Lion Oil Co.

National Labor Relations Board - Board Decisions

Jun 5, 1950

90 N.L.R.B. 102 (N.L.R.B. 1950)

I it the Matter of LION OIL COMPANY, EMPLOYER and OIL WORKERS
INTERNATIONAL UNION, CIO, PETITIONER
Case No. 15-RC-325.-Decided June 5, 1950
DECISION AND ORDER
Upon a petition duly filed under Section 9 (c) of the National Labor
Relations Act, a hearing was held before Victor H. Hess, Jr., hearing
officer. The hearing officer's rulings made at the hearing are free from
prejudicial error and are hereby affirmed?
Pursuant to the provisions of Section 3 (b) of the Act, the Board
has delegated its powers in connection-with this case to a three-member
panel [Chairman Herzog and Members Reynolds and Styles].
Upon the entire record in this case the Board finds :
1. The Employer is engaged in commerce within the meaning of
the Act.
2. The labor organization involved claims to represent employees of
the Employer.
3. No question affecting commerce exists concerning the representa-
tion of employees of the Employer within the meaning of Section 9
(c) (1) and Section 2 (6) and (7) of the Act, for the following
reasons:
The Petitioner seeks to represent a unit consisting of production and
maintenance employees working within a plant, which it describes as
"a gasoline plant," operated by the Employer at the Shuler Oil Field
near El Dorado, Arkansas. It would exclude from the unit all pro-
duction and maintenance employees working for the Employer in the
surrounding oil field, asserting that their work is so different from
that of the plant employees, both in function and in the skills required,
as to render inappropriate a unit comprising both groups. The Em-
ployer contends that all its employees at Shuler, whether working in
the field or the plant, are primarily engaged in the production of oil
in an operation so highly integrated that only a unit comprising both
groups can be appropriate.
i At the hearing , the Employer moved to dismiss the petition on the ground that the unit
requested is inappropriate . For the reasons hereinafter stated, this motion is hereby
granted.
90 NLRB No. 11.
102
LION OIL COMPANY 103
The Employer and 27 other corporations and individuals own the
leases to certain producing horizons at the Shuler Field, principally
that known as the Jones Sand Pool. Previous to 1941 their holdings
were operated separately, which proved to be an uneconomic method
of operation, wasteful of both oil and of natural gas. After the com-
pletion of scientific surveys, the owners in January 1941 entered into
an agreement for unified operation designating the Employer as sole
operator.2 The individual operators executed cross-assignments of
their interests dividing the ownership of the Pool between them on
agreed percentages, of which the largest, 44 percent, is the Employer's.
The oil in the Jones Sand Pool has always contained a high per-
centage of natural gas. During the 4-year period of competitive oper-
ation, 50 percent of the gas pressure within the reservoir underlying
the oil field has been dissipated. Maintenance of adequate pressure in
the reservoir being essential to effective operation, one of the first
steps under the "utilization agreement" was to provide a system
whereby the natural gas, after its separation from the oil, could be
compressed for reinjection into designated wells.3 These facilities
consist of gas gathering lines, leading the gas from the well batteries
in the field to a repressuring plant with four compressors, and injec-
tion lines for the return of the repressured gas to the wells.
In order to prevent vapor locks in the injection lines, it was then
necessary to construct facilities for extracting all liquids from the
gas before its reinjection. These facilities, consisting of an absorber,
heat exchanger towers and auxiliary equipment, are the only part of
the plant which may accurately be described as a gasoline plant. Al-
though these facilities constitute about 50 percent of the total plant
equipment,' and at present this phase of the Employer's operation is
profitable, the Employer contends that the gasoline plant operation is
merely auxiliary to the production of oil, pointing out that sales of
casing head gasoline and the other end products of the extraction
process have been less than one-tenth the value of the oil sold.5 In
further support of this contention the Employer testified that with
constant recycling of the natural gas it will, in time, become so lean
that the sale of the liquids extracted from it will not cover the cost
2 The "unitization agreement" was approved by the Arkansas Gas and Oil Commis-
sion and has been administered under its supervision.
B Injection of gas into some of the wells fills up space within the reservoir left by
the production of gas and oil, and by filling , that space maintains pressure which is
the medium through which oil or liquids get to the well bore and eventually to the
surface. A secondary desirable effect is that the reinjected gas tends to sweep before
it oil that has been left in the bore spaces.
* It should be noted that the plant does not consist of a single building but rather
of a group of buildings , plus various facilities in the open around the buildings.
6 Sales of casing head gasoline , propane, and butane in the first 11 months of 1949
amounted to $576,000 while sales of oil totaled $6 , 000,092.
104 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
of their extraction. When this stage is reached, which can be expected
to occur long before exhaustion of the recoverable oil, the Employer
nevertheless plans to continue extraction because of the great benefits
to the repressuring program.
- All its operations under the "unitization agreement"-extraction,
repressuring, and field operations-are designated by the Employer
as the Shuler Production Unit. They are tinder the immediate charge
of a production superintendent and are conducted independently of
the Employer's other operations. The Employer maintains separate
records and accounts for the Shuler Unit operation and charges the
cost against it. The coowners also pay the Employer a fixed monthly
-fee for its service as an operator.' Although the Employer is the sole
operator, there is a committee selected from all the owners to represent
them on matters of policy.?
Consonant with the Employer's contention that the Shuler Produc-
tion Unit is a highly integrated operation, transfers of personnel from
field to plant or vice versa have been permitted from the inception of
the operation. For at least 2 years all employees have been given
opportunity to bid for any vacancy whether in the field or in the plant.
Selection is based upon a combination of unit-wide seniority and fit-
ness, but in any event the bidder with the highest seniority is permitted
a 60-day trial on the job. There are two main categories of field jobs,
switcher and roustabout, and two of plant jobs, operator and oiler.
The record is silent as to their rates of pay. The switchers are respon-
sible for the tank batteries connected to the oil wells, and their main
duties are those common to switchers throughout the oil industry.
Their work impinges on that of the plant in one respect. They are
responsible for the equipment at the batteries which separates the
natural gas from the oil and must detect the difficulties there which
sometimes result in the accidental diversion of oil into the gas gather-
ing lines. If they fail to do so, oil accumulates at the plant and a
whistle is blown to warn the switchers of the situation.
The roustabouts- are divided, into three groups. Two well service
gangs perform the duties typical of such employees in oil fields. The
third, a repair gang, maintains the wells, tank batteries, and gas lines,
and occasionally works within. the plant itself when a repair job
6 As the Employer is itself owner of a 44-percent interest it bears its proportionate
share of this as of all other costs.
7'17he operating committee approved the extension to employees of the Shuler Pro-
duction Unit (all of whom are carried on the Employer's payrolls) of such employee
benefits as group life insurance, health plans, and annuity plans, already available
to employees in the Lion Oil Company's wholly owned operations. It further sanctioned
prorata contribution by the Unit owners to such of these programs as call for employer
contribution. For purposes of determining the amount of benefit under these programs,
or the time and amount of a Shuler employee's vacation, previous service in the Em-
ployer's wholly owned operations is counted as well as service in the Unit.
LION OIL COMPANY 105
cannot be performed by the plant crew alone. It was estimated that
repair roustabouts spend about 25 percent of their time in working on
the gas line or within the plant. Similarly, the plant repair crew does
repair work in the field when repair roustabouts are not available for
a particular job.
. The two main job classifications in and about the plant are operator
and oiler. Two operators and one oiler are on duty on each of three
8-hour shifts. One operator is responsible for operation of the pres-
sure maintenance machinery and that of the water wells which furnish
water to the plant. The other operator is responsible for the liquid
extraction facilities. The oiler's main task is to keep the compressors
oiled
Maintenance and repair of all plant machinery is in charge of the
subforeman of maintenance. On the main shift there is one repair-
man and the subforeman works along with the repairman. An addi-
tional operator performs the repair work on each of the other shifts.
In support of the contention that the unit should be confined to work-
ers within the plant, the Petitioner introduced excerpts from its con-
tracts with numerous gasoline plant owners. However, only one of
these-contracts involved. a repressuring plant operated by the owner of
the field," and it provided for a unit which included some of the field
workers!
Upon the entire record, we believe it to be apparent that the gaso-
line produced by the Employer at the Shuler Unit is but a limited by-
product of its oil producing operations. Its plant performs essentially
a repressuring function utilized to maintain the flow of oil, which is
not refined at this location but is shipped to other points. In view of
the integrated nature of the Employer's operations at this field, their
conduct as a single separate enterprise, the community of conditions
of employment and employees benefits, and the presence of some degree
of employee interchange, we believe that a unit limited to the gasoline
or repressuring plant is inappropriate for collective bargaining.bo
Accordingly, we shall dismiss the petition.
ORDER
It is hereby ordered that the petition herein be, and it hereby is,
dismissed.
8 Some of these contracts' involved plants whose operators have no ]eases in the sur=
rounding oil fields, but purchase the oil they process . In such cases, of course , no field
workers are employed by the contracting employer.
D The Petitioner ' s further argument that the field workers should be represented on a com-
pany-wide basis and not be broken up into units at various fields is not valid with regard to
the Shuler Production Unit because it is not a segment of the Employer 's own business but
a separate business , 56 percent of which is in ownership other than the Employer's.
11 J. S. Abercrombie Co., 77 NLRB 712 ; Deep Oil Development Co., 74 NLRB 941.