Mid-Co Gasoline Co.

National Labor Relations Board - Board Decisions

Oct 10, 1949

86 N.L.R.B. 448 (N.L.R.B. 1949)

In the Matter Of MID-Co GASOLINE COMPANY and INTERNATIONAL
ASSOCIATION OF MACHINISTS
Case No. 16-C-1468
SUPPLEMENTAL FINDINGS
CONCLUSIONS AND RECOMMENDATION
October 10, 194.9
On July 30, 1948, the National Labor Relations Board, herein
called the Board, issued a Decision and Order in this case,' in which it
found that Mid-Co Gasoline Company, herein called the Respondent,
had engaged in and was engaging in certain unfair labor practices
affecting commerce, and ordered the Respondent to cease and desist
therefrom and take certain affirmative remedial action.
The Board thereafter petitioned the United States Court of Appeals
for the Fifth Circuit to enforce its order against the Respondent. On
February 16, 1949, the court handed.down its opinion, remanding the
case to the Board for "the taking of such further evidence as is avail-
able and relevant" with respect to the Respondent's business; and
directed the Board "to make further findings of fact and conclusions
of law thereupon." 2
On April 13, 1949, the Board issued an order reopening the record,
remanding the proceeding to its Regional Director for the Sixteenth
Region for the purpose of conducting a hearing to receive further evi-
dence in accordance with the court's opinion, and authorizing the
Regional Director to issue a notice of such further hearing. The
Regional Director issued a notice of hearing on May 3, 1949.
On June 10, 1949, all the parties to this proceeding, being desirous
of obviating the necessity of a formal hearing, entered into a stipula-
tion of fact and agreed that the Board may make such findings as
it deems necessary and justified by the record previously made herein
and on the aforesaid stipulation. The parties expressly waived any
right to any further hearing before the Board. The stipulation is
hereby accepted and made a part of the record herein.
1 78 N. L. R. B. 740.
2172 F. 2d 974.
86 N. L. R. B., No. 62.
448
MID-CO GASOLINE COMPANY 449
Pursuant to the remand by the United States Court of Appeals for
the Fifth Circuit and upon consideration of the entire record in the
proceeding, the Board makes the following :
SUPPLEMENTAL FINDINGS
With respect to the factors on which additional evidence was served,
the record shows :
1. Lone Star uses dry natural gas and casinghead gas, as well as
residue gas, in its operations. All three types of gas are interchange-
able and commingled, no particular type of gas being necessary for
Lone Star's operations. During the year 1946, Lone Star sold to con-
sumers in Dallas, Texas, 16,797,847 M cubic feet of all types of gas, of
which amount 5.04 percent was delivered by Mid-Co. During the
year 1946, Mid-Co sold 2,018,601 M cubic feet of gas to Lone Star, of
which amount 38 percent was used by Lone Star for Dallas consumers
and the remaining percentage was used elsewhere in Texas.
2. On a daily basis, the capacity of Lone Star's pipe lines, from
the Cayuga Field I to Dallas is 165,552 M cubic feet. On a similar
basis, 251,926 M cubic feet of gas is available in the Cayuga Field.
3. On a daily basis, 5,311 M cubic feet of gas is deliverable by Mid-
Co through existing connections to Lone Star's pipe lines.
4. All gas delivered by Lone Star to industrial consumers in Dallas
is a combination of two or more types of gas. If Mid-Co ceased its
operations, Lone Star could secure an adequate substitute of gas from
Texas sources without interference with the practical, reasonable, and
economical operation of its business. Lone Star's available supply in
the Cayuga Field, during the year 1946, could have been decreased by
86,374 TAI cubic feet before it would have experienced interference with
In our prior Decision and Order ( 78 N. L . R. B. 740 ), the Board found as follows:
Mid-Co Gasoline Company , a Texas corporation , operates at Malakoff, Texas, a
natural gasoline plant and a small refinery which process natural gas into natural and
white gasoline , butane, kerosene , kerosene distillate , fuel oil , and residue gas. The
Employer annually purchases raw materials valued at over $ 100,000 from various oil
and gas producers , all located within the State of Texas . It annually sells and.delivers
over $ 300,000 worth of refined products to petroleum and refining companies within
the State , which companies , in turn, sell said products locally . During a similar
period, it sells a small portion of residue gas to the Athens Natural Gas Company,
which supplies the fuel gas needs of the town of Athens , Texas ; in addition , it delivers
the remainder of the residue gas to pipe line gathering system of the Lone Star Gas
Company, a public utility company which is itself engaged in interstate commerce.
During the year 1946 , the Lone Star Gas Company purchased from the Employer
2,018,601 cubic feet of residue gas, valued at over $1 . 00,000. This gas, which was
thus intermingled with gas purchased from refiners , was sold by the Lone Star Gas
Company in the city of Dallas , Texas , to interstate carriers , and to other consumers,
whose operations admittedly affect interstate commerce.
The record in that proceeding also showed that aside from the Cayuga Field, where the
Respondent 's plant is located, Lone Star also obtained gas from a source of supply in the
State of Oklahoma.
* Mid-Co's operations are in the Cayuga Field . The record also refers to Mid -Co's opera-
tions as the Malakoff Field. Malakoff , Texas, is thepost-office address of Mid-Co.
450 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the practical , reasonable , and economic operation of its business.
'Other gas is available in the Cayuga Field in sufficient quantities to
replace the gas received from Mid-Co , "and nothing would be required
of Lone Star to obtain such additional supply other than the opening
of valves to allow the gas to flow into its gathering system in the
Cayuga Field."
5. The .pipe lines through which Mid-Co obtains its supply of
natural gas and through which it delivers its residue gas to Lone
Star are not owned or controlled by Lone Star , and such lines would
not be available to Lone Star in the event Mid-Co ceased operations.
6. (a) During 1946, the total sales by Lone Star to all of its con-
sumers in Dallas amounted to $6,829,532 , of which amount $224,710,
or 3.3 percent , represented sales to 12 specific consumers engaged in
businesses affecting interstate commerce.
(b) During 1946 , the total sales by Lone Star to all its consumers
in the State of Texas amounted to $24,494,585 , of which amount 0.92
-percent (ninety-two hundredths of 1 percent ) represented sales to
the 12 specific consumers.
(c) There is no evidence to show what "proportion of the sale of
gas [by Lone Star] to interstate consumers within the city of Dallas
bore to the total gas received during the same period of time from the
State of Oklahoma."
7. (a) During 1946, in the absence of the supply of gas furnished
by Mid-Co, Lone Star had sufficient gas lines running from Cayuga
Field to Dallas, together with lines supplying gas from other sources,
to have met the requirements of its Dallas customers.
(b) During 1946, there was no difference between the cost per M
-cubic feet of gas supplied by Mid -Co and gas supplied from other
,sources within the Cayuga Field.
8. Of Lone Star 's gas requirements in 1946 for Dallas users, 4.97
percent was received from Oklahoma; 27.19 percent from Cayuga
Field, exclusive of Mid-Co; and 5.04 percent from Mid-Co. The re-
mainder of the gas supplied to Dallas users was produced from other
.sources in Texas.
9. (a) During 1946, the average cost to Lone Star of gas received
from Oklahoma was 5.18 cents per M cubic feet in the field, and the
cost of gas received from Mid-Co was 6 cents per M cubic feet at the
plant.
(b) If Mid-Co should cease its operations , it would not be possible
for Lone Star to call more.heavily on the Oklahoma supply of gas,
because all of the Oklahoma gas is now being transported.
Conclusions
We are here concerned with the effect of the Respondent 's intrastate
residue gas operations on interstate commerce, as defined by the Act.
MID-CO GASOLINE COMPANY 451
Under existing circumstances, a stoppage of the Respondent's gas pro-
duction would directly and immediately increase over 5 percent the
amount of gas needed by Lone Star from other sources for distribu-
tion to its Dallas consumers, including the Western Union Telegraph
Co., certain interstate railroad carriers, and 12 named industrial users
whose businesses affect commerce within the meaning of the Act. ,, In
view of the fact that the Respondent regularly supplies a portion of
the gas used and needed by business affecting interstate commerce
and that the Respondent's contribution to the supply enables these
businesses to operate and function in their normal manner, we find
that a labor dispute at the Respondent's plant would affect commerce.
In determining whether or not this effect on commerce is substantial
enough to warrant application of the Act, we have considered the
fact that the Respondent's contribution to the total gas supply is rela-
tively small. However, since, under existing circumstances the Re-
spondent's contribution, whether it be small or large, is necessary to
fulfill the gas requirements of business affecting commerce, we find
that the Respondent's business substantially affects commerce. In any
event, the effect of the Respondent's unfair labor practices on inter-
state commerce "is not to be determined by confining judgment to the
quantitative effect of the activities immediately before the Board.
Appropriate for judgment is the fact that the immediate situation is
representative of many others . . ., the total incidence of which,
if left unchecked may well become far-reaching in its harm to com-
merce." 5
This principle is particularly applicable here, where we are seeking
to protect businesses affecting interstate commerce from injury re-
sulting from a stoppage or diminution of their normal gas require-
ments, which are satisfied by the pooling of gas from a number of
suppliers. In our opinion, for purposes of the Act, it makes little
difference whether, for physical or economic reasons, Lone Star ob-
tains its gas from a number of different suppliers, like the Respondent,
or from a single supplier. The business of supplying gas to Lone
Star, regardless of the number of entities involved and the proportion
supplied by each, must be viewed as a single integrated operation.
To protect the commerce which is substantially affected by the total
supply of gas, we find it necessary to assert jurisdiction over the labor
dispute with the Respondent, whose contribution to the total supply
of gas is representative of other suppliers. Otherwise, if Lone Star
obtained its supply of gas rateably from 20 different small suppliers
like the Respondent and the contribution of each were deemed trivial
in isolation, the entire supply of gas could be obstructed by separate
Polish National Alliance v . N. L. R. B., 322 U . S. 643, 648.
452 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
labor disputes among its suppliers and the resultant effect on commerce
would remain unremedied.
Moreover, we are convinced that the assertion of jurisdiction over
the Respondent would tend to assure the continuity of operation of
other suppliers to Lone Star. The record shows that the Respond-
ent as well as other suppliers operate in the Cayuga oil field. It
therefore follows that all employees in that field have a close com-
munity 'of interest with respect to wages, hours, and working condi-
tions. Experience has demonstrated that strikes are frequently spon-
taneous and contagious and it is reasonable to believe that under the
circumstances here present a strike or labor dispute at the Respond-
ent's operation, arising over its refusal to bargain, could well lead to
similar disturbance at the Cayuga operations of other Lone Star
suppliers.6
Finally, we have considered the conclusionary testimony that in the
event the Respondent ceased supplying gas, Lone Star could secure
an equivalent supply from other sources in the Cayuga Field by open-
ing its values. In this connection it is noted that the record fails to
disclose the relationship of this substitute gas supply to other gas
which flows in commerce or to other businesses affecting commerce.
In any event, it is well settled by the highest authority that the avail-
ability of a substitute arrangement is not material, as a matter of law,
to the issue of jurisdiction.7 Lone Star, in the operation of its busi-
ness affecting commerce, has determined that its supply of gas could
best be obtained in part from the Respondent and "any outside act
that would compel [it] to change [its] mode of operation would affect
such business." 8
On the basis of the entire record, we find that the Respondent's
unfair labor practices affect commerce within the meaning of the Act
and that it would best effectuate the policies of the Act to assert
jurisdiction in this case.
RECOMMENDATION
The National Labor Relations Board respectfully recommends to
the United States Court of Appeals for the Fifth Circuit that the
Board's Order of July 30, 1948, be enforced.
MEMBERS MURDOCK. and GRAY took no part in the consideration of
the above Supplemental Findings, Conclusions, and Recommendation.
6 See N. L. R. B. v. Jones & Laughlin Steel Corporation , 301 U. S. 1, 42.
IN. L. R. B. v. Bradford Dyeing ,Association, 310 U. S. 318, 326; J. L. Brandeis and
Sons v. N. L. R. B., 142 F. 2d 977, 980 (C. A. 8), cert. denied 323 U. S. 751.
8 Pueblo Gas and Fuel Co. V. N. L. R. B., 118 F. 2d 304, 306.