Sakrete of Northern California, Inc.

National Labor Relations Board - Board Decisions

Jul 10, 1962

137 N.L.R.B. 1220 (N.L.R.B. 1962)

1220 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
CONCLUSIONS OF LAW
1. Dale Electronics , Inc., is engaged in commerce within the meaning of Section
2(6) and (7) of the Act.
2. International Union of Electrical, Radio and Machine Workers, AFL-CIO, is
a labor organization within the meaning of Section 2(5) of the Act.
3. Dale Electronics Employee Welfare Committee is a labor organization within
the meaning of Section 2(5) of the Act.
4. By dominating and interfering with the administration of the Dale Electronics
Employee Welfare Committee and by giving support to it Respondent has engaged
in unfair labor practices in violation of Section 8(a)(2) and (1) of the Act.
5. By maintaining in effect a solicitation rule which prohibits solicitation on com-
pany property Respondent has engaged in interference , restraint , and coercion in
violation of Section 8(a) (1) of the Act.
6. By conducting a poll of its employees for the purpose of determining whether or
not they wished the Company to continue the Dale Electronics Employee Welfare
Committee the Respondent engaged in interference , restraint, and coercion within the
meaning of Section 8 (a),(1) of the Act.
7. The aforesaid unfair labor practices are unfair labor practices within the mean-
ing of Section 2(6) and (7) of the Act.
[Recommendations omitted from publication.]
Sakrete of Northern California, Inc. and Freight, Construction,
General Drivers and Helpers , Local 287, International Brother-
hood of Teamsters, Chauffeurs, Warehousemen and Helpers
of America. Case No. 20-CA-2069. July 10, 1962
DECISION AND ORDER REMANDING CASE TO
THE TRIAL EXAMINER
On April 6, 1962, Trial Examiner Maurice M. Miller issued his
Intermediate Report in the above-entitled proceeding, recommending
dismissal of the complaint for jurisdictional reasons, as set forth in
the Intermediate Report attached hereto. Thereafter, the Charging
Party and the General Counsel filed exceptions to the Intermediate Re-
port together with supporting briefs and a request by the General
Counsel that this case be remanded to the Trial Examiner.
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 McCulloch and Mem-
bers Rodgers and Fanning].
The Board has considered the rulings of the Trial Examiner made
at the hearing in connection with the jurisdictional issue and finds
that no prejudicial error was committed. The rulings are hereby
affirmed. The Board has considered the Intermediate Report, the
exceptions and briefs, and the entire record in the case. We find merit
in the exceptions, and, accordingly, do not adopt the Trial Examiner's
conclusions or recommendations, but only his findings of fact which
are not inconsistent with our Decision and Order herein.
137 NLRB No. 131.
SAKRETE OF NORTHERN CALIFORNIA, INC. 1221
Organized in October 1958, as a California corporation, Sakrete of
Northern California, Inc., engages in the production of packaged dry
concrete , mortar, and plaster mixes, which are sold to northern Cali-
fornia retail building material dealers for local distribution. For the
first 21/2 years of its existence, Respondent maintained a plant in East
Palo Alto, California; during the late spring of 1961, however, pro-
ductive operations were transferred to Milpitas, California, the plant
involved in the instant proceeding. Respondent also sells "black top"
asphalt mix, produced by a southern California firm.
All products of Respondent are prepared with patented equipment,
pursuant to a set formula, and are packaged and sold under the regis-
tered trade name "Sakrete." The registered trademark is owned by
Sakrete, Incorporated, an Ohio corporation located in Cincinnati,
which also holds an exclusive license to use specially designed and
patented equipment to manufacture Sakrete by the methods described
in the patents covering the equipment involved. Sakrete, Incorpo-
rated, licenses approximately 26 other firms in the United States to use
its patented equipment and registered "Sakrete" trademark. Re-
spondent is one of these licensees ; the licensing agreement between
Sakrete, Incorporated, and Respondent is explained in detail in the
Intermediate Report attached hereto.
Throughout the period with which this case is concerned , Mr. and
Mrs. Arthur C. Avril have owned the entire capital stock of Sakrete,
Incorporated. Mr. Avril has functioned as the firm's president, Mrs.
Avril as its vice president and treasurer, and George Riehl as its secre-
tary. These officers also constitute the corporate board of directors.
Mr. and Mrs. Avril likewise own all the capital stock of the Respond-
ent firm. Mr. Avril functions as its president, Mrs. Avril as its
secretary-treasurer, and Joseph Orbaugh as its vice president. These
officers also constitute Respondent's corporate board of directors.
Sakrete, Incorporated's officers and directors function in the same ca-
pacity for A. & T. Development Corporation, an Ohio corporation
located in Cincinnati, which manufactures and sells the patented
machinery used by "Sakrete" licensees. No testimony was proffered
with respect to the corporate stock ownership of A. & T. Development
Corporation.
Before the Board will take jurisdiction, it must be shown that Re-
spondent meets the Board's $50,000 inflow-outflow standards for non-
retail enterprises.' Uncontroverted record testimony shows that the
operations of the Respondent corporation, considered alone, do not
meet the Board's jurisdictional requirements. The record does estab-
lish, however, that Sakrete, Incorporated, during the year preceding
the hearing herein, sold and shipped products valued in excess of
1 Siemons Mailing Service, 122 NLRB 81.
1222 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
$50,000 to customers located outside of the State of Ohio, and that it
purchased materials and supplies valued in excess of $50,000 which
tions shipped to it from outside the State of Ohio. Thus, the opera-
tions of Sakrete, Incorporated, meet the Board's jurisdictional re-
quirements. The question remains whether Respondent's operations
should be considered together with Sakrete, Incorporated's opera-
tions as a "single employer" for jurisdictional purposes. The Trial
Examiner found that they should not; the Board disagrees.
The Board often treats separate corporations as one employer for
jurisdictional purposes, where it is found that the firms, despite their
nominal separation, are highly integrated with respect to ownership
and operation. Some of the principal factors which have been con-
sidered relevant in determining the extent of integration are: (1)
interrelation of operations, (2) centralized control of labor relations,
(3) common management, and (4) common ownership or financial
control 2
The record reveals that Respondent and Sakrete, Incorporated's
conduct of business operations are substantially parallel. Both sell
the same products, and use special patented equipment supplied by
third firm having officers and directors identical with those of Re-
spondent's licensor. Respondent, as licensee, must conform to quality
standards set by Sakrete, Incorporated, and may not sell any products
not approved by Sakrete, Incorporated. There is no regular inter-
change of employees between the two, but Sakrete, Incorporated, pos-
sesses the right to dispatch a staff member, or some qualified specialist
employed by any licensee's firm, to Respondent's plant in order to
check its operations, and in order to train or advise Respondent's per-
sonnel. Although no central accounting system is employed, and no
formal report is made by Respondent to Sakrete, Incorporated, re-
specting its expenditures and profits, Avril admitted that, as presi-
dent of Respondent, he presides at all of Respondent's business meet-
ings, makes all major economic decisions, and keeps close watch over
Respondent's overall operations. He is the ultimate authority for
both companies, whose operating policies and procedures are thus al-
most identical.
Admittedly, Avril, as president of Sakrete, Incorporated, estab-
lishes all of that corporation's policies with regard to wage scales,
hours, and conditions of employment, and is responsible for its sales,
purchases of supplies, and its hire and discharge of employees. Al-
though it was also admitted that Avril establishes all the general rules
with respect to wages, hours, and conditions of work at Respondent's
plant, and makes all major decisions with regard to contracts of pur-
chase and sale, there was some dispute among the parties as to who is
responsible for the diurnal or "current," business operations. Re-
3 See Twenty-First Annual Report, pp. 14-15.
SAKRETE OF NORTHERN CALIFORNIA, INC. 1223
spondent claims, and the Trial Examiner found, that these decisions
have been made by Philip Schneider, Respondent's executive secre-
tary, who has had overall charge of the Milpitas plant.
Although we agree that Schneider was given apparent authority to
make local decisions, the record shows that in practice the scope of his
decisions has been very narrow. The plant at Milpitas employs only a
secretary, a truckdriver, and three production and maintenance em-
ployees, and had been operating there for only an approximate 6
months at the time of the hearing. Avril admitted that, as president
of Respondent, the right of ultimate authority in all matters resides in
him. He has made decisions which were local in nature, such as hiring
employees. It was Avril who negotiated by phone with his struck em-
ployees at Milpitas. As a matter of fact, Avril stated that Schneider
had acted outside his authority when he had "laid off" the employees
who went out on strike. In view of these facts, we cannot agree that
Avril does nothing more than set general policy for the Milpitas plant,
or that Schneider exercises authority in regard to all local matters.
The fact of common ownership and financial control of Respondent
and Sakrete, Incorporated, has been conceded. In view of these facts,
and the record as a whole, and especially in view of the fact that the
operations of Respondent and Sakrete, Incorporated, are closely inter-
related, that their labor relations policies are almost identical and are
centrally controlled, that the management of both resides virtually
in one man, and that both are commonly owned and financially con-
trolled, we find that these two companies constitute a "single em-
ployer" for jurisdictional purposes. As the operations of Sakrete,
Incorporated, and Respondent, taken together, meet the Board's juris-
dictional requirements, we shall assert jurisdiction over Respondent.3
Accordingly, we shall grant the General Counsel's motion to re-
mand the case to the Trial Examiner for the preparation of a Supple-
mental Intermediate Report concerning the merits of the complaint.
[The Board remanded the case to the Trial Examiner for the prep-
aration and issuance of a Supplemental Intermediate Report, setting
forth his findings of fact, conclusions of law, and recommendations
with respect to the unfair labor practices alleged in the complaint.]
s The Trial Examiner found, and we agree, that Respondent is engaged in commerce
within the meaning of the Act.
INTERMEDIATE REPORT AND RECOMMENDED ORDER
STATEMENT OF THE CASE
Upon a charge duly filed and served June 19, 1961, the General Counsel of the
National Labor Relations Board caused a complaint and notice of hearing to be
issued and served upon Sakrete of Northern California, Inc., designated as Respond-
ent in this report. The complaint was issued August 4, 4961; therein Respondent
was charged with unfair labor practices affecting commerce within the meaning of
Section 8(a)(1), (2 ), ( 3), and (5) of the National Labor Relations Act, as amended.
61 Stat. 136, 73 Stat. 519. Thereafter, through answer duly filed, Respondent
1224 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
conceded the complaint's jurisdictional allegations and certain factual allegations;
commission of any unfair labor practice was, however, denied. On August 23 and
September 5, 1961, amended charges were filed and duly served. Subsequently,
the General Counsel issued an amendment of his prior complaint, dated September 6,
1961, which was duly served. (This amendment modified certain factual allega-
tions of the complaint, supplementing them, also, with further allegations based upon
the first and second amended charges.) On September 12, 1961, the General Counsel
issued and caused to be served a second amendment of the complaint; thereby, certain
formal allegations previously omitted from the complaint, inadvertently, were sup-
plied . Respondent filed a September 14 answer to the complaint as amended.
Therein, Respondent conceded certain facts with respect to its business operations,
but denied other factual allegations of the complaint as amended in this connection;
further, Respondent denied the General Counsel's legal contention with respect
to its involvement in commerce and business operations which affect commerce within
the meaning of Section 2(,6) and (7) of the Act, as amended. Respondent's com-
mission of any unfair labor practice was likewise denied.
Pursuant to notice, a hearing with respect to the issues was held at San Jose,
California, on September 20, 21, and 22, 1961, before Trial Examiner Maurice M.
Miller. The General Counsel, Respondent, and Freight, Construction General
Drivers and Helpers, Local 287, International Brotherhood of Teamsters, Chauf-
feurs, Warehousemen and Helpers of America, designated as the Union in this report,
were represented by counsel. Each party was afforded a full opportunity to be heard,
to examine and cross-examine witnesses, and to introduce evidence pertinent to the
issues. When their testimonial presentations were complete, counsel waived oral
argument. Thereafter, briefs were filed in behalf of the General Counsel and Re-
spondent; these have been fully considered.
Upon the entire testimonial record, documentary evidence received, and my
observation of the witnesses, I make the following:
FINDINGS OF FACT
1. JURISDICTION
Facts
A. Sakrete, Incorporated
Sakrete, Incorporated, an Ohio corporation-whose relationship with Respondent
will be detailed-maintains its principal office and place of business at Cincinnati,
Ohio; there it engaged in the production and sale of packaged dry concrete, mortar,
and plaster mixes, prepared for use with the addition of water. The designated mixes
are prepared pursuant to a predetermined formula, and packaged and sold under
the trade name "Sakrete" which is a registered trademark owned by the Cincinnati
enterprise. Sales of the firm are limited to dealers within the Cincinnati area.
Respondent's answer, however, concedes that Sakrete, Incorporated, during the past
year, sold and shipped products valued in excess of $50,000 to customers located
across State lines, and purchased materials and supplies valued in excess of $50,000
which were shipped to the designated firm by suppliers located across State lines.
Throughout the period through which this case is concerned, Mr. and Mrs. Arthur
C. Avril have owned the entire capital stock of Sakrete, Incorporated. Mr. Avril
has functioned, throughout, as the firm's president. In that capacity, he has estab-
lished policy and executed contracts in the firm's behalf. He possesses the power to
remove or reassign employees. (Though a producing company, with a seasonably
variable work force of X10 to 25 employees, Sakrete, Incorporated, has never
negotiated or executed a collective-bargaining agreement with any labor organiza-
tion representing its employees.) Mrs. Avril serves as the company's vice president
and treasurer; George Riehl functions as its secretary. These officers constitute the
corporate board of directors.
Sakrete, Incorporated, licenses approximately 26 other firms in 45 States to use its
patented equipment and registered "Sakrete" trademark. These may or may not use
"Sakrete" with their business name. Their license agreements, however, follow a
standard form. The licensor contracts to permit the licensee to use the trademark
within a specified territory, agrees to maintain the legal validity and enforceability
of the trademark and to prevent its use by persons other than licensees , agrees to list
additional products in connection with which the trademark may be used and to
establish and enforce standards of quality, agrees to study the licensee's operations
at the licensee' s request , and agrees not to grant a license on more favorable terms to
any other party. The licensee agrees to represent itself to the public as a manu-
SAKRETE OF NORTHERN CALIFORNIA, INC. 1225
facturer of Sakrete products , agrees that it will not manufacture or sell Sakrete
products outside of its designated territory, agrees to submit a sample of each of its
products quarterly to an independent testing laboratory and to forward the labora-
tory's report to the licensor, agrees to maintain standards of quality , agrees to cease
use of the name "Sakrete " upon termination of the agreement , agrees to refrain
from advertising or merchandising practices which might impair the validity or en-
forceability of the trademark , agrees to pay the licensor a fee of $100 per day for any
study made pursuant to contract , agrees to pay the licensor $50 per month royalty
for use of the trademark , and agrees to display along with the trademark , when used,
certain printed matter designed to give notice that it is a registered trademark.
Further provisions specify remedies for the enforcement of the license agreement,
and the rights of the parties in the event of any breach.
Sakrete, Incorporated , derives "somewhere around 10 to 12 percent" of its
corporate income from the licenses noted; dollar amounts have not been specified
for the record , however, with respect to the firm's gross income, or that part of it
which derives from licenses granted . Sakrete, Incorporated , holds no financial
interest in any licensee . Mr. and Mrs . Avril, likewise , hold no financial interest in
any licensee, except for their ownership of Respondent 's corporate stock-noted fur-
ther in this report-and some stock of Associated Products Corporation, which
distributes Sakrete products in the southern California area.
B. A. & T. Development Corporation
Described for the record as another segment of the Sakrete complex, A. & T. De-
velopment Corporation was formed to develop , manufacture , and sell new machinery
for the processing of Sakrete dry mixes ; additionally , this firm provides service for
Sakrete licensees with respect to laboratory testing and quality control. Prior to
the present case , A. & T.'s income was completely derived from the sale of ma-
chinery and services to Sakrete , Incorporated , licensees ; testimony has not been
sought or proffered , however, with respect to A. & T.'s total annual sales income, or
the volume of its purchases . The firm maintains its principal place of business in
Cincinnati , Ohio; record evidence reveals that Sakrete, Incorporated 's officers and
directors function in the same capacity for A. & T., but no testimony with respect
to its corporate stock ownership has been proffered.
C. Respondent
Organized in October 1958 as a California corporation , Sakrete of Northern
California , Inc., engages in the production of packaged dry concrete , mortar, and
plaster mixes . The firm also sells "black top" asphalt mix , produced by a southern
California firm. All company products are prepared with patented equipment,
pursuant to a set formula , packaged, and sold under the registered "Sakrete" trade
name to northern California retail building material dealers, for local distribution
to homeowners , contractors , and industrial plants requiring small quantities of
concrete , mortar, plaster , or asphalt for minor jobs.
Mr. and Mrs. Arthur C. Avril, previously noted as the sole holders of Sakrete,
Incorporated 's capital stock, likewise own all capital stock of the Respondent firm,
which they hold in equal shares. Mr. Avril serves as Respondent 's president ; in that
capacity-as with Sakrete, Incorporated , also-he determines policy, executes con-
tracts, and possesses the power to remove or transfer employees . ( Normally, other
local company officers-not specified-execute contracts for the day-to-day functions
of the business ; Avril, however, tries to review all contracts involving long-term "non-
current" commitments before their execution .) Mrs. Avril functions as secretary-
treasurer ; and Joseph Arbaugh ( Orebaugh or Orbaugh) serves as the firm's vice
president . These officers , likewise, constitute the Respondent's board of directors.
All raw materials which Respondent uses-cement , sand, and gravel-are produced
in California and purchased for Respondent 's use in that State . The asphalt product
which the firm handles is likewise a California product.
For the first 2'/2 years of its existence , Respondent maintained a plant in East Palo
Alto, California; during the late spring of 1961 , however , productive operations were
transferred to Milpitas , California, where a new plant had been constructed. Pro-
duction at the new plant began about May 15; shortly thereafter , Respondent con-
tracted to purchase from A . & T. Development Corporation $65,000 worth of
machinery and equipment, for delivery on July 1 or earlier . (For such machinery
and equipment , Respondent contracted to pay monthly installments on the purchase
price, in an amount equivalent to 2 cents per bag of Sakrete products produced and
sold by Respondent during the prior month .) Respondent functions as a licensee
of Sakrete, Incorporated, pursuant to a license contract with a February 11, 1959,
1226 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
effective date . Under this contract, Respondent 's use of the registered "Sakrete"
trademark is limited to the Northern California area. None of the dealers purchas-
ing and receiving Sakrete products from Respondent maintain places of business
located east or north of California 's central valley . (During July or August 1961,
Respondent made one out-of-State truck delivery to Carson City, Nevada, pursuant
to an order placed by a northern California dealer ; this sale grossed approximately
$200 or $300.) Record evidence establishes without contradiction that Respondent's
dealers purchase Sakrete products primarily for local resale ; so far as Respondent
knows, none of its products have moved out of the State , directly or indirectly, with
the single exception previously noted.
Avril, as Respondent 's president, establishes company policy-including "general
rules" with respect to wage scales , hours of work , and working conditions-but dele-
gates responsibility for "normal" or "current" business operations to local manage-
ment ; this would include responsibility for sales, the purchase of supplies, the
determination of basic wage structures , and the hire or discharge of employees.
Testifying generally, Avril declared-without challenge-that he performs none of
these functions , reserving his concern only for the maintenance of a profitable busi-
ness, measured by results . Throughout the period with which this case is concerned,
Philip V . Schneider , with the job title of executive secretary , has had overall charge
of the Milpitas plant. (Vice President Arbaugh 's role-with respect to local plant
management-has not been delineated for the record .) Record evidence reveals that
Schneider , because of his responsibility for sales, spends much time away from the
plant. Daily production , therefore , has normally been supervised by Ray Freeman,
with the job title of production superintendent . Besides Schneider and Freeman,
Respondent 's normal employee complement at the Milpitas plant-throughout the
period with which this case is concerned-consisted of one office girl, two production
employees , and a delivery truck driver.
D. Relation between Respondent and other Sakrete firms
Previously , reference has been made to the fact that Respondent 's capital stock,
and Sakrete, Incorporated 's are owned by the same persons, although not in the
same proportion . The corporations have two officers and directors in common.
Respondent concedes that Avril, by virtue of his position as president of both, fixes
general policy for both firms . Apart from this connection , Respondent's only rela-
tionship with Sakrete, Incorporated , is defined by the license contract previously
noted . Respondent submits no periodic financial statements to Sakrete , Incorpo-
rated-nor does it employ any standardized system of accounts prescribed by the
latter. (While Respondent makes royalty payments , called for by the contract,
amounting to $50 per month for use of the registered "Sakrete" trademark , nothing
in the record would warrant a determination that the firm has ever called upon
Sakrete, Incorporated , for a study of its operations pursuant to the license contract.)
Neither firm sells any manufactured product to the other , purchases materials from
the other , or services customers of the other . No personnel are employed in com-
mon; record evidence establishes no routine interchange of employees. While
Sakrete , Incorporated , possesses the right to dispatch a staff member , or some quali-
fied specialist employed by a licensed firm, to some licensee's plant in order to check
operations , train personnel , or provide advice, any determination to pursue such a
right would merely involve temporary personnel transfers without any shift from
Sakrete, Incorporated 's payroll to that of any licensed firm ; no such arrangement
affecting Respondent has ever been effectuated.
Though Respondent and A. & T. Development Corporation have two officers and
directors in common, their only further connection derives from Respondent's
purchase of production machinery for the Milpitas plant from A. & T., pursuant to
the agreement previously noted.
The relationship between Respondent and various other Sakrete licensees is limited
to Respondent 's participation in some sort of cooperative arrangement pursuant to
which each licensee contributes part of the amount budgeted annually for advertise-
ment of the registered "Sakrete" trade name in various publications with national
circulation . Under this arrangement , licensees designate representatives to meet
annually for the purpose of approving plans for such advertising , and budgeting its
cost ; actual plans for the placement of advertising are prepared by a committee
elected by the licensees . (Mr. Avril participates in these general licensee meetings as
Sakrete, Incorporated's representative. Vice President Arbaugh and Executive Secre-
tary Schneider have represented the Respondent firm. By virtue of his post as Sakrete,
Incorporated's president , Avril holds a permanent seat on the licensee's committee; to
date , no representative of Respondent , designated as such , served as a committee
member.) The proportion of the total cost scheduled for contribution by each
SAKRETE OF NORTHERN CALIFORNIA, INC. 1227
licensee is based upon the relative circulation within its licensed territory of the
publication or publications with which advertising may be placed . Nothing in the
present record reveals the total annual cost of such advertising or the dollar amount
of Respondent 's annual contribution.
Conclusions
Pursuant to statute , Board cognizance of any case presented for decision must
necessarily derive from a preliminary determination that legal jurisdiction exists;
such a determination will reflect a conclusion that the business operation involved
"affects" commerce as the statute requires , and that its effect on commerce may not
be considered so small as to preclude a finding of statutory jurisdiction under the
de minimis rule. Secondly, record evidence must show that the business operation
meets applicable jurisdictional standards.
There can be no doubt, upon the record, that Respondent's business operation bears
some relation to commerce ; labor practices reasonably calculated to affect the firm's
business would presumably warrant characterization as labor practices likely to have
more than a minimal effect on commerce , statutorily defined . Nevertheless, Re-
spondent 's participation in interstate commerce clearly falls below the level of par-
ticipation required under this agency's presently applicable jurisdictional standards.
See Siemon 's Mailing Service, 122 NLRB 81 and related cases.
Eschewing any contention to the contrary, the General Counsel would argue,
rather, that record evidence reveals a sufficiently close relationship between Respond-
ent and Sakrete , Incorporated , to warrant their treatment as a single employer for
jurisdictional purposes . Since Respondent has conceded , through its answer, that
Sakrete, Incorporated , makes annual purchases and shipments across State lines,
sufficiently to meet jurisdictional standards , the General Counsel 's contention is
that the Board may rely upon the Ohio corporation 's participation in commerce to
warrant the assertion of jurisdiction herein.
This Agency has consistently treated separate concerns, which are closely related,
as one employer for the purpose of determining whether to assert jurisdiction. The
question in such cases has been whether the firms, despite their nominal separation,
are sufficiently integrated to warrant Board consideration of their combined business
operations when applying jurisdictional standards. And the principal factors which
have been considered relevant to any determination regarding the existence of suffi-
cient integration include the extent of: (1) interrelation of operations; (2) cen-
tralized control of labor relations; (3) common management ; and (4 ) common
ownership or financial control. No one of these factors has been held determina-
tive, but Board opinions have stressed the first three factors which tend to reveal
functional integration, particularly centralized control of labor relations. See
Twenty-first Annual Report, pp. 14-15, and the cases therein cited. The Board has
declined , in several cases, to find integration merely upon the basis of common
ownership or financial control.
With respect to Respondent and Sakrete, Incorporated, however, common owner-
ship and financial control has been conceded. Considered in isolation, such a con-
cession cannot be considered sufficient to warrant treatment of the two concerns as a
single unit for jurisdictional purposes. Central Dairy Products Co., Stefjen's
Branch, 114 NLRB 1189; Modern Linen & Laundry Service, Inc., 110 NLRB 1305.
The General Counsel, however, contends that the relationship between Sakrete,
Incorporated, and the Respondent firm reflects each and every type of integration
which the Board customarily considers relevant to a jurisdictional determination.
Conventionally , Board determinations finding functional integration between
nominally separate business firms reflect the Agency 's consideration of testimonial
or documentary evidence regarding : ( 1) Shared or leased premises, facilities, or
equipment (Straits Aggregate & Equipment Corp., et al., 133 NLRB 108; Mohican
Trucking Company, 131 NLRB 806; Alamo-Braun Beef Company, et al., 128 NLRB
32); (2) shared, or freely interchanged, managerial, clerical, or production workers
(Mohican Trucking Company, supra; Hamilton Bros., Inc., et al. 130 NLRB 233;
Jat Transportation Corp., et al., 128 NLRB 780; Alamo-Braun Beef Company, et al.,
supra); (3) substantial reliance by one firm upon services provided by the other
(Hamilton Bros., Inc., et al, supra; or ( 4) one firm's status as a regular user, manu-
facturer, processor, transporter, or handler of goods or materials provided by the
other firm, either as part of some "straight-line operation" or some unified produc-
tion effort (Straits Aggregate & Equipment Corp., et al., supra; Mohican Trucking
Company, supra; Pine State Creamery Company, Inc., et al., 130 NLRB 892; Alamo-
Braun Beef Company, et al., supra. Compare National Union of Marine Cooks
and Stewards, et al., (Irwin-Lyons Lumber Company) 87 NLRB 54; N.L R.B. v.
Somerset Classics, Inc., et al., 193 F. 2d 613 •(C.A. 2); N.L.R.B. V. National Gar-
1228 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ment Company, 166 F. 2d 233 (C.A. 8); and others). Without a record revelatory
of such relationships , or some comparable relationship , this agency has normally
refused to consider functional integration proved.
Record evidence in this case reveals nothing more than Respondent 's conduct of
business operations substantially parallel with those of Sakrete , Incorporated, based
upon a license supplied by the latter firm ; beyond that , the record merely shows that
Respondent 's business uses certain special equipment , supplied by a third firm having
officers and directors identical with those of Respondent 's licensor.
Board decisions note "centralized control of labor relations " frequently as a sig-
nificantly determinative factor in determinations regarding the presence of opera-
tional integration between separate concerns sufficient to warrant their treatment
as a single employer for jurisdictional purposes . Record evidence normally con-
sidered relevant to such determinations may reflect: (1) responsibility for decisions
with respect to labor relations matters delegated to a single management official or
department (Straits Aggregate & Equipment Corp., et al., supra; Mohican Trucking
Company, supra; Alpha Corporation, Transportable Systems Division, 128 NLRB
309; Alamo-Braun Beef Company , et al., supra ); ( 2) centralized management
decisions regarding wage rates , work schedules , fringe benefit programs , and other
working conditions, promulgated and effectuated without distinction between simi-
larly situated employees of two or more separate concerns (Pine State Creamery
Company, Inc., et al., supra; Jat Transportation Corp., et al., supra; V.I.P. Radio,
Inc., 128 NLRB 113); or (3) centralization of hiring, discharge, and personnel
record functions for separate concerns ( Jat Transportation Corp., et al., supra;
Orkin Exterminating Company, Inc. (of Kentucky), 115 NLRB 622). No cases
have come to my attention wherein control of labor relations matters for separate
concerns was found sufficiently centralized merely because policy determinations
with respect to such matters were made by a single management official without
proof that such determinations-nominally made for separate business enterprises-
revealed some degree of coordination or deliberate parallelism. Compare Orkin
"The Rat Man," Incorporated, 112 NLRB 762, and Orkin Exterminating Company,
Inc., supra, in this connection.
With respect to Respondent, record evidence does reveal that President Avril sets
labor relations policy generally; so far as appears, however, his policy would merely
require the firm's local management to meet prevailing labor market standards-
regarding wages, hours and conditions of work-within the San Jose area. (Testi-
mony which Respondent's president proffered reveals that he merely reviews the
firm's financial statement and cost records, periodically, for the purpose of mani-
festing his interest in the maintenance of a profitable operation .) When functioning
as president of Sakrete, Incorporated, Avril likewise sets general policy, leaving
specific decisions with respect to that policy's routine effectuation to local manage-
ment. Should the firm 's Cincinnati plant superintendent seek a conference with
him relative to wage rates or merit raises for plant personnel, Avril will express his
views with respect to zany question raised; no requirements appear to have been laid
down , however, regarding the routine presentation of such matters for his
consideration.
Nothing in the present record, further, suggests that Avril's policy determinations
with respect to Sakrete, Incorporated, and the Respondent firm are coordinated, or
dependent upon each other in any way. No common policy-with respect to wages,
work schedules, fringe benefits of the employment relationship, or conditions of
work-has been conceded. While Respondent's president has, upon one specific
occasion, discussed wage rates, work schedules, pay for holidays, and vacation
privileges , with a worker 's spokesman , his personal participation in the consensus
reached was clearly motivated by the currency of a work stoppage and the pres-
ence of a picket line. Such developments would normally be expected to engage
the personal attention of top management. Nothing in the testimony with respect
to the incident-putting aside the fact that Avril spoke from Cincinnati via long
distance telephone-reveals any relationship between the determinations made by
Avril in Respondent's behalf and Sakrete, Incorporated's concerns.
Conventionally , Board determinations finding "common management " present as
,a factor revelatory of significant integration , affecting two business enterprises
nominally distinguishable, have rested upon record evidence that: ( 1) some single
management representative or managerial group routinely supervises daily opera-
tions (Perfect T.V., Inc., 134 NLRB 575; Straits Aggregate & Equipment Corp., et
al, supra; Mohican Trucking Company, supra; Pine State Creamery Company, Inc,
supra; Zanetti Riverton Bus Lines, 128 NLRB 1309 ); (2) one accounting depart-
ment or firm of auditors provides unified or centrally directed accounting or auditing
service (Mohican Trucking Company, supra; Pine State Creamery Company, Inc.,
SAKRETE OF NORTHERN CALIFORNIA, INC. 1229
et al., supra; Jat Transportation Corp., et al., supra; Alamo-Braun Beef Company,
supra); (3) centralized or common facilities are provided for the purchase and
distribution of mutually required equipment materials and supplies (Jat Transporta-
tion Corp., et al., supra; C. L. Morris, Inc., et al., 127 NLRB 761; Orkin Exterminat-
ing Company, Inc., supra). Something more than mere potential common control,
which inheres in common ownership, must, however, be shown. Compare I. G. Roy
and Sons Company v. N.L.R.B., 251 F. 2d 771 (C.A. 1), in this connection.
Record evidence herein, however, fails to show either centralized accounting or
auditing, centralized purchasing or distribution of materials and supplies, or central-
ized supervision of day-to-day operations. While Avril-functioning as Respondent's
president-does sign checks and review proposed long-term "non-current" commit-
ments, nothing in the record suggests any correlation between such functions-per-
formed by him as Respondent's president-and similar functions which he may be
called upon to perform as the president of Respondent's licensor.
Arguably, Respondent's dependence upon license arrangements for the conduct
of its business might be found revelatory of a significant relationship between the
firm and its licensor, Sakrete, Incorporated, sufficient to warrant treatment of these
firms as a single, integrated enterprise for jurisdictional purposes. Reference could
be made to the mutuality of obligation established by their license agreement, which
that document couples with remedies available to the licensor specifically calculated
to facilitate some limited control of Respondent's business operations under the
license.
Such contractual provisions, conceivably, might be considered roughly analogous to
those franchise arrangements which the Board once considered sufficient to link
certain types of manufacturers and dealers as integral parts of a multistate enterprise.
Avedis Baxter, et al., d/b/a Baxter Bros., 91 NLRB 1480. In the cited case, the
Board observed that:
. we ,are of the opinion that when an [employer] is an integral part of a
multi-state enterprise, the Board should exercise its discretion in favor of taking
jurisdiction. We consider franchised automobile dealers, such as the Respond-
ents to be enterprises of this nature, even though, as here, the business may be
locally owned and make all its sales within the state. In reaching this conclusion,
the Board has considered the franchise arrangements under which the Respond-
ents operate and the fact that they function as an essential element in a Nation-
wide system devoted to the manufacture and distribution of automobiles.
Within 4 years, however, the Board determined that the "franchise yardstick" would
no longer be used to justify the assertion of jurisdiction over automobile dealers, or
distributors, wholesale or retail, in any other industry. Wilson-Oldsmobile, 110
NLRB 534. The Agency determined further that, where local retail establishments
had franchise agreements with a concern engaged in commerce or business opera-
tions which affect commerce, jurisdictional standards generally applicable to local
retail establishments would be applied.
Franchise agreements within the field of automobile or soft drink distribution
clearly present a stronger case for the assertion of Board jurisdiction than license
agreements of the type reflected by the present record. Franchises normally create a
relationship, between a manufacturer and dealer, pursuant to which physical goods
move across State lines. The license granted Respondent by Sakrete, Incorporated,
however, gives rise to no interstate movement, except for Respondent's nonrecurrent
purchase of special equipment, and the resultant fund transfers characterized, on the
one hand, as license royalties and, on the other, as monthly installment payments for
machinery purchased. Under the circumstances, cogent argument can be made
that ,the Board's present reluctance to exercise jurisdiction over franchised distributors
of manufactured products, solely by virtue of their franchise status, should be con-
sidered both relevant and persuasive with respect to disposition of the present case.
Further, compare N.L.R.B. v. New Madrid Manufacturing Company, et al., d/b/a
Jones Manufacturing Company, 215 F. 2d 908, 912-913 (CA. 8), in this connection.
Substantially, the question presented for determination is whether sufficient integra-
tion exists between Respondent and Sakrete, Incorporated, to warrant their treatment
as a single employer. Frequently, such a question calls for refined judgment, with
respect to which reasonable minds may differ. Since the present record, however,
reflects a minimum quantum of functional integration between the two firms, man-
agement performance with respect to their routine operations which can hardly be
considered centralized except in the most general sense, and sporadic control of labor
relations discretely conducted with respect to each business by top management-
with responsibility for most routine determinations left to local supervision-I find
myself constrained to conclude that Respondent and Sakrete, Incorporated, despite
1230 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
their common ownership , should not be considered sufficiently integrated to merit
treatment as a single firm for jurisdictional purposes.
RECOMMENDATIONS
Since the business operations of Respondent , considered separately, reflect no
participation in commerce sufficient to ,warrant exercise of the Board's jurisdiction
under presently applicable jurisdictional standards , I recommend that the present
complaint be dismissed.
Massachusetts Electric Company and Utility Workers Union of
America , AFL-CIO. Case No. I -RC-6798. July 10, 1962
DECISION AND DIRECTION OF ELECTION
Upon a petition duly filed under Section 9(c) of the National Labor
Relations Act, a hearing was held before Orlando Rodio, hearing
officer. The hearing officer's rulings made at the hearing are free from
prejudicial error and are hereby affirmed.
Pursuant to the provisions of Section 3(b) of the Act, the Board
has delegated its powers in connection with this case to a three-
member panel [Members Rodgers, Fanning, and Brown].
Upon the entire record in this case, the Board finds :
1. The Employer is engaged in commerce within the meaning of the
Act.
2. The labor organizations involved claim to represent certain em-
ployees of the Employer.
3. A question affecting commerce exists concerning the representa-
tion of employees of the Employer within the meaning of Section
9 (c) (1) and Section 2 (6) and (7) of the Act.
4. The Employer, Massachusetts Electric Company, generates and
sells electric power in Worcester County, Quincy, Weymouth, Attle-
boro, northern Berkshire, southern Berkshire, and Northampton,
Massachusetts. The Petitioner seeks a single unit of employees at
Weymouth and Quincy, currently represented by the Intervenor,
Local 332, Brotherhood of Utility Workers of New England, Inc.,
herein called the BUW. The Employer contends that a larger seg-
ment, covering its employees in Weymouth, Quincy, Attleboro, and
Worcester County, but excluding those in northern Berkshire, south-
ern Berkshire, and Northampton, currently otherwise represented, is
alone appropriate. The Intervenor is willing to accept whatever unit
the Board may find appropriate.
The Employer is 1 of 17 operating subsidiaries of New England
Electric System, a holding company with subsidiaries in several New
England States, including Massachusetts. For several years prior to
1961, the Employer, then known as Worcester County Electric Com-
pany, operated only in Worcester County. During the same period,
137 NLRB No. 128.