Dalzell Towing Co., Inc.

National Labor Relations Board - Board Decisions

May 29, 1962

137 N.L.R.B. 427 (N.L.R.B. 1962)

DALZELL TOWING COMPANY, INC., ETC. 427
Dalzell Towing Company, Inc ., and Compania de Navegacion
Suffolk, S.A. and National Maritime Union of America, AFL-
CIO, Petitioner. Case No. I-RC-11504. May 29, 1962
DECISION AND ORDER
Upon a petition duly filed under Section 9 (c) of the National Labor
Relations Act, a hearing was held before Carl B. Davidson, hearing
officer. The hearing officer's rulings made at the hearing are free from
prejudicial error and are hereby affirmed.
Upon the entire record in this case, the Board finds :
1. The Petitioner seeks a unit of all unlicensed seamen aboard the
tanker Estrellita, a Panamanian-flag vessel. The companies contend
that in view of the vessel's flag and the other foreign factors here
present, the vessel and its operations do not come within the jurisdic-
tion of the Act.
Compania de Navegacion Suffolk, S.A. (here called, Suffolk), a
Panamanian corporation, is the owner and operator of the Estrellita,'
a Panamanian-flag vessel, and the only vessel involved in this proceed-
ing. Suffolk's sole business is that relating to the Estrellita which
it charters on the world market. In fact, Suffolk was apparently
organized as a wholly owned subsidiary by Oil Transfer Corporation
for the express purpose of owning and operating the Estrellita guider
the Panamanian flag in world trade. As for Oil Transfer, which
formerly owned the Estrellita, it is a Delaware corporation engaged
in the operation of American flag vessels carrying bulk liquids in
T7nited States coastal trade. All stockholders of Oil Transfer are
American citizens, and all officers of that corporation hold correspond-
ing positions with Suffolk. Additionally, three of Suffolk's five direc-
tors are directors of Oil Transfer. All the officers and directors of
both corporations are United States citizens.
Though Suffolk's "principal place of business" is in Panama, its
office there appears to be little more than the minimum required to
take advantage of incorporation under the laws of that country. Its
business is actually carried out from its New York offices shared with
Oil Transfer, where general executive policy and decisions relating to
the Estrellita are made by the company's officers. As noted, Suffolk
charters the Estrellita, apparently, under time charter arrangements.
Suffolk is responsible at all times for hiring the officers and crew of
the vessel, for provisioning and repairing it, and for carrying out
1 Dalzell Towing Company, Inc, named in the petition as the Employer together with
Suffolk is the agent for the Estrellita while in the port of New York . Dalzell receives in-
voices for fuel , provisions , and other items for the vessel which it pays with sums ad-
vanced by Suffolk. In addition , it serves as the local cable and letter address for the
Estrellita However, as Dalzell is not otherwise responsible for the operation of the
vessel , does not hire its crew, pay their wages , or otherwise affect their employment, we
find it is not the employer of the employees sought herein.
137 NLRB No. 48.
428 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
other operational details. When owned directly by Oil Transfer the
Estrellita was engaged as an American flag vessel in United States
coastal traffic carrying oil. However, this vessel in 1957 was trans-
ferred to Suffolk and was apparently placed under the Panamanian
flag at this time. Since then, the Estrellita's operations have been
wholly separate from the coastal trade of Oil Transfer. Thus, she has
been offered for charter on the world market for the conveyance of
oil, water, molasses, and chemicals and has been chartered by both
domestic and foreign corporations. As a result of this type of opera-
tion the Estrellita has spent, since her transfer to Suffolk, only some
26 percent of her total operation time in voyages on which she entered
United States ports. During the first 2 years of such operations, the
Estrellita remained almost exclusively in service in Sumatra working
under charter to a Dutch oil company. More recently, during the
year immediately preceding the filing of the petition she was chartered
primarily to American shippers and, in consequence, a large majority
of her voyages touched United States ports.
It is evident from the foregoing, and we find, that Suffolk, as the
owner-operator of the Estrellita with full responsibility for manning
the vessel and otherwise dealing with the crew, is the Employer of the
employees in the requested unit. We find further that Suffolk is
basically an instrumentality of Oil Transfer.2 This is apparent from
the facts that (1) its officers and three of its directors hold the same
positions with its parent; (2) it shares common offices with its parent,
and (3) it was organized for the particular purpose of operating one
of its parent's ships in international trade. And, because of the above,
and the fact that Suffolk operates it business for the most part from
the United States we find also that Suffolk is, despite its Panamanian
incorporation,3 essentially a domestic United States enterprise. In
sum, we have here an American employer engaged in operating a ves-
sel, in commercial activities involving voyages touching United States
ports some 26 percent of the time over a 3-year period, or about 50 per-
cent during the year preceding the filing of the petition.
In determining in other cases whether substantial contacts exist
which bring a foreign flag vessel within the jurisdictional coverage
of the Act,4 the Board has noted the importance of the United States
nationality of a ship-owning employer and of voyages to and from
United States ports. However, the Board has also emphasized that
the application of the substantial contact test for determining mari-
time jurisdiction is not simply a mechanical operation of finding the
presence of some special contacts. "Rather the problem is one," the
Board has stated, "of evaluating the many aspects of the operation
2 See Peninsular & Occidental Steamship Company, et al, 120 NLRB 1097.
3 See Chemical Carrier v R Smith d Co , International, 154 F. Supp. 886
, See West India Fruit and Steamship Company, Inc ., 130 NLRB 343 ; Hamilton Bros,
Inc, 133 NLRB 868 ; and case cited footnote 2 above.
DALZELL TOWING COMPANY, INC., ETC. 429
and determining whether or not the shipping involved is essentially
that of this nation and not that of a foreign nation ..." 5 Conse-
quently, we have looked to the national connections of the owner-
operator of a ship as important insofar as these connections show the
nationality of the commercial activities in which ship is involved.6
The situation here is different, however, in that it is the business opera-
tions of the charterers, who may or may not be United States nationals,
and not that of Suffolk, which determines in what commerce the
Estrellita will sail. Indeed, under the type of charter operations
here involved, the United States connections of the owner-operator,
though showing some United States interest in the ship, do not in
themselves demonstrate sufficiently substantial United States contacts
to confer jurisdiction. Similarly, the physical contacts of the vessel
to the United States do not evince substantial ties to the commerce of
this nation. Thus, the physical contacts derive not from the connec-
tion which the ship and its operation have to the owner-operator's
fixed United States enterprise,' but rather from the charter's business;
and the charterer, to reiterate, is whoever happens to charter the vessel."
In addition, nothing in the record before us suggests that either Suf-
folk or economic conditions favor chartering of the vessel by domestic,
United States enterprises. While the chartering of the vessel, during
the year prior to the filing of the petition, did lead the vessel into
frequent contacts with United States ports, there is no indication that
the pattern of the recent past will continue into the future. In our
view, this fortuitous element underlying the physical contacts of the
vessel with the United States diminishes the importance of such con-
tacts in determining whether jurisdiction exists.'
In view of the foregoing, we conclude that substantial American
contacts under the Board's decision in West India are not present in
this proceeding. As there are no overriding United States interests
5 United Fruit Company, 134 NLRB 287
6In Eastern Shipping Corporation , et at, 132 NLRB 930, the Board found the Act to
apply even though the owner - operator of the ship was a bona fide foreign corporation as
the facts showed the ship was operated as a part of an essentially domestic United States
enterprise
7 As the Board has pointed out, in its view the mere fact a ship visits United States
ports sporadically or regularly does not alone determine whether or not the Act is
applicable. The test is whether or not the shipping is that of this nation , rather than
that of a foreign nation See United Fruit Company, 135 NLRB 185; also, Eastern
Shipping Corporation , et at, supra ; and Hamilton Bros , Inc, supra.
8 Thus, it should be noted that the situation here is sharply distinguished from those
in United Fruit, supra , and Peninsular & Occidental, supra, where the foreign corporations
chartered their vessels only to United States corporations to which they were related for
the continuing use of such corporations as an adjunct of their United States located coin-
merce Consequently, the ships by the very nature of the business in which they were
involved regularly traded with United States ports, and barring some wholly unforeseen
change would continue to do so.
9 As the Board pointed out in West India, supra, the Supreme Court seems to have held
that "something more than a chance or fortuitous connection to substantial American
interests is required before it will find a Congressional intent to regulate the event."
130 NLRB 343 , footnote 74.
430 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
warranting a finding that the Estrellita comes within the jurisdiction
of the Act, we defer to the law of the flag, which is itself a substantial
contact,10 and find that we are without jurisdiction to proceed. We
shall, therefore, dismiss the petition.
[The Board dismissed the petition.]
MEMBER RODGERS, concurring :
This is yet another one of those cases in which the Board has been
asked to assert jurisdiction over vessels owned by American ship-
owners, but registered under the flags of foreign nations and operated
almost entirely by foreign citizens."
While I am not persuaded that the so-called jurisdictional factors
here are essentially different from those in a number of cases where
the Board has justified an assertion of jurisdiction, I concur in dis-
missing the instant petition-but for the reasons I asserted in my
dissenting opinions in the other cases.12
10 See Lauritzen v Larsen 345 U S 571, 584
11 West India Fruit and Steamship Company, Inc, 130 NLRB 343 ; Peninsular it Occi-
dental Steamship Company, Inc, 132 NLRB 10, Hamilton Bros, Inc, 133 NLRB 868,
Eastern Shipping Corporation , et al , 132 NLRB 930; United Fruit Company, 184 NLRB
287; Owens-Illinois Glass Company, 136 NLRB 389 See also Grace Line, Inc, 135
NLRB 775.
"See Sociedad National do Marineros de Honduras ( United Fruit Company ) v Frank
W. McCulloch, Chairman, 300 F. 2d 222 (D C D.C) , Empressa Hondurcua Do Vapores
(United Fruit Company ) v. Ivan C McLeod, Regional Director, 201 F Sapp 82 (CA 2)
Owens -Illinois Glass Co. v McCulloch, et at, 50 LRRM 2041 (D C.D C ), April 13, 1962,
enjoining representation election order in Board Case No 12-RC-1293.
Biscayne Television Corporation and Local No. 666, Interna-
tional Alliance of Theatrical Stage Employees and Moving
Picture Machine Operators of the United States and Canada,
AFL-CIO
Biscayne Television Corporation and Local 780, International
Alliance of Theatrical Stage Employees and Moving Picture
Machine Operators of the United States and Canada , AFL-CIO
Biscayne Television Corporation and Motion Picture Film Edi-
tors, Local 780 , International Alliance of Theatrical Stage
Employees and Moving Picture Machine Operators of the
United States and Canada , AFL-CIO and National Associa-
tion of Broadcast Employees and Technicians , AFL-CIO.
Cases Nos. 12-CA-494 12-GA-587, and 12-PC-3/8. May 31, 1969
SUPPLEMENTAL DECISION AND ORDER
On November 30, 1959, the Board issued its Decision and Order in
the above-entitled cases ,' finding that the Respondent interfered with.
1125 NLRB 437.
137 NLRB No. 43.