Leone Industries

National Labor Relations Board - Board Decisions

Aug 6, 1968

172 N.L.R.B. 1463 (N.L.R.B. 1968)

LEONE INDUSTRIES
Leone Industries and Glass Bottle Blowers Associa-
tion of the United States and Canada , AFL-CIO,
Petitioner . Case 4-RC-7484
August 6, 1968
DECISION ON REVIEW
By CHAIRMAN MCCULLOCH AND MEMBERS
FANNING, JENKINS, AND ZAGORIA
On December 7, 1967, the Regional Director for
Region 4 issued a Decision and Order in the above-
entitled proceeding in which he dismissed the peti-
tion for a unit of individuals undergoing training
under a program established by the Employer pur-
suant to its agreement with the Economic Develop-
ment Administration (EDA) to prepare them for
work at the Employer's Bridgeton, New Jersey,
plant. His basis for dismissal was that the plant had
not begun operations and, therefore, the trainees
were not employees. He stated that his dismissal
was without prejudice to any party filing a petition
at an appropriate time when the Employer has em-
ployees engaged in production.' Thereafter, in ac-
cordance with Section 102.67 of the National
Labor Relations Board Rules and Regulations, Se-
ries 8, as amended, the Employer filed a request for
review of the Regional Director's Decision on the
grounds (1) that his finding concerning the em-
ployee status of the trainees involved raises a sub-
stantial issue of law and policy because of the
absence of officially reported precedent, and (2)
that his findings of fact with respect to the contract-
bar issue were clearly erroneous. The Petitioner
filed opposition to the request for review.
The National Labor Relations Board by tele-
graphic order dated January 9, 1968, granted the
request for review. Thereafter, the Employer, the
Petitioner, and Local 286 filed briefs on review.
The Board has considered the entire record in
this case with respect to the issues under review, in-
cluding the briefs on review, and makes the follow-
ing findings:
In April 1965, the Employer applied to EDA for
a loan under the provisions of the Manpower
Development and Training Act (MDTA), as
amended (42 U.S.C. 2571-2620), for the purpose of
i Local 286, International Brotherhood of Pulp , Sulphate , and Paper Mill
Workers, AFL-CIO, intervened on the basis of a contract which it ad-
vanced as a bar Intervenor American Flint Glass Workers of North Amer-
ica sought a separate unit of individuals training for work at the Employer's
plant as moldmakers and apprentices
2 The State Department of Vocational Education, in cooperation with
the Department of Public Schools of the city of Bridgeton, and the State
Manpower and Development Training Administration , the U S Depart-
1463
constructing the plant here involved for the manu-
facture and sale of certain types of glass containers.
The loan was granted and the plant was erected. In
order to qualify for the loan the Employer agreed
with EDA that it would locate its plant in an
economically depressed area in Bridgeton, New
Jersey, conduct "a valid and meaningful training
program" to develop manpower skills for residents
of the area, and employ in its plant those who suc-
cessfully completed their training . The training pro-
gram was funded by EDA through agencies of the
State of New Jersey and was "supervised" or ad-
ministered by agencies of both the state and
Federal governments.2 The Employer, with the
assistance of government agencies, prepared in-
struction manuals and outlines of course content,
with visual aids, all of which had to be approved by
state and Federal agencies.
When applicants for the program appeared at the
plant the Employer had them all fill out applica-
tions and sent them to the State Bureau of Employ-
ment Security where they were screened as to their
qualifications for participation in the program3 and
to determine their eligibility for subsistence pay-
ments if selected for training.4 From the list of
qualified persons, the Employer selected those it
wished to train.
The training program began in mid-August 1967
with about 55 trainees. The Employer recruited six
instructors, a coordinator of training, a secretary,
and a janitor for work in connection with the pro-
gram. The Employer is reimbursed from govern-
ment funds for trainees' salaries up to certain
authorized ceilings. The Employer pays two of
them salaries in excess of the ceilings. The Em-
ployer stated that when production began the six
instructors and the coordinator of training would
become managerial and supervisory personnel and
the secretary and janitor would retain their jobs.
The trainees were assigned to one of six classes,
each under its own instructor. Two of the classes
prepared the trainees for different skill groupings in
maintenance classifications. The Employer planned
to utilize the classifications of maintenance I, II, III,
IV, and V and would assign the trainees to one of
these classifications on the basis of evaluations
made after completion of the training program.
Another class prepared trainees for classifications
ment of Labor's Bureau of Apprenticeship Training , the State Bureau of
Employment Security, EDA, etc.
3 Two types of applicants were sought those interested in developing
skills, and others seeking to upgrade their skills
' The minimum weekly subsistence payment for a head of household was
$41, and $5 was added for each dependent , but the maximum payment was
$66. Those who did not qualify for subsistence payments were not for this
reason disqualified from participation in the program
172 NLRB No. 158
1464 DECISIONS OF NATIONAL
denominated utility I, 11, and Iii; another for the
classifications of machine operator, apprentice
machine operator, and upkeep man, another for the
classifications of carton assembly, selector-packer,
and utility-inspector-packing, and another for the
classifications of moldmaker and apprentice mold-
maker. I fie classes were scheduled to last 12
weeks, after which the Employer expected to begin
production operations.' Early in the program a few
of the trainees dropped out and were replaced. As
of the October 6 hearing date there were 57
trainees. The Employer's planned complement at
full production is about 70, including supervisors.
Under its contract with the Federal Government
the Employer is obligated to continue the employ-
ment of qualified trainees after the termination of
the training period.
The training classes are held at the Employer's
plant Attendance is required by the Federal
Government to be 6 hours a day, 5 days a week.
However, the Employer sets the class hours and
breaktimes. The trainees are taught by the use of
manuals, textbooks, lectures, films, and dry-run
practice. The Employer tests and grades the
trainees and may terminate those whose per-
formance is unsatisfactory. It checks starting,
quitting, and breaktimes. However, officials of the
involved government agencies visit the plant from
time to time to check on various aspects of the pro-
gram, and the Employer is required to make
periodic reports to appropriate agencies on the
progress of each trainee.
As above indicated, trainees may receive sub-
sistence payments. All but 11 of them qualify for
such payments and receive them by check directly
from the State Bureau of Employment Security.
They receive no wages; however, the Employer
makes workmen's compensation payments for them
during their period of training, and they may
receive benefits under the collective-bargaining
agreement between the Employer and Intervenor
Local 286, discussed below, contingent upon the
successful completion of their training.
On September 12, 1967, a collective-bargaining
agreement was executed, effective as of September
1 1 , 1967, until September 10, 1970, stating that the
Employer recognized Local 286 as bargaining
representative of all hourly rated employees em-
ployed by the Employer at its Bridgeton plant, and
containing provisions as to wages, hours, working
conditions, and fringe benefits for such employees.6
As above indicated, on the execution date of the
Some of the trainees would require additional training while on the job
The Petitioner filed charges against the Employer in Case 4-CA-4480,
alleging violations of Section 8(a)(1) and (2) of the Act and naming Local
286 as an unlawfully assisted labor organization The charges were
LABOR RELATIONS BOARD
contract there were approximately 57 trainees at
the plant being trained to fill the classifications
which would be needed by the Employer in its plant
operations.
On the basis of the foregoing and the entire
record in this case, we conclude, contrary to the
Regional Director's finding, that the trainees here
involved, by virtue of the Employer's commitment
to employ them in its plant upon successful comple-
tion of their training, occupied a status analogous
to that of probationary employees rather than to
that of typical vocational students who have no
commitment for employment upon completion of
their training. Moreover, notwithstanding the facts
that government funds are used for subsistence pay-
ments and program expenses, and that the require-
ments for participation in the training program, the
contents of the training courses, and the mechanics
of the programs' operations had to conform to stan-
dards set by government agencies given responsi-
bilities for the implementation of MDTA, we find
that the Employer was the effective operator of the
program in that it selected the trainees and the in-
structors and controlled day-to-day operations.
The controls exercised by government agencies
over the operation of the program do not, there-
fore, militate against our finding that the trainees
were employees of the Employer.' Furthermore, as
the trainees under this program occupy a status
akin to that of probationary employees, we are not
persuaded by the Petitioner's argument that
because of their trainee status they are not in a
position to feel unfettered in the selection of a bar-
gaining agent.
We therefore reach the question whether or not
the contract between Local 286 and the Employer
may operate as a bar herein. The Petitioner con-
tended that the contract did not operate as a bar on
the grounds (1) that its terms and conditions were
not applicable until the trainees were working at
the plant, and (2) that, under the rule in General
Extrusion Company,8 there was not, at the time the
contract was executed, a representative and sub-
stantial complement employed at the plant. We find
no merit in these contentions.
Clearly, as to (2), the trainees were being trained
for specific types of work in the Employer's plant
and comprised almost the entire complement which
would be needed for full production. We find,
therefore, that the requirements of General Extru-
sion have been met. As to (1), the contract ex-
plicitly states it is effective as of September 11,
dismissed by the Regional Director as lacking in merit
' See Space Services International Corporation, 156 NLRB 1227,
1232-33
121 NLRB 1165
LEONE INDUSTRIES
1967, and the fact that there are few provisions
relating to the trainees merely indicates that the
Employer's existing practices during the training
period were acceptable to Local 286. Moreover,
the contract has provisions relating to seniority and
vacations which allow credit for time spent in the
training program.' We are satisfied, in the circum-
stances of this case, that the contract, which em-
braces a portion of the training period of the Em-
ployer's employees, sufficiently stabilizes the bar-
gaining relationship to preclude an election at this
time . We therefore find the contract to be a bar.10
Accordingly, for the reasons expressed herein,
the Regional Director's Order dismissing the peti-
tion is hereby affirmed.
MEMBER ZAGORIA, dissenting:
I reject the majority's finding that the trainees
were "employees" under the Act and further reject
the view that the agreement executed between
Leone Industries and Local 286 constitutes a con-
tractual bar to the holding of an election.
Moreover, I would reverse the Regional Director's
dismissal of the petition on the ground that,
although at the time the petition was filed there
were no employees in the unit , employees have
since been hired" and there is a sufficient showing
of interest under the circumstances of this case to
warrant conducting a certification election.
The trainee's relationship to Leone Industries, an
agent of the U.S. Economic and Development Ad-
ministration in carrying out a program under the
Manpower Development and Training Act, was in
the nature of student-teacher, not employee-em-
ployer. Therefore, the unit recognized did not con-
stitute a unit of "employees" as that term is defined
in Section 2(3) of the Act or used in Section 9 of
the Act. Since there were no employees available to
authorize Local 286 to be their exclusive bargain-
ing representative at the time the agreement
between Leone Industries and Local 286 was ex-
ecuted, that agreement was not a valid collective-
bargaining agreement for the purposes of the con-
tract-bar doctrine or any other purposes under the
Act.
The National Labor Relations Act was designed
and adopted to provide orderly procedures by
which employees can collectively resolve disputes
° Contrary to the implication in the dissent, we find nothing in Appalachi-
an Shale Products Co, 121 NLRB 1160, that is inconsistent with our hold-
ing herein
Nor do we, like our dissenting colleague , find any resemblance between
the Employer 's plant and a university campus or a vocational high school
The purpose of the government loan for the construction of the plant and
the other training and subsistence aids was to provide employment for re-
sidents of the area , and the Employer's selection of the trainees , and of the
maintenance and utility training to be given , was with a view to their em-
1465
with their employers respecting wages, hours, and
other terms and conditions of employment. In this
time of campus unrest, some observers may see a
need for similar machinery designed and adopted to
aid orderly processes by which students can collec-
tively resolve disputes with their teachers and
school administrators respecting curricula, the
quality of instruction, use of campus facilities,
scholarship aid, the grading system, the role of the
university in modern society, and the like. If such
machinery is desirable, it is clear that this Act was
neither adopted nor designed for that purpose. The
majority's decision in this case, however, casts the
Act and the Board into such a role.
During the period in question, Leone Industries
was engaged in providing the service of training
men in various skills. The employees of a company
engaged in providing training services are its in-
structors; the trainees are the consumers of its ser-
vice. Here those consumers were sponsored by the
Federal Government which, through its agencies
and agencies of the State of New Jersey, arranged
for tuition payment in the form of a loan grant to
Leone Industries, and maintained control over such
items as the financial assistance to be provided to
the students from the sponsor's funds, the type of
curriculum to be offered, admissions standards, and
the basic criteria for successful completion of the
course of study. The majority's analogy to the
probationary employee is, I think, in error. A
probationary employee is hired by his employer and
participates in a work program in a work setting
under operative wages, hours, and other terms and
conditions of employment. In contrast, the trainees
in question were exposed to a school environment,
not a working environment. Their collective ex-
perience in the plant involved course content, class-
room hours, study assignments, and examinations;
not wages, hours, and other terms and conditions of
employment. While it is true that Leone Industries'
contractual commitment to hire all trainees who
successfully completed the course gave the trainees
a potential community of employee interests, that
community of interests was about as cohesive and
defined as that of a group of high school or college
classmates who 6 months prior to graduation have
outstanding job offers from the same company.
Some may never graduate. Some may, at the last
ployment in that plant We find therefore that the trainees had passed
beyond the stage of mere aspiring students when the agreement between
Local 286 and the Employer was executed
10 In view of our finding that the contract is a bar to the petition, we need
not pass upon the Petitioner 's motion that the Board ascertain the current
status of the trainees, either administratively or by reopening the record.
1i The Board has been informed by Petitioner in its supplemental brief,
without contradiction , that the plant commenced manufacturing opera-
tions on or about November 3, 1967.
354-126 O-LT - 73 - pt. 2 - 21
1466 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
minute , decide to sell their newly developed skills
elsewhere . And, whereas Leone Industries was en-
gaged in the operation of a training program at the
time the purported collective-bargaining agreement
was signed , and at the time the petition herein was
filed, when it finally became the employer of the
trainees who were hired, the company shifted over
to a very different sort of operation-a manufactur-
ing enterprise . The plant environment and the rela-
tionship of the trainees to Leone Industries and
with each other has undoubtedly altered con-
siderably now that they (or at least some of them)
have been hired to work in the glass manufacturing
operation.
On the other hand , if the trainees in question
were employees under the Act, I think that the
majority errs in finding that the purported collec-
tive-bargaining agreement constituted a bar to the
petition. The agreement between Local 286 and
Leone Industries provided for wages and other
benefits which were not applicable until the then
unknown future date on which the company ceased
to operate a training school and began operations
as a manufacturing establishment . A contract with
such indefinite provisions is not , in my opinion,
adequate to bar an election . 12 It is no answer to say
that the absence of provisions governing practices
during the training period " merely indicates that
the Employer 's existing practices during the train-
ing period were acceptable to Local 286." The con-
tract-bar principle is not operative in the absence of
an executed written agreement . 13 A parole un-
derstanding to maintain the status quo is not suffi-
cient under the Board 's normal contract -bar stan-
dards ." Accordingly , unless the majority is chang-
ing existing doctrine respecting the contract-bar
rule, an inadequate contract cannot take life from
implied incorporation of the status quo into the
written agreement.
Further, under the General Extrusion rule,15 the
contract in question should not act as an election
bar here for neither the operations nor the work en-
vironment were representative when recognition
was granted .16 The purported collective-bargaining
agreement lists 18 job classifications. Even if the
trainees were employees under the Act, none were
employed at any of these 18 job classifications
when the contract was executed nor were these
classifications " in existence " within the meaning of
General Extrusion at the time the hearing was held.
Although zero may be one hundred percent of zero
under some sophisticated theories of mathematics, I
do not think that the 50-percent standard respect-
ing existing job classifications, as established in
General Extrusion, has been satisfied. Moreover, in-
asmuch as hiring was dependent upon successful
completion of the training course, I would find that,
as stated in the General Extrusion decision, this
contract does not bar an election because it was ex-
ecuted before any employees had been hired.
It Appalachian Shale Products Co., 121 NLRB 1160.
" Ibid
14 Ibid.
" 121 NLRB 1165
"Cf. National Gypsum co , 128 NLRB 315,319