Hamburg Industries, Inc.

National Labor Relations Board - Board Decisions

Sep 7, 1971

193 N.L.R.B. 67 (N.L.R.B. 1971)

HAMBURG INDUSTRIES 67
Hamburg Industries , Inc., Fidelity Services, Inc. &
Industrial Technical Services, Inc. and Internation-
al Brotherhood of Painters and Allied Trades,
AFL-CIO , Local Union 1730 , Petitioner. Case
I I-RC-3275
September 7, 1971
DECISION AND DIRECTION OF
ELECTION
BY CHAIRMAN MILLER AND MEMBERS
FANNING, JENKINS, AND KENNEDY
Upon a petition duly filed under Section 9(c) of the
National Labor Relations Act, as amended, a hearing
was held before Hearing Officer Charles M. William-
son. Thereafter, pursuant to Section 102.67 of the
National Labor Relations Board Rules and Regula-
tions and Statements of Procedure, Series 8, as
amended, and by direction of the Regional Director
for Region 11, this case was transferred to the
National Labor Relations Board for decision. Briefs
have been timely filed by Hamburg Industries,
Inc., Fidelity Services, Inc., and the International
Brotherhood of Painters and Allied Trades, AFL-
CIO, Local Union 1730.
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 1 the Board finds:
1. The Petitioner seeks to represent certain em-
ployees at Hamburg Industries, Inc.'s plant in
Hamburg, South Carolina, and contends that they are
employed jointly by Hamburg Industries, Inc.,
Fidelity Services, Inc., and Industrial Technical
Services, Inc.,2 and not solely by Fidelity as both
Hamburg and Fidelity contend.
Hamburg argues that Fidelity is the sole employer
of the maintenance and production workers at its
plant and that as a separate business entity from both
Fidelity and ITS it is not an employer, joint or
otherwise, of Fidelity's employees.
Fidelity argues that it alone is the employer of the
maintenance and production workers at Hamburg
and, since Petitioner sought a unit consisting of
employees of Fidelity, Hamburg, and ITS as joint
employers, the unit is not appropriate.
ITS was not represented at the hearing and did not
file a brief; it appears to be a defunct corporation
without employees or contracts to supply labor3 and
is not a joint employer of the maintenance and
production workers employed at Hamburg's plant.
Hamburg is engaged in the business of contracting
with railroad companies for the repair, maintenance,
and remanufacture of railroad cars at its plant in
Hamburg, South Carolina. It has 10 employees at its
plant: office clericals, company executives, and 3
superintendents, who are not maintenance or prod-
uction workers. Hamburg supplies all the necessary
tools and supplies and contracts with Fidelity for its
entire work force of 283 men including 13 supervisors
and also contracts with another firm for its guard
force. Hamburg receives a contract from a railroad,
estimates the number of men and the length of time
necessary to fulfill the contract and then requests that
number of men for that length of time from Fidelity.
Hamburg instructs Fidelity on the work to be
performed and its three superintendents constantly
check the performance of the workers and the quality
of the work. The work instructions are communicated
to the workers by the 13 supervisors supplied by
Fidelity. Hamburg can require that work be redone
and can terminate its contract with Fidelity at any
time for any reason. Hamburg has its own safety rules
followed by all employees at its plant, can force
Fidelity to remove employees from its plant, can veto
overtime, and can change the hours of work for all
employees, as it recently did when it requested a work
schedule change from five 8-hour days to four 10-
hour days and discontinued overtime for the extra 2
hours daily which had been the practice. Hamburg
reimburses Fidelity for all of its costs including wages,
payroll taxes, social security taxes, workmen's com-
pensation, and pays Fidelity a fee which is a certain
percentage of the weekly payroll; the percentage
varies according to the amount of the payroll.
Fidelity is engaged in the business of supplying
labor; currently it is under contract to three firms,
including Hamburg. Fidelity maintains an employ-
ment office staffed with its own personnel at Ham-
burg's plant, It determines the employees' rates of pay
and can institute unilateral pay raises; however unless
the pay increases are presented to and accepted by
Hamburg, the increased labor costs are absorbed by
Fidelity alone. Fidelity uses the same employees'
handbook, pay scale, and fringe benefits for all of its
employees regardless of the company they are
contracted to.
In view of Hamburg's considerable control over
Fidelity's operations in such critical areas as work
instructions, quality control and the right to reject
finished work, work scheduling, and indirect control
over wages, it is obvious that Hamburg is a joint
I Hamburg Industries , Inc. 's and Fidelity Services, Inc. 's requests for
oral argument are hereby denied as in our opinion the record, including the
briefs, adequately presents the issues herein and the positions of the parties.
2 Hereafter referred to as Hamburg , Fidelity, and ITS.
3 ITS, until early 1971, was under contract to Hamburg to supply part
of its labor needs.
193 NLRB No. 13
68 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
employer along with Fidelity of all employees at
Hamburg's plant engaged in the maintenance and
remanufacture of railroad cars. Accordingly, we find
that the joint Employer is engaged in commerce
within the meaning of the Act and it will effectuate
the purposes of the Act to assert jurisdiction herein.
2. The parties stipulated that the Petitioner is a
labor organization within the meaning of the Act, and
we so find.
3. A question affecting commerce exists concern-
ing the representation of the employees of the
Employer within the meaning of Sections 9(c)(1) and
2(6) and (7) of the Act.
4. The Petitioner seeks to represent a unit of all
employees engaged in the maintenance and remanu-
facture of railroad cars, who are normally working at
Hamburg Industries, Inc., Hamburg, South Carolina,
but excluding all office clerical employees, guards,
and supervisors as defined in the Act. The parties
agreed to the composition of the unit with the
exception of the leadmen. The Petitioner contends
that leadmen are in fact supervisors, and not rank-
and-file employees as both Hamburg and Fidelity
contend, and should be excluded from the unit. We do
not agree.
There are 18 leadmen each with a crew that has a
designated job function. They are hourly paid and do
some manual work, paperwork, inspections, help
employees with their job skills, and generally set the
pace for production; Fidelity and Hamburg both
refer to leadmen as "Pushers." If a work problem
develops the leadmen take no disciplinary action
themselves, but report the facts to a foreman who
makes his own independent investigation to deter-
mine what action is to be taken. There is no persuasive
evidence that leadmen satisfy the statutory definition
of "Supervisor."
Accordingly, we find that the following employees
constitute a unit appropriate for the purposes of
collective bargaining within the meaning of Section
9(b) of the Act:
All employees including leadmen engaged in the
maintenance and remanufacture of railroad cars
at Hamburg Industries, South Carolina, but
excluding all office clerical employees, guards, and
supervisors as defined in the Act.
[Direction of Election 4 omitted from publication ]
CHAIRMAN MILLER, dissenting in part:
I disagree with my colleagues' finding that a joint-
employer relationship exists between Hamburg In-
n In order to assure that all eligible voters may have the opportunity to
be informed of the issues in the exercise of their statutory right to vote, all
parties to the election should have access to a list of voters and their
addresses which may be used to communicate with them Excelsior
Underwear Inc, 156 NLRB 1236, N L R.B v Wyman-Gordon Co, 394 U S
759 Accordingly, it is hereby directed that an election eligibility list,
containing the names and addresses of all the eligible voters, must be filed
dustries, Inc. and Fidelity Services, Inc. Rather, I find
that the evidence in the record clearly establishes that
Fidelity alone is the sole employer of the maintenance
and production employees at Hamburg's plant. In the
past, in order to determine whether a joint-employer
relationship exists, the Board has taken special
cognizance of the presence or absence of factors such
as common ownership, common control over labor
relations policy, and close direct day-to-day supervi-
sion over the contractor's employees. (See, for
example, Hychem Constructors, Inc., 169 NLRB 274.)
None of these factors are present in the instant case.
Although the Union attempted to prove that a
common corporate relationship existed, the unrefuted
testimony established that the two companies have no
common officers or stockholders.
The contractual arrangement between Fidelity and
Hamburg is a typical cost-plus agreement. In further-
ance of that agreement, Hamburg exercises only the
degree of control necessary to police the cost aspects
of the agreement and to see that Fidelity furnishes the
quality of service agreed upon in the contract.
Accordingly, Fidelity's practice is to discuss wage
increases with Hamburg prior to their institution.
However, the record establishes that Fidelity has
instituted standard increases when it has seen fit, and
that Hamburg has always approved such increases.
Hamburg naturally has the right to reject work done
by Fidelity's employees, if it is not of sufficient quality
to meet the specifications of the railroad companies
requesting the work. However, this right merely exists
to enable Hamburg to police the contract. It does not
operate to create an employment relationship be-
tween Hamburg and Fidelity's employees. Apart from
this limited quality and cost control, the employees
are entirely under Fidelity's supervision. They are
hired by Fidelity and assigned to a jobsite where
Fidelity has a contract, as Fidelity sees fit. Regardless
of the job to which they are assigned, they all receive a
Fidelity employee handbook, which does not apply to
Hamburg's own employees. The employees work
directly under Fidelity's supervision and have no
contact with any Hamburg personnel. While Ham-
burg can insist that a Fidelity employee be removed
from the job, it has never exercised this right. Even if it
were to do so, the determination of whether to
terminate the employee or simply transfer him to
another jobsite would still belong to Fidelity. Thus,
discipline and discharge of the employees are solely
under Fidelity's control.
by the Employer with the Regional Director for Region 11 within 7 days of
the date of this Decision and Direction of Election The Regional Director
shall make the list available to all parties to the election . No extension of
time to file this list shall be granted by the Regional Director except in
extraordinary circumstances Failure to comply with this requirement shall
be grounds for setting aside the election whenever proper objections are
filed.
HAMBURG INDUSTRIES
It should be noted that Fidelity has been involved in
previous Board litigation in connection with its
relationship with Columbia Nitrogen Corporation. In
Fidelity Maintenance & Construction Company, Inc.,5
173 NLRB 1032, Fidelity and Columbia Nitrogen
were alleged to be joint employers. The factual
situation was almost identical to that in the instant
case except that Columbia Nitrogen was more
involved with Fidelity's employees in that it per-
5 The record shows that on January I, 1971, for expansion purposes,
Fidelity Maintenance and Construction Company changed its name to
69
formed certain interviewing and testing services for
Fidelity with respect to employment applicants. The
Trial Examiner's Decision held that Fidelity and
Columbia Nitrogen were not joint employers of
Fidelity's employees. Although the Board did not find
it necessary to pass on this aspect of the case, I agree
with the Trial Examiner's Decision on the joint-
employer issue and I would make the same finding in
the instant case.
Fidelity Services, Inc