George Schuwirth

National Labor Relations Board - Board Decisions

Mar 23, 1964

146 N.L.R.B. 459 (N.L.R.B. 1964)

GEORGE SCHUWIRTH 459
of proof, and the-exhibits, in the instant case, and concludes on this
additional basis that the prior denial of the request for review was
proper. In these circumstances, and as the motion for reconsidera-
tion raises no other matters not previously considered by the Board,
we shall reaffirm the Decision and Order in the present case.
[The Board' granted the motion for reconsideration and, upon re-
consideration, reaffirmed the original Decision and Order.]
MEMBER JENKINS took no part in the consideration of the above
Supplemental Decision and Order.
George Schuwirth and International Union of United Brewery,
Flour, Cereal , Soft Drink and Distillery Workers of America,
AFL-CIO, Local Union No. 110, Petitioner . Case No. 23-RC-
1197. March r 23, 196/
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 Hearing Officer C. • L.
Moser.' 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 Employer, an individual, doing business in San Antonio,
Texas, is engaged in selling spent grain, the residual byproduct of
brewing, to dairymen in the San Antonio area, including Bexar
County and adjoining counties in Texas. During 1962, he purchased
approximately $93,000 worth of this spent grain from the Lone Star
Brewing Company in San Antonio, Texas, and his purchases during
1963 were running ahead of that year. The Employer makes no sales
or purchases from outside the State of Texas. The Brewing Com-
pany, during 1962, purchased barley and corn grain in the amount of
$1,970,227 that was shipped directly from outside the State of Texas.
The Employer employs approximately nine drivers, who comprise
the unit sought by the Petitioner. These drivers pick up the spent
grain at the Lone Star Brewing Company, where it- appears in mush-
like form after having been processed through Lone Star's brew
kettles into its tanks. It is estimated that this brewing process re-
moves approximately 80 percent of the food value from the grain,
leaving a residue unfit for human consumption.. The spent grain is
'This case was transferred to the Board by the Regional Director for the Twenty-third
Region.
146 NLRB No. 51.
460 DECISIONS Or, NATIONAL LABOR RELATIONS BOARD
then delivered by the Employer to some 50 dairymen customers -in the
San Antonio area. These dairymen use the spent grain for dairy
feed.
. The Employer moved to dismiss the instant petition on jurisdic-
tional grounds, contending, inter alia, that it is strictly a local and re-
tail business and that its operations do not affect commerce in any
manner; that irrespective of the nature of such business, it does not
sell to customers who meet the jurisdictional tests prescribed by the
Board; and that whether it be retail or nonretail, its business has no
impact or effect on commerce except in a most insubstantial manner.
The Petitioner contends that Employer's business is subject to and
satisfies the Board's jurisdictional standards for nonretail enterprises.
We agree with the Petitioner that the Employer's operations are
wholesale, and not retail, in nature. The dairy farmer purchases
spent grain not "to satisfy his own personal wants or those of his
family or friends" but to use in his "commercial" operations as a milk
producer.2 We do not believe the processes to which the grain was
subjected by the Lone Star Brewing Company involved such an altera-
tion in the grain's form or content as to take the sales of the spent
grain out of the,stream of commerce sand thus render the Board's in-
direct inflow standard inapplicable.'
Accordingly, we find that the Employer annually purchases in ex-
cess of $50,000 worth of goods or merchandise which originate out-
side the State of Texas; that the Employer's operations therefore are
such as affect commerce within the meaning of the Act,4 and that it
will effectuate the policies of the Act to assert jurisdiction herein s
2. The labor organization named herein claims to represent certain
employees of the Employer.
3. A question affecting commerce exists concerning the representa-
tion 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 following employees of the Employer constitute a unit ap-
propriate for the purposes of collective bargaining within Section
9(b) of theAct:6
2 See J S Latta d Son, 114 NLRB 1248; Treasure State Equipment Company, 114
NLRB 529; Bussey-Williams Tire Co, Inc, 122 NLRB 1146. See also 'Southern Dolomite,
129 NLRB 1342, 1344, footnote 7.
3 Combined Century Theatres, Inc., et al, 120 NLRB 1379. We do- not deem the spent
grain to be a material alteration or part of an entirely different product within the meaning
of Kenneth Chevrolet Company, et al., 110 NLRB 1615, and hence , contrary to the inter-
pretation of the dissent , we are not departing from the rule stated in that case.
d N.L.R.B. v. Reliance Fuel Oil Corporation, 371 U.S. 224. See also Wickard v. Filburn;
317 US 111. -
- 5 Siemens Mailing Service, 122 NLRB 81 , 85 As the indirect inflow test is met, it is
immaterial that the record does not reflect whether or not the Employer' s customers sell
produce to customers outside the State of Texas.
6 The unit description appears substantially as amended at the hearing.
GEORGE SCHUWIRTH 461
All -drivers, excluding office employees, office clerical employees,
guards and/or watchmen, all other -employees, and supervisors as
defined in the Act.
[Text of Direction of Election omitted from publication.]
MEMBER LFEDOM, dissenting :
Unlike the majority, I would not assert jurisdiction in this
proceeding.
The jurisdictional facts are not in dispute. The Employer is
engaged in selling spent grain, a waste product, to dairymen in the
San Antonio, Texas, area.' He makes no sales directly across State
lines; nor do the dairymen to whom the Employer sells the spent
grain make any sales across State lines. It is clear, therefore, that
the Employer meets neither the direct nor indirect outflow standards
of the Board. While the Employer makes no purchases directly from
outside of Texas, he purchases more than $50,000 worth of spent
grain from the Lone Star Brewing Company. Lone Star itself pur-
chases, from out of State, barley and corn in the amount of approxi-
mately $2 million. This barley and corn is processed by Lone Star
and made into beer. After the brewing process, a residue, the spent
grain, is sold to the Employer.
On the basis of the foregoing facts, the majority concludes that
since the Employer purchased in excess of $50,000 worth of "goods
or merchandise which originated outside of the State of Texas," it
would effectuate the policies of the Act to assert jurisdiction over
his operations. I believe that this result is contrary to clear and
compelling precedent and would have the effect of subjecting a
purely local enterprise to the Board's jurisdiction.
Initially, I think it is important to emphasize that the Employer
patently does not meet the Board's indirect inflow test as stated in
Siemo,s Mailing Service, 122 NLRB 81, 85. There the Board defined
indirect inflow as the "purchase of goods or services which originated
outside the employer's State but which he purchased from a seller
within a State who received such goods or services from outside the
State." [Emphasis supplied.] Here, in asserting jurisdiction, the
majority relies on the Employer's purchases of spent grain. How-
ever, the spent grain does not originate outside of Texas. It is the
barley and corn which originated outside of Texas. Further, it is
apparent that barley and corn grain are not the same "goods" as the
spent grain. The fact is recognized by the majority which explicitly
finds that the grain is processed by Lone Star through brew kettles
and that approximately 80 percent of the food value of the grain is
7I agree with the majority that the Employer's operations are wholesale and not retail
in nature.
462 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
removed; that the grain ends up as a mushlike form, containing no
whole grain ; that, as such, it is unfit for human consumption ; and
that it is this residue mushlike product which is the spent grain pur-
chased by the Employer. It is clear that the Employer does not pur-
chase "goods" originating from out of State and therefore does not
meet the Board's indirect inflow test as stated in Siemons.
This result is also required by the Board's decision in Kenneth
Chevrolet Company, et al., 110 NLRB 1615, not alluded to by the
majority. The Board there expressly held that it would consider
"a product as being part of the indirect stream of inflowing commerce
only when it is delivered to the ultimate purchaser in the, same form
as when it entered the State." [Emphasis supplied.] In that case,
the Board refused to assert jurisdiction over retail automobile dealers
who purchased automobiles from assembly plants within the State
where the component parts of the automobiles originated from out-
side the State. Applying the Kenneth Chevrolet rule in the instant
case, I would find that since the spent grain delivered to the Em-
ployer is obviously not "in the same form" as when it entered the
State, the Employer does not satisfy the Board's indirect inflow re-
quirements.' Indeed, the case before us is an even stronger case
than Kenneth Chevrolet for not asserting jurisdiction. Thus, as the
Board there noted, the automobile components sold across State lines,
albeit maintaining to some extent their original identity, became
"part of an entirely different product," and therefore were not "in
the same form" when they were sold to the ultimate employer. Here,
however, as the majority concedes, the original products, the barley
and corn, no longer exist after the brewing process. It goes through
a chemical process and is transformed into several entirely different
products. Surely, in these circumstances, the spent grain purchased
by the Employer should not be deemed to be ""in the same form" as
those goods which were in the stream of commerce.
Nor do I believe that the Board's decision in Combined Century
Theatres, Inc., et al., 120 NLRB 1379, relied on by the majority, is to
the contrary. There, a majority of the Board 9 asserted jurisdiction
over a chain of movie theaters on the basis of the inflow standard.
8 while it is difficult to find precise analogies to this somewhat peculiar problem, I be-
lieve that the Supreme Court decisions relating to the definition of "imports" under the
United States Constitution might be instructive . Under article I, par. 10, clause 2, of
the Con's'titution, a State may not levy a tax on imports. However, the Supreme Court has
repeatedly held that a State may tax goods that have been imported if they have been so
altered from their physical form in'which they arrived that they had lost their character
as foreign imports. See Gulf Fisheries Co. v. Maclnerney , 270 U.S. 124: cf. Youngstown
Sheet & Tube Co. v. Bowers , 358 U.S. 534 , 501 (dissenting opinion ). By the same token,
if goods, although brought from across State lines, have been so altered from " their physical
form in which they crossed State lines , they change their character and no longer may be
considered to be in the stream of interstate commerce.
Member , Rodgers and I dissented.
GEORGE SCHUWIRTH 463
The master negatives in that case were made in California and were
a different product from the positive prints purchased within New
York by the motion picture theaters for exhibition . The Board ma-
jority made it perfectly clear that it was asserting jurisdiction only
because these employers were paying more than $50 ,000 to local
distributors who were acting for out-of-State producers for the right
temporarily to exhibit to paying audiences spectacles created aid
received from out of State . This basis for, asserting jurisdiction is,
of course, not present in the instant case . Moreover, the majority in
Combined Century Theaters 'distinguished Kenneth Chevrolet on
the ground that a positive film print in an exact duplicate of the
negative, but in reverse, and therefore it is not an "entirely different
product" in the sense that anautomobile is different from the parts
of which it is made. Accordingly, since the spent grain is an entirely
different product from the barley and corn which cross State lines,
it. would appear to follow, even under the majority opinion in Com-
bined Century, that the Board should not assert jurisdiction over the
instant Employer.
I note, too , that in Combined Century the substance of the Board's
reasoning was that since the master negatives which are made in Cali-
fornia are exported to New York for the purpose of being made into
positives which will be leased to the theaters in New York and ex-
hibited to the public , if the theaters were to stop buying the positives,
the film makers in California presumably would stop shipping the
negatives to New York.10 In the instant case , however, Lone Star pur-
chased grain from out of State in order to brew beer. The Employer
does not purchase beer; he purchases the waste product from the brew-
ing process. It is highly unlikely, therefore , that even if the Em-
ployer stopped buying spent grain from Lone Star, Lone Star's pur-
chases from out of State would be affected . It is therefore clear that
the Employer's purchases of spent grain do not affect commerce either
directly or indirectly."
Iam concerned 'by the result reached by the majority because, taken
to its logical conclusion , it would mean that many purely local enter-
prises would Abe subjected to the Board 's jurisdiction . For example,
would the Board assert jurisdiction over a neighborhood junk dealer
10A similar argument was made in Kenneth Chevrolet . See Member Murdock's dissent,
110 NLRB at 1617.
11 The majority also relies on the decision in N.L R.B. v. Reliance Fuel Oil Corporation,
371 U.S. 224 , in which the Supreme Court affirmed the Board's assertion of jurisdiction
over Reliance , which purchased within the State fuel oil from Gulf 011, an enterprise
engaged in interstate commerce . But there , unlike here, the product purchased by Reliance
from Gulf, the fuel oil , was the very same product purchased by Gulf from out of State.
Nor, obviously , is Wxckard v. Filburn, 317 U.S. 111, which dealt with the issue whether
Congress ' power to regulate interstate commerce included the power to enact the wheat-
marketing quota provisions of the Agriculture Adjustment Act, in point:
744-670-65-vol. 146-31
464 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
who makes only local purchases and sales because the items, before
they became junk, were sold across State lines? Or, would it assert
jurisdiction over the employer who purchased the manufactured prod-
uct locally, for sale locally, solely because the raw materials for that
end product were originally sold across State lines? The majority de-
cision here, I fear, requires an affirmative answer to these questions.
As the Employer is a wholly local enterprise which does not meet
the applicable Board jurisdictional standards, I would not assert
jurisdiction. I would accordingly dismiss the petition herein.
MEMBER FANNING 'took no part in the consideration of the above
Decision and Direction of Election.
Ore-Ida Foods, Inc. and Teamsters Food Processing Employees
Local No. 943 , affiliated with International Brotherhood of
Teamsters , Chauffeurs , Warehousemen and Helpers of Amer-
ica. Case No. 36-CA-1271. March 24, 1964
DECISION AND ORDER
On December 9, 1963, Trial Examiner James R. Hemingway issued
his Decision in the above-entitled proceeding, finding that the Re-
spondent had engaged in and was engaging in certain unfair labor
practices within the meaning of the Act, 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 and General Counsel filed exceptions to the Decision and
supporting briefs.
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 [Members Leedom, Fanning, and
Brown].
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 Trial
Examiner's Decision, the exceptions and briefs, and the entire record
in the case, and hereby adopts the findings, conclusions, and recom-
mendations of the Trial Examiner.'
' In light of the Trial Examiner ' s finding as to the absence of evidence to support the
Respondent 's contention that it had subcontracted the work of the unit of over - the-road
drivers prior to the organizational activities of the Union , the Board deems it unnecessary
to pass on the Trial Examiner's subsequent dicta regarding the effect of the alleged sub-
contract in the event that it had been proven.
146 NLRB No. 60.