JA-CE Co., Inc.

National Labor Relations Board - Board Decisions

Aug 16, 1973

205 N.L.R.B. 578 (N.L.R.B. 1973)

578 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
JA-CE Company , Inc. and Local Union No . 462, a/w
International Brotherhood of Teamsters, Chauf-
feurs, Warehousemen and Helpers of America, Peti-
tioner . Case 22-RC-5657
August 16, 1973
DECISION AND DIRECTION OF ELECTION
BY CHAIRMAN MILLER AND MEMBERS FANNING AND
PENELLO
Upon a petition duly filed under Section 9(c) of the
National Labor Relations Act, as amended, a hearing
was held before Hearing Officer Margaret Berkowitz
of the National Labor Relations Board. Following the
close of the hearing the Acting Regional Director for
Region 22 transferred this case to the Board for deci-
sion. Thereafter, the Employer and the Petitioner filed
briefs.
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 reviewed the Hearing Officer's rul-
ings made at the hearing and finds that they are free
from prejudicial error. They are hereby affirmed.
Upon the entire record in this proceeding, the
Board finds:
1. The Employer, a New Jersey corporation head-
quartered in the city of New Brunswick, is engaged in
the food-service management business and has con-
tracts to operate cafeteria programs for 19 school dis-
tricts within the State of New Jersey. The Employer's
gross volume of business during the year preceding
the hearing held herein exceeded $3 million. During
the same period, the Employer purchased materials
and supplies valued in excess of $50,000, which were
shipped into New Jersey from outside the State. The
parties concede, and we find, that the Employer is
engaged in commerce within the meaning of the Act.
However, there remains a question as to whether the
Board should assert jurisdiction over the Employer
herein, in view of its relationship to the several school
districts for whom it provides the aforementioned
food services.
At the outset, it is clear that the several school
districts, and their respective boards of education
which act in their behalf, as part of the public school
system of the State of New Jersey are not employers
within the meaning of the Act. Whether this Board
will assert jurisdiction over an enterprise under con-
tract with these boards of education depends upon the
relationship of the contractor's services to the activi-
ties of the several district boards of education, institu-
tions which are excluded from the Act's jurisdiction.
That relationship depends in larger part upon the de-
gree of control exercised by the several boards of
education over the labor relations policies of the Em-
ployer.'
The Employer contends that it provides food serv-
ices to the several school districts as an independent
contractor, exercising complete control over, and as-
suming responsibility for the direction of, its employ-
ees. Accordingly, the Employer urges this Board to
assert jurisdiction herein.
The Petitioner does not contend otherwise. More-
over, like the Employer, the Petitioner urges that even
if this Board should deem it inappropriate to assert
jurisdiction in this case, it should nevertheless de-
termine the unit question presented herein.
As previously stated, the Employer has entered into
19 separate food-service contracts with school boards
representing their respective districts. Under these
contracts, which only become operative after approv-
al by the New Jersey State Department of Education,
the Employer operates a food-service program at 93
schools, and mans some 60 cafeteria units. The capital
equipment and food-service facilities used in provid-
ing these services is owned by the several school dis-
tricts. Under the contract, the districts assume the
responsibility for maintenance of dining room areas,
and for the cleaning of windows, walls, ceilings, and
light fixtures. The Employer is responsible for the
routine cleaning of kitchens, serving areas, dishrooms,
storerooms, and the like. These contracts further pro-
vide that the Employer, on its own credit, shall pro-
vide, prepare, and serve to the students, faculty, and
visitors such foods and milk, including "type A"
lunches, defined by the National School Lunch Pro-
gram, at such prices and at such hours and days as the
school districts shall direct. In this respect, the Em-
ployer is required to consult with each of the school
districts respecting food and menu requirements. The
Employer is required to prepare and submit to a
school representative a proposed menu 2 weeks in
advance of its anticipated use. In furtherance of its
contractual responsibilities, the Employer is also re-
quired to provide expert administrative, dietetic, pur-
chasing, engineering consulting, and personal advice
and supervision. The Employer is also obliged to em-
ploy only persons acceptable to the various school
districts. The Employer alone, however, is responsible
for carrying workmen's compensation insurance, and
also assumes the entire responsibility for any and all
damages and injuries of any kind or nature arising out
of the operation of the cafeterias and lunch areas. As
consideration for these services, the Employer re-
Servomanon Mathias Pa, Inc, 200 NLRB No 136
205 NLRB No. 92
JA-CE CO.
ceives a sum equivalent to 8 percent of gross sales. In
order to monitor the contractor's performance, each
of the school districts has a right to full access at all
times to the cafeteria premises and equipment with or
without notice. The Employer is also required to keep
full and accurate accounts and records in connection
with the food-service programs undertaken pursuant
to these several agreements, which are subject to audit
by the school districts during regular working hours
and at reasonable places.
The foregoing contractual provisions are deemed
necessary to allow each of the school districts to retain
control over the general operation of the school food-
service program, consistent with the policies and pro-
cedures set forth by the New Jersey State Department
of Education.
In fulfilling its responsibilities under the contract
here involved, the Employer maintains the following
organizational structure. Each of the 60 cafeteria
units is supervised by a manager who is responsible
for day-to-day operations. These managers, in turn,
report directly to 10 area supervisors, each of whom
is assigned to cover one or more school districts.
These area supervisors maintain contact directly with
the cafeteria managers and with employees operating
the "satellite" schools serviced by cafeteria units. The
area supervisors, in turn, report to one of two regional
supervisors. The regional supervisors report to the
Employer's director of operations, who, in turn, re-
ports directly to the president. Communications be-
tween the Employer and the several school districts
are not undertaken below the regional level.
Although the school districts reserve the right to
remove JA-CE employees who are not deemed ac-
ceptable, hiring is done exclusively by the Employer,
and no cafeteria employee has ever been discharged
by the Employer as a result of the operation of this
provision. In "99 percent" of the cases, employees are
recruited locally. They are generally hired by the area
supervisors on recommendation of the cafeteria man-
agers and following applicant interviews held either
by the managers, the area supervisors, or both. Under
the applicable agreements, prospective employees are
required to submit to, and pass, physical examina-
tions. Wage rates and fringe benefits for employees
are established by the Employer, and payment of
wages is, of course, made by checks of the Employer,
which are distributed by its supervisors.
While the days during which the Employer is re-
quired to furnish services differ in the several districts,
depending upon each district's vacation schedule, or
for other reasons peculiarly applicable to the several
districts, the Employer, at its discretion, determines
the working hours and the length of the workday, as
well as granting or denying requests for time off from
579
work. In this respect, among other things taken into
consideration are the number of individuals to be fed
and the layout of the food service facilities. The Em-
ployer publishes its own rules and regulations for the
conduct of employees.
From the foregoing it is clear that the school boards
involved have incorporated sufficient controls in their
respective contracts with the Employer to insure satis-
factory performance by the Employer. The assump-
tion of these controls to assure contract compliance
by a "cost plus" contractor, however, is not inconsis-
tent with a factual finding that the degree of control
over labor relations retained by that contractor is suf-
ficient to preclude the merger of that contractor's
identity as an "employer" with an enterprise exempt-
ed from the provisions of our Act. Indeed, we find on
the record evidence that the contractor, the Employer,
here involved is a profitmaking entity independent of
the school system, and that it has retained virtually
full control over the labor relations policies governing
its employees, in the same manner as any other busi-
ness concern would do. As to its business indepen-
dence, we note that the Employer prepares the menus
used in the food-service program employing the ex-
pertise of its own dieticians. While these menus are
submitted in advance for approval by the several
school boards, we note that such approval has never
been withheld and, indeed, is not likely to be withheld
unless those menus fall short of compliance with the
rules and regulations governing Federal and state
food programs. Further, the Employer alone is res-
ponsible for all dealings with food vendors and sup-
pliers, and exercises complete discretion with respect
to the selection of food products and the terms and
conditions of payment therefor. The various school
boards take no part in this selection process and are
not responsible for the purchases made. Further, un-
der the contracts involved, the Employer assumes full
responsibility for damages arising out of his opera-
tions.
With respect to labor relations, we note that the
Employer herein is alone responsible for the recruit-
ment of satisfactory employees. Thus, the Employer
advertises for needed personnel, interviews them, and,
on the basis of such interviews, selects those candi-
dates it deems best qualified for the positions avail-
able in each of the 19 school districts? The fact that
the school boards may under the contract require the
removal of an occasional objectionable employee
does not require a different conclusion. There is no
showing in the record that this reserved right has
played any significant role in the composition of the
2 Cf Servomation Mathias Pa, Inc, 200 NLRB 136, where the exempt
institution maintained control over both the structure of the respondent's
managerial organization and substantial areas of its labor relations policies
580 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Employer's work force. It is also clear that the condi-
tions under which employees work are determined by
the Employer. While the school boards determine the
days on which the cafeterias are to be open, the Em-
ployer determines the hours which employees shall
work and the length of the workday. Nor does any
school board representative have any authority to su-
pervise or direct the employees in the performance of
their food-service tasks.
In sum, we find that the only significant control
manifest by the several school boards over the
Employer's operations is budgetary, in that the Em-
ployer, in the event its contract proves less profitable
than anticipated, may have to justify to the boards
certain costs for which it is entitled to reimbursement.
Such budgetary control as may result from these pro-
visions of the contracts between the Employer and the
schools is too remote, in our view, to justify a "single
employer" finding. Accordingly, we find that the Em-
ployer is engaged in commerce within the meaning of
the Act and that it will effectuate the purposes of the
Act to assert jurisdiction herein.3
2. The labor organization involved claims to repre-
sent certain employees of the employer.
3. A question affecting commerce exists concern-
ing the representation of certain employees of the
Employer within the meaning of Section 9(c)(1) and
Section 2(6) and (7) of the Act.
4. The Petitioner seeks a unit of approximately 105
catering service employees employed by the Employ-
er in the Edison, New Jersey, public school system,
including cooks, dishwashers, cashiers, cakemakers,
sandwichmakers, food preparers, and kitchen work-
ers, but excluding managers, office clerical employ-
ees, guards, and supervisors as defined in the Act. The
Employer contends that the only appropriate unit is
one composed of individuals employed in all 19
school districts. In the alternative, the Employer as-
serts that those employees working in the 10 districts
comprising the Employer's southeast administrative
region constitute the smallest unit appropriate for the
purposes of collective bargaining.
Ultimate responsibility for the Employer's food-
service activities rests with its president. He is assisted
by a director of operations. All of the Employer's
food-service activities are grouped within either its
northwest or southeast regions. The regional supervi-
sors, who report directly to the director of operations,
have working under them 10 area supervisors, each of
whom is responsible for the day-to-day operations of
one or more school districts. Within the school dis-
3 Howard Johnson Co., 135 NLRB 1260, enfd . 317 F.2d I (C.A. 1), cert
denied 375 U S 920, Herbert Harvey, Inc , 171 NLRB 238, enfd 424 F 2d
770 (C.A D.C).
tricts, there are some 60 cafeteria units, each super-
vised by a cafeteria manager, and satellite facilities
manned by personnel who report to their appropriate
area supervisor. There are approximately 600 employ-
ees throughout the Employer's system.
Within the Edison school district, with which we
are here concerned, the Employer employs approxi-
mately 105 employees who work at the 5 schools with
cafeteria units or at the 16 satellite food-service facili-
ties. The Employer serves approximately 13,485 stu-
dents in the Edison school system. The area
supervisor responsible for the Employer's day-to-day
operations within this school system works exclusive-
ly in that capacity, having no responsibility for the
activities within any other school district.
Geographically, the 19 school districts are widely
scattered throughout the State of New Jersey, the
longest straight-line distance between 2 being approx-
imately 50 miles. Some of these school districts are
located in large urban areas and others are located in
distinctly rural areas of the State.
As previously mentioned, hiring for the various
school districts is undertaken at the local level, and
employees generally live in close proximity to their
places of work. Employment interviews are normally
conducted by a cafeteria manager, the area supervisor
of the district involved, or by both. The manager may
effectively recommend that an individual be hired,
but ultimate authority for that decision rests with the
area supervisor. Area supervisors also make the final
decisions with respect to transfers between schools in
a given district, have the discretion to grant time off
to employees, and impose discipline when appropri-
ate.
Conditions of employment vary in each of the
school districts, largely because of the different re-
quirements for food service expressed by the several
districts. Although starting rates of pay are uniform
throughout the several districts, subsequent rates of
pay employees receive may vary. The number of days
and hours of work are not uniform within the various
school systems.
Temporary transfers of employees between districts
appear nominal, amounting to only 68 man days of
the 160,000 man days worked during the approxi-
mately 2 academic years under consideration.
There is no history of bargaining for employees in
any of the districts here involved, and no labor organi-
zation is seeking the Employer's overall operation. It
may well be that the optimum unit for collective bar-
gaining would be districtwide in scope, but this does
not preclude the Petitioner from seeking representa-
tion in a smaller unit if, as we find here, the smaller
unit, standing alone, is under all the circumstances
also appropriate for the purposes of collective bar-
JA-CE CO.
gaining .4 Upon consideration of the entire record in
this case , including particularly the substantial degree
of autonomy exercised by the area supervisor for the
Employer 's Edison school district operation , the mini-
mal interchange of employees , the absence of any
bargaining history, and the fact that no labor organi-
zation is seeking a larger unit , we are satisfied that the
requested unit constitutes an appropriate unit which
will assure to employees the fullest freedom in exercis-
ing the rights guaranteed by the Act.
4 Dixie Belle Mills, Inc, a wholly owned subsidiary of Belle Industries, Inc,
1389 NLRB 629, 631
581
Accordingly, we find that the following employees
of the Employer constitute a unit appropriate for the
purposes of collective bargaining within the meaning
of Section 9(b) of the Act.
All catering service employees employed by
the Employer in the Edison, New Jersey, public
school system, including cooks, dishwashers,
cashiers, waitresses, cakemakers, sandwichmak-
ers, food preparers, and kitchen workers, but ex-
cluding managers, office clerical employees,
guards, and supervisors as defined in the Act.
[Direction of Election and Excelsior footnote omit-
ted from publication.]