McMahan's of Santa Ana and Lynwood

National Labor Relations Board - Board Decisions

Oct 20, 1950

91 N.L.R.B. 1154 (N.L.R.B. 1950)

In the Matter Of MOMAHAN'S OF SANTA ANA AND LYNWOOD, SOME-
TIMES KNOWN AS MC 'MAHAN'S FURNITURE STORES, RESPONDENT and
NEW FURNITURE AND APPLIANCE DRIVERS, WAREHOUSEMEN AND
HELPERS LOCAL UNION No. 196 , . OF INTERNATIONAL BROTHERHOOD
OF TEAMSTERS , CHAUFFEURS , WAREHOUSEMEN AND HELPERS OF
AMERICA, AFL, UNION
Cases Nos. 21-CA-555 and 21-CA-556.-Decided October 20,'1950
DECISION AND ORDER
On June 26 , 1950, Trial Examiner William E. Spencer issued his
Order, a copy of which is attached hereto, dismissing the amended
complaint in the above-entitled proceeding, on the ground that the
Respondent 's business is essentially local in character ; and that
the assertion of jurisdiction over the Respondent would not effectu-
ate the policies of the National Labor Relations Act. Thereafter,
the General Counsel filed his request for a review of the Trial Ex-
aminer's Order and exceptions thereto, and the Respondent filed a
brief and reply brief to the General Counsel's request for review.'
Pursuant to the provisions of Section 3 (b) of the National Labor
Relations Act, the Board has delegated its powers in connection with
this case to a three-member panel [Chairman Herzog and Members
Reynolds and Murdock].
The Board has reviewed the rulings made by the Trial Examiner
at the hearing and finds that no prejudicial error was committed.
The rulings are hereby affirmed. The Board has considered the
Order, the General Counsel's exceptions thereto, the Respondent's
briefs, and the entire record in this case, and hereby adopts the find-
ings and Order of the- Trial Examiner with the following addition.
The Respondent operates an intrastate retail chain of four furniture
stores. All of its sales are made locally. Inasmuch as its annual di-
rect out-of-State purchases are less than $500,000 2 in value, and its
indirect annual out-of-State purchases are less than $1,000,000 3
1 The Respondent 's request for oral argument is denied as the record and briefs ade-
quately present the positions of the parties.
2 Cf. Federal Dairy Co., Inc., 81 NLRB 638.
1 Cf. Dorn's House of Miracles , Inc., 91 NLRB 632.
91 NLRB No. 183.
1154
McMAHAN'S OF SANTA ANA AND LYNWOOD 1155•
in value,' we find that it would not effectuate the policies of the Act
to exercise jurisdiction over the Respondent' s operations . Accord-
ingly, we shall dismiss the complaint herein.
ORDER
It is hereby ordered that the complaint herein be, and it hereby
is, dismissed in its entirety.
ORDER DISMISSING COMPLAINT
Upon amended charges duly filed, the General Counsel of the National Labor
Relations Board issued a complaint dated March 15, 1950, in the above-entitled
matter. The Respondent filed an answer denying jurisdiction and the commis-
sion of the alleged unfair labor practices.
Pursuant to notice a hearing was held on April 18, 19, 20, and 24, 1950, and
May 23 and 24, 1950, at Los Angeles, California. All parties were represented,
at the hearing and were afforded full opportunity to be heard, to examine and
cross-examine witnesses, to introduce relevant and material evidence, to argue
the issues orally, and to file briefs and/or proposed findings of fact and con-
clusions of law. The General Counsel and the Respondent, respectively, filed
briefs.
At the hearing the Respondent moved to strike the testimony of three named
witnesses insofar as it was related to the business of nonrespondent companies,
and ruling was reserved thereon. This motion is now granted except insofar
as the testimony of the witnesses was related to the common use. of advertising,
mediums by the Respondent and the aforesaid nonrespondent companies. In
view of the findings made below it is not necessary, at this time, to rule on
Respondent's motion to dismiss the 8 (a) (5) allegations of the complaint.
Respondent's motion to dismiss-the complaint on jurisdictional grounds, upon
which ruling was reserved at the hearing, is now granted for reasons stated
below.
The Respondent, a California corporation, operates four retail stores located,
respectively, at Lynwood, Maywood, Bell, and Bell Gardens, in Los Angeles
County, California, and one store at Santa Ana, Orange County, California.
The Lynwood, Maywood, Bell, and Bell Gardens stores are located within the
metropolitan Los Angeles area, and are relatively close to each other. The
Maywood store is located about one-half mile from the Bell store, 11/> miles'
from the Bell Gardens store, and 6 miles from the Lynwood store. The Santa
Ana store is located 25 miles away from the nearest store in this group.
During the 12-month period from March 1, 1949, through February 1950, the
Respondent's total purchases were approximately $995,665. During the calendar
year 1949, Respondent purchased approximately $161,141 in value of products
which originated outside the State of California. Of this amount, $19,319 in
value of products were. purchased from sellers located outside the State of
California and shipped directly from points outside California to Respondent's
stores in California ; merchandise valued at $14,182 was purchased through
4 Nor do the combined direct and indirect out-of-State purchases satisfy the Board's
minimal jurisdictional standard. See The Rutledge Paper Products, Inc., 91 NLRB 625.
917572-51-vol. 91- 7 4
1156 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
distributors located within California but shipped directly to Respondent's
stores in California from points outside the State ; and the remainder was de-
livered to Respondent from distributors ' local warehouses.
The Respondent sells, among other things, nationally advertised brands of
appliances , radios, television sets, and furniture , such as Emerson , Zenith,
General Electric, Admiral, Bendix, Philco, Sunbeam, Hoover, Teletone, Thor,
Simmons, Baby-Line, Bigelow-Sanford, Easy, Virtue Brothers, and Balboa Pacific
Company products. Certain of these nationally advertised products are sold
by Respondent under retail dealer agreements , servicing dealer franchises, or
dealer authorizations . These franchises or dealer agreements are not exclusive,
provide very little control over the Respondent's merchandising of the products,
and cover such matters as allotments and deliveries , permission to use trade
marks and trade names , sales promotion programs , advertising campaigns, pro-
tection afforded Respondent against defects in the products, commitments by
Respondent as to marketing , advertising, servicing, price ranges , and kindred
matters. All such agreements are terminable at will or on very short notice.
In the course and conduct of its business the Respondent utilizes as advertising
media, local radio, television, and newspaper facilities. On occasion, Respond-
ent advertises jointly with other California retail furniture stores bearing the
name, "McMahan's Furniture Stores," and shares proportionately in the costs
thereof. Newspaper advertising by the Respondent is placed in Los Angeles
newspapers of general circulation and local community newspapers. This
advertising, on occasion, is set up and paid for, partially or wholly, by the com-
pany distributing or producing the nationally advertised product named in the
advertising matter. This type of advertising includes advertisements for Philco,
Emerson, General Electric, Zenith, and Teletone products, among others.
All of Respondent's sales are made within the State of California.'
Because of its direct out-of-the -State purchases as well as its purchases of
products which originate outside the State of California, it is clear, and is found,
that the Respondent is engaged in commerce within the meaning of the Act.
The Board does not, however , assert jurisdiction in every case where its juris-
diction lies . If the business is peculiarly or predominantly local in character,
the Board may, as a matter of policy , decline to assert jurisdiction . While the
issue is a fairly close one here, it is believed that the Board 's policy, as defined
in a long line of cases, excludes the exercise of jurisdiction in this case.
The Respondent operates a chain of five retail furniture stores, none of which
is located outside the State of California. Therefore , there is no interstate
exchange of goods, services and communications between the several stores
such as is normally found in chain stores which are operated in two or more
States and over which the Board has consistently exercised its jurisdiction. The
Board has declined to exercise its jurisdiction in cases involving intrastate chains
of grocery stores,' clothing stores,' drug stores,' and various other retail establish-
'Findings on commerce are based upon a stipulation of the parties or credited testi-
mony , and, with minor exceptions, duplicate the proposed findings contained in the General
Counsel 's brief. The undersigned declines to take official notice of Moodg's Manual of
Investments, as requested by the General Counsel, and hereby rejects the General Counsel's
offer of certain excerpts from this publication marked for identification as General Counsel
Exhibit No. 10.
2 See Hom-Ond Food Stores , Inc., 77 NLRB 647, involving a chain of 13 retail grocery
stores.
2 See Fashion Fair Shops and Millan Shop , 88 NLRB 1512, involving a chain of five retail
clothing stores ; also , Squire's, Inc., 88 NLRB 8, involving three men 's clothing stores.
4 See Haleston Drug Stores , 82 NLRB 1264, involving a chain of four drug stores.. ,
McMAHAN'S OF SANTA ANA AND LYNWOOD 1157
ments,b though the direct interstate shipment of goods involved greatly exceeded
like shipments in-the case at bar. Of a total of $995,665 of purchases made by the
Respondent during a representative year, only $161,141 in value was for mer-
chandise originating outside the State. Of this amount, direct shipments to
Respondent's stores amounted to only $33,501 in value. These amounts, of
course, do not fall within the de mininlis doctrine but are indicative of the slight
degree to which interstate operations would be affected by a dispute involving
one or more of Respondent's stores. It is common knowledge that nationally
advertised brands of merchandise are now sold in retail grocery, clothing and
drug stores, and therefore the fact that the Respondent buys and sells electrical
appliances and other products which are nationally advertised is not sufficient
to distinguish its operations from those of establishments over which the Board
has declined to assert its jurisdiction.
Of the cases in which the Board has exercised jurisdiction, perhaps the closest
in kind to the operations here involved, are the department store cases. How-
ever, department stores over which the Board has exercised jurisdiction normally
receive a much higher percentage of their merchandise directly through channels
of interstate commerce, make substantial shipment of goods to customers outside
the State, and, in some cases, are integrated to a substantial degree in a national
organization.° It is not believed that the volume of interstate transactions is
substantial enough here to overcome the essentially local character of Respond-
ent's operations.
The General Counsel further relies on cases involving franchised automobile
dealers over whom the Board normally exercises jurisdiction.
It is true that the Respondent sells certain nationally advertised products
under franchises or dealer agreements, but these agreements are not exclusive
and impose but slight control over Respondent's merchandising of the products.
Unlike the automobile dealer who normally handles only one make of car under
a direct factory dealer franchise, the Respondent handles many nationally
advertised products, most of which are purchased through local dealers, and these
represent but a fractional part of its total business. Clearly, an interruption
in Respondent's operations would have but indirect and slight effect on inter-
state shipments of these nationally advertised products. And, as already noted,
it is common knowledge that the same, or other nationally advertised mer-
chandise, is handled by small as well as large retail establishments throughout
the country. In short, if the merchandising of nationally advertised products
under dealer agreements such as exist in the case at bar, were to be made the
criterion, the exercise of the Board's jurisdiction would soon extend to multi-
tudinous retail establishments of the corner grocery store variety.
. These, then, are the factors which persuade the undersigned that the Board
will not, as a matter of policy, exercise jurisdiction over an intrastate chain of
retail furniture stores whose business is predominantly and essentially local in
character. Accordingly,
IT IS HEREBY ORDERED that the complaint be dismissed in its entirety.
a See Quigleys Department Store No. 3, 89 NLRB. 381, involving a chain of seven 5 &
10 stores in Los Angeles county.
6 See May Department Stores Company, 326 U. S. 376; Parks-Belk Company of Eliza-
bethton, 77 NLRB 429; Sam's, Inc., 78 NLRB 826: Block and Kuhl Department Stores,
83 NLRB 419. In The P. B.,Magrane Store, Inc., 84 NLRB 345, all sales were local, but
50 percent of the purchases represented shipments in interstate commerce.
1158 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Any party may obtain a review of the foregoing Order, pursuant to Section
203.27 of the Rules and Regulations of the Board, by filing a request therefor with
the Board, stating the grounds for review, and immediately upon such filing:
serving a copy thereof on the Regional Director and the other parties. Unless
such request for review is filed within ten (10) days from the date of this Orden
of dismissal, the case shall be closed.
6