Jack Frost, Inc.

National Labor Relations Board - Board Decisions

Feb 6, 1973

201 N.L.R.B. 659 (N.L.R.B. 1973)

JACK FROST, INC. 659
Jack Frost, Inc. and Milk & Dairy Employees Drivers,
Local 471 , Affiliated With International Brother-
hood of Teamsters , Chauffeurs, Warehousemen
and Helpers of America, Petitioner. Case
18-RC-8937
February 6, 1973
DECISION AND DIRECTION OF
ELECTION
BY MEMBERS FANNING, JENKINS, 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 Leslie J.
Kraus on March 22, 24, and April 6, 7, and 19, 1972.
Following the hearing and pursuant to Section
102.67 of the National Labor Relations Board Rules
and Regulations and Statements of Procedure, Series
8, as amended, this case was transferred to the
National Labor Relations Board for decision by
direction of the Acting Regional Director for Region
18. The Employer and the Petitioner filed briefs.
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 Officer's
rulings made at the hearing and finds that they are
free from prejudicial error. They are hereby affirmed.
Upon the entire record in this case, the Board
finds:
1. The Employer is engaged in commerce within
the meaning of the Act and it will effectuate the
purposes of the Act to assert jurisdiction herein.
2. The Petitioner is a labor organization claiming
to represent certain employees of the Employer.
3. A question affecting commerce exists concern-
ing the representation of employees of the Employer
within the meaning of Section 9(c)(1) and Section
2(6) and (7) of the Act.
The Petitioner seeks to represent a unit of the
Employer's production and maintenance employees.
The Employer contends that these individuals are
"agricultural laborers" exempt from the Act's cover-
age by virtue of the definition of "employee"
contained in Section 2(3) of the Act.'
The Employer (hereinafter Jack Frost) is engaged
in the processing and marketing of eggs and poultry
on an 800-acre farm located near St. Cloud,
Minnesota. Farming activities include hatchery
operations, breeder operations, feed mill operations,
the actual raising of birds, and egg farming and
processing. The egg processing plant is located on
this farm of which only 5 percent is used in the
Employer's operations.2 In addition, there is a feed
mill which is utilized to produce the feed distributed
to the contract farmers, two poultry barns on the
farm at which chickens are raised, and a laying barn
adjacent to the egg processing plant.
In order to insure a supply of eggs and poultry for
processing and/or marketing, Jack Frost has entered
into contractual relationships with independent
farmers in the St. Cloud area to engage in the
production of eggs and chickens. The contract
between the independent contract farmers and Jack
Frost states that Jack Frost at all times is the sole
owner of the chickens producing the eggs and, as a
result, Jack Frost bears all risk of loss with regard to
the destruction of the eggs and/or chickens. The
contract farmers must build and operate barns as
specified by Jack Frost, and servicemen are sent out
to make sure that the contract farmers are operating
their barns as directed. The contract farmers receive
remuneration for their services from Jack Frost in
the form of rental payments for the barn plus a fixed
price and bonus system for the eggs produced. The
contract farmers do not participate in the profits
received for the sale of the eggs.
The actual agricultural work of feeding and caring
for the birds, collecting the eggs, and preparing the
eggs for shipment to the egg processing plant is
performed by the contract farmers . Approximately
3,600 cases of eggs (30 dozen eggs per case) are
processed weekly at the egg processing plant. The
personnel at the egg processing plant are not engaged
in any agriculture function; they are engaged almost
entirely in processing and preparing the eggs for
market.3 The personnel working as truckdrivers4 for
Jack Frost pick up the eggs at the contract farmers'
farms and transport them to the egg processing plant.
There, employees grade, inspect, candle, and pack
the eggs for shipment. After the eggs are processed
and packed for shipping, the truckdrivers transport
them to various points for marketing and for further
processing.
For the purposes of marketing the eggs, Jack Frost
has entered into a joint venture with Armour and Co.
Under this agreement , Armour's investment consists
of a one-half interest in both the birds and the eggs
produced by the birds. Armour provides
$500,000-$600,000 in cash and, in addition, leases a
breaking plant at St. Charles, Minnesota. Jack Frost
I Sec 2(3) exempts from the definition of "employee" "any individual None of the farmers leasing portions of the 800 -acre farm utilizes any of
employed as an agricultural laborer .. " that area for contract farming with Jack Frost.
' The bulk of the 800-acre farm is leased by Jack Frost to area farmers . 3 There are approximately 25 employees at the egg processing plant
Jack Frost exercises no control over what the farmers do with the land. 4 There are five truckdrivers.
201 NLRB No. 93
660 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
provides a similar amount of money and, in addition,
provides the facilities at the processing plant and the
obligations under the contract with the contract
farmers.
The issue in this case centers around a determina-
tion as to whether the truckdrivers and the employ-
ees who work in the egg processing plant are
"employees" within the meaning of Section 2(3) of
the Act or "agricultural laborers" within the meaning
of Section 3(f) of the Fair Labor Standards Act
(hereinafter F.L.S.A.).5 Annually, since July 1946,
Congress has added a rider to the Board's annual
appropriation measure which, in effect, directs the
Board to be guided by the definition of "agriculture"
provided in Section 3(f) of F.L.S.A. in determining
whether individuals are agricultural laborers within
the meaning of Section 2(3) of the National Labor
Relations Act. The Board has frequently stated that
it was its policy to consider the interpretation of
Section 3(f) adopted by the Department of Labor in
view of that agency's responsibility and experience in
administering the F.L.S.A.6 Section 3(f) of the
F.L.S.A. reads, in pertinent part, as follows:
.. , agriculture includes farming in all its
branches and among other things includes .. .
the production, cultivation, growing and harvest-
ing of any agricultural . . . commodities . . . and
any practices . . . performed by a farmer or on a
farm as an incident to or in conjunction with such
farming operation, including preparation for
market or to carriers for transportation to market.
As the truckdrivers and egg processing plant
employees herein are not engaged in direct farming
operations, of the type enumerated in the "primary"
definition of "agriculture," the question is whether
they are engaged in activities included in the
"secondary" definition of that term.? In order to
come within this definition, the operation must be
performed either by a farmer or on a farm as an
incident to or in conjunction with the farming
operation. The determination requires that the
character of the particular function be evaluated to
determine whether it is part of the agricultural
activity or a distinct business activity. The totality of
the situation controls, and not the character applica-
tion of isolated factors or tests.8
The Code of Federal Regulations deals with the
specific situation presented to the Board in the
instant proceeding:
Contract arrangements for raising poultry.
Feed dealers and processors sometime enter
S 29 U.S.C., Sec. 205(f).
6 McAnally Enterprise, Inc, 152 NLRB 527, 529.
r Farmers Reservoir & Irrigation Co v. McComb Wage and Hour
Administrator, 337 U.S. 755, 762
s McAnally Enterprise, Inc, supra at 530.
29 C F R , sec 780.135
into contractual arrangements with farmers under
which the latter agree to raise to marketable size
baby chicks supplied by the former who also
undertake to furnish all the required feed and
possibly additional items. Typically, the feed
dealer or processor retains title to the chickens
until they are sold . Under such an arrangement,
the activities of the farmers and their employees
in raising the poultry are clearly exempt. The
activities of the feed dealer or processor, on the
other hand, are not "raising of poultry" and
employees engaged in them cannot be exempt on
that ground. Employees of the feed dealer or
processor who perform work on the farm as an
incident to or in conjunction with the raising of
poultry on the farm and engage in no non-exempt
activity during the workweek may, however, be
exempt as employees in "secondary" agriculture.9
This section indicates that in situations such as the
one herein , when processors enter into contractual
arrangements with independent farmers whereby the
farmers agree to raise poultry to marketable size and
the processor supplies the baby chicks, furnishes the
required feed, and retains title to the chickens until
they are sold, the activities of the independent
farmers and their employees in raising the poultry
are clearly exempt, but the activities of the processor
are not "raising of poultry" and their employees
cannot be exempt on that ground.
Based upon the facts in the instant case , we find
that the contractual relationship between Jack Frost
and the independent contract farmers does not
operate to transform the truckdrivers and the
processing plant employees of Jack Frost into
agricultural laborers for purposes of the F.L.S.A.10
We conclude that Jack Frost is not engaged in a
farming operation . Rather than hiring employees
to engage in the farming , Jack Frost has chosen
to obtain 98 percent of the eggs processed at the
plant from independent contract farmers . Hence,
the processing operation carried on by Jack Frost
is not incident to or in conjunction with the farming
operation.
Accordingly, we find the following employees of
Jack Frost constitute a unit appropriate for the
purpose of collective bargaining within the meaning
of Section 9(b) of the Act:
All employees of the egg processing plant includ-
ing truckdrivers, excluding office clerical, guards,
10 See Victor Ryckebosch, Inc, 189 NLRB No. 8. On November 28, 1972.
the Court of Appeals for the Ninth Circuit decided adversely to the Board
in Ryckebosck However, with due deference to the opinion of that court, we
shall adhere to the Board 's views expressed in that case insofar as they are
applicable to the present case.
JACK FROST, INC. 661
casual employees , temporary employees, and [Direction of Election and Excelsior footnote
supervisors , as defined in the Act. omitted from publication.]