Numrich Arms Corp.

National Labor Relations Board - Board Decisions

Aug 8, 1978

237 N.L.R.B. 313 (N.L.R.B. 1978)

NUMRICH ARMS CORPORATION
Numrich Arms Corporation; Auto-Ordnance Corpora-
tion and Local 1968, International Brotherhood of
Electrical Workers, AFL-CIO, Petitioner. Case 3
RC-6928
August 8, 1978
DECISION ON REVIEW
BY CHAIRMAN FANNIN(; AN[) MEMRB.RS JENKINS
AND PENI hl.L
The Regional Director for Region 3 issued his De-
cision and Direction of Election in this proceeding
on June 17. 1977, directing an election in a unit of
"all production and maintenance employees of Auto-
Ordnance Corporation" and "all mail order pro-
cessors, pickers, packers and shippers employed by
Numrich Arms Corporation." Contrary to the Em-
ployer's contentions, the Regional Director found
that the two corporations are a single integrated en-
terprise and that the employees at each site shared a
sufficient "community of interest" warranting their
inclusion in a single bargaining unit. Thereafter, in
accordance with Section 102.67 of the National La-
bor Relations Board's Rules and Regulations, Series
8, as amended, the Employer filed a timely request
for review of the Regional Director's decision. alleg-
ing that the Regional Director erred facually and de-
ting that the Regional Director erred factually and
departed from Board precedents. The National La-
bor Relations Board granted the request for review
by telegraphic order dated September 28, 1977.
Thereafter the Employer filed a joint brief on review.
Pursuant to the provisions of Section 3(hb) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the entire record includ-
ing the brief on review and has decided to affirm the
Regional Director's decision.
Auto-Ordnance Corporation is a New York corpo-
ration, established in 1974, located in West Hurley,
New York. It is engaged solely in the manufacture
and sale of Thompson submachine guns and semiau-
tomatic carbines. The stock of the corporation is
owned by four individuals. George Numrich owns 49
The Regional Director also determined ihiI I lopkis and Allen \I. lnu
fatluring Corp. another corporation locitced in %est liurlex and soiell
owned hb George Numrich. cea.sed Iperalirl feor legitimate hullmnes pur-
poses Petitioner requested review of this poi,ltr l of the Reeiona.l )Direclor'
decision and then filed an unfair Iihor prlitic halrge aleiig. ,lir alt.
that the closure of the corporation ias iiunla ful Ihe Bolard r antedl Pell-
tioner's request for review \re haie been dnilltriativels ad liecd thhat Ihe
allegations related to the closure have been dlsmissed .id i, ippeal ihI ,
been taken We therefore affirm the Relinlat l I)irctor'sr deCtslln dlinll siln
Petitioner's election petition with respe1ct t Ilipkins and mllen
percent of the stock and is the vice president; Ira
Trast owns 25 percent of the stock and is the presi-
dent: Steve Kass is the accountant and owns 10 per-
cent of the stock: and E. A. Holcomb owns the re-
maining 16 percent of the stock. The secretary of the
corporation is Peggy Thatcher. Frank Gromack is
plant manager of Auto-Ordnance and is primarily
responsible for the supervision of the Company's em-
ployees. Auto-Ordnance does not own the premises it
occupies but instead is a tenant of Numrich Sports
Center, a distinct corporate entity owned exclusively
by George Numrich. Approximately 10 persons are
employed by the Company.
Numrich Arms Corporation, also a New York cor-
poration located in West Hurley. is a mail-order
warehouse establishment engaged in the purchase
and sale of firearm parts. It occupies three warehous-
es, owned by George Numrich, situated within 300
yards of Auto-Ordnance. The corporation employs
approximately 15 individuals.
George Numrich is president and sole owner of
Numrich Arms. Ira Trast is treasurer. Peggy Thatch-
er is secretary, and Myron Parslow is vice president.
Steve Kass is also accountant for this corporation.
In its request for review the Employer relies upon
Milo E.x-pres.s, 2 ,artin Outdoor Advertising,3 and Don
Bur;gces. ( o.struction (orporation,4 in support of its
contention that Auto-Ordnance and Numrich Arms
are distinct corporate entities. The Employer avers
that the labor relations policy for each Company is
dependent upon the financial vitality of each enter-
prise and that, accordingly, there exists no common
labor relations policy; that the Auto-Ordnance em-
ploNees do not participate in the profit-sharing and
pension plans that exist for Numrich Arms employ-
ees: that Frank Gromack alone manages and con-
trols Auto-Ordnance employees; and that there is lit-
tle interchange among employees of the respective
corporations. The Employer further argues that the
single-employer determination was erroneous be-
cause each (Company files separate tax returns, each
has separate employee facilities, the nature of the
work and requisite job skills differ at each site, and
personnel files and employee records are separately
maintained.
Although the Board decisions cited by the Em-
ployer are relevant to the instant case, in our view the
facts herein support the Regional Director's conclu-
sions.
- t1/, AL tI.rt.. It , nd A,, -w,e Ia.rent re I aransl.r ( iipani, 21 2 NI.RB
3 13 3 1974)
larltt OuhJliir -d i rrt,! ,t ( pit/t1 .lln :zl , S Iinda, Itn . ()ld,,l I thrt
ti. 198 Ni RH 1 It 1972)
i)t,,,l Blur . S i ,tl'i llI l iiit ( qr lll,httl d h i ta Murgu (til tnlrullt oin andt
1),,nRhl l It, and rHti t hlt d i a I & B Budlder 2217 NLRB 705
( 19771
237 NLRB No. 32
313
4)ECISIONS OF NATIONAL LABOR RELATIONS BOARD
It is uncontroverted that the corporations have
common corporate officers and, although George
Numrich is technically a minority shareholder of
Auto-Ordnance, the record discloses that Numrich
owns the real estate occupied by Auto-Ordnance
and, at least on one occasion, purchased equipment
for the Company without prior approval of the board
of directors. It is conceded that the board of directors
for Auto-Ordnance convenes infrequently and, in
fact, has averaged only one meeting each year since
the corporation's inception.
Ira Trast, a common corporate officer and minori-
ty shareholder of Auto-Ordnance. is ultimately re-
sponsible for the labor relations policies of both cor-
porations. Although the Employer alleges that the
policy at each Company is dependent upon the fi-
nancial condition of each corporation, the record is
clear that the policies are uniform and that Ira Trast
alone is responsible for the final resolution of em-
ployee grievances, the amount of employee remuner-
ation, and the formulation of benefits programs.'
Moreover, although Auto-Ordnance employees do
not participate in the profit-sharing and pension
plans offered to Numrich Arms employees, the Com-
panies have a common health and hospitalization
plan, a common holiday and vacation policy, and a
single life insurance plan.
The Companies utilize a common computerized
payroll system and offer a common savings plan per-
mitting employees to deduct moneys each week for
deposit in individual savings accounts. tlhe employ-
ees at each facility were informed of the payroll sys-
tem and savings plan. instituted in 1976, in a memo-
randum prepared on Numrich Arms stationery and
distributed to employees at both Companies. the
record further reveals that other common memoran-
dums communicating management policy have been
distributed to employees of both corporations.
The evidence further establishes that national ad-
vertising for each corporation is performed by a sin-
gle agency and that Ira Trast prepares advertise-
ments for inclusion in regional and local periodicals
for both Companies. Numrich Arms' most renowned
advertisement announces that Numrich is the "exclu-
sive manufacturer of the T hompson submachine
gun," suggesting thereby that Auto-Ordnance, con-
Foir example, Irast testified that employee grievants, If dissatiisfild iMith
their supervisor's proposed resolution. coime to hiim tnil thai he is empoi.-
ered to resolke all grievances. Nulrich testified I rast is priimal.i rcspo ns-
ble for Ihe formulation of the benefits proegrm ins accorded ctinploices o f
hoth ( ompanies F urther testimony reveals I llst determines crnplihsccs
remuneration and regularly reviews merit increcse reclnimmeldaltion s made
by each (Company's manager Trast disagrees ulih apprixitmatells 21) percent
of (romack's recommendaltions I here is h is t i nplc evidence Irat I s di
rectly and actively involved in the laibor relations practices of hoth ('inipa-
nies. l nlike our dissenting colleiague, c d not hbelieve I ra.ts inls vemient
can accurately he chairacterized ;s cithei piolent l I ir Iilbstltnlllh
cededly the manufacturer of the item, and Numrich
are integrated. This suggestion is further supported
by the uncontradicted testimony of a former clerical
employee of Hopkins and Allen, a defunct corpora-
tion which was owned by George Numrich, estab-
lishing that the secretaries and clericals of Auto-Ord-
nance and Numrich Arms were instructed, at a
common meeting of the above-mentioned employees,
to characterize the Companies as a unified entity.
Additionally,. the telephone and mail policies indi-
cate a degree of cooperation uncommon with auton-
omous enterprises. Telephone calls intended for
Auto-Ordnance can be received on the Numrich
Arms telephone and the record demonstrates that, if
a call is not answered by Auto-Ordnance personnel,
the customer's information is recorded by a Numrich
Arms employee and later forwarded to Auto-Ord-
nance. Similarly, mail received at Numrich Arms but
addressed to Auto-Ordnance is segregated and later
delivered by a Numrich Arms employee to Auto-
Ordnance.
Although the nature of the work performed at
these closely situated facilities is dissimilar, the rec-
ord reflects that employees have transferred, albeit
infrequently, between corporations. Numrich Arms
purchases and and sells products of Auto-Ordnance,
but the sale of these items comprises a small amount
of Numrich Arms' revenue. Each corporation invoic-
es the other for services performed by its respective
employees. The record also establishes that Auto-
Ordnance has utilized Numrich Arms' shipping facil-
ities on a number of occasions.
It is axiomatic that the Board considers "several
nominally separate business entities to be a single
employer where they comprise an integrated business
enterprise." 6 Significant criteria in determining the
relevant employer are interrelationship of operations,
common management, centralized control of labor
relations, and common ownership.
In our opinion sufficient bases exist here to war-
rant the single-employer finding. The record is clear
that Ira Trast controls the labor relations policies at
both Companies and that these policies, with the ex-
ception of the absence of profit-sharing and pension
plans at Auto-Ordnance, are identical. Trast has ulti-
mate authority to adjust grievances, evaluate all em-
ployees, determine their remuneration, and hire and
terminate employees. Certain policies, applicable to
both Companies. are communicated to employees in
common memorandums.
Although George Numrich is not a majority share-
Roll. & L, , i/cL..\.n Breadl us let hni .iil. .tas L l Umon 1264. International
Bri-ctherol, d ,/l E , trlta a ? I or,acr ., EL ( IO v. Broad ca Service of Mobhile,
In, . 380 .S. 255 (19651
Id a.t 256: South I'rairie ( n ur tuiC.n (' . LocaI. l o 62'7, International
I n,,i i/ O/pr ailing In timrs, .41 1 . ( 10 425 L S. 800 ( 1976).
314
NUMRICH ARMS CORPORATION
holder of Auto-Ordnance, the record indicates that
he has authority to make decisions affecting the
management of the corporation. Considering
Numrich's substantial involvement, the Board can-
not be expected to accept the proposition that signifi-
cant decisions affecting the operation of Auto-Ord-
nance are implemented without his approval.
Although the everyday management of Auto-Ord-
nance is entrusted to Plant Manager Gromack, his
decisions are reviewed by Ira Trast. who maintains
his office at Numrich Arms. Thus, Ira I rast exercises
control and supervision of employees at both Num-
rich Arms and Auto-Ordnance.
And, finally, even if the degree of product integra-
tion is not substantial, the record evidence amplN
demonstrates that these enterprises are otherwise sig-
nificantly integrated.!
In our view, the degree of interrelationship, com-
mon control of labor relations, and common man-
agement among other factors extant herein. would
not be present in an arm's-length relationship be-
tween unintegrated and autonomous enterprises. We
therefore affirm the Regional Director's finding that
the two corporations constitute a single integrated
enterprise.
The Regional Director further concluded that the
appropriate bargaining unit consists of employees of
both Numrich Arms and Auto-Ordnance. A determli-
nation that two companies are a single employer is
not conclusively determinative of the appropriate
unit question.9 In determining the unit, the Board is
concerned primarily with the colmmiunitv of interests
of the affected employees. Nonetheless, the criteria
related to the single-emplo er issue are relevant to
the unit question.
Again, the labor relations policies of both Compa-
nies are ultimately the responsibility of Ira Trast, a
common corporate officer. Thus. Trast is ultimatel\
responsible for the adjustment of griesances. employ-
ee remuneration, and the hiring and discharging of
W e do not consider S,lho Erepre, uupra, cited hs the F- miploer, it he
determinatiie of the single-cinplsyer issue in this aise NWi, in,.ls.ed 1 ,O
cormmonl) owned trucking lonlpanliles he I Board otncluded lhit the Iv,0
operaotions were not .a ingle integra3ed huLslnesC enlerprlse Signifiantl;i.
one of the companies operated nonunio,n and Ihe other union thuLS al-
though the common ow ner palrtllcpaled in the lahor relatlons of bolh .onl-
panies. the personnel and lahor relalions policies of the iespectie cnltrprlrs
es were ohbvlousls distinc t Stmrlitl Outdi, r lde rivintg. sslr.t inslsed oc
advertising companies. 'he companies .ere not cosmlionl tis otned ined had
different corporatle officers and different labor. hiring and dischlrge' poh
ties Fach cornpan. malintained sepllate parsroll recordls nd hianik ac
counts rhe case is therefore clealrl, dliglsllish.hlhe Nor doe s I)i , Birvi te
('onsrrut -i it (C rp. upra. detract froni our coi, clusiot, l in this case l he
Boardl decided in that case thit tsat w ctn crinti lpaei T .ines scn tituttd .
single employer where Btiress. the presideinl aind c.rillting sh lreholder of
one cornpamn and 50 percent partner in the other, exercised contrrol o0er ihe
tIperations, flnancl.al affairs. and Ihabor rei.tla l to of hlhl ecielpli ir cs
Petlar Aitw l S, ,.ti ( itt i i nid ,tl Prriim ( il !1,rl (i , 2'1 Ni RI
(1977!
employees. And. as noted above, the labor relations
policies are essentially identical. With the exception
of the profit-sharing and pension plans offered to
Numrich Arms employees. the fringe benefits provid-
ed to all employees are coterminous. Specifically,
these Companies offer a common health and hospi-
talization plan and a common life insurance plan.
Their holiday and vacation policies are uniform.
Although manaMgers at each site supervise the day-
to-daN operations of the respective corporations. the
record establishes that the authority of the managers
is not absolute and that significant decisions are the
ultimate responsibility of Ira Trast and George Num-
rich. I he nature of the work performed at each facil-
it, admittedlN is not similar. It appears, however.
that employees of both Companies perform shipping
duties. Nonectheless, the Board has long recognized
that because emploxees engage in different processes
does not preclude their inclusion in a combined
unit.
Il
Other considerations contributing to a community
of interest of employees in both Companies include
the common management and ownership of the cor-
porations: the proximity of the facilities; the tele-
phone and mail policies which necessitate contact
between certain employees; the common memoran-
dums announcing management policies; the recipro-
cal invoicing for services performed by each Com-
pany's employees: the indication already discussed,
reflected in Numrich Arin's advertising, that the
( ompanies are integrated: and several, albeit infre-
quent, interchanges of employees. In addition, Peti-
tioner requested a combined unit of these employees.
('onsidering the record as a whole, we conclude that.
although there is some evidence in the record suppor-
tive of the Employer's position, there is sufficient evi-
dence demonstrating a community of interest be-
tween the employees of the respective corporations
warranting their inclusion in the single unit described
in the Regional Director's decision and found appro-
priate herein.
Accordingly, this matter is remanded to the Re-
gional Director for Region 3 for the purpose of con-
ducting an election in accordance with his Decision
and Direction of Election except that the eligibility
payroll period for the election shall be the period
immediately preceding the issuance date of this Deci-
sion on Review. A revised eligibility list, containing
the names and addresses of all eligible voters, must
be filed by the Employer with the Regional Director
within 7 days from the date of issuance of this Deci-
sion on Review.
I etr tt P, d,/c ( , i/.ims. 140 NilRB 'it, I58 19 1
315
I)E( ISIONS OF NATIONAL LABOR REL.A IONS BOH()ARD
M IM H1R .IN NKINS, dissenting:
I do not agree with my colleagues that the record
evidence establishes that Numrich Arms Corporation
and Auto-Ordnance Corporation function as a single
enterprise and therefore constitute a single employer
under the Act. Hence. I would not find that the em-
ployees of these separate Fnmployers constitute an ap-
propriate unit nor would I direct an election in such
unit.
It is well settled that the Boar d will treat separ ate
entities as one employer where their operations and
ownership are highly integrated. Ilowever, the Board
has found common ownership not determinativ e
where common control was not shown. F urthernlore.
the Board has held with court approxal that such
common control must be actual or active, as distin-
guished from potential control.'
At the outset, I note that this is not a case involv-
ing common controlling ownership in an individual
or a family. Thus, George Numrichl is the sole owner
of Numrich Arms but holds only a minorits interest
in Auto-Ordnance. The three unrelated individuals
who together o wn the ma jority interest in Auto-()rd-
nance hold no interest in Nunirich Arinis. Nor is
there a claim that Numrich. the principal stocklholder
in the two ('omnpanies. exercises actual or actixve c n-
trol over the dav-to-day operations of either ciii-
plover. Instead, as more fullI described hbelow. the
plant manager for each emplo\ecr exercises control
over day-to-day operations.
In addition, there is no dispute that Numirilch Ai is
and Auto-Ordnance are distinct corporate entities
that perform different operations in separate huilid-
ings. Numrich Arms operates a mail-order ware-
house. Auto-Ordnance manufactures machine iguls.
Furthermore, the record shows that neither enplo ,er
performs the work of the other. Theie are no CserVices
performed at Nunmrich Arms which are specificall}
integrated with Auto-Ordnince or vice versa. In
short, there is no product integration hetwecll the
two separate employers.
As a consequence of the dissimilar work per-
formed hb the two Coimpanies, each emploper eri-
ploys different cl;lssif:cations of employ ees with dif-
ferent qualifications and skills. Furthermore, there is
no employxee interchlange betweenl the txo eilphllocrs.
In this latter connection. m, colleagues finrd that
employees ha e transferred, albeit infrequcentl. be-
tween corporations.'' E ven this equix ocal chatri lclcri-
zation of limited iItelrchangig is unsuinpported \b the
record. 'Thus. the record shows thlit the cnipio cc
wh10 has imovxed betxween Numrich Arms anld iAuto-
I S .c (/C// It' ( 1t1s1 11, ("1. /fl , -lithi ]]t(.. ( I o'i'rlt ,"rpi ¢ "; /lt'lt 1'
1".3 NI RB 04q I64 I.[[ !r,, ?/ ~ ] u' 1 u ,: t ,,I - /d ( ,,'t, ;;, ..,..
(6 i /-t~ it ( ?;Itlrtr [lt'tt ( ..., tIp tl 2 I I " I R1/ '!).Jl 0 /' 1,
Ordnance was permanently rather than temporarily
transferred arnd that one such "transfer" occurred af-
ter the emploNee was discharged by the Auto-Ord-
nance plant manager. The evidence of temporary in-
terchange was between Auto-Ordnance and Hopkins
anld Allen Mainufacturinig ( orp., a now out-of-busi-
less company. not between Auto-Ordnance and
Numrich Arms.
Nor are tile operations of the two employers other-
wise appreciably integrated. Instead, the record
shows that the twxo emplovers are separately man-
aged. I hus. the record shoxws, contrary to my col-
leaguies' finding. that the Auto-Ordnance plant man-
ager. Frank (iromack. does his own hiring and firing.
In addition, (r nnack exercises control over day-to-
day operations of Auto-Ordnance including invento-
ir\ and Ipurchasinl. \utAlto-()idrialnce also handles its
own advertising with its ownI budget and has its own
catalog,. salesmen, aind marketing system. Although
the Companies share I single bank-computerized
pa. roll sy stem. each (Compan pa ys its share of the
cost, and the payroll accounts and checks are sepa-
rate. 1he two employers file separate tax returns.
Persolnnel files and eriployee records are separatelI
niaiii tainced a rid there are separate employee facilities
for the elmplo)ees of cach employer. In these circum-
stances. the limited cooperation as to misdirected
mail a.nd phone calls hIardlI offsets the evidence as to
separate operations
F-inally. I must take exception to my colleagues
findinrl that Ira I rast is responsible for the resolution
of employee c rievances. the amount of employee re-
muneratioll, aind the hir ing and termination of em-
plosees. 1lhe record show s that actual or active con-
trol of da\ -to-dax operations of Auto-Ordnance is hb
Plan t N lanager Frank (;roemack and that, at best.
Irast merely has potential control over the two em-
plo ers. Indeed, I rast testified thlat Auto-Ordnance
Plant Manager (ironemack "does his own hiring and
lirinll" that (iroimack decides xwhether or not an em-
rlo\cc \\ill be i xc11 a rraise. and that grievances are
haniidled bs the respective plant managers. Nor is
there e iderince that Ilrast routinely reviews
(irolnmack's decisions. Another indication of
('roni;ick's control ox\er the da -to-day operation of
Aiuto-()rdi rince is the evidence that I rast spends an
hour or less i monilth at the Auto-Ordnance facilits
M hille Nuinric h testified th;at he has been in the facil-
itl one time for 5 minuites within the past 1-1 2
\cars IIn addition. eminlliee benefits at the two
Cioiimpanries differ. I lhis. profit-sharing anld pension
plans aire ax ailabh to Nutlrichi Arrms employees but
niol int Autom-()rdiance erilplo ees.
iI sUnlll, the record revea;lls an absence of common
contr l ,lii olxnticslhip. ail aibsicncc of product inte-
316
NUMRICH ARMS CORPORA lION
gration, a lack of appreciable integration of opera-
tions. and a lack of interchange hetw een Numrich
Arms and Auto-Ordnance. In addition, the record
demonstrates, amply, that Plant .Mlanager (il(omack
exercises day-to-da\ autoniom at Auto-Ordnance
and that there are significant differences in the major
henefits a;lallable to the tuwo Companies' employees.
In these CilFIClllstances, I do not find that the record
establishes that the two separate legIl entities have
been shlox n to he a single integrated enterprise.
317