The Middle West Corporation

National Labor Relations Board - Board Decisions

Dec 13, 1938

10 N.L.R.B. 618 (N.L.R.B. 1938)

In the Matter of THE MIDDLE 117-EST CORPORATION , 20 NORTH WACKER
DRIVE, CHICAGO , ILLINOIS , KENTUCKY UTILITIES COMPANY, OLD Do-
MINION POWER COMPANY, KENTUCKY POWER & LIGHT COMPANY,
154 W. MAIN STREET, LEXINGTON , KENTUCKY and INTERNATIONAL
BROTHERHOOD OF ELECTRICAL WORKERS (A. F. OF L.), 1365 S. 6TH
STREET, PADUCAH , KENTUCKY
Case No. R-1024.-Decided December 13, 1938
Electric, Gas, Watcr, and Ice Utility Industry-Investigation of Representa-
tives: controversy concerning representation of employees: controversy con-
cerning appropriate unit ; refusal by employers to recognize union as exclusive
representative of employees-Unit Appropriate for Collective Bargaining: com-
panies operated as a system; central management of labor relations; uniform
wage scales and working conditions ; unit consisting of employees of certain,
companies based on extent of organ ization-Elect,on Ordered
Mr. W. J. Perricelli, for the Board.
Mr. Squire R. Ogden, of Louisville, Ky., for the Companies.
Mr. Arthur Bennett, of Washington, D. C., for the Union.
Miss Margaret Holmes, of counsel to the Board.
DECISION
AND
DIRECTION OF ELECTION
STATEMENT OF THE CASE
On June 30, 1938, International Brotherhood of Electrical Work-
ers, herein called the Union, filed with the Regional Director for the
Ninth Region (Cincinnati, Ohio) a petition, subsequently amended,.
alleging that a question affecting commerce had arisen concerning
the representation of employees of The Middle West Corporation of
Chicago, Illinois, Kentucky Utilities Company, Kentucky Power &
Light Company, and Old Dominion Power Company, of Lexington,
Kentucky, herein collectively called the Companies, and requesting
an investigation and certification of representatives pursuant to Sec-
tion 9 (c) of the National Labor Relations Act, 49 Stat. 449, herein
called the Act. On August 19, 1938, the National Labor Relations
Board, herein called the Board, acting pursuant to Section 9 (c)
of the Act and Article III, Section 3, of National Labor Relations
Board Rules and Regulations-Series 1, as amended, ordered an in-
10 N L. R B., No. 46
618
DE,C1SIONS AND ORDERS 619
vestigation and authorized the Regional Director to conduct it and
to provide for an appropriate hearing upon due notice.
On September 2, 1938, the Regional Director issued a notice of
hearing, copies of which were duly served on the Union and the
Companies . Pursuant to the notice , a hearing was held on Septem-
ber 19, 1938 , at Cincinnati , Ohio, before Horace A. Ruckel , the Trial
Examiner duly designated by the Board . The Board and the Com-
panies were represented by counsel , and the Union was represented
by its international representative . All participated in the hearing.
During the course of the hearing the Trial Examiner made several
rulings on motions and on objections to the admission of evidence.
Thereafter the Companies filed briefs with the Board. The Board
has reviewed the rulings of the Trial Examiner and finds that no,
prejudicial errors were committed . The rulings are hereby affirmed.
:Upon the entire record in the case, the Board makes the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE CODIPANIES
The Middle West Corporation is a holding company incorporated
under the laws of the State of Illinois. Through its 61 subsidiaries,
it furnishes one or more utility services to 15 States in the United
States, Mexico, and two Canadian provinces. Kentucky Utilities
Company, Kentucky Power & Light Company, and Old Dominion
Power Company, subsidiaries of The Middle West Corporation, are
operating utility companies engaged in supplying electric, gas, water,
ice, and bus service in Kentucky, Virginia, and Tennessee.
The Middle West Corporation owns all common stock in Kentucky
Utilities Company, a Kentucky corporation, which owns all stock
in Old Dominion Power Company, a Virginia corporation. The
Middle West Corporation owns more than 50 per cent of the stock of
United Public Service Corporation which owns all common stock in
Kentucky Power & Light Company, a Kentucky corporation.'
Through a wholly owned subsidiary, Middle West Service Com-
pany, The Middle West Corporation supervises the operations of the
other Companies from a centrally located office in Lexington, Ken-
tucky, from which they are managed as a closely integrated system.2
R. Al. Watt, president of Kentucky Utilities Company, Kentucky
Power & Light Company, and Old Dominion Power Company, directs
i Kentucky Utilities Company owns all stock in Lexington Utilities Company, a Kentucky
corporation, Dixie Power & Light Company, ,id South Fulton Power & Light Compnny,
Tennessee corporations, none of which were named in the petition South Fulton Power
and Light Company and Dixie Power & Light Company have no employees, theit business
of collecting bills, maintaining property, etc., being handled by Kentucky Utilities Company
employees
2 Including the three subsidiaries of Kentucky Utilities not named in the petition
,620 NATIONAL LABOR RELATIONS BOARD
labor relations. Several department heads, such as treasurer, auditor,
.sales manager, and director of operations, handle problems related to
-their departments for all Companies.
The operating territory of the Companies is divided into four
.geographical divisions, each having a division manager and other
division officers who are directly responsible to the Lexington office
and who act on behalf of any company which has property or em-
ployees within the division.
The Companies are principally engaged in the generation, sale,
-and distribution of electric energy, the greater portion of which
is generated by Kentucky Utilities Company in Kentucky and trans-
mitted to the other Companies at points of connection between their
transmission systems. The transmission system of Kentucky Utili-
ties Company extends from Louisville, Kentucky, through its Dix
Dam and Pineville generating stations to the State line between Ken-
tucky and Virginia, where it connects with the transmission system of
Old Dominion Power Company south of Pocket, Virginia, and at
other points on the Kentucky-Virginia State line, at which points of
connection Old Dominion Power Company obtained 33 per cent of
its electric supply from Kentucky Utilities Company in 1937; and
across the Kentucky-Tennessee State line through Middlesboro, Ken-
tucky, and Cumberland Gap, Tennessee, and again through Fulton,
Kentucky, and South Fulton, Tennessee, where it connects with
the lines of two small Tennessee subsidiaries which obtain all the
-electric energy supplied to eight communities in Tennessee from
-Kentucky Utilities Company. The transmission system of Kentucky
Utilities Company connects with that of Kentucky Power & Light
Company in northern Kentucky, at which points of connection Ken-
tucky Power & Light Company obtains substantially all of its electric
-supply from Kentucky Utilities Company.3
The total sales of electric energy for the system in 1937 were
415,475,344 kilowatt hours. Of this amount, Kentucky Utilities Com-
-pany delivered 48,278,454 kilowatt hours outside Kentucky and re-
ceived 43,031,000 kilowatt hours from outside Kentucky. Old Domin-
ion Power Company delivered 32,100,000 kilowatt hours outside Vir-
ginia, and received 44,994,359 kilowatt hours from outside Virginia.
All purchases and sales of electric energy by Kentucky Power & Light
Company and Lexington Utilities Company were consummated in
{Kentucky. In 1937 the Tennessee subsidiaries obtained 932,932 kilo-
watt hours of electric energy from outside Tennessee.
In addition to the generation, sale, and distribution of electric
..energy, the Companies furnish gas, ice, and water services in Ken-
$There is a similar interconnection betReen the transmission systems of Kentucky Utili-
,ties Company and Lexington Utilities Company at points neat Lexington, Kentucky
I)ECISIONC AND 011DE11S 621_
tucky and Virginia, the production of which commodities is dependent
upon the electric energy the Companies generate. Thus, machinery
used in the manufacture of ice and gas, or for pumping water, is.
operated by means of electricity generated and distributed by the-
system.
The Companies sell electric energy to unaffiliated light and power
companies at the Kentucky-Illinois State line and to unaffiliated light
and power companies in Kentucky. They supply electric energy to,
12 manufacturing concerns in Kentucky and Virginia whose products.
have a national market, and to 7 interstate railroads in Kentucky
and three in Virginia. Electric energy is furnished to Western
Union, Postal Telegraph, and Southern Bell Telephone and Tele--
graph Company and to radio stations, newspapers, and airports. The-
Companies supply electric energy for navigation lights on the Ken-
tucky and Ohio Rivers, and for the operation of locks and dams.
Large quantities of materials are purchased in interstate commerce.
In 1937, $57,000 worth of copper wire and cables was purchased out-
side Kentucky, Virginia, and Tennessee; $28,000 was spent in the.
purchase of poles, half of which came from other States. The Com-
panies obtained $182,000 worth of transformers and meters from-
concerns in other States and retailed $493,650 worth of electrical
appliances, most of which were manufactured in States other than-
Kentucky, Virginia, and Tennessee.
There are about 1,200 employees on the pay rolls of the Companies.
II. THE ORGANIZATION INVOLVED
International Brotherhood of Electrical Workers is a labor organi-
zation affiliated with the American Federation of Labor, admitting
to its membership all employees of the Companies in the gas, water,-,
electric, and ice departments, excluding supervisors, foremen, clerical'
forces, janitors and janitresses, salesmen, office employees, and others-
having the right to hire and discharge.
IlI. THE QUESTION CONCERNING REPRESENTATIOIN
The Union commenced organizing employees of the Companies in
April 1937. Local unions were established in three operating di-
visions and at the date of the hearing organization work was being-
carried on in the fourth division for the purpose of establishing a
local there.
In June 1938, a committee composed of representatives from each
local met with the president of the Companies to discuss an agree-
ment concerning hours and wages which had been drafted by the-
committee for employees of the Companies throughout the four-
divisions. On July 29, 1938, a conference was held in the Cincinnati,-
•622 NATIONAL LABOR RELATIONS BOARD
office of the Board, attended by E. W. Brown, director of operations
for the Companies, and union representatives. - At this conference
negotiations on the wage-hour proposal were continued, and the
Union offered to prove that it represented a majority of employees
.of the Companies. Brown stated at that time that the Companies
would not recognize the Union as exclusive bargaining agent until
it had been certified by the Board. At the Cincinnati conference a
consent election was discussed but no agreement was, reached upon it.
At the hearing, and in briefs filed with the Board, the Companies
-disputed the Union's claim that it represents a majority of employees.
We find that a question has arisen concerning representation of
employees of the Companies.
IV. THE EFFECT OF THE QUESTION CONCERNING REPRESENTATION UPON
COMMERCE
We find that the question concerning representation which has
arisen, occurring in connection with the operations of the Companies
described in Section I above, has a close, intimate, and substantial
relation to trade, traffic, and commerce among the several States, and
tends to lead to labor disputes burdening and obstructing -ommerce
and the free flow of commerce.
V. THE APPROPRIATE UNIT
The Union is seeking a unit composed of employees of the Compa-
nies in the gas, water, electric, and ice departments, excluding super-
visors, foremen, clerical forces, janitors and janitresses, salesmen,
office employees, and others having the right to hire and discharge.
The Companies have no objection to the classification of employees
made by the Union but insist that the employees of each Company
should constitute a separate bargaining unit.
As pointed out in Section I the Companies, through unified stock
ownership, management and operation, comprise a closely integrated
system. Employees throughout the system, regardless of the Com-
pany on whose pay roll they are carried, perform substantially similar
functions and enjoy uniform wage scales and hours of work. Labor
policies are determined in the Lexington office for the entire system.
In view of the central management of labor relations, a system-wide
unit ordinarily would be proper.
However, Lexington Utilities Company, a subsidiary of Kentucky
Utilities Company, which is managed and operated from the Lexing-
ton office as 'a part of the system' and which has 150 employees, was
not included in the petition filed by the Union. There is no evidence
that the Union or any other labor organization has organized these
DECISIONS AND ORDERS 623
employees and the Companies do not object to their exclusion from
the unit. Under similar circumstances we have held that a part of
a system may constitute an appropriate unit.' We therefore conclude
that employees of The Middle West Corporation, Kentucky Utilities
Company, Kentucky Power & Light .Company, and Old Dominion
Power Company should be embraced in one unit.
We find that employees of the Companies in the gas, water, electric,
and ice departments, excluding supervisors, foremen, clerical forces,
janitors and janitresses, salesmen, office employees, and others having
the right to hire and discharge, constitute a unit appropriate for the
purposes of collective bargaining and that said unit will insure to
employees of the Companies the full benefit of their right to self-
organization and to collective bargaining and otherwise effectuate
the policies of the Act.
VI. THE DETERMINATION OF REPRESENTATIVES
There was introduced in evidence the pay roll of the Companies
as of August 15, 1938, showing 617 employees in the gas, water, ice,
and electric departments. Pursuant to agreement at the hearing, the
Companies and the Union subsequently collaborated in the prepara-
tion of an exhibit showing certain persons on the pay roll of August
15, 1938, namely Joseph Miller of -Maysville, Kentucky, and Fred
Habermehl, of Augusta, Kentucky, to be supervisory employees. It
was understood at the hearing that these men would be excluded from
the bargaining unit and they are hereby excluded. In addition, the
same exhibit contained the names of certain persons properly within
the classifications of employees in the appropriate unit whose names,
through error, did not appear on the pay roll actually submitted in
evidence at the hearing. Accordingly, we include Henry Cummins,
Earlington, Kentucky; J. W. Snavely, Pinesville, Kentucky; J. R.
Thompson and W. Berry Vick, Paducah, Kentucky, within the unit.
There are, therefore, 619 employees in the appropriate unit. The
financial secretaries of the Union testified that the Union represents
approximately 295 of such employees. The Union did not introduce
other proof of its claim to represent a majority of employees in the
proper unit.
Under the,circumstances, we find that the question which has arisen
concerning the representation of employees can best be resolved by
the holding of an election by secret ballot. Those employees of the
Companies in the appropriate unit who were employed during the pay-
d Matter of R. C. A. Communications, Inc and American Radio Telegraphists' Associa-
tion, 2 N. L. R B 1109 ; Matter of United Shipyards, Inc. and Locals No 12, No 14, No 1S
of the Industrial Union of Marine and Shipbuilding 1Po>Tes of Auie,tiea, 5 N L 11 B 742
624 NATIONAL LABOR RELATIONS BOARD
roll period of August 15, 1938, shall be eligible to vote, except those
employees who have since quit or been discharged for cause.
Upon the basis of the above findings of fact and upon the entire
record in the case, the Board makes the following :
CONOLusloNs OF LAW
1. A question affecting commerce has arisen concerning the repre-
sentation of employees of The Middle West Corporation, Kentucky
Utilities Company, Kentucky Power & Light Company, and Old
Dominion Power Company , of Lexington , Kentucky , within the mean-
ing of Section 9 (c) and Section 2 (6) and (7) of the National Labor
Relations Act.
2. All employees of the Companies in the gas , water, electric, and
ice departments , excluding supervisors , foremen , clerical forces, jani-
tors and janitresses , salesmen, office employees , and others having the
right to hire and discharge , constitute a unit appropriate for the pur-
poses of collective bargaining , within the meaning of Section 9 (b)
of the National Labor Relations Act.
DIRECTION OF ELECTION
By virtue of and pursuant to the power vested in the National
Labor Relations Board by Section 9 (c) of the National Labor Rela-
tions Act , and pursuant to Article III, Section 8, of National Labor
Relations Board Rules and Regulations-Series 1, as amended, it is
hereby
DIRECTED that, as part of the investigation authorized by the Board
to ascertain representatives for the purposes of collective bargaining
with The Middle West Corporation, of Chicago, Illinois, Kentucky
Utilities Company, Kentucky Power & Light Company, and Old
Dominion Power Company , of Lexington , Kentucky , an election by
secret ballot shall be conducted within thirty ( 30) days from the date
of this Direction , under the direction and supervision of the Regional
Director for the Ninth Region, acting in this matter as agent for the
National Labor Relations Board and subject to Article III, Section 9,
of said Rules and Regulations, among all employees of the Companies
whose names appear on the Companies' pay roll for August 15, 1938,
including the names of Henry Cummins, J. W. Snavely, J. R. Thomp-
son, and W. Berry Vick, and excluding supervisors , foremen, clerical
forces, janitc.rs and janitresses, salesmen, office employees, and others
having the right to hire and discharge, and excluding employees who
have since quit or been discharged for cause, to determine whether or
not they desire to be represented by the International Brotherhood of
Electrical Workers for the purposes of collective bargaining.