James Johnston Property Management

National Labor Relations Board - Board Decisions

Nov 3, 1975

221 N.L.R.B. 301 (N.L.R.B. 1975)

JAMES JOHNSTON PROPERTY MGT. 301
James Johnston Property Management and Service
Employees' International Union, Local 18, Peti-
tioner. Case 20-RC-12761
November 3, 1975
DECISION AND DIRECTION OF
ELECTION
BY MEMBERS FANNING, JENKINS, AND
PENELLO
Upon a petition duly filed under Section 9(c) of the
National Labor Relations Act, as amended, a
hearing was held before Hearing Officer Robert M.
Sprague. By direction of the Acting Regional
Director for Region 20, this case was transferred to
the National Labor Relations Board for decision.
Thereafter, the Employer and the Petitioner filed
briefs.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has reviewed the Hearing Officer's
rulings made at the hearing and finds that they are
free from prejudicial error. The rulings are hereby
affirmed.
Upon the entire record in this case, the Board
fmds:
1. The Petitioner seeks to represent certain
employees of the Employer. The Employer contends
that the gross revenues derived from its operations
are insufficient to warrant the assertion of the
Board's jurisdiction. We find no merit in the
Employer's contention.
The Employer is engaged in the business of
providing management services to residential apart-
ment complexes. It enters into contracts with the
owners of such apartments whereby it is agreed that
the Employer will perform such services as collecting
rent from tenants, maintaining and repairing the
apartments, and maintaining the grounds upon
which the buildings are located. The Employer has
the authority to hire employees and to make
whatever disbursements are required for the mainte-
nance of the apartments.
The Employer presently has a contract to provide
management services for an apartment complex
located at 720 Union Street, Oakland, California.
The owner of the complex is More Oakland
Residential Housing, Incorporated (herein referred
to as Mor). Mor is a nonprofit corporation, duly
established under the laws of California to provide
low and moderate income housing. The corporation
has been granted authority under the National
Housing Act of 1949, a Federal act administered by
221 NLRB No. 56
the Department of Housing and Urban Develop-
ment, to construct such housing, and to receive
Federal funds from HUD to assist in such construc-
tion. Mor holds legal title to the property and is
required to enter into a contract with a management
company to manage the property, receive the rents,
and maintain the premises. The parties stipulated
that the Employer is in the position of an independ-
ent contractor in relation to Mor.
The Employer's contract to provide services at 720
Union Street provides that the Employer's guaran-
teed fee is 5 percent of the gross rental collections
derived from the apartments, or $2,142 per month,
whichever is greater. Pursuant to the contract, the
Employer is reimbursed by Mor for its payroll and
supply expenses, amounting to approximately
$50,000 per year from the Union Street location. The
gross rentals from the Union Street project for the
present fiscal year are projected to be approximately
$350,000.
In addition to the contract at Union Street, the
Employer has contracts to provide services at seven
other locations, five of which are federally subsi-
dized. Total gross rentals from these projects are
$1,250,000. The Employer's gross revenues-, pursuant
to its guaranteed fee from these projects is, $55,000,
plus reimbursement for supplies and expenses of
approximately $100,000.
The Petitioner contends that the Board should
assert jurisdiction over the Employer's operations. It
relies on Carol Management Corporation, 133 NLRB
1126 (1961), in support of its contention that the
totality of an employer's operations should be
considered in determining whether any portion of
those operations meets the Board's jurisdictional
standards. The Petitioner argues that, because the
Employer has management contracts with a total of
eight apartment complexes, the revenues derived
from all those complexes should be taken into
account in determining whether to assert jurisdiction.
The Petitioner states that the gross revenues derived
from all the apartments managed by the Employer
are well in excess of the $500,000 standard estab-
lished by the Board for residential apartments in Karl
Gerber, Max Taetle, Nathan Metz & Estate of Bernard
Katz, Co-Partners d/b/a Parkview Gardens, 166
NLRB 697 (1967). As stated earlier, gross rental
revenues derived from the apartments managed by
the Employer are in excess of $500,000. We find
merit in Petitioner's contention.
Collectively, the revenues derived by all the
apartments which are under the management and
control of the Employer exceed our apartment house
jurisdictional standard, although individually each of
the buildings falls below that standard. However, in
our determination of whether to assert jurisdiction
302 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
over this Employer, we must be concerned with the
impact of its operations on commerce. The enterprise
here is the Employer's management of several
apartment buildings. It has the same management,
labor, and personnel policies for all the buildings. In
this respect, the enterprise is no different from what
it would be if all the buildings- were owned by the
same person and that person managed them himself.
If the Employer's labor policies cause a disruptive
impact on commerce, the management has the
potential for affecting- all the buildings and not just
one of them.
Furthermore, the Board has a longstanding prac-
tice of aggregating gross revenues derived from all
the buildings managed by an employer of this type.
Of particular pertinence to this proceeding is Paczftc
Hosts, Inc. - Padre Trails Motel Corporation.' In that
case, the Board asserted jurisdiction over a manage-
ment corporation engaged, in managing nine separate
hotels. Although the fees derived by the management
company for its services, as well as the revenues
individually derived by each separate hotel, were not
sufficient, standing alone, to warrant the- exercise of
the Board's jurisdiction, the Board aggregated the
gross revenues derived by all the hotels managed by
the same employer. An election was directed in a
unit of 'employees at one hotel, even though its
revenues fell far short of the jurisdictional standard.
We perceive no difference between Pacific Hosts
and the present case, even though our dissenting
colleague would have `us believe that we must make a
finding that the Employer and the owners of the
buildings''are joint employers before we may assert
jurisdiction. As the impact on commerce is the 'same
irrespective of such status, we fail to see why the
absence of such 'a finding should affect our determi-
nation in this regard.
Accordingly, in view of the foregoing, and in light
of the fact that the total gross dollar volume of
business of all the apartment buildings managed by
the Employer exceeds $500,000 annually, we find
that the Employer is' engaged in commerce within the
meaning of the Act, and that it will effectuate the
purposes of the Act to assert jurisdiction 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 employees of the Employer
within the meaning of Sections 9(c)(1) and 2(6) and
(7) of the Act.
The 'Petitioner seeks to represent a unit of all
maintenance personnel at the 720 Union Street
location. Included in the unit are six employees who
are on the Employer's payroll and who are super-
vised by the resident manager of the complex, also
on the Employer's payroll. These employees perform
such duties as cleaning and maintaining apartments
and maintaining the premises, under the direction of
the resident manager. -
The Employer contends that seven persons who are
classified as resident , custodians and assistant resi-
dent custodians should not be included in the unit.
The Employer claims that these seven persons were
previously engaged by the owner of the building, are
not paid by the Employer, and are not subject to the
supervision of the Employer. '
The custodians entered into a contract with the
owner of the building to provide various mainte-
nance services similar to those performed by the six
maintenance personnel paid by the Employer. As
compensation, they are given a rent-free apartment
in the building for which they are responsible. Since
the Employer took over the management of the
complex, the custodians have continued to perform
services.
The Employer argues that the custodians are not its
employees. Betty Figgins, the resident manager of
the complex, testified that. she has no authority to
direct the custodians in their, duties, nor may she
assign them duties to perform. From the state of the
record, and the fact that, the custodians live in the
buildings which they maintain, it is apparent that
they are responsible for responding to maintenance
requests from tenants to the extent the tenants do not
go directly to Mrs. Figgins. Figgins has an office in
the main building of the complex and is primarily
responsible for collecting rent, accepting applications
for apartments, and the general supervision and
maintenance of the complex.
Although the Employer contends to the contrary,
we find it difficult to believe that these custodians are
not subject to Figgins' direction. If this were true,
then these persons would be supervised by no one, as
it is not contended that they are supervised by, or
even employees of, Mor, even though their original
contracts were with Mor. From the record before us,
we believe that the seven custodians are now
employed by the Employer and were so employed by
it when it assumed management of the complex. The
custodians have duties and responsibilities similar to
those of the other maintenance personnel and share a
similar community of interest with them.
Accordingly, for the reasons stated above, we find
that the following employees of the Employer
constitute an appropriate unit for the purposes of
collective bargaining within the meaning of Section
9(b) of the Act:
1 156 NLRB 1467 (1966). See also HDC, Inc, 218 NLRB No. 56 (1975)
JAMES JOHNSTON PROPERTY MGT. 303
All maintenance personnel employed by the
Employer at the apartment complex located at
720 Union Street, Oakland, California, including
all resident and assistant resident custodians, but
excluding office clericals, guards and supervisors
as defined in the Act.
[Direction of Election and Excelsior footnote
omitted from publication.]
MEMBER PENELLO , dissenting:
I disagree with the majority 's decision to assert
jurisdiction over this Employer.
The majority relies on Pacific Hosts, Inc. - Padre
Trails Motel Corporation, 156 NLRB 1467 ( 1966), in
support of its contention that jurisdiction should be
asserted over this Employer. The majority argues
that the Board in that case asserted jurisdiction over
a management corporation by combining the reve-
nue derived from all the motels it operated , and that
the same principle should be applied to the present
case. However , an important finding made by the
Board in Pacific Hosts is lacking in the case presently
under consideration . The Board found that Pacific,
the management corporation , and,Padre , the owner
of the motel , were joint employers of the employees
at the motel in question . There was evidence that
Padre retained veto power over the actions taken by
Pacific , and that Padre retained the right to effective-
ly recommend the hiring and firing of employees,
notwithstanding that the complete overall responsi-
bility and authority for the motel's daily manage-
ment was vested in Pacific.
In the case presently under consideration, there is
no finding , nor is there any contention by the parties,
that the owner of the building and the Employer are
joint employers . In fact, the persons who manage the
daily operation of the apartments; such as the
resident manager and' maintenance men, are supplied
by and are employees of the management company,
not of the owner of the building . Furthermore , unlike
Pacific Hosts, there is no indication that the owner
retains any veto power over any actions taken by
Johnston, except that the owner's approval is
required for any unscheduled purchase in excess of
$500. Otherwise, the decision to incur expenses is at
the discretion of the resident manager . Additionally,
the owner does not retain any power to hire or fire
employees, or to participate in the formulation of
labor relations policies, as these functions are
performed by the resident manager in conjunction
with the president of the Employer.
Implicit in the Board's decision in Pacific Hosts is a
finding that Pacific was a joint employer, along with
each individual owner, of the employees at the other
eight motels managed by it. The Board noted that
each management agreement to which Pacific was a
party vested in Pacific complete responsibility for the
efficient operation of each motel, but that the owners
of the motels also retained sufficient control over the
policies instituted by Pacific, so that Pacific and
Padre, as well as Pacific and the other owners, were
considered to be joint employers.
Absent a finding that Johnston and the owners of
the other eight apartment complexes are joint
employers or single employers, or that the manage-
ment and ownership functions constitute a single
integrated enterprise, it does not seem appropriate to
aggregate the rental revenues received by the owners
of such properties. In the cases where the Board has
aggregated revenues, there has been a finding that
the owner of the building and the management
company are either joint employers or a single
employer. There is no suchfinding or contention in
the present case.
The Employer itself does not derive rental revenue
as income from any of the complexes which it
manages, as it is merely a contract manager of the
apartments .' Furthermore , the issue in this case is not
whether to assert jurisdiction over the apartment
buildings as separate entities. The question is
whether the management company does sufficient
business and has a sufficient impact on commerce to
warrant the exercise of jurisdiction over its opera-
tions. In this regard, it would be appropriate to
aggregate all the revenues received by the manage-
ment company from all its contracts, its compensa-
tion being in the form of commissions and reim-
bursed expenses. However, as the total of the
Employer's gross revenues is $230 ,000, its operations
do not meet the jurisdictional standard of $500,000 in
revenue.