Parkview Gardens

National Labor Relations Board - Board Decisions

Jun 30, 1967

166 N.L.R.B. 697 (N.L.R.B. 1967)

PARKVIEW GARDENS 697
Karl Gerber, Max Taetle , Nathan Metz & Estate of
Bernard Katz, Co-Partners d/b/a Parkview
Gardens and Government Service Employees'
Union Local 536, Building Service Employees In-
ternational Union, AFL-CIO, Petitioner. Case
5-RC-5834
June 30, 1967
DECISION AND DIRECTION
OF ELECTION
Upon a petition duly filed under Section 9(c) of
the National Labor Relations Act, as amended, a
hearing was held before a Hearing Officer of the
National Labor Relations Board. The Hearing Of-
ficer's rulings made at the hearing are free from
prejudicial error and are hereby affirmed. Briefs
have been filed by the Employer and the Petitioner.
Upon the entire record in this case, the Board
finds:
1. The Employer' contends that the petition
should be dismissed on the ground that its opera-
tions do not satisfy any of the Board's jurisdictional
standards because it is engaged exclusively in the
ownership and management of local residential
apartments. Alternatively, it contends that, should
the Board decide to assert jurisdiction over re-
sidential apartments, it should establish standards
that are meaningful and appropriate, both in terms
of the industry, generally, and in terms of the appli-
cation of the Act.
The Employer is a partnership of three in-
dividuals and the estate of a fourth individual (as
named, supra). The partnership d/b/a Parkview
Gardens is engaged in the operation of Parkview
Gardens, a garden-type apartment project com-
posed of 592 units located on 25 acres of land in
East Riverdale, Maryland. The project was
completed 4 years ago at a cost of approximately
$4,500,000 and since that time its annual gross
rental revenue has been about $650,000 per year.
In excess of $250, 000 of this revenue is transferred
interstate to national insurance companies annually
in mortgage money payments. In addition, about
$87,000 is spent annually for goods and services.
The record does not establish the origin of the sup-
plies and materials purchased, nor does it show that
these materials are manufactured in Maryland. The
project is operated by a property manager, who is
employed by the partnership. The partnership owns
no other property, assets, apartments, or commer-
cial enterprises. The individual partners (including
the estate of Bernard Katz) consider themselves
real estate investors, and, in addition to their interest
in Parkview Gardens, they individually, and in vari-
ous combinations, have investment interests in
other residential properties located mostly in the
State of Maryland.
Since the enactment of the National Labor Rela-
tions Act in 1935, the Board has not exercised its
discretionary jurisdiction to the fullest possible ex-
tent under the authority delegated to it by Congress.
In 1957 the Supreme Court's decision in P.S. Guss
d/bla Photo Sound Products v. Utah Labor Rela-
tions Board2 denied to the States authority to assert
jurisdiction over enterprises as to which the Board
declined to exercise its statutory jurisdiction. In
1958 the Board re-examined its jurisdictional poli-
cies in light of the experience under its 1950 and
1954 standards and the Supreme Court's decision
in the Guss case, and revised its jurisdictional
standards3 so that more individuals, labor organiza-
tions, and employers could invoke the rights and
protections afforded by the statute, establishing ap-
propriate monetary standards for different indus-
tries.4 However, in revising its jurisdictional stand-
ards in 1958, the Board did not establish a stand-
ard for the residential apartment housing industry
and has, therefore, determined whether or not to as-
sert jurisdiction over employees in this industry on
an ad hoc basis.5 The Board has asserted jurisdic-
tion over apartment house employers in the District
of Columbia,6 where the Board exercises plenary
jurisdiction7 over employers whose operation of re-
sidential apartments affect national defense;8 over
employers primarily engaged in the ownership and
management of residential properties but who are
also engaged in other operations;9 over a large scale
interstate apartment house operation; 10 and over
employers engaged in operation or management of
apartments and other operations which are covered
by existing jurisdictional standards."
Because of an increasing incidence of cases in-
volving this industry, the Board has now decided to
establish an appropriate jurisdictional standard for
the residential apartment industry. This industry is
one of substantial size, it is a highly financed seg-
I The name of the Employer appears as amended at the hearing
2353US.I
i The Board's 1958 review of jurisdictional policies was consistent with
a practice of periodic review of its jurisdictional policies. Coca-Cola Bot-
tling Company of Stockton, 110 NLRB 840,841
4 Twenty-Third Annual Report of the National Labor Relations Board,
p. 7.
5 In 1959, Congress passed the Labor-Management Reporting and Dis-
closure Act, which, inter aha, amended the Act to include Section 14(c)(1).
This section permits the Board, subject to certain limitations not here ap-
plicable, to limit in its discretion the exercise of its statutory jurisdiction to
enterprises whose effect on commerce, in the Board' s opinion, is substan-
tial.
6 Westchester Corporation, 124 NLRB 194; The Mensh Corporation,
159 NLRB 156; Shannon & Luchs, Agents for Capitol Park One, Inc.,
162 NLRB 1381 See also Pentagon Plaza, Inc, 143 NLRB 1280.
' M. S Ginn & Company, 114 NLRB 112
8 Western Area Housing Company, 107 NLRB 1263
0 E.g , Horizon House, 151 NLRB 766
10 Leisure World Sales Corporation, Inc., 163 NLRB 668
11 Carol Management, 133 NLRB 1126, Claiborne Towers, Inc., 126
NLRB 187; Mariemont Inn, 145 NLRB 79 See also Pentagon Plaza,
Inc , supra.
166 NLRB No. 80
698 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ment of our economy, and its operations exert a
substantial impact on commerce.12 Apartment
house construction in the United States has risen
from 23.9 percent of all housing construction in
1961 to 33.8 percent in 1965, and construction
starts for multifamily dwelling units have increased
67 percent in 4 years- 13 In 1965, permits were is-
sued for the construction of $3.5 billion worth of
multifamily units, i.e., for projects containing five or
more units, in the United States. The apartment
housing industry is already very large and con-
tinually growing.
There is a growing trend toward the corporate
ownership of such real estate. In the past the laws
of most States ". . . for many years prohibited the
chain ownership of property by institutions, such as
banks and insurance companies. 1114 In recent years,
however, the need to promote capital pools for in-
vestment in rental housing has led many States to
authorize institutional ownership of apartment
projects. 15
With this growth of corporate ownership, the in-
dustry has become highly competitive. As a result
it now provides many additional services to the
housing consumer. Among them are reception and
answering services, valet services, maintenance
services, high speed elevators, recreational and so-
cial facilities such as swimming pools, tennis courts,
golf courses, varied function rooms, and the like.
These added services and facilities require the ex-
penditures of large sums of money and additional
staffing for their operation and maintenance. In the
case of a particular apartment house, purchases of
materials and supplies may or may not directly in-
volve interstate commerce. But, as shown by the
facts in this case, an apartment development of any
size is almost invariably financed by interstate
financial institutions.
Moreover, in the aggregate, purchases necessary
for furnishings, appliances, and other maintenance
supplies and materials of the industry clearly have
a substantial impact on the interstate business
operations of supplying firms and thus on interstate
commerce. In addition, the operations of the indus-
try facilitate the movement and placement of per-
sons throughout the United States by providing
adequate housing facilities within areas offering em-
ployment. This is clearly illustrated by the develop-
ment around military installations of apartment
housing over which the Board has, on occasion, as-
serted jurisdiction. however it is also observable in
industrial areas where privateindustry has obtained
large government contracts. In short, the growth of
the apartment housing industry has been nourished
12 Whether the Board has jurisdiction over a particular operation is not
to be determined by confining judgment to the qualitative effect of the ac-
tivities immediately before the Board in a particular case See N L R B v
Fainblatt, et al , 306 U.S. 601
13 U S. Department of Commerce, Business and Defense Services Ad-
by a demand for housing created by our national
economic development.
The Board is aware that in some situations the
impact on interstate commerce of labor disputes in
the industry is more clearly identifiable than in
others. Accordingly, although we have decided to
assert jurisdiction over employers in the apartment
housing industry, we are of the opinion, and find,
that it will effectuate the policies of the Act to limit
assertion of jurisdiction to apartment housing pro-
jects which receive at least $500,000 in gross
revenues per annum. In making this determination,
we have been guided by our experience in asserting
jurisdiction over retail concerns and over concerns
in the hotel and motel industry, where we have ap-
plied the $500,000 annual gross revenues standard.
We are persuaded that this standard will enable the
Board to exercise jurisdiction over that part of the
industry which exerts a substantial impact on com-
merce, wit out unduly burdening the Board's
processes bj involving it in a multitude of cases
whose total economic significance is slight.
Moreover our experience persuades us that it is
desirable to have a fixed dollar standard of general
applicability to the industry, rather than to deter-
mine the impact on commerce on some other basis,
because the ease of application of such a standard
as well as its predictable application to given cases,
results in advantages to employers and employees
in the industry, and to the Board.
In the instant case, the Employer's operations are
representative of operations in the apartment hous-
ing industry generally. As indicated previously,
Parkview Gardens is composed of 592 units which
were built at a cost of approximately $4.500.000. It
has an annual gross revenue of $650,000 per year.
In excess of $250.000 of the gross revenues are dis-
tributed in mortgage payments to national insurance
companies annually. Its normal yearly operating
and maintenance figures show that it spends
$30,000 for fuel oil, $24,000 for cleaning materials,
$3-400 for roofing repairs, $36-40,000 for electrici-
ty which is purchased from Potomac Electric
Power Company, and $6-7,000 for gas. In addition
to the above some of the Employer's business ex-
penditures mentioned in the record show that $8-
9,000 is spent annually on advertising, and $2,000
for accounting services. In sum, the record herein
establishes that more than one-half of the Em-
ployer's annual gross revenue ($650,000) is paid
out each year for the operation and maintenance of
Parkview Gardens. A substantial portion of such
revenue is utilized in the purchase of materials, sup-
plies, goods, and services which move in interstate
ministration, Construction Review. Vol 12, p. 17, No 12
14 Downs, Jr, James C , P,inciples of Real Estate Management, 1964,
p 436
1, Ibid
PARKVIEW
commerce. Accordingly, we find that the Em-
ployer's operations affect commerce within the
meaning of Section 2(6) and (7) of the Act, and, as
the Employer's annual gross revenues exceed
$500,000, we find that it will effectuate the policies
of the Act to assert jurisdiction herein.
2. The labor organization involved claims to
represent certain employees of the Employer.
3. A question affecting commerce exists con-
cerning the representation of employees of the Em-
ployer within the meaning of Sections 9(c)(1) and
2(6) and (7) of the Act.
4. We find that the following employees of the
16 An election eligibility list, containing the names and addresses of all
the eligible voters, must be filed by the Employer with the Regional
Director for Region 5 within 7 days after the date of this Decision and
Direction of Election The Regional Director shall make the list available
to all parties to the election. No extension of time to file this list shall be
GARDENS 699
Employer, as stipulated by the parties at the hear-
ing, constitute a unit appropriate for the purposes of
collective bargaining within the meaning of Section
9(b) of the Act:
All building custodial employees of the Employer
at its 6400 Riverdale Road, Riverdale, Maryland,
location, including maids. janitors, and painters, but
excluding maintenance engineers, guards, office
clerical employees, and supervisors, as defined in
the Act.
[Direction of Election 16 omitted from publica-
tion.]
granted by the Regional Director except in extraordinary circumstances
Failure to comply with this requirement shall be grounds for setting aside
the election whenever proper objections are filed Excelsior Underwear
Inc., 156NLRB 1236