BDM Services Co.

National Labor Relations Board - Board DecisionsJun 30, 1975

218 N.L.R.B. 1191 (N.L.R.B. 1975)

BDM SERVICES COMPANY 1191 BDM Services Company and International Brother- hood of Electrical Workers, Local 2182, AFL- CIO, Petitioner. Case 20-RC-1 1950 June 30, 1975 DECISION AND DIRECTION OF ELECTION Upon a petition duly filed under Section 9(c) of the National Labor Relations Act, as amended, a hearing was held before Hearing Officer Helen Phillips. Thereafter, the Employer filed a brief. The Board has reviewed the Hearing Officer's rulings made at the hearing and finds that they are free from prejudicial error. They are hereby affirmed. Upon the entire record in this case, including the Employer's brief, the Board finds: 1. The Petitioner seeks to represent a unit of employees of the Employer, herein sometimes called BDM, in its engineering department. Employer BDM contends that the petition should be dismissed on the ground that the Board does not have jurisdiction in the instant case because the Employer is not an employer of the employees herein sought, within the meaning of Section 2(2) of the Act. BDM, a Texas corporation with principal offices at Vienna, Virginia, is solely engaged in the business of providing scientific and engineering support to the United States Army and other Government agencies. During the past calendar year, BDM provided services valued in excess of $500,000 to the United States Army and other Government agencies.' The employees herein sought are stationed at the United States Army base at Fort Ord, California, which also encompasses testing operations at the nearby Hunter Liggett Army reservation. They are engaged in providing scientific advice in engineering and technical support for the development of Army tactics, organization, equipment, and other material. Their 'work becomes the property of the Army, and on the basis thereof the ,Army may accept or reject the work, make its, own final determinations as to the results of the experimentations, and write its own reports. In performing its work for the Army, the BDM personnel, individually and as a group, is organized in a so-called counterpart mode, which means that for every Army position of authority connected with their work there is an identical counterpart position in the BDM internal structure. The Army and the BDM counterpart groups at Fort Ord are known as the Combat -Development Experimentation Com- mand, or C-DEC, and the Fort Ord Scientific Support Laboratory, respectively. Each BDM worker has his Army counterpart, and whenever an Army officer goes from Fort Ord to Hunter Liggett his BDM counterpart normally makes the same inspec- tion at the same time. As a result of this organiza- tional structure, should the Army decide to make changes therein, BDM would be. obliged to follow suit, even if that means a change in the number of employees. - BDM and the Army operate pursuant to an award fee contract, whereby BDM's compensation is tied to the Army's evaluation of its job performance. The contract, conforming to the terms of the Walsh- Healy Act, permits the Army to specify the type of people to be employed, to inspect the credentials of the employees involved, and to determine the number of man-hours to be allotted for the work. BDM's employees wear Army fatigues and other items of Army clothing and are required to conform to Army base regulations. They use the same mess halls and other facilities except the Army PX. They work in the same buildings as Army personnel and their desks abut the desks of Army personnel. BDM relies on the foregoing facts to support its contention that it is merely an agent of the Army, and not an employer as defined in Section 2(2) of the Act. The following facts, however, persuade us that, to the contrary, the Employer is an employer within the meaning of the Act. The current contract between BDM and the Army specifically provides that BDM is to operate as an independent contrac- tor, and not as an agent of Government. The contract further provides that, whenever BDM has knowledge that any actual or potential labor dispute is delaying or threatening to delay the timely performance of the contract, it shall immediately give notice thereof, including all relevant information with respect thereto, to the Army's contracting officer. The Employer has sole charge of labor relations affecting its employees at Fort Ord and at the Hunter Liggett reservation. The Employer hires and dis- charges employees, determines their 'wages , and hours,2 and deducts Federal income tax and social security payments and California State disability insurance contributions from their wages, The Employer has issued standing orders to the BDM personnel not to take orders from the military and it is considered improper practice for the military counterpart personnel to issue them orders.3 The BDM employees receive no Army medical assistance I The parties stipulated that annually the Employer neither ships nor contract, it retains ultimate control over the employees' hours of receives goods or materials valued in excess of$50,000. employment. 2 Although in practice the Employer generally accedes to the base office 3 As an example, it appears that the Army is without authority to cancel hours, in order to assure a favorable rating pursuant to its award service employees' luncheon breaks at test sites. 218 NLRB No. 180 1192 DECISIONS OF NATIONAL LABOR RELATIONS BOARD except in rare emergencies and, as noted above, receive no PX privileges. The Army may only request, but not order, the assignment of a BDM employee to a particular project, and the Employer has the fmal say in the matter. Although, as noted above, the employees are expected to obey Army base regulations, they are not subject to court martial for infractions thereof, and the Army-may remove them from the base only for serious breaches of security or for endangering life or limb. Our dissenting colleagues would decline jurisdic- tion on the basis of a so-called "intimately related or connected' arrangement" between the Employer and the Army which, they claim, justifies our extending to the Employer the Army's exemption from the Board's jurisdictional -processes. Thus they point to such features of the "arrangement" as the stationing of the employees at an Army base, the coordination of their work functions in counterpart mode with the Army, their receipt of certain Army privileges and their being subject to certain responsibilities while on the Army's premises or while using its property, their wearing of Army clothing, the application of base regulations -to their hours of work, and the fact that the Employer's work product belongs solely to the Army, which may accept or reject it. In so doing, our colleagues appear to confuse the support services provided by the Army to the Employer with the service the Employer performs for the Army. The services to be supplied by the Employer include' scientific advice in engineering and technical support for the development of Army tactics, organization, and equipment. On the other hand, it is the -Army alone which performs the military services and in doing so may adopt or reject the Employer's, advice and services as its own property. The work about which the Employer a A substantially similar arrangement pertained in Sis-Q Flying Service, Inc; Hemet Valley Flying Service Company; IBM, Inc., 197 NLRB 195 (1972), pursuant to contracts between Federal and California forestry agencies , on the one hand, and private employers, on the other, to provide firefighting pilots for those agencies In that case , notwithstanding the necessary controls retained by the agencies over the pilots' work routines and operations due to the special nature of the missions to be performed, and further notwithstanding the companies' claims of intimate relationship of their work to the operations of those exempt agencies , the Board panel (Chairman Miller and Members Fanning and Kennedy)- held that the companies retained a sufficient control over the employees' conditions of employment to warrant a finding that they were employers within the meaning of the Act. 5 N.L.KB. v. E C Atkins & Company, 331 U.S. 398 (1947); Marianas Stevedoring & Development Co. Inc, 182 NLRB 1043 (1970). In the Atkins case, which involved the assertion of jurisdiction over guards recruited by Army MP's at a defense plant, a majority of the Court stated as follows (331 U.S. at 412-413): We cannot say that the Board was without warrant in law or in fact in concluding that respondent retained "a sufficient residual measure of control over the terms and conditions of employment of the guards" so that they might fairly be described as employees of respondent. The most important incidents of the employer-employees relationship- wages, hours and promotion-remained matters to be determined by creates and furnishes evaluations for--the Army is performed at an Army base, and the Employer must necessarily examine, observe, and evaluate it there, in Army buildings on the base, and in close conjunction with the Army personnel doing the work which is being evaluated. This close conjunction of personnel, use of Army buildings and other facilities, confor- mance to base regulations and dress, and the like, upon which our colleagues rely, are simply the Employer's surface conformance to conditions on the base on which it works, These factors show little or nothing of any Army control over the Employer's performance of its evaluation, or of any Army control over the substance or means of any individu- al employee's performance of his work.4 In these circumstances, we find that while the United States Army does playa part in the day-to- day assignments of the affected employees such role does not in and of itself preclude the Petitioner and the Employer from entering into a collective-bargain- ing relationship with respect to those subjects and conditions of employment effectively within the Employer's control and not in direct conflict with the operations of the United States Army.5 In these circumstances, we fmd that it will best effectuate the purposes of the Act to assert jurisdic- tion herein. 2. The Petitioner is a labor organization claiming to represent certain employees of the Employer. 3., A question affecting commerce exists concern- ing the representation of certain employees of the Employer within the meaning of Section 9(c)(1) and Section 2(6) and (7) of the Act. 4. The parties agree, and we fmd, that the following employees constitute a unit, appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act: respondent rather than by the Army. Respondent could settle those vital matters unilaterally or by agreement with the guards . And the guards were free to negotiate and bargain individually or collectively on these items . It is precisely such a situation to which the National Labor Relations Act is applicable . It is a situation where collective bargaining may be appropriate and where statutory objectives may be achieved despite the limitations imposed by militarization . Under such circumstances, the Board may properly find that an employee status exists for purposes of the Act. A further conclusion in Atkins should be noted ; namely, its statement (331 U.S. at 412) that The War Department regulations and the actual practice in these plants were based upon the explicit assumption that the guards were the private employees of respondent rather than employees pr soldiers of the United States. In the instant case, it would appear that the same conclusion should be drawn as to the Army, absent any definitive contrary language in its contract with the Employer and in further view of the above-noted contractual obligation of the Employer promptly to notify the Army of any imminent or potential labor dispute, thereby indicating the Army's awareness of a potential collective-bargaining status involving the Employ- er's employees subject to its contract. BDM SERVICES COMPANY 1193 All senior engineers, senior associate engineers, engineers, associate engineers, senior scientific programmers, scientific programmers, systems programmers, programmers, programmers ana- lysts, and associate programmers employed by the employer in its engineering department in and around Fort Ord, California, including Hunter Liggett Military Reservation, including group leaders,6 but excluding office clerical employees, guards, all other employees, and supervisors as defined in the Act. [Direction of Election omitted from publication.]? MEMBERS KENNEDY and PENELLO, dissenting: In deciding to assert jurisdiction in this case the majority members have ignored, without overruling or distinguishing a whole series of cases, many of them scarcely months old, which are unmistakable precedents for declining to entertain jurisdiction in this case ; we will discuss these cases in inverse order of recency. In Toledo District Nurse Association, 216 NLRB No. 130 (1975), the Board majority (Member Fanning dissenting) refused to assert jurisdiction over a private, nonprofit visiting nurse association which rendered community health visiting nurse services in close association with the similar services provided by the city of Toledo, an exempt employer, on the ground that the city of Toledo and the private nurse service were joint employers of the nurse service employees and the Board was therefore precluded by Section 2(2) of the Act from asserting jurisdiction. Moreover, the Board added, even if there was no joint employer relationship, the Board in the exercise of its discretion would refuse to assert jurisdiction because of the "intimate relationship" between the City of Toledo and the nurse associa- tion. In Rural Fire Protection Company, 216 NLRB No. 95 (1975), the Board (Member Fanning dissenting) refused to assert jurisdiction over a private company rendering firefighting services to a municipality, an exempt employer, on the ground that the services rendered were, "intimately related" to the purposes of the municipality. In Wackenhut Corp., 203 NLRB 86 (1973), the Board declined to assert jurisdiction over a private company rendering guard services to a city college, an exempt employer, upon the ground that the services rendered were "intimately related to the latter's administration and educational purposes." 6 The Employer contends that the five group leaders are neither supervisory nor managerial employees and should therfore be included in the unit. The Petitioner does not disagree . Testimony adduced at the hearing clearly indicates that they possess none of the customary attributes In Servomation Mathias Pa., Inc., 200 NLRB 1063 (1972); Slater Corporation, 197 NLRB 1282 (1972); The Prophet Co., 150 NLRB 1559 (1965); and Crotty Brothers, N. Y., Inc., 146 NLRB 755 (1964), the Board refused to assert jurisdiction over food service contractors which operated food service facilities in exempt colleges upon the ground that the services rendered by the private contractors were "intimately tied" to, the educational purposes of the nonprofit college. In The Horn & Hardart Company, 154 NLRB 1368 (1965), the Board declined -to assert jurisdiction over a food service contractor which operated all the food service facilities of a nonprofit hospital, at that time an exempt employer. The Board said at 1370: We conclude . . . that the food service opera- tions performed by the Employer under its contract with the Hospital are incidental to and intimately connected with the patient care and medical education purposes of the Hospital. In view of the close relationship found to exist between the Employer's operations here involved and the activities of the Hospital, and as the latter is exempt from the Board's jurisdiction, we find ... that it will not effectuate the purposes of the Act to assert jurisdiction. In Herbert Harvey, Inc.,- 171 NLRB 238 (1968), the Board explained its practice relative to the assertion of jurisdiction over employers rendering services to exempt institutions. The Board said at 239: The Board has . . . uniformly held that the assertion of jurisdiction over a contractor provid- ing services for an institution exempted from the process of the Act is dependent upon the relationship of the services performed to the exempted functions of the institution. Where the services are intimately connected with the ex- empted operations of the institution, the Board has found that the contractor shares the exemp- tion; on the other hand, where the services are not essential to such operations the Board has found that the contractor is not exempt and asserts jurisdiction over .the contractor's activities. By so doing the Board is enabled to strike a balance between the congressional policy of excluding the noncommercial charitable and educational activi- ties of institutions and the policy of the statute to encourage collective bargaining-one of the fundamental purposes of the Act .8 of supervisory or managerial employees , and we therefore include them in the unit 7 [Excelsior footnote omitted from publication.] 8 In Herbert Harvey the Board asserted jurisdiction over an employer (Continued) 1194 DECISIONS OF NATIONAL LABOR RELATIONS BOARD It is hard to visualize an arrangement more deserving of being characterized as intimately con- nected or intimately related to an exempt employer than that which exists between the Employer and the United States. The employees involved are stationed at the United States Army base at Fort Ord, California. They are engaged in providing scientific advice in engineering and technical support for the development' of Army tactics, organization equip- ment, and other material. Their sole function is to advise the Army in its experimental programs. The Army may accept or reject the Employer's advice and it is the Army which makes the final determina- tion as to the result of the experimentation. The Employer's work product belongs solely to the Army. The Employer's work force is organized in a so- called "counterpart mode" to the Army, that is, for every Army division or position of authority there is an identical counterpart in the Employer's internal structure. The Army group concerned is called the Combat Development Experimentation Command (C-DEC). The Employer's parallel organization is called the Fort Ord Scientific Support Laboratory. The two counterparts endeavor to coordinate their activities. Thus when an Army officer goes from Fort Ord to the nearby Hunter Liggett Army reservation to inspect progress, his counterpart in the Employer's organization makes the same inspection at the same time. The officers of C-DEC and the employees of the Laboratory share the same office facilities. The Employer's personnel are "colocated" directly along- side members of the Army. They occupy the same buildings, the same rooms, and in some instances have their desks actually side by side with those of their counterpart Army officers. During work in the field, the Employer's personnel are required to wear Army uniforms provided by the Army, but with a shoulder insignia indicating that they are Laboratory personnel. In the field, the Laboratory employees are, treated exactly as if they were regular Army staff members. They sleep in the same quarters and share the food and mess facilities of Army personnel. They also use the Army's dispensary facilities. All of the equipment used in experimental testing is owned by the Army. To use such equipment, the Employer's personnel must go through Army chan- nels and receive Army permission. While at the worksite, Laboratory employees are subject to military discipline which may be enforced by Army M.P.'s. The Army monitors the Employer's activities very closely. The Employer is required to submit periodic progress and personnel reports to the Army. rendering maintenance services to the World Bank. The Board held that these maintenance services had no connection with the functions of the Bank as an investment institution . See also Bay Ran Maintenance The Army has the authority to require the Employer to remove from the job any employee who violates a significant Army regulation. The Army retains complete control over the granting of security clearances. It may require the Employer to remove an employee from the job for security reasons regardless of the Employer's wishes or the employee's competence. The Army determines what hours the Employer's personnel will work and what particular tasks will be given priority. It can even request that a certain employee be assigned to a particular task. The Employer functions under an "award fee" contract with the Army. Under this contract the Army evaluates the Employer informally every month and formally every 3 months. The Employer's compensation is determined by these evaluations. The general grading criteria include timeliness of work, quality of work, and effectiveness in control- ling and reducing costs. In addition, the contract requires the Employer to abide by the terms of the Walsh-Healy Act concerning wages and working conditions of employees and to notify the Army regarding delays threatened by labor disputes. Further, the Army specifies the types of people to be employed and the number of man-hours to be alloted. The Army has the authority to inspect the credentials of individuals employed by the Laborato- ry to insure that they qualify for the categories being procured under the contract. Finally, as an addition- al control the Employer is constantly kept aware that any disregard of the Army's desires concerning hours of work, job procedures, or other performances may be held against it when the contract comes up for- renewal. The majority has not really answered the argument made on the basis of the case heretofore cited. These cases hold that even where a private employee relationship exists the Board will nevertheless in the exercise of its discretion refuse to assert jurisdiction over a private company rendering services intimately related to the purposes of an exempt employer. The majority relies heavily on N.LR.B. v. E. C. Atkins & Company, 331 U.S. 398 (1947). That-case involved guards employed by a private company engaged in defense manufacturing; the guards were militarized. However, both the Board and the Court held that the guards were employees of the manufacturing compa- ny. The guards were employed by and rendered services to a private company; there was no question of intimate relationship to an exempt employer. Moreover, the military explicitly recognized the right of guards to bargain collectively with their employ- ers. Corporation of New York, 161 NLRB 820 ( 1966). BDM SERVICES COMPANY 1195 Marianas Stevedoring & Development Co., Inc., 182 NLRB 1043 (1970), also cited by the majority, involved alien contract workers recruited by a private employer pursuant to a contract with the United States Navy for employment at the United States ship repair facility located in the Territory of Guam. Originally, the Board in the exercise of its discretion refused to entertain a representation petition involving these employees .9 However, subse- quently, the United States Navy suggested that the employer permit a representation election to be conducted. In view of the Navy's position, the Board reconsidered its previous decision and decided to conduct the election. In the present case, we do not have a request by the United States Army that an election be permitted. Moreover, the relationship between the Employer and the Army is far closer than that which existed between the employer in the cited case and the United States Navy. The third case cited by the majority is Sis-Q Flying Service, Inc., 197 NLRB 195 (1972). That case involved private companies furnishing aircraft and pilots to Federal and state forestry services for firefighting purposes. The Board found that the private companies were the employers of the flying and ground personnel and there was "insufficient reason to warrant withholding the exercise of jurisdiction. . . ." In other words, the Board did not believe that the operations of the flying companies were so intimately related to the functions of the exempt employer as to justify withholding its statutory jurisdiction. The relationship of the Employ- er in the present case to the United States Army is far closer and more intimate than the relationship of the flying companies to governmental agencies in Sis-Q Flying Service. For the foregoing reasons, we dissent from the decision of the majority to assert jurisdiction in this case.'° 9 170 NLRB 1187 ( 1968). no In addition to the reasons for declining to assert jurisdiction set forth above, Member Kennedy would also dismiss the petition upon the ground that the Employer and the United States Army are joint employers of the employees involved and therefore the Board is precluded by the Act from asserting jurisdiction. Toledo District Nurse Association, 216 NLRB No. 130 (1975), Massachusetts Society for Prevention of Cruelty to Ammals, 203 NLRB 98 (1973).