Kenneth Chevrolet Co.

National Labor Relations Board - Board Decisions

Dec 15, 1954

110 N.L.R.B. 1615 (N.L.R.B. 1954)

KENNETH CHEVROLET COMPANY 1615
Board has not asserted its jurisdiction over such an institution despite
the fact that its operations may have been the indirect cause of a sub-
stantial flow of materials across State lines.9 We do not believe that
the Board should further extend the exercise of its jurisdiction by as-
serting it in this case.10 As the enterprise here involved consists of
the noncommercial activity of a nonprofit educational institution, we
would not assert jurisdiction but would dismiss the petition.
9 The Trustees of Columbia University, supra; see also Armour Research Foundation
of Illinois Institute of Technology, 107 NLRB 1053.
11 The Board has, of course, asserted jurisdiction over typically commercial enterprises
engaged in activities for the United States Government or related to the national de-
fense. See, for example, Columbia Reporting Company, 88 NLRB 168; E. C. Williams, 88
NLRB 620; General Electric Company, 89 NLRB 726 at 736; The Zia Company, 94
NLRB 214; The Lewis Engineering Company, 101 NLRB 484; Maytag Aircraft Corp.,
110 NLRB 594. The present case, however, is distinguishable both from such cases and
from those mentioned in footnote 4, supra, in that here neither the Employer nor the ac-
tivity concerned is "commercial" within the meaning of that term as it is related to the
Board's jurisdictional policy. we know of no previous case in which the Board has
asserted jurisdiction upon the basis of facts such as are present here.
KENNETH CHEVROLET COMPANY, HARRY MANN CHEVROLET COMPANY,
SPREEN OLDSMOBILE CADILLAC (COMPANY), AND MURPHY OLDSMO-
BILE COMPANY and AUTOMOBILE SALESMEN'S UNION, LOCAL 404,
RCIA, AFL, PETITIONER. Cases Nos. 21-RC-3545, 21-RC-3567,
21-RC-3568, and 21-RC-3574. December 15,1954
Decision and Order
Upon separate petitions duly filed under Section 9 (c) of the Na-
tional Labor Relations Act, separate hearings were held in the above-
entitled cases before Carl Filter, hearing officer. The hearing officer's
rulings made at the hearings are free from prejudicial error and are
hereby affirmed.
Upon the entire record in these cases,' the Board finds :
All of the Employers in these cases are retail automobile dealers
in the Greater Los Angeles, California, area. None make sales di-
rectly or indirectly outside the State or to persons or firms engaged
in interstate commerce. None make total annual purchases directly
from outside the State in excess of $500,000. Although each purchases
over $1,000,000 worth of new automobiles annually, and one Employ-
er's purchases total over $2,000,000, delivery of all of these automo-
biles, with one exception, is taken from assembly plants located within
the State. Spreen Oldsmobile Cadillac receives cars valued at
$336,397, from outside the State. Forty-three percent by value of all
component parts used in assembling Chevrolet automobiles and 80
percent by value of the component parts of Oldsmobile automobiles
1 The cases are consolidated herein for the purpose of decision.
110 NLRB No. 241.
1616 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
are manufactured outside the State. Each of these Employers holds
a nonexclusive sales franchise from the manufacturer of the make or
makes of automobile it sells.
In accordance with the recently announced decision of the Board
in the case of Wilson-0ldsmobile,2 we have determined that the Board
will no longer use the "franchise yardstick" for purposes of asserting
jurisdiction over automobile dealers or distributors, wholesale or re-
tail, or any other industry. Where, as in the instant cases, a local
retail establishment has a franchise agreement with a multistate enter-
prise, the Board will apply the same jurisdictional standards as are
applied to other local retail establishments.' Nor will the Board
assert jurisdiction over a retail establishment unless it has direct out-
of-State purchases of at least $1,000,000 per annum or indirect out-
of-State purchases of at least $2,000,000 per annum, or direct out-of-
State sales of at least $100,000 per annum."
We do not find that the operations of any of these Employers meet
the foregoing standards. Unlike our dissenting colleague, we do not
believe that the operations of these Employers satisfy the standards
for indirect inflow merely because a large proportion by value of the
component parts of the automobiles purchased by the Employers
originate outside the State. We consider a product as being part of
an indirect stream of inflowing commerce only when it is delivered
to the ultimate purchaser in the same form as when it entered the
State. The flow is stopped when the form is materially altered, or,
as in the case at bar, When the items become part of an entirely dif-
ferent product. We cannot believe that our colleague would have
the Board consider every item of commerce sold in the State of its
manufacture or assembly as indirect inflow solely upon the ground
that parts of such items originate outside the State. Moreover, we
do not believe that the assembly of automobiles is such a unique proc-
ess, different from any other manufacturing operation, to warrant the
application of a separate standard to the automobile industry merely
because that industry has, for economic reasons, established assembly
plants near its large markets.
Accordingly, we find that it will not effectuate the policies of the
Act to assert jurisdiction herein, and we shall order dismissed the pe-
titions filed herein.
[The Board dismissed the petitions.]
2 William T. Wilson and Mabel J. Wilson, a partnership , ddb/a Wilson-Oldsmobile, 110
NLRB 534.
3 See Wilson-Oldsmobile , footnote 2, supra.
4 Hogue and Knott Supermarkets , 110 NLRB 543. We did not mean to imply by adopt-
ing separate standards for retail establishments that in all cases they would be mutually
exclusive. In the case of the indirect sn/low requirement , it is only logical that to meet
such requirement direct inflow should be added to indirect inflow. In the instant case,
since we find no indirect inflow, there is nothing to add to the Employer's direct inflow.
0
KENNETH CHEVROLET COMPANY 1617
MEMBER MURDOCK, dissenting in part:
While I consider myself bound by the majority decisions in Wil-
son-Oldsmobile and Hogue and Knott Supermarkets,' the instant
case appears to me to be an unwarranted extension of those already
highly restrictive standards for the assertion of jurisdiction. In
brief, the majority is specifically holding here that purchases of new
ears from assembly plants of major automobile manufacturers do not
constitute "indirect inflow" for dealers located in the same State.
This strained and unrealistic approach virtually destroys any re-
maining chance that even a few franchised auto dealers and their
employees will be subject to the restraints and protections of the Act
for those dealers whose operations are huge enough to possibly meet
the $2,000,000 indirect inflow test are generally situated in the same
States as the auto manufacturers' assembly plants. Indeed, the latter
were necessitated by the large local sales market. Thus, though all
the dealers herein had purchases of more than $1,000,000 and one had
more than $2,000,000, the majority rejects jurisdiction of even the lat-
ter company because its purchases were made from the California
assembly plant of Chevrolet instead of the main Chevrolet production
center. Yet 43 percent by value of the component parts of these
Chevrolets and as high as 80 percent of the parts of other brands
originate outside the State of California and the Board and the courts
have consistently held that the establishment of such assembly plants
does not change the essentially interstate character of the manufac-
ture and distribution of automobiles.6
To qualify as "indirect inflow," according to the majority decision,
the product concerned must be "delivered to the ultimate purchaser
in the same form as when it entered the State. The flow is stopped
when the form is materially altered, or, as in the case at bar, when
the items become part of an entirely different product." This re-
strictive concept of the indirect inflow, first announced here, is an
extreme one akin to archaic views of interstate commerce long since
discarded by the courts. Its failure to reflect the essentially interstate
nature of many transactions, such as those herein, is obvious. What-
ever operations are performed at the assembly plants from which these
Employers purchase their cars, the manufacture and distribution of
those cars remains inherently interstate in character and type. A
cessation of dealer's operations with a resulting cessation of pur-
chases from the assembly plants would have an immediate and un-
questioned effect upon the flow of interstate commerce and not merely
an impact confined to the State of California.
For these reasons, I cannot accept the extremely restricted view of
"indirect inflow" set forth in this case, and I must dissent from the
refusal to assert jurisdiction herein.
Wilson - Oldsmobile , 110 NLRB 534; Hogue and Knott Supermarkets, 110 NLRB 543.
s See my dissenting opinion in irilson-Oldsmobile, supra, and cases cited therein.
338207-55-vol. 110-103