Mahoning Mining Co.

National Labor Relations Board - Board Decisions

Apr 28, 1945

61 N.L.R.B. 792 (N.L.R.B. 1945)

In the Matter Of MAHONING MINING COMPANY and LOCAL UNION
#12,509, DISTRICC 50, UNITED MINE WORKERS or AMERICA
Case No. 14-C-883.-Decided April 08, 1940
Messrs. Kieth W. Blinn and Hugh D. McNew, for the Board.
Pope and Driemeyer, by Robert L. Broderick, of East St . Louis, Ill.,
and Messrs . J. G. Trewartha and R. K. Wisco, both of Rosiclare, Ill.,
for the respondent.
Mr. Harold Stephenson, of Rosiclare, Ill., for the Union.
Mr. William, C. Baisinger, Jr., of counsel to the Board.
DECISION
AND
ORDER
STATEMENT OF THE CASE
Upon an amended charge duly filed on August 23, 1944, by Local
Union #12,509 , District 50, United Mine Workers of America, herein
called the Union, the National Labor Relations Board, herein called
the Board , by the Regional Director for the Fourteenth Region (St.
Louis, Missouri ), issued its complaint , dated August 23, 1944, against
Mahoning Mining Company, herein called the respondent , alleging
that the respondent had engaged in and was engaging in unfair labor
practices affecting commerce , within the meaning of Section 8 (1) and
(5) and Section 2 ( 6) and ( 7) of the National Labor Relations Act,
49 Stat: 449 , herein called the Act. A copy of the complaint , accom-
panied by Notice of Hearing, was duly served upon the respondent
and the Union.
With respect to the unfair labor practices , the complaint alleged in
substance : ( 1) that all employees of the respondent at its W. L. Davis
Mine, Anna L. Davis Mine, and West Green Mine, excluding clerical
and supervisory employees , guards , safety men , and the engineer, con-
stitute a unit appropriate for the purposes of collective bargaining;
(2) that the Union has been designated and selected by a majority of
all employees in said unit as their exclusive representative for the
61N.L R. B., No. 128
792
MAHONING MINING COMPANY 793
purpose of collective bargaining pursuant to an election conducted by
the Board on July 9, 1942 , and has, at all times since the date of the
election, continued to be the exclusive representative of the employees
in said ' unit; ( 3) that on or about September 8, 1943, and at all times
thereafter , the respondent , although duly requested , refused to bar-
gain collectively with the Union as the exclusive representative of its
employees in said appropriate unit; and ( 4) that, by such refusal, the
respondent violated Section 8 ( 5) of the Act and thereby interfered
with, restrained , and coerced its employees in the exercise of the rights
guaranteed in Section 7 of the Act , within the meaning of Section 8 (1)
of the Act.
On 'September 8, 1944, the respondent filed its answer 1 in which,
after admitting the facts set forth in the complaint as to its cor-
porate organization and its business operations , it denied the allega-
tions of the complaint with respect to unfair labor practices and set
forth affirmative matter, hereinafter discussed , by way of defense.
Pursuant to notice , a hearing was held at Elizabethtown , Illinois,
on September 14 and 15, 1944 , before Charles E. Persons , the Trial
Examiner duly designated by the Chief Trail Examiner . The Board
and the respondent were represented by counsel , and the Union, by
one of its officials . All parties participated in the hearing. Full
opportunity to be heard , to examine and cross-examine witnesses, and
to introduce evidence bearing on the issues was afforded all parties.
At the beginning of the hearing the respondent moved to amend its
answer by correcting the date stated in the final paragraph thereof
from September 3 to September 8. At the close of the hearing the
Board moved to conform the pleadings to the proof as to minor errors
not touching matters of substance . These motions were granted with-
out objection . During the course of the hearing , the Trial Examiner
made rulings on other motions and on objections to the admission of
evidence. The Board has reviewed the rulings of the Trial Examiner
and finds that no prejudicial error was committed. The rulings are
hereby affirmed.
On November 4, 1944, the Trial Examiner issued his Intermediate
Report, copies of which were duly served upon the parties, finding
that the respondent had engaged in and was engaging in the unfair
labor practices alleged in the complaint and recommending that it
cease and desist therefrom and take certain affirmative action. There-
after, the respondent filed exceptions and a brief . The Union has not
filed any exceptions . No request for oral argument before the Board
was made, and none was held.
' The time for the filing of the answer was extended by of der of the Regional Director
issued on September 4, 1944.
794 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The Board has considered the Intermediate Report, the respondent's
exceptions and brief, and the entire record in the case, and finds that
the exceptions have merit.
Upon the entire record in the case, the Board makes the following :
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT 2
Mahoning Mining Company, a Deleware corporation having its
principal office at Youngstown , Ohio, is engaged in the mining of lead,
zinc, and fluorspar at its mines in the vicinity of Cave in Rock, Illinois,
and in the operation of a mill at Rosiclare , Illinois, at which it reduces
ore produced at its own mines and other mines in the vicinity . During
the calendar year 1943, the respondent purchased raw materials and
supplies valued in excess of $100,000 , of which more than 50 percent
was purchased and shipped from points outside the State of Illinois.
During the same year the respondent sold and shipped products valued
in excess of $400,000 , of which more than 50 percent was sold and
shipped from its operations in the vicinity of Rosiclare , Illinois, to
points outside the State of Illinois . The operations of the respondent
carried on during the months of 1944, immediately preceding the hear-
ing, were substantially similar to its operations during 1943.
The respondent admits, and we find, that it is engaged in commerce
within the meaning of the National Labor Relations Act.
H. THE ORGANIZATION INVOLVED
Local Union #12,509, District 50, United Mine Workers of Amer-
ica, is a labor organization admitting to membership employees of
the respondent.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background
1. The mines involved
The respondent owns three fluorspar mines in the vicinity of Cave
in Rock, Illinois, known as the W. L. Davis Mine, Anna L. Davis
Mine, and West Green Mine, herein referred to as the Davis Mine,
Anna Mine, and West Green Mine, respectively. The respondent has
operated the Davis Mine continuously since 1939. The Anna Mine
was. operated by the respondent from 1941 to April or May 1943, at
2 The findings in this Section are based ( a) on a stipulation of the parties incorporated
in the record ; ( b) on allegations in the complaint , admitted by the respondent in its
answer ; and (c ) on testimony which is uncontroverted.
MAIIONING MINING COMPANY 795
which time it was shut down because the respondent was unable to
obtain a sufficient number of employees to produce the desired
quantity of ore. Thereafter, on July 9, 1943, the respondent entered
into a mining contract with J. W. Patton and Sons, an independent
contractor, herein called Patton ,3 for the operation of the Anna Mine.
The respondent operated its West Green Mine from 1941 to September
1, 1943, when it entered into a contract with Cat Mining Company,
hereinto called Cat,4 to operate the West Green Mine. At the time of
the hearing in this proceeding, as theretofore, the operation of the
three mines was a constituent part of the business of the respondent.
The ore there mined, together with additional amounts brought from
other mines in the vicinity, is assayed and milled in the respondent's
plant at Rosiclare; and the products are thereafter sold to the United
States Government or on the general market.
2. The history of collective bargaining with respect to the Davis,
Anna, and West Green Mines
On May 29, 1942, in a representation proceeding involving the re-
spondent and the Union, the Board issued a Decision and Direction
of. Election,5 in which it found, on the basis of a stipulation of the
parties, that "all employees at the three mines operated by the Com-
pany in and near Cave in Rock, Illinois, excluding clerical and super-
visory employees, guards, safetymen and the engineer, constitute a
unit appropriate for the purposes of collective bargaining, within the
meaning of Section 9 (b) of the Act."
Pursuant to the Board's Direction of Election, an election by secret
ballot was held on July 9, 1942. A majority of the votes having been
cast for the Union, on July 30, 1942, the Board certified the Union as
the statutory representative of the employees within the appropriate
unit as defined above. Thereafter, the respondent and the Union en-
tered into a contract effective from October 1, 1942, to October 1, 1943,
and "from year to year thereafter unless, by notice given by either
party thirty (30) days prior to the expiration of any year, it be sooner
3 Patton, an experienced contractor , is a partnership composed of J. W. Patton and his
two sons , Paul and Tom Since the formation of the partnership in 1931, Patton has con-
tracted for hauling, road construction , and mining operations . Patton owns considerable
equipment suited to this type of work At the time of the hearing , among other things,
Patton was engaged in hauling operations under separate contracts with two companies not
Involved in this proceeding.
4 Cat is a partnership formed in August 1943 , by five individuals , four of whom had at
various times been employed by the respondent, to engage in independent mining operations.
After Cat had entered into the mining contract with the respondent , two of the partners
sold their interest in the partnership to the other three partners . The respondent accepted
this change in the partnership structure and operations continued under the contract
6 Matter of Mahonxng Mining Company and United Mine Workers of America , Gas, Coke,
and Chemical Workers, District No. 50, C. I O., 41 N. L. R. B. 497. The Union has since
changed its name to that hereinabove set forth.
796 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
terminated." Among other things, the agreement included a provi-
sion that the respondent "deduct from the earnings of members of
the Union] the amounts each employee authorizes in writing to be
deducted" and transmit such amounts to the Union.
0
B. The alleged refusal to bargain
After execution of the contracts with Patton and Cat mentioned
above, on September 8 and October 4, 1943, the Union and the
respondent through their representatives met for the purpose of
collective bargaining. At the first meeting, "various phases of the old
contract were discussed and the union members presented certain
features which they would like to have incorporated in the new con-
tract"; and it was agreed to have a later meeting. after consideration of
the new proposals. At the second meeting, union representatives pre-
sented a demand that the respondent deduct union dues of three of
their members alleged to have been recently transferred from the W.
L. Davis to the West Green Mine. The respondent refused, stating
that the men in question were not its employees. In the ensuing dis-
cussion the respondent informed the Union that the respondent did
not recognize the mining employees in the Anna Mine or those in the
West Green Mine as employees of the respondent. The respondent
asserted that Patton and Cat, respectively, as independent contractors,
were the employers of the men in these mines. While refusing to bar-
gain for these men, the respondent stated that it was willing and ready
to bargain for employees in the W. L. Davis Mine and for surface men
working in the power plant at the West Green Mines The Union did
not find this an acceptable basis for negotiation and withdrew. There-
after, it filed with the Board charges which give rise to this proceeding.
We agree with the Trial Examiner that the essential question for
solution is whether the respondent was obligated under the Act to
bargain for the employees working in the Anna and West Green mines
after the mining contracts had been entered into with Patton and Cat,
respectively.
As disclosed in the record, contracts involving leasing of mining
sites are frequently made in the fluorspar mining area in the vicinity
of the respondent's operations. The provisions in the respondent's
contracts with Patton and Cat are substantially similar and conform,
with a single exception,? to provisions found in contracts in general
9 A powerhouse that generates electricity and compressed air is located on the west Green
Mine property. The respondent operates this powerhouse and, under the terms of its con-
tract with Cat, sells Cat electricity and compressed air In the operation of the power-
house, the respondent employs about seven men, who are referred to as surface employees
as distinguished from mine employees These employees are on the respondent's pay roll
and were included in the bargaining unit found appropriate in the representation case.
7In this area, mining contracts are customarily entered into for a term of 1 year
MAHONING MINING COMPANY 797
usage in this mining area. Each contract states that the respondent,
referred to in the contracts as the Company, desires to employ the con-
tractor, referring to Patton or Cat as the case may be, as an inde-
pendent contractor to deliver fluorspar ore from the respective mine
involved. Paragraph 1 of the contract with Cat, dealing with the
term of the agreement, is as follows :
The term of this agreement, for the exclusive purpose of de-
livering fluorspar ore and disposing of waste rock incident to the
mining thereof, shall be thirty (30) days from the date first above
written; provided, that the term of this agreement shall be and
become extended for succeeding thirty (30) day periods there-
after, unless and until either the Company or the contractor shall
serve upon the other a written notice of termination, which notice
shall be served not less than ten (10) days prior to the expiration
of the then current thirty (30) day period, and unless said term
shall be sooner terminated by default as herein provided.8
Each contractor was to use the .machinery, buildings, and equipment
of the respondent, the contractor assuming an obligation to keep the
same in repair and to replace parts as needed. The contractor also
became responsible under the agreements for the extension of air and
electric lines and of haulage tracks, as the work progressed. He was
to "hire, control and fire [his] own employees and arrange for the
method of their compensation entirely in [his] discretion and control."
The contracts specifically provided that "there shall be no privity of
contract between the Company and the Contractor's employees."
In addition, the contractor was to insure his liability under workmen
compensation and occupational disease laws and to obtain adequate
public liability insurance ° Immediately upon commencing operation,
each contractor was to post written notices, notifying all persons that
the property was being operated under an agreement with the respond-
ent and that the contractor was assuming liability for all labor per-
formed and supplies and materials used.10 He was to keep an accurate
record of the amount of waste discarded. He was to have'access to the
8 As stated above, this paragraph is quoted from the respondent's contract with Cat, the
corresponding provision in the contract with Patton is substantially similar but contains
minor variations in phraseology
IIn practice, the contractors also made Social Security deductions from employees'
wages.
10 A notice posted on September 1, 1943, by Cat at the West Green Mine reads as follows.
To Whom it May Concern
This property known as the West Green Mine is operated by the Cat Mining Company
under an agreement with the Mahoning Mining Company, and the Cat Mining Company
is liable for all labor performed and supplies and materials used by the Cat Mining
Company in and upon•this property. The Cat Mining Company is responsible for all
debts and expenses incurred in the mining operations in and upon this property.
THE CAT MINING COMPANY.
[Signed by each partner]
639675-45-vol 61-52
798 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
respondent 's mine maps and drill records for guidance in his opera-
tions. The contractor was to deliver ore into the mine hopper in
minimum and maximum amounts fixed in the contracts 11
The contractor further agreed "that he will not through improper
mining methods or through violation of any of the requirements of the
Statutes of the State of Illinois or the rules and regulations of any
official of the State of Illinois , so conduct his operation as to cause loss
or damage to the [respondent] or its property or interfere with the
ability of the [respondent ] upon the expiration of the term of this
agreement to enter upon said property and immediately conduct min-
ing operations therein." Each contract also provided that "the con-
tractor shall not assign or subcontract this contract ... without the
written consent of the Company."
The respondent agreed to furnish each contractor compressed air at
a stated price per shift and was to have the "right at all times to enter
said property and all underground workings thereof for purposes of
inspecting , surveying and sampling ." The respondent was to haul the
ore from the shaft hopper of each mine to its mill in Rosiclare , Illinois ;
weigh and assay it; and pay a basic rate "per net dry ton" based on a
specified calcium fluoride content.12 There were also bonus payments
provided for one of higher content and penalties for ore assaying a
lower given percentage in calcium fluoride content 13
It appears' that in operation all the terms and provisions of the con-
tracts have been observed . Patton commenced operations at the Anna
Mine on July 9, 1943 . None of the men employed by Patton to work
in the mine were former employees of the respondent . Many of them
had been in Patton 's employ for 4 or 5 years . Patton maintains an
office in Elizabethtown , Illinois, where its pay roll is prepared and pay
checks are issued for all its employees , including the workers at the
Anna Mine. Patton pays the men at the Anna Mine on different dates
than the pay days established by the respondent . Paul Patton, one of
the partners , is i>;l charge of the mining operations of Patton . He reg-
ularly worked full time in the Anna Mine and was in charge of opera-
tions, supervising the employees , determining the mining methods to
be used, and selecting the areas in the mine to be exploited. The record
11 200 to 400 tons per week in the case of the Anna L. Davis Mine ; 100 to 200 tons per
day at the west Green Mine.
12 Fifty-five percent at the Anna L. Davis ; 50-55 percent at the west Green.
13 There was a supplementary agreement between the respondent and Cat to the effect
that, at the end of the first month of operations at the west Green Mine by Cat, Cat would
present to the respondent an accurate record of tonnage mined and waste discarded and of
all costs incurred. The data was to provide a basis for determining a new price per ton of
ore mined. Accordingly on October 1, 1943, the parties met and agreed to a reduction in
price from $2 50 to $2.10 per ton. Records introduced in the hearing show. that, despite
the cut in price, Cat received approximately $2.50 per ton of ore mined in November 1943.
The reduction in price per ton of ore was counterbalanced by bonus payments, the calcium
flouride content having been raised from 51 to 55 percent in. September to 59 to 62 percent
in November. -
MAHONING MINING COMPANY 799
reflects no interference by the respondent with Patton's control of the
selection, supervision, or discharge of employees working in the Anna
Mine.
According to uncontradicted testimony of Paul Patton, sometime
in July 1944, he was advised by the respondent that it would soon
have a sufficient supply of ore of the type produced at the Anna Mine
to last for a considerable period of time. Accordingly, the respondent
and Patton agreed that Patton should discontinue operations at the
Anna Mine until the respondent had reduced the stockpile of ore at its
mill. Consequently, on or about August 25, 1944, Patton ceased oper-
ations at the Anna Mine and, pursuant to a separate contract with
the respondent, commenced operations on certain of the respondent's
property at Salem, Kentucky, where Patton was still working at the
date of the hearing. Paul Patton and John G. Trewartha, the re-
spondent's general manager, who had signed the contract relating
to operation of the Anna mine, testified that they regarded per-
formance under that contract as temporarily suspended until such time
as the respondent had need for more ore from the Anna Mine.
Cat commenced operations at the West Green Mine under its con-
tract with the respondent on September 1, 1943. On September 8,
1943, the date of the alleged refusal to bargain, 5 of the 7 production
employees working at the West Green Mine were persons who had
been in the employ of the respondent prior to September 1, 1943?'
Of these 5 persons, 2 had worked as guards at the respondent's W. L.
Davis Mine 15 immediately prior to the time they went to work for Cat
as skilled laborers at 14 cents more per hour than they had earned as
guards; 1 had been employed at the W. L. Davis Mine, in a capacity
not revealed in the record, immediately prior to employment at the
West Green Mine; and the remaining 2 persons were formerly em-
ployed at the W. L. Davis Mine but had not worked for the respondent
for several months prior to the time that they were hired by Cat.
Harold Kitelinger, one of Cat's partners, testified, without contradic-
tion, that, in the latter part of September 1943, Cat had a full crew
of about 26 men. It does hot appear, however, whether all 26 of
these employees then worked at the West Green Mine or whether
any of the additional 19 persons hired were former employees of the
respondent 16 Kitelinger testified that all persons hired by Cat when
14 The respondent operated the West Green Mine until Cat took over on September 1,
1943 The record does not disclose what happened to the persons employed at west Green
by the respondent prior to September 1, except as hereinafter disclosed.
11 The W. L. Davis Mine, which is still operated exclusively by the respondent , together
with the Anna and West Green Mines, comprised the operational unit which the Board pre-
,viously found to be appropriate.
16 At the date of the hearing , in addition to operating the West Green Mine, Cat was
engaged under a separate contract in performing developmental work at another of the
respondent ' s mines known as the East Green Mine . This mine is not within the unit here-
tofore determined by the Board to be appropriate.
Soo DECISIONS Or NATIONAL LABOR RELATIONS BOARD
it commenced operating under the contract with the respondent, were
considered by Cat as newly hired employees, and that Cat did not
recognize the seniority which any of these persons may have acquired
while working for the respondent. As in the case of Patton, the
record reflects no interference by the respondent with Cat's control
of the selection, supervision,. or discharge of employees working in
the West Green Mine 17
Upon the basis of the foregoing, we do not agree with the Trial
Examiner's conclusion that the respondent exercises or has the right
to exercise sufficient control over the respective operations of Patton
and Cat at the Anna and West Green Mines to establish that the re-
spondent is an employer of the persons working in these two mines
within the meaning of the Act.
The record shows, as the Trial Examiner finds, that it is common
practice in the fluorspar mining industry for mine owners to contract
out the operation of their mines to others. It is undisputed that the
mining contracts here involved are substantially similar to the mining
contracts customarily used in the industry. There is neither claim
nor evidence that the respondent entered into the contracts with Pat-
ton and Cat for the purpose of evading any obligation of the respon-
dent under the Act. Examination of the contracts shows that the
contracting parties clearly intended that Patton and Cat were to
operate the Anna and West Green Mines, respectively, as independent
contractors free from any control by the respondent with respect to
the method of operation or with respect to the hire, discharge, hours,
wages, or other terms or conditions of employment of the persons
working in the two mines. Thus, each of the contracts provided :
1. That there "shall be no privity of contract between the [re-
spondent] and the contractor's employees. . . .
2. That the contractor "shall select, control and fire his own
employees, and arrange for the method of their compensation
entirely in 'the discretion and control of the contractor, and shall
have exclusive control over the mining operations during the term
hereof."
3. That the contractor was to take out and pay for all types of
insurance necessary for the protection of its employees while
operating the mine; and
"Employee Clifford Edwards , who worked for Cat in the West Green Mine as a mucker,
testified, without contradiction, that the respondent's Mine Superintendent V. G Smith
customarily inspected the west Green Mine two or three times a week and that, on one such
occasion, Edwards overheard Smith tell Kitelinger that the ore on which Edwards was
working "wasn 't what it ought to be" and that more of it should not be mucked There-
after, Kitelinger told Edwards to "go over to another place and go to mucking " On cross-
examination, however, Edwards testified that this was the only occasion on which he had
heard Smith give advice or directions to representatives of Cat
MAHONING MINING COMPANY 801
4. That the contractor was to post notices on the mine property
concerning its liability for all labor. performed and debts and ex-
penses incurred by it while operating the mine.
It is undisputed that the above-stated provisions of the contracts, as
well as all others, have been observed by all parties since the contractors
commenced operations under the respective contracts.
General Manager Trewartha testified, without contradiction, that,
inasmuch as the respondent was unfamiliar with the capabilities of
Patton and Cat at the time the mining contracts were executed, the
respondent insisted upon short-term contracts to enable it to retake
possession of the mines on short notice in the event that the contractors
proved unable to supply a sufficient amount of ore. Moreover, merely
because the contracts are month to month agreements, terminable on
10 days' notice, it does not necessarily follow, that the persons working
in the Anna or West Green Mines would be severed from the con-
tractor's pay roll should the contracts be terminated. Both Patton
and Cat hold themselves out to the world as independent contractors
and, as disclosed by the record, at the date of the hearing both were
engaged in performing work under other contracts. As previously
noted, many of the persons working at the Anna Mine have been em-
ployed by Patton for 4 or 5 years. The usual employment relation-
ship is terminable at will. Thus, the employment security of the
workers at the Anna and West Green Mines is not fundamentally un-
like that of the ordinary employee. Furthermore, it does not nec-
essarily follow that the respondent would retain such workers in the
event of cancelation of the contracts. Besides, so long as these con-
tracts remain in force, the contractors have exclusive control over the
subjects of collective bargaining as to the workers here in question, and
they may bargain collectively with the contractors with respect to such
employment. In other words, so far as appears, the'contractors are
the real employers.
The single incident related by employee Edwards, considered in the
light of other evidence in the record, does not, in our opinion, estab-
lish that the respondent possesses the right to control the operations of
Cat. Cat was composed of experienced miners but inexperienced con-
tractors. Mine Superintendent Smith was well qualified by his ex-
perience with the respondent, particularly in connection with the West
Green Mine, to advise Kitelinger with respect to contract operations.
It is reasonable to infer that Kitelinger received and Smith gave such
advice as an incident of the joint interest of the parties in profitable
operation of the venture. It is also significant that, although Edwards
saw Smith inspecting the mine two or three times a week, this is the
802 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
only occasion that he heard Smith give any advice or instruction to
representatives of Cat.
As mentioned above, at least a month prior to the interruption of
operations at the Anna Mine, Patton and the respondent had mutually
agreed to close the mine for an indefinite period, and Patton had
entered into a separate agreement'with the respondent to perform
work at another location until such time as the Anna Mine should
be reopened. This temporary departure from the terms of Patton's
contract was not unilaterally made on the spur of the moment, as the
Trial Examiner infers, but was a mutual understanding of the parties
for a temporary cessation of performance under the contract.
In reaching his conclusion that the respondent occupied the position
of an employer as to the workers in the Anna and West Green Mines,
the Trial Examiner relied strongly upon the Board's decision in the
Kendall case 18 We are of the opinion that the instant case is distin-
guishable from the Kendall case. In the case before us there is no
showing that either Patton or Cat performed their mining operations
according to any plant, general or otherwise, formulated by the re-
spondent. Nor, except for the single incident related by employee
Edwards, has any representative of the respondent ever offered any
suggestion as to the operational methods to be used by Patton or Cat.
The virtual absence of control by the respondent over the operations of
Patton and Cat or of the employees in the mines, in our opinion, clearly
distinguishes this case from the Kendall case. We have consistently
declined to find the existence of an employer-employee relationship
between the employees of an independent contractor and a so-called
employer for whom the contractor is performing work in the absence
of economic facts demonstrating the need for the establishment of
18 Matter of S. A. Kendall, et al ., 38 N L R . B. 1071. In that case the Kray Coal Com-
pany owned four mikes in west Virginia which were operated respectively by four mining
contractors under separate contracts identical in substance . The contracts provided (1)
that the contractor was to properly mine and deliver- coal to Kray ; ' ( 2) that Kray was to
pay a stated price for each ton of coal delivered ; ( 3) that the coal was to be mined in a
manner satisfactory to Kray and in conformity with west Virginia mining laws; and (4)
that the contract could be terminated upon 7 days ' written notice by either party. In
practice each contractor was required to perform his mining operations according to a
general plan formulated by Kray., A representative of Kray made periodic iinspections of
each mine , and his instructions and suggestions as to operating methods to be used were
followed by the contractors Upon these facts the Board found that, inasmuch as Kray
owned the mines and a substantial portion of the mining equipment in them and received
almost their entire output of coal, his interest in the contractor ' s operation of the mines
was substantial . The Board further found that Kray retained a substatial degree of con-
trol over the operations of the contractors and the employees in the mines not only by virtue
of the power to cancel the contracts on 7 days' notice but also by reason of the supervision
exercised through Kray 's representatives , who inspected the mine and instructed the con-
tractors as to the method of operation to pursue Under these circumstances , the Board
concluded that an employer-employee relationship existed not only between the contractors
and their respective employees but also between the employees of the contractors and Kray.
Accordingly , the Board found Kray and the contractors to be co -employers
MAHONING MINING COMPANY 803
collective bargaining between them or evidence that such employer
exercises, or has the right to exercise, a substantial degree of control
over the employees of the contractor.19 Here there is no such showing.
The Trial Examiner further reasoned that, since the Board has
previously determined that all employees working at the three mines,
W. L. Davis, Anna, and West Green, when operated by the respondent,
constituted an appropriate unit, and the respondent and the Union
had entered into a contract- covering such employees, effective until
October 1, 1943, the respondent, although privileged to contract out
the operations of its mines, was obligated under the Act, as well as by
the contract, to maintain collective bargaining relations with the Union
as the statutory representative of the persons within the appropriate
.unit. Applying this principle, the Trial Examiner found that, by
failing to incorporate the provisions of its collective bargaining con-
tract with the Union in the mining contracts which it had entered into
with Patton and Cat prior to the expiration date of the bargaining
agreement and by its subsequent refusal to bargain with the Union as
to the persons working at the Anna and West Green Mines, the re-
spondent refused to bargain collectively within the meaning of Section
8 (5) of the Act.
We do not agree with the Trial Examiner. The Board has recog-
nized that its finding with respect to the appropriate unit in a par-
ticular business may subsequently become inappropriate due to
changes in the business structure, operational methods of the employer,
or the extent of union organization among the employees 20 Thus,
where conversion of a factory from peacetime to war production has
produced fundamental changes in the employer's manufacturing oper-
ations, the Board has found that previous bargaining units, although
appropriate when established, lost their identities and may no longer
be considered appropriate.21 Since changing conditions in industry
necessitate revision of bargaining units which will best effectuate the
policies of the Act, the Board has never held that once it has established
an appropriate unit for bargaining purposes, an employer may not
in good faith, without regard to union organization of employees,
change his business structure, sell or contract out a portion of his
operations, or make any like change which might affect the con-
stituency of the appropriate unit without first consulting the bargain-
ing representative of the employees affected by the proposed business
change. Also, none of the persons working for Patton at the Anna
19 Cf. Matter of Firesafe Builders Corp . 57 N. L It. B. 1803 ; Matter of Cbnsolidated
Vultee Aircraft Corporation and Studio Commissary Service Company , 57 N L. R B. 1680;
and Matter of Markham and Callow , Incorporated, 13 N. L . R B. 963
29 Mills Industries Incorporated , et al., 57 N. L . It. B. 467.
21 Marshall Stove Company , 57 N. L. It. B 375.
804 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Mine were former employees of the respondent. So far as the record
shows, only three employees working for Cat at the West Green Mine,
on September 8, 1943, had been employed by the respondent immedi-
ately prior to being hired by Cat, and each of them was considered by
Cat to be a newly hired employee. Thus, we are not concerned here
with a situation in which an employer has contracted out all or a
part of his operations and the contractor has continued the employer's
business with the same employees. Finally, it is undenied that, at
all times material, the respondent has been willing to bargain with
the Union as to the employees at the W. L. Davis Mine and the surface
employees at the West Green Mine who are within the unit previously
established by the Board and the bargaining agreement. We con-
clude that the respondent has thereby satisfied its obligations under
the Act.
Having found that the record fails to support the Trial Examiner's
finding that the respondent exercises or has the right to exercise
sufficient control over the respective operations and employees of Pat-
ton and Cat at the Anna and West Green Mines to establish an em-
plover-employee relationship between the respondent and those
employees, and having found no basis under the Act for the Trial
Examiner's conclusion that the respondent violated Section 8 (5) of
the Act by failing to incorporate the provisions of its collective bar-
gaining contract with the Union in,the mining contracts with Patton
and Cat or by subsequently refusing to bargain with the Union for
the persons working in the Anna and West Green Mines, we conclude,
'contrary to the Trial Examiner, that the respondent has not refused
to bargain collectively within the meaning of Section 8 (5) of the
Act.22 Accordingly, we shall dismiss the complaint.
Upon the entire record in the case, the Board makes the follow-
ing :
CONCLUSIONS OF LAW
1. The operations of the respondent, Mahoning^Mining Company,
Youngstown, Ohio, herein involved, occur in commerce, within the
meaning of Section 2 (6) and (7) of the Act.
2. Local Union $k12,509, District 50, United Mine Workers of
America, is a labor organization, within the meaning of Section 2
(5) of the Act.
3. The respondent has not engaged in unfair labor practices,
within the meaning of Section 8 (1) and (5) of the Act, as alleged in
the complaint.
ze In view of our decision, we have no occasion to determine the appropriate unit, as such,
or to pass upon the Union's claimed status as majority representative at the time of the
alleged refusal to bargain.
MAHONING MINING COMPANY
ORDER
805
Upon the entire record in the case, and pursuant to Section 10 (c)
of the National Labor Relations Act, the National Labor Relations
Board hereby orders that the complaint issued herein against the re-
spondent, Mahoning Mining Company, Youngstown, Ohio, be, and it
hereby is, dismissed.,
CHAIRMAN MILLIS took no part in the consideration of the above
Decision and Order.