCO reserves the power to
control pass privileges with the airlines and it
provides its employees and their families with visas.
IASCO employees who are assigned from one
international flight to another are given additional
training, by IASCO, so that they can pass the
aeronautical board requirements of those other
countries. They also undergo 6-month checks by
these boards.
784 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
It has been established that Japan Air Lines is not
an employer under the Act.6 Hence, the issue which
we must resolve here is whether to assert jurisdiction
over the Employer, IASCO, for purposes of finding a
unit consisting solely of flight crew personnel
provided to that airline in the circumstances of this
case. For the reasons given below, we believe that the
assertion of jurisdiction is not warranted.
As noted, the Petitioner is seeking IASCO pilots,
copilots, flight engineers, and navigators working for
JAL and based in Anchorage, Alaska. The IASCO
flight personnel fly JAL planes, over JAL routes, on
JAL schedules, all under the direction and control of
JAL personnel. The latter are direct-hires of JAL and
under the direct control of JAL. Other than the flight
personnel of IASCO engaged in flight functions on
JAL planes all other duties on the planes appear to
be performed by JAL employees. The IASCO flight
personnel are hired by IASCO under agreement
between IASCO and JAL that a particular individual
involved will be acceptable to JAL. Thereafter such
individual is trained by JAL; periodically examined
by JAL; directed in the day-to-day duties by and
under the control of JAL; and promoted, disciplined,
granted time off, granted benefits, and discharged by
JAL. The duties JAL assigns to IASCO flight
personnel involve duties performed for purposes of
operating the plane in flight.
6 See International In-Flight Catering Co., Ltd., 209 NLRB 444 (1974).
1 Herbert Harvey, Inc., 171 NLRB 238, 240 ( 1968), enfd . 424 F.2d 770
(C.A.D.C., 1969).
It is well-settled Board policy that "[W]here the
services are intimately connected with the exempted
operations of the institution . . . the contractor
shares the exemption; on the other hand, where the
services are not essential to such operations . . . the
contractor is not exempt and [the Board] asserts
jurisdiction over the contractor's activities."7 In this
case , it plainly appears that the Employer's flight
personnel contracted to Japan Air Lines and based
in Anchorage, Alaska, are involved in and intimately
related to Japan Air Lines flight services. Indeed, the
cockpit service herein is itself an essential element of
the flying service which JAL supplies to its custom-
ers. It follows that, with regard to the employees
requested by Petitioner who are performing these
services for Japan Air Lines, IASCO, the Employer,
shares the airline , Japan Air Lines', exemption from
the Board 's jurisdiction.8 This is not to be construed
as a determination that IASCO itself is, or is not,
excluded from this Board's jurisdiction insofar as any
other employees may be concerned.
ORDER
It is hereby ordered that the petition filed herein
be, and it hereby is, dismissed.
8 In view of our finding herein, whether JAL's exemption as a foreign-
ftag air carver as such would constitute a separate basis for declining
jurisdiction herein is a matter we need not consider.