Tri-Service Drilling Co.

National Labor Relations Board - Board Decisions

Jun 2, 1969

176 N.L.R.B. 284 (N.L.R.B. 1969)

284 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Tri-Service Drilling Company and Local 826,
International Union of Operating Engineers,
AFL-CIO. Case 16-CA-3440
Upon a consideration of the briefs of the parties and
the entire record in this case, I make the following
FINDINGS OF FACT
June 2, 1969
DECISION AND ORDER
BY CHAIRMAN MCCULI OCH AND MEMBERS
BROWN AND JENKINS
On March 20, 1969, Trial Examiner Fannie M.
Boyls issued her Decision in the above-entitled
proceeding, finding that the Respondent had
engaged in and was engaging in certain unfair labor
practices and recommending that it cease and desist
therefrom and take certain affirmative action, as set
forth in the attached Trial Examiner's Decision.
Thereafter, the Respondent filed exceptions to the
Trial Examiner's Decision and a supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
powers in connection with this case to a
three-member panel.
The Board has reviewed the rulings of the Trial
Examiner made at the hearing and finds that no
prejudicial error was committed. The rulings are
hereby affirmed. The Board has considered the
exceptions, the brief, and the entire record in this
case, and hereby adopts the findings, conclusions,
and recommendations of the Trial Examiner.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board adopts as its Order the
Recommended Order of the Trial Examiner, and
hereby orders that the Respondent, Tri-Service
Drilling Company, Midland, Texas, its officers,
agents, successors, and assigns, shall take the action
set forth in the Trial Examiner's Recommended
Order.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
FANNIE M. BoYLs, Trial Examiner: This case was
heard before me in Odessa, Texas, on January 23, 1969.
The complaint, issued on October 15, 1968 and based
upon a charge filed on September 30, 1968, alleges that
Respondent, Tri-Service Drilling Company, violated
Section 8(a)(5) and (1) of the Act by unlawfully refusing
to bargain with Local 826, International Union of
Operating Engineers, AFL-CIO, herein called the Union.
Respondent filed an answer, admitting that it had refused
to bargain with the Union but denying, for reasons
hereinafter set forth, that its refusal to bargain was
unlawful. After the conclusion of the hearing counsel for
the General Counsel and for Respondent filed briefs which
have been carefully considered.
176 NLRB No. 35
1. THE BUSINESS OF RESPONDENT
Respondent is a Texas corporation having its principal
office and place of business in Midland, Texas, from
which headquarters it is engaged in the business of drilling
oil and gas wells in the Permian Basin area in Texas and
Mexico. During the 12-month period preceding the
issuance of the complaint, Respondent, in the course and
conduct of its business, performed services valued in
excess of $50,000, of which amount services valued in
excess of $50,000 were performed in states other than
Texas. Respondent concedes and I find that it is engaged
in commerce within the meaning of Section 2(6) and (7) of
the Act. I further find that it will effectuate the policies of
the Act to assert jurisdiction herein.
II. THE LABOR ORGANIZATION INVOLVED
Local 826, International Union of Operating Engineers,
AFL-CIO, is a labor organization within the meaning of
Section 2 (5) of the Act.
III. POSTURE OF THIS CASE AND ISSUES PRESENTED
Following certification by the Board on September 4,
1968 of the Union as the exclusive bargaining
representative of Respondent's employees in a concededly
appropriate bargaining unit, Respondent has refused
requests by the Union to bargain with it, contending that
the Board in the representation case improperly overruled
some of its objections to the election. Normally issues
which were or could have been litigated in a
representation proceeding may not be litigated or
relitigated in refusal-to-bargain unfair labor practice
proceedings based, as this case is, on the underlying
representation proceeding. The Trial Examiner would be
bound by the Board's decision in the representation case
and would be in no position to overrule the Board,
regardless of whether he agreed or disagreed with the
Board.' Both Respondent and the General Counsel in this
case, however, assert that because of a special reservation
in the Stipulation for Certification upon Consent Election
in the representation case, Respondent is entitled in this
unfair labor practice case to present evidence in support of
its contention that the Board's requirements for voter
eligibility as set forth in Hondo Drilling Company,
N.S.L., 164 NLRB No. 67, and Carl B. King Drilling
Co., 164 NLRB No. 68, are not applicable to
Respondent.'
'Pittsburgh Plate Glass Co. v. N.L.R.B., 313 U.S. 146, 162; Rules and
Regulations, National Labor Relations Board , Series 8, as amended July
8, 1968, Sections 102.67 (f) and 102 . 69 (c).
'In those companion cases involving employment patterns of employees
of oil well drilling companies in the Permian Basin area ( in which
Respondent is also located ), the Board fashioned a formula , described
infra, for compiling voter eligibility lists which it believed would fairly and
realistically resolve the question of voter eligibility in representation
elections for employees similarly situated. See also, Moran Oil Producing
and Drilling Corporation , 174 NLRB No. 26 ; Wek Drilling Co, Inc. 174
NLRB No. 92: Brahaney Drilling Company, inc., Case 16-CA-3443, Trial
Examiner ' s Decision issued March 6, 1969; and 32nd Annual Report of the
NLRB, p. 66-67.
TRI-SERVICE DRILLING CO.
The special reservation in the Stipulation for
Certification Upon Consent Election to which the parties
refer , consists of the following provision:
Hearing and notice thereof , Direction of Election, and
the making of Findings of Fact and Conclusions of Law
by the Board prior to the election are hereby expressly
waived ; provided , however , that this Stipulation for
Consent is without waiver of or prejudice to the
Employer ' s right to contest and litigate through
objections to the election , Section 8 ( a)(5) procedures or
otherwise the validity of or applicability of the
particular voter eligibility rule followed by the Regional
Director for the employees of this Employer in this
election , pursuant to direction of the National Labor
Relations Board in Hondo Drilling Company , N.S.L.,
164 NLRB No. 67 and Carl B. King Drilling Co., 164
NLRB No. 68.
Although I have some misgivings as to whether the
General Counsel and Respondent have properly
interpreted this provision to permit Respondent to adduce
in this complaint case evidence which it was afforded an
opportunity to adduce but failed to adduce in the
underlying representation case , I have accepted that
interpretation for the purpose of this case and have
received all evidence proffered on the issue as to the
propriety of applying to Respondent the voting eligibility
rule applied by the Board in the Hondo and King cases
cited above. This rule or formula , which will herein be
referred to as the Hondo-King rule or formula,3 provides
that the unit employees eligible to vote should include not
only those appearing on the employer's payroll
immediately preceding the issuance of the Regional
Director's Notice of Election (subject to the normal
qualifications pertaining to eligibility ), but also those
employed by the employer for a minimum of 10 working
days during the 90-calendar day period preceding the
issuance of the Direction of Election, who have not been
terminated for cause or quit voluntarily prior to the
completion of the last job on which they were employed.'
Respondent also sought to litigate in this case the
validity of the Board 's rulings on two other objections to
the election in the representation proceeding. As pointed
out to Respondent at the hearing , however , its right to
litigate those objections in the complaint case was not
'For the sake of brevity , this has sometimes been referred to as the
Hondo rule and apparently for that reason Respondent , in its brief, has
compared the evidentiary facts concerning Respondent ' s operations and
employment data solely with those of Hondo , a company operating smaller
rigs than its own, rather than with King, the size of whose rigs more nearly
corresponds with Respondent ' s. The Hondo and King cases were
companion cases before the Board and the differing rig sizes and
experiences of the two companies were considered by the Board in
formulating a single voting eligibility rule which it believed appropriate for
both those companies.
'The applicability of the Hondo-King voting eligibility formula to
another employer , Brahaney Drilling Company , Inc., was similarly
litigated before me in Case 16 -CA-3443, just 2 days before the hearing in
this case . My decision in the Brahaney case was issued on March 6, 1969.
Where, as in this case, no credibility issues involving the eligibility rule are
involved , it would seem the more orderly and logical procedure to have the
facts stipulated and presented to the Regional Director or Board in the
representation proceeding. I see no reason why a formal hearing to receive
the evidence should have been necessary . Nevertheless, so long as the
Sti pulation for Certification provides for a right to litigate this issue in the
complaint case and, the Employer signed this stipulation in reliance on his
right to a hearing on the eligibility issue , as Respondent contends it did, it
appears only fair, as the General Counsel apparently recognized, that
Respondent be permitted to present its evidence in the unfair labor practice
case.
285
reserved in the Stipulation for Consent and, as to those
objections, the Trial Examiner would be in no position to
overrule the Board, even if she disagreed with the Board's
rulings. Respondent, however, was permitted to preserve
its objections, for purposes of appeal or reargument before
the Board, by making proffers of affidavits, which have
been placed in a rejected exhibit file, and by being given
an opportunity to proffer testimony of any witness whose
testimony it might consider as attacking the credibility of
evidence relied upon by the Regional Director in his
Report on Objections to the Election. Respondent did not
avail itself of the latter opportunity.
IV. THE REPRESENTATION PROCEEDING
Pursuant to a Stipulation for Certification Upon
Consent Election entered into by Respondent and the
Union and approved by the Board's Regional Director on
March 21, 1968, an election was held on April 16. The
Tally of Ballots showed that of 61 eligible voters, 36
(including two whose votes were challenged) cast ballots
- 22 for and 12 against the Union. Respondent thereafter
filed timely Objections to the Election, contending, inter
alia, that the so-called Hondo-King formula for
determining eligibility of employees to vote was
inapplicable to Respondent's operations.
The Regional Director on July 8 issued his Report on
Objections overruling all the objections and recommending
that the Board certify the Union. With•espect to t he
Hondo-King eligibility formula, he recited that
Respondent had been requested to furnish evidence in
support of its objections based upon the use of that
formula but that no such evidence had been received.
On July 19, Respondent filed with the Board its
exceptions to the Regional Director's report. The Board,
on September 4, 1968, issued its Decision and
Certification of Representatives, finding that Respondent's
exceptions raised no material issues of fact or law
warranting reversal of the Regional Director's
recommendations, adopting the Regional Director's
recommendations and certifying the Union as the
bargaining representative of Respondent's employees in
the agreed upon appropriate bargaining unit , namely: All
derrickmen, motormen and floorhands, otherwise referred
to as roughnecks, employed by Respondent in drilling
operations in the Permian Basin area , excluding all tool
pushers, drillers, office employees, technical employees,
guards, professional employees and all supervisors as
defined in the Act.'
'It would appear to me , from the face of the exhibits in the
representation case which were introduced in this case that the number of
employees voting solely by reason of the application of the Hondo-King
formula were insufficient to effect the results of the election In its
Exceptions to the Regional Directors Report on Objections, Respondent
mentions only two men whose votes were challenged and three more who
voted without challenge but whose votes would have been challenged by
reason of the application of the Hondo-King formula had the Board agent
not erroneously prevented Respondent from using a previously prepared
list of men whose votes it intended to challenge . A subtraction of these five
voters from the total of those eligible and from the total number of votes
for the Union would still leave the Union with a majority. However, the
General Counsel did not contend in the hearing before me that the
challenges or possible challenges could not have affected the results of the
election and I shall accordingly make no finding on that subject.
286 DECISIONS OF NATIONAL
V. THE EVIDENCE RELATING TO APPLICATION OF THE
HONDO-KING FORMULA
Respondent contracts to drill oil wells in the Permian
Basin area within a radius of about 150 miles from its
headquarters in Midland , Texas.' It owns seven rigs and
drills to depths of between 5,000 and 20,000 feet.
Once Respondent spuds a well it normally must operate
the rig used on that well 24 hours a day, 7 days a week,
until the drilling of the well has been completed. The
drilling operation requires the services of a driller (who is
a supervisor) and four roughnecks on each of the three
tours or shifts. This means that 12 roughnecks are
required for each 24-hour day. The driller is responsible
for hiring his own crew and may also fire them.
The number of days required to drill a well depends in
large part upon the depth of the well. During the period
between April 1, 1967 and March 31, 1968, it took
Respondent a minimum period of 10 days for one well
and a maximum period of 178 days for another.7 The
average time for drilling a well during this period was 59.5
days.'
Respondent as well as other oil well drilling contractors
in the Permian Basin area have difficulty in recruiting and
keeping all the roughnecks needed in the drilling of wells.
As shown by the record in this case, and as pointed out by
the Board in the Hondo and King cases, there is a high
turnover in the employment of roughnecks in that area.
Some roughnecks stay in the industry for only a brief
period of time but many others follow the industry for
most of their lives. Their job tenure with each drilling
Company, however, tends to be unstable. As explained by
N. B. Dortch, who has been a driller in the Permian Basin
area for 18 years and who drilled for Respondent on three
separate occasions in 1968 , the long distances which many
of the roughnecks frequently have to travel between their
homes and the situs of the wells is a major factor in the
brevity of their job tenure. On one of the drilling jobs
Dortch started for Respondent in 1968 he and his
roughnecks had to travel about 130 miles each way to and
from the well and their homes. Aside from the roughnecks
who quit to find work closer to their homes , some may
quit to work on a deeper well which will assure them
longer employment. Others may quit to rest up from their
arduous 7-day workweek schedule or for various personal
reasons . Some may even be bumped from their j ohs by
crews who have greater seniority with the particular
drilling company - as happened to driller Dortch and his
crew on one of Respondent's wells.
There exists in the Permian Basin area a large labor
pool of roughnecks who follow their trade for many years
or all their lives. Not many of them work for any single
company long enough to earn a living working only for
that company. However, many become rehires for one or
more companies and they work several times for one
company during the year.
As an inducement to encourage more permanency in
employment for its roughnecks , Respondent furnishes a
The Permian Basin area . as the Board found in the Hondo and King
cases, comprises about 95,000 square miles in the western part of Texas
and the eastern part of New Mexico.
'Resp . Exh. 3 would indicate that one well took a minimum of 4 days to
drill, but I have accepted the explanation made by Respondent in its brief
that this well had not been completed on March 31 , 1968, and have
eliminated that well from consideration.
'This compares with a normal of 60 to 70 days for King. whose rigs drill
to about the same depth as Respondent 's. and with an average of 18 days
for Hondo, whose rigs drilled more shallow wells.
LABOR RELATIONS BOARD
1-week paid vacation to employees who have remained in
its employ for more than a year and contributes to an
insurance program for its employees who have been
continuously employed for more than 6 months.' This
does not mean, as Respondent's Secretary-Treasurer
Branham explained, that an employee will be disqualified
for the insurance or vacation benefits merely because he
does not work for Respondent during the qualifying
periods while there is no work available during brief
periods of time even though he may receive a time order
(a termination slip). If, upon the completion of one well,
there is an expectation that the rig will be used and the
roughnecks needed on another well within 30 days, the
roughnecks will continue to be covered under the
insurance program. Similarly, there is no particular
number of days a roughneck must work for Respondent
during a 1-year period to qualify for the vacation benefits.
Respondent uses its discretion in each case to decide
whether a roughneck's breaks in employment should
disqualify him for the vacation and employment elsewhere
during breaks in employment with Respondent would not
necessarily disqualify him for his vacation benefits.10
Despite efforts by Respondent to encourage
permanency of employment of roughnecks, it has
experienced a large turnover in employment among these
employees. If all 7 of Respondent's rigs were operating at
one time, it would need the services of 84 roughnecks, but
Respondent's records (Respondent's Exhibit 3) show that
during the period between April 1, 1967 and March 31,
1968 a maximum of 6 of its 7 rigs, and an average of only
4 rigs, were being operated at any one time." This would
mean that Respondent actually would need a maximum of
72 and an average of 48 roughnecks at one time.
Nevertheless, as the parties stipulated (G. C. Exh. 3),
during the period of slightly more than 1 year prior to
April 7, 1968, Respondent employed 384 roughnecks. It
took this large number to perform the work of the 48 to
72 roughnecks who were needed in a 24-hour day. In
other words, Respondent had to employ eight times as
many roughnecks as it would have needed had all of them
been steadily employed." Of these 384 roughnecks, 22 had
worked for Respondent long enough to qualify for a
vacation under Respondent 's vacation plan and 38 long
enough to qualify under its plan for insurance benefits."
The record does not show how many of those qualifying
for these benefits were employed by Respondent at the
time of the election.
'King, likewise , had insurance and vacation benefits for its employees.
Hospitalization benefits were provided for roughnecks working at least a
180 days over a 2-year period and a paid vacation was given to those
accumulating 350 days of accrued time . About 12 of the 174 roughnecks
employed by King in I year received these benefits . The Board 's decision
in the Hondo case does not disclose whether that Company had any
insurance or vacation benefits for its employees.
"Even where Respondent has a 2 -well contract for a certain rig there
may be about a 3-week interval between the completion of one well and
the spudding of the next one. Title examinations , getting the location
surveyed and staked , and other preparatory steps necessarily preclude
immediate employment of the roughnecks on the second well.
"The average of 4 has been ascertained by dividing by 365 the total of
1,457 operating days for Respondent 's 7 rigs as shown on Resp Exh. 3
"King likewise had to employ about 8 times as many roughnecks during
a 1-year period as it would have needed had all of them been steadily
employed . Hondo employed between 8 and 12 times as many.
"A breakdown of the 384 roughnecks working during the approximately
1-year period above referred to shows that 17 worked for 301 days or
more ; 13 between 201 and 300 days ; 24 between 100 and 200 days; 19
between 51 and 100 days; 50 between 26 and 50 days; 67 between I I and
25 days , and 194 between I and 10 days (G.C.Exh 3).
TRI-SERVICE DRILLING CO.
It is thus apparent in this case , as in the King and
Hondo cases, that there exist competing considerations of
a high turnover in employment and a continued interest in
employment with Respondent demonstrated by a
significant portion of the work force. A comparison of the
operations and employment pattern of Respondent with
those of King and Hondo, in my view, shows no
significant differences which would warrant the application
of a different voting eligibility rule for roughnecks
employed by Respondent. This comparison shows a
particularly striking similarity between the facts in this
case and those found by the Board in the King case. It is
accordingly found that the formula for voting eligibility
established by the Board in the Hondo and King cases
was properly applied in this case and that the Union was
validly certified on September 4, 1968 as the
representative of Respondent's employees in the
appropriate bargaining unit. Since Respondent concedes
that on or about September 9, 1968 and thereafter it has
refused the Union's request to bargain, it must be found
that such refusal to bargain was in violation of Section
8(a)(5) and (1) of the Act.
CONCLUSIONS OF LAW
1. All derrickmen , motormen and floorhands, otherwise
referred to as roughnecks , employed by Respondent in the
drilling of oil wells in the area known as the Permian
Basin , but excluding all tool pushers , drillers , office
employees , technical employees, professional employees,
guards and all supervisors as defined in the Act constitute
a unit appropriate for the purposes of collective
bargaining within the meaning of Section 9(b) of the Act.
2. Since September 4, 1968 , Local 826 , International
Union of Operating Engineers , AFL-CIO, has been the
certified and exclusive representative of all employees in
the aforesaid appropriate unit for the purposes of
collective bargaining within the meaning of Section 9(a) of
the Act.
3. By refusing on or about September 9, 1968 and at all
times thereafter to bargain collectively with the
above-named labor organization as the exclusive
bargaining representative of all its employees in the
appropriate unit, Respondent has engaged in and is
engaging in an unfair labor practice within the meaning of
Section 8 (a)(5) and ( 1) of the Act.
4. The aforesaid unfair labor practice affects commerce
within the meaning of Section 2 (6) and (7) of the Act.
287
A. For the purpose of determining the effective period
of the certification, the initial year of certification shall be
deemed to be begin on the date Respondent commences to
bargain in good faith with the Union as the recognized
bargaining representative in the appropriate unit described
herein below.'
B. Tri-Service Drilling Company, its officers, agents,
successors, and assigns, shall:
1. Cease and desist from:
(a) Refusing to bargain collectively with Local 826,
International Union of Operating Engineers, AFL-CIO,
as the exclusive bargaining representative of the employees
in the following appropriate unit:
All derrickmen, motormen and floorhands, otherwise
referred to as roughnecks, employed by Respondent in
the drilling operations in the area known as the
Permian Basin, but excluding all tool pushers, drillers,
office employees, technical employees, professional
employees, guards, and all supervisors as defined in the
Act.
(b) In any like or related manner interfering with,
restraining , or coercing employees in the exercise of their
rights guaranteed under Section 7 of the Act.
2. Take the following affirmative action designed to
effectuate the policies of the Act:
(a) Upon request, bargain collectively with Local 826,
International Union of Operating Engineers, AFL-CIO,
as the exclusive representative of the employees in the
aforesaid appropriate unit with respect to rates of pay,
wages, hours of work, and other terms and conditions of
employment, and embody in a signed agreement any
understanding reached.
(b) Post at its Midland, Texas, headquarters copies of
the attached notice marked "Appendix."" Copies of said
notice, on forms to be furnished by the Regional Director
for Region 16, after being duly signed by an authorized
representative of Respondent, shall be posted by
Respondent immediately upon receipt thereof, and be
maintained by it for 60 consecutive days thereafter, in
conspicuous places, including all places where notices to
employees are customarily posted. Reasonable steps shall
be taken by Respondent to insure that said notices are not
altered, defaced, or covered by any other material.
(c) Notify the Regional Director for Region 16, in
writing , within 20 days from the receipt of this
Recommended Order, what steps it has taken to comply
herewith. 11
THE REMEDY
It having been found that Respondent has engaged in
and is engaging in an unfair labor practice within the
meaning of Section 8(a)(5) and (1) of the Act, my
Recommended Order will require that it cease and desist
therefrom and, upon request , bargain collectively with the
Union as the exclusive representative of all employees in
the appropriate unit and , if an understanding is reached,
embody such understanding in a signed agreement.
RECOMMENDED ORDER
Upon the foregoing findings of fact and conclusions of
law and the entire record in this case , and pursuant to
Section 10(c) of the National Labor Relations Act, as
amended, it is hereby ordered:
"The purpose of this provision is to insure that the employees in the
appropriate unit will be accorded the services of their selected bargaining
representative for the period provided by law See M,-Jac Poultry Co.,
Inc., 136 NLRB 785; Commerce Co. d/b/a Lamar Hotel, 140 NLRB 226,
229, enfd . 328 F .2d 600 (C A. 5), cert . denied 379 U.S. 817, Burnett
Construction Co., 149 NLRB 1419, 1421 , enfd . 350 F.2d 57 (C.A. 10).
"In the event that this Recommended Order is adopted by the Board,
the words "a Decision and Order" shall be substituted for the words "the
Recommended Order of a Trial Examiner " in the notice In the further
event that the Board's Order is enforced by a decree of a United States
Court of Appeals, the words "a Decree of the United States Court of
Appeals Enforcing an Order " shall be substituted for the words "a
Decision and Order."
"In the event that this Recommended Order is adopted by the Board,
this provision shall be modified to read: "Notify the Regional Director for
Region 16, in writing, within 10 days from the date of this Order, what
steps Respondent has taken to comply herewith."
288 DECISIONS OF NATIONAL
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to the Recommended Order of a Trial
Examiner of the National Labor Relations Board and in
order to effectuate the policies of the National Labor
Relations Act , as amended , we hereby notify our
employees that:
WE WILL NOT refuse to bargain collectively with
Local 826, International Union of Operating Engineers,
AFL-CIO, as the exclusive representative of the
employees in the bargaining unit described below.
WE WILL NOT in any like or related manner interfere
with , restrain , or coerce our employees in the exercise
of the rights guaranteed them by Section 7 of the Act.
WE WILL, upon request , bargain with the
above-named Union, as the exclusive representatives of
all employees in the bargaining unit described below
with respect to wages, hours, and other terms and
conditions of employment , and, if an understanding is
reached , embody such understanding in a signed
agreement.
LABOR RELATIONS BOARD
The bargaining unit consists of-
All derrickmen , motormen and floorhands , otherwise
referred to as roughnecks , excluding tool pushers,
drillers , office employees , technical employees,
professional employees, guards and supervisors as
defined in the Act.
TRI-SERVICE DRILLING
COMPANY
(Employer)
Dated By
(Representative ) (Title)
This notice must remain posted for 60 consecutive days
from the date of posting , and must not be altered,
defaced , or covered by any other material.
If employees have any question concerning this notice
or compliance with its provisions they may communicate
directly with the Board ' s Regional Office , 8A24 Federal
Office Building , 819 Taylor Street , Forth Worth, Texas
76102 , Telephone 817-334-2921.