Kingsbury Electric Cooperative, Inc.

National Labor Relations Board - Board Decisions

Sep 17, 1962

138 N.L.R.B. 577 (N.L.R.B. 1962)

KINGSBURY ELECTRIC COOPERATIVE, INC. 577
ing of the Act and whether the Union's picketing activities constitute
violations of the Act. As these issues do not concern questions of the
applicability of the Board's discretionary commerce standards, they
do not fall within the intendment of the Board's advisory opinion
rules.'
[The Board dismissed the petition.]
$ The advisory opinion procedures are set forth in Sections 102.98 through 102 104 of
the Board's Rules and Regulations.
Section 102.99(a), which deals with a petition filed by a party to a State proceeding,
requires that the petition allege inter ilia:
(6) The commerce data relating to the operations of such business . [Emphasis
supplied ]
^(7) Whether commerce data described in this section are admitted or denied by
other parties to the proceeding. [Emphasis supplied ]
(8) The findings, if any, of the agency or court respecting the commerce data de-
scribed in this section. [Emphasis supplied ]
Section 102 98(b), which deals with a petition filed by a State agency or court, requires
that the petition allege inter alia:
(5) The findings of the agency or court, or in the absence of findings, a .statement
of the evidence relating to the commerce operations of such business . [Emphasis
supplied.]
Section 102 103 provides that the Board determine whether "the commerce operations
of the employer involved are such that it would or would not assert jurisdiction."
[Emphasis supplied ]
Further, Sections 102.106 and 102 110 of the Rules dealing with declaratory orders have
similar piovisions relating to "commerce data" and "commerce operations of the employer."
Kingsbury Electric Cooperative, Inc. and Local Union No. 426,
International Brotherhood of Electrical Workers, affiliated
with the International Brotherhood of Electrical Workers,
AFL-CIO. Case No. 18-CA-1288. September 17, 1962
DECISION AND ORDER
On January 18, 1962, Trial Examiner James T. Barker issued an
Intermediate Report, attached hereto, in the above-entitled proceed-
ing, finding that the Respondent's operations did not meet the Board's
standards for the assertion of jurisdiction. Accordingly, without
passing upon the merits of the complaint, which alleged violations
of Section 8 (a) (1) and (5) of the Act, the Trial Examiner recom-
mended that the complaint be dismissed. Subsequently, by order
dated April 20, 1962, the Board reversed the Trial Examiner's juris-
dictional findings and remanded the case to the Trial Examiner for
the submission of a Supplemental Intermediate Report on the merits
of the case.
On June 8, 1962, the Trial Examiner issued his Supplemental Inter-
mediate Report finding that the Respondent had engaged in and was
engaging in certain unfair labor practices and recommending that it
138 NLRB No. 63.
578 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
cease and desist therefrom and take certain affirmative action, as set
forth in the attached Supplemental Intermediate Report. There-
after, the Respondent filed exceptions to the Supplemental Inter-
mediate Report and a supporting brief.
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 [Chairman McCulloch and Mem-
bers Fanning and Brown].
The Board has considered 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 Inter-
mediate Report, the Supplemental Intermediate Report, the excep-
tions and briefs, and the entire record in this case, and hereby adopts
the findings, conclusions, and recommendations of the Trial Exam-
iner's Supplemental Intermediate Report with the following
additions.'
The Trial Examiner in his Intermediate Report concluded that the
Respondent did not meet the Board's standards for the assertion of
jurisdiction because its direct and indirect inflow did not meet the
$50,000 combined inflow and outflow standards for retail enterprises
established in Siemons Mailing Service 2 or for electric power coop-
eratives in Sioux Valley Empire Electric Association.3 In reaching
this conclusion, the Trial Examiner excluded from Respondents
$82,266.63 of gross inflow of materials, $53,928.89 expended for items
which he treated as nonrecurring capital expenditures within the
meaning of Magic Mountain, Inc 4 This left only $28,337.74 of di-
rect or indirect inflow, exclusive of purchases of electrical energy,
which was cognizable for jurisdictional purposes 5 It thus became
essential to determine whether Respondent's purchases of electrical
energy amounting to $43,228.80 may be considered inflow. The Trial
Examiner found that such purchases were not inflow because a sig-
nificant portion of Respondent's power supply originated directly
from Fort Randall Dam in the State of South Dakota and he, ac-
cordingly, recommended dismissal of the complaint.
'Respondent objects to the Board's failure to make its jurisdictional findings until
after issuance of the Supplemental Intermediate Report, contending that it should be
afforded an opportunity to resolve the jurisdictional issue raised herein through appellate
litigation before being subjected to a remedial order directed to the unfair labor practices
found by the Board We perceive no merit in such piecemeal litigation of the issues as
proposed by the Respondent The jurisdictional findings made herein are based upon a
complete record, the Respondent made no effort to reopen the hearing or otherwise add to
the record, and, in any event, the Respondent is not prejudiced by the Board's failure to
issue a final order on the jurisdictional issue before proceeding to a consideration of the
unfair labor practices alleged in the complaint
2122 NLRB 81.
3 122 NLRB 92
4 123 NLRB 1170
5For the reasons indicated intia, we find it unnecessary to pass upon the Trial Ex-
aminer's exclusion from consideration of the nonrecurring capital expenditures in making
his determination.
KINGSBURY ELECTRIC COOPERATIVE, INC. 579
We do not agree with the Trial Examiner 's resolution of the juris-
dictional issue. The record indicates that Respondent , 1 of 21 member-
cooperatives of East River Electric Power Cooperative , Inc., pur-
chases the entirety of its power requirements through that wholesale
power cooperative , which also supplies electrical energy to 19 other
retail cooperatives in South Dakota and to 1 in Minnesota. East
River, in turn , secures its power from the U.S. Bureau of Reclama-
tion, which operates a system of generating and transmission facili-
ties encompassing an area which includes all of South Dakota and
portions of North Dakota, Montana, Nebraska, Iowa, and Minnesota.
The system operated by the U.S. Bureau of Reclamation is a single,
integrated one having interconnections with 10 private utilities located
at various points throughout a 6-State area . Most of its power is
derived from four U . S. Corps of Engineers ' hydroelectric dams on
the Missouri River but the Bureau also makes supplemental power
purchases from private utilities such as the Nebraska Power System
and Montana-Dakota Utilities Company.
The record indicates that electric power is generated at hydroelec-
tric sites as needed and only at times that water is being released from
behind the dam; that the amount of power generated at any of the
four Corps of Engineers ' dams varies during a single day, depending
upon demand; that power may not be stored but flows into the system
for eventual transmission to purchasers ; and that power generated at
different sources is indistinguishable after it has flowed into the sys-
tem. It further appears that power generated at the four Corps of
Engineers ' dams and that purchased from supplemental sources is
intermingled in the Bureau's system; that power thus integrated into
the system will flow over the entire system ; and that it is not possible
to trace the source of any given supply of power . It is thus impossible
to ascertain from which of the various supply sources Respondent's
power was , at any one time, derived . As stated in the Intermediate
Report, "the conclusion reasonably to be drawn is that it derives from
a complex of all generating sources operating as an integral operation."
In the light of the foregoing, we are of the opinion that the electric
energy purchased by the Respondent, having been drawn from a res-
ervoir or pool of power which was generated at various points over a
six-State area and carried from its several sources to the ultimate
users over a multistate transmission system was , by its very nature, a
commodity in interstate commerce. As such, its cost is to be included
in the computation of inflow for jurisdictional purposes . The addi-
tion of Respondent's 1960 power purchases of $43,228.80 to its
$28,337 of direct and indirect inflow based upon purchases of ma-
terials brings the Respondent within the jurisdictional standard for
power cooperatives established in the Sioux Valley case . We shall,,
accordingly , assert jurisdiction.
662333-63-vol 138-38
580 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ORDER
The Board adopts the Recommended Order contained in the Trial
Examiner's Supplemental Intermediate Report.
CHAIRMAN MCCULLOCH, concurring :
The Board, of course, has statutory jurisdiction over Respondent's
operations. Nonetheless, here, as in other areas, the Board has here-
tofore established criteria limiting the assertion of its acknowledged
jurisdiction. Unlike my colleagues, I have some reservations as to
whether those criteria have been met in the instant case.
However, I find it unnecessary to resolve that issue. Tipping the
balance, in my view, is the fact that the Board has already asserted
its acknowledged jurisdiction over Respondent's operations and has
certified the Union herein, albeit pursuant to a consent-election agree-
ment. To decline presently to implement that certification in deroga-
tion of the rights of parties who have relied upon it would be to mock
our own processes.
Accordingly, I concur in the assertion of jurisdiction. I also adopt
the Trial Examiner's findings, conclusions, and recommendations as
to the substantive matters alleged as unfair labor practices.
INTERMEDIATE REPORT
STATEMENT OF THE CASE
Upon a charge and an amended charge filed on July i l and September 28, 1961,
respectively , by Local Union No. 426, International Brotherhood of Electrical
Workers, affiliated with the International Brotherhood of Electrical Workers,
AFL-CIO, herein called the Union, the Regional Director of the Eighteenth Region
of the National Labor Relations Board, herein referred to as the Board, issued a
complaint on October 6, 1961 , against Kingsbury Electric Cooperative , Inc., herein
called Respondent , alleging violations of Section 8(a)(1) and ( 5) of the National
Labor Relations Act, as amended ( 61 Stat. 136 , 73 Stat. 519), herein called the
Act. Copies of the charge , amended charge, complaint , and notice of the hearing
were duly served on the Respondent and the Charging Party.
With respect to jurisdiction the complaint alleges, in substance , that in the cal-
endar year 1960 Respondent, through its agent East River Electric Power Coop-
erative, Inc., herein called East River , purchased electrical energy from the U.S.
Bureau of Reclamation , herein called the Bureau , valued in excess of $43,000; and
that in the same period Respondent made purchases of goods, materials , and services
directly or indirectly from outside the State of South Dakota valued in excess of
$82,000. Accordingly, the complaint alleges that Respondent is engaged in com-
merce within the meaning of the Act.'
With respect to the unfair labor practices, the complaint alleges, in substance,
that Respondent violated Section 8(a) (1) of the Act by interrogating its employees
concerning their union membership, activities , and desires , and threatening its
employees with layoff or other reprisals if they became or remained members
of the Union or gave assistance or support to it; and Section 8(a)(1) and (5) of
the Act by unilaterally increasing the wages of its employees , and by refusing at
all times pertinent since June 13, 1961 , to bargain with the Union , despite the
Union's proper request that it do so, and notwithstanding the Union 's status as
exclusive and certified bargaining representative for Respondent's employees in an
appropriate unit.
'At the hearing the General Counsel conceded that Respondent's gross volume of busi-
ness during the calendar year 1960 was less than $250,000 and accordingly agreed that
the gross volume of business standard of Sooua Valley Empire Electric Association, 122
NLRB 92, was not satisfied.
KINGSBURY ELECTRIC COOPERATIVE, INC. 581
Respondent's answer, filed October 16, 1961, denies certain jurisdictional aver-
ments in the complaint, and also denies the commission of any unfair labor prac-
tices. As regards jurisdiction, Respondent challenges the averment relating to the
purchase of electrical energy, disputing, in substance, its source and therefore its
status as inflow; and contending further that approximately $62,000 of Respondent's
1960 purchase totaling in excess of $82,000 was expended for capital improvements
nonrecurring in nature and not includable for jurisdictional purposes.
Pursuant to a notice, a hearing was held in De Smet, South Dakota, on October 31,
1961, and November 1, 1961, before Trial Examiner James T. Barker. All parties
were represented by counsel, and were afforded full opportunity to participate in
the hearing, to introduce relevant evidence bearing on the issues, to argue the issues
orally upon the record, and to file briefs and proposed findings of fact and con-
clusions of law. A brief was filed by the General Counsel on December 8, 1961,
and by the Respondent on December 11, 1961.
Issue
Whether jurisdiction will be asserted in the instant labor dispute.
FINDINGS OF FACT AND CONCLUSIONS
A. Relationship of Respondent and East River
Respondent is a South Dakota corporation with its principal place of business
at De Smet, South Dakota, where it is engaged as a public utility in the sale and
distribution of electric energy to its customer-owners, most of whom are farm or
residential users, but some of whom are commercial operators. Substantially all
of its customers are located in Kingsbury County and all within the State of
South Dakota. Respondent was organized in 1944 or 1945 and was energized in
1948. It generates no electric power of its own but purchases its power require-
ments from East River which like Respondent, generates no power but transmits
over its own system power purchased from the U.S. Bureau, of Reclamation.
East River is a separate cooperative organization organized under the laws of
South Dakota with its headquarters at Madison, South Dakota. Ownership of
East River is vested in Respondent and 20 other rural electric cooperatives. All
member-cooperatives of East River are located in the State of South Dakota, except
one which is headquartered in Wheaton, Minnesota.
East River is controlled by a 21-member board of directors comprised of I repre-
sentative of each member-cooperative. Respondent is represented on the board
by Carl Weerts who at the time of the hearing was vice president of East River.
East River financially compensates Weerts only to the extent of paying his expenses
and a per diem. Kingsbury does not compensate him for his services to East River.
East River was organized in the early 1950's and provides its 21-member coop-
eratives with their wholesale power requirements which it has by contract com-
mitted itself to furnish to them. Prior to the organization of East River, Re-
spondent purchased its power requirements from Ottertail Power Company, a pri-
vate power utility operating in North Dakota, South Dakota, and Minnesota.
East River carries on a "power-use program" (not otherwise described in the record)
but does not exercise jurisdiction over Kingsbury's charges or otherwise exert
control or direction over its management, policies, or personnel.
There has been no exchange of equipment between Respondent and East River,
but in emergencies involving line trouble, manpower may be exchanged and its
costs paid by the user, although there is no evidence of any actual interchange of
manpower having taken place.
Net earnings, or margins, of East River from the sale of power to its member-
cooperatives is credited back annually to the account of each member-cooperative
on a capital credits basis, each member's distributive share being determined on
the basis of its current year's purchases,of power from East River.
On these facts I find that East River and Respondent do not comprise for juris-
dictional purposes a single employer (cf. Southeastern Concrete Products Company,
et al., 127 NLRB 1024; Brown & Root Carbide, Inc., 119 NLRB 815), but rather,
East River has the status of a purchasing agent for Respondent, and, for jurisdic-
tional purposes, the amount of Respondent's purchase from East River, and not
East River's total 1960 power purchases is alone cognizable.
B. System improvement program
At the time of the hearing Respondent's transmission system consisted of 746.2
miles of primary and secondary transmission lines. The secondary lines are those
582 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
subsidiary lines leading from the principal or primary transmission lines directly
to the premises of Respondent's customers.
Respondent's existing system of primary lines is not essentially more extensive
than as originally constructed in the 1940's. Additional secondary lines have from
time-to-time been added to meet the needs of new customers.
As originally installed, Respondent's transmission system was comprised princi-
pally of single-phase line, but there were 18 miles of 2-phase and 44.5 miles of 3-
phase line? The system was originally designed to meet the demands of a 300-
kilowatt-hour per month average customer requirement. By 1960 this average
requirement had risen to 395 kilowatt-hours per month. To provide adequate
service to its customers Respondent, commencing in 1960, undertook a planned
program of system improvement which included, so far as the primary lines were
concerned, the conversion during 1960 of 14 miles of single-phase line to 3-phase
and 4 miles of 3-phase copper line to 3-phase aluminum. At the time of the hearing,
there had been in 1961 additional conversion of 7 miles of single-phase line to 3-
phase line and 1 mile of single-phase to 2-phase. Further, during 1961, one-half
mile of tie line had been installed. Material cost for this conversion totaled
$30,335.46.3
Also pursuant to its planned system improvement program, the Respondent in
1960 purchased 13 voltage regulators, 3 of which were installed in the 21 miles of
newly converted 3-phase primary lines and 10 elsewhere in the existing system. The
voltage regulators were installed at strategic points in the system to eliminate ex-
cessive voltage drop, thus assuring uniform flow of voltage over the system. The
cost of the 13 regulators and necessary bypass switches was $23,593.43.
As an additional element of its system improvement program, the Respondent in
1960 rebuilt or otherwise effectuated improvements to secondary service lines of
customers using materials costing $7,393.
All but a small portion-odds and ends-of the materials used in the Respond-
ent's system improvement program were purchased and received either directly or
indirectly from outside the State of South Dakota during the calendar year 1960.
At the hearing the parties stipulated that during the calendar year 1960, Respond-
ent made purchases Of goods, materials, and services totaling $82,450.63 which
originated either directly or indirectly from points outside the State of South Dakota.
However, this stipulation was without prejudice to Respondent's contention that
approximately $62,000 of this amount was expended for materials for capital im-
provements and were of a nonrecurring nature. Neither was the General Counsel
by this stipulation prejudice from showing the contrary.
Of the stipulated gross figure, a small sum, $184, represented an amount paid by
Respondent during 1960 to Burrough Corporation, headquartered in Sioux Falls,
South Dakota, for repairs performed at Respondent's De Smet, South Dakota, head-
quarters under a service contract. Accordingly, the amount of $184 is not inflow
and is deductible from the stipulated amount rendering a reduced gross figure of
$82,266.63.
The critical issue relating to the expenditures for materials used in the system
improvement program is whether or not they were nonrecurring capital expendi-
tures within the meaning of the Richter Transfer and Magic Mountain line of de-
cisions, and therefore excludable from total inflow. In Magic Mountain, Inc., 123
NLRB 1170, the Board, relying on Richter Transfer Company, 80 NLRB 1246, and
E. T. Gresham Company, Inc., 85 NLRB 891, stated:
The Board has long held that it will not assert jurisdiction over an employer's
business on the basis of its nonrecurring capital expenditures alone, and we
reiterate that policy here. The present operations of the Employer, aside from
its capital expenditures, do not have sufficient impact on interstate commerce to
warrant our assertion of jurisdiction at this time. Since we find that it will
not presently effectuate the policies of the Act to assert jurisdiction, we shall
dismiss the instant petition. [Footnote citation eliminated.]
The Board subsequently applied Magic Mountain in Raybern Bus Service, Inc.,
128 NLRB 430, and, as in the cited cases, dismissed for want of jurisdiction. The
2 As implied, 2-phase line has twice and 3-phase line three times the transmission
capacity of single-phase line, with equivalent savings in transmission cost
:'See Appendix A for a compilation and allocation of Respondent's 1960 capital
expenditures
The evidence regarding the use of materials purchased from J. H. Larson Electric
Company in May and June 1960, in the sums of $429.90 and $218.46, respectively, is too
ambiguous to warrant a determination that they were, as Respondent contends, applied
to primary line conversion , a matter which Respondent was obliged to prove.
KINGSBURY ELECTRIC COOPERATIVE, INC. 583
Board found Magic Mountain inapplicable in Seven-Up Nesbitt Bottling Company
of Greeley, Inc., Case No. 30-RC-1885, July 5, 1961, 1960 CCH NLRB 8972,
wherein it asserted jurisdiction .4
I interpret Magic Mountain and related cases as holding that, given an enterprise
essentially local in character, capital expenditures which will not recur with some
regularity and in some established pattern are not includable for jurisdictional pur-
poses (see, e.g., Richter Transfer Company, supra, at footnote 1; E. T. Gresham
Company, Inc., supra; cf. Seven-Up Nesbitt Bottling Company of Greeley, Inc.,
supra) unless the major portion of the inflow requisite to asserting jurisdiction derives
independently from and is not comprised of capital goods or equipment. (See E. T.
Gresham Company, Inc., supra; of Seven-Up Nesbitt Bottling Company of Greeley,
Inc., supra.) In Magic Mountain the Board in citing Gresham, a 1949 case, wherein
the employer had interstate purchases, other than capital equipment, valued in excess
of $36,000, appears to have negatived any assumption that the Magic Mountain
rationale is applicable only in those cases wherein inflow is comprised exclusively
of capital goods. As Respondent generates no electrical energy but is engaged in the
enterprise of distributing electricity primarily to farms and residences-substantially
all of which are in Kingsbury County and all within the State of South Dakota-
I conclude Respondent is engaged in an enterprise essentially local in character within
the meaning of pertinent Board decisions cited above. (See also Inter-County Rural
Electric Cooperative Corporation, 106 NLRB 1316.) 5 Moreover, as will become
presently apparent, I do not deem the total of Respondent's other inflow to be suffi-
cient to alone constitute the major portion of the $50,000 inflow necessary to meet
the standard of Sioux Valley Empire Electric Association, 122 NLRB 92.6
The remaining question therefore is whether the expenditures in issue are of a
"recurring nature" as this term is applied in the controlling line of cases.
Respondent's improvement program was undertaken pursuant to a projection of
customer demand and system requirements for a 25-year period until 1985. Pursuant
to the plan, the total material requirements for the three facets of the improvement
program were ascertained in advance and informal bids were let? Financing was
through the Rural Electrification Administration.
As previously found, the conversion work on the primary lines was under-
taken to meet the needs resulting from the increase in power requirements of the
customer-owners from 1948 to 1960. To fill projected power demands it is con-
templated under the plan that East River will install by 1985, two new substations,
to serve Respondent; one of which will be built at Oldham, South Dakota, in 1962,
and one near De Smet at a later and undetermined time prior to 1985. It is partly
in preparation for East River's New Oldham substation that the 1960-61 program
of primary line conversion was undertaken.
When the Oldham substation is completed there will "possibly" be some further
line conversion, and in certain years over the term of Respondent's 25-year pro-
jection some other primary conversion will take place; however, in many years
none will be undertaken at all. Further, if customer demand continues at projected
41n pertinent part the decision, not published in NLRB volumes, reads as follows:
The Employer urges the Board to decline jurisdiction herein because, but for the
purchase of a truck for $5,000 the Employer's inflow for 1959 would not have ex-
ceeded the $50,000, minimum standard established in Siemens Mailing Service, 122
NLRB 81. It asserts that the purchase of the truck is a non-recurring capital ex-
penditure, and that the Board's decision in Magic Mountain, Inc., 123 NLRB 1170,
is applicable here. In that case the Board stated that it would not assert jurisdic-
tion on the basis of non-recurring capital expenditures alone. Here the major por-
tion of Employer's inflow is in items other than capital goods and jurisdiction thus
would not be based solely on capital expenditures. Moreover, the record discloses
that the Employer presently operates 5 trucks which are replaced on a rotating basis,
and that a truck was purchased in each of the years 1959, 1958, 1957, and 1955.
Clearly this does not qualify as a non-recurring capital expenditure. We find that
the case relied upon by the Employer is inapplicable.
5 That it purchases electrical energy, some of which may originate outside the State,
does not render it less a "local" enterprise than were the contractors or excavators which
in Richter and Gresham cases purchased trucks, bulldozers, or scrapers from out-of-State.
G The "major portion" of the inflow independent of shipments of capital equipment in
Seven-Up was $45,000 of a required $50,000. As above stated, a total of over $36,000 of
interstate purchases was not considered by the Board in Gresham substantial enough, in
the circumstances of that case, to warrant asserting jurisdiction.
7 These materials included poles, conductors, voltage regulators, crossarms, and in-
sulators, as well as numerous items of hardware.
584 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
level, the conversion program of 1960-61 will have to be duplicated one more time
by 1985 a
It is clear that pursuant to its projection, Respondent in the period of the next
24 years will undertake some additional conversion of its single-phase primary line
to 3-phase line. However, it is equally clear this is to be an intermittent program
only; not an annual or biannual undertaking; to be accomplished at times and
intervals as yet undetermined; contingent as to extent upon an actual fulfillment
of predicted customer demand; and at an unspecified level of expenditures.
I conclude and find in view of the foregoing that the $30,335.46 expended for
materials for use in converting its primary transmission lines were expenditures non-
recurring in nature within the meaning of Magic Mountain and not cognizable for
jurisdictional purposes .9
I likewise find to be a nonrecurring capital expenditure, the $23,593.43 spent for
bypass switches and 13 regulators all of which were incorporated into the system
(10 in the existing lines and 3 on the converted lines) so as to become additions to,
or betterment of, Respondent's transmission system. The undisputed evidence of
the record shows that each regulator is interchangeable as to location within the
system and has a normal usage or life span of many years. Respondent's long-range
program running until 1985 calls for no regulators to be purchased. Accordingly,
I conclude this capital expenditure is not includible for jurisdictional purposes.
On the contrary, however, I find that Respondent's secondary or customer im-
provement program is a continuing one and the sum of $7,393 expended during the
calendar year 1960 for materials to carry out this element of Respondent's program
is includible as inflow for jurisdictional purposes. Some secondary improvement
work is carried on each year by Respondent and will be continuous in the future
to meet the varying and increased demands of different customers. While service
once performed for a given customer may not be repeated, similar undertakings are
annually necessary; and, further, as a result of the redesign of Respondent's primary
system, secondary improvement will continue at a high level for a period of time.
(See Seven-Up Nesbitt Bottling Company of Greeley, Inc., supra.)
Thus, of the $82,266 worth of materials purchased by Respondent during the
calendar year 1960, either directly or indirectly from outside the State of South
Dakota, $28,337 of this amount constitutes the total direct or indirect inflow,
exclusive of Respondent's purchases of electrical energy during 1960, which is
includible for jurisdictional purposes. It accordingly becomes essential to deter-
mine what portion, if any, of Respondent's 1960 purchases of electrical energy may
be considered inflow for the said purpose.
8 The undisputed testimony of Robert Monkman, Respondent' s former manager. I credit
the testimony of Monkman Based on my observations of him as he testified, he impressed
me as truthful , forthright,/ and reliable witness, who over a long direct and cross-
examination testified with complete objectivity and demonstrated a thorough knowledge
of the matter about which he was questioned I do not deem the "admissions" contained
in Respondent 's annual report under the heading "Manager's Report" which is General
Counsel's Exhibit No. 15, pages 2 and 3, to derogate from the record testimony of
Monkman , but rather, to be consistent therewith.
General Counsel's Exhibit No. 15 was admitted in evidence over Respondent 's objection.
I affirm my ruling admitting it In evidence. ( See Rule 43(b) ; Federal Rule of Civil
Procedure, III Wigmore on Evidence, Section 916.)
Contrary to the contention General Counsel makes in his brief, no decisional sig-
nificance attaches to the fact that materials ordered and received in 1960 for use in the
improvement program were designated and stored as "normal inventory," along with
materials used for normal maintenance purposes . The Improvement program requirements
as distinguished from normal maintenance and replacement requirements were separately
ascertained and purchases were made pursuant to Informal bids Among other material,
a special variety of poles, aluminum conductors, and copper sleeves were ordered for the
program and were therefore readily discernible from normal inventory. The General
Counsel does not show that materials specially ordered were not for the purposes specified
Even though for Internal inventory purposes, the Respondent chose to treat the improve-
ment program materials as "normal inventory" this does not alter the fact that absent
the improvement program, purchases of the magnitude here involved would not have
occurred.
Neither is it significant under the standards of Sioux Valley, supra, that financing was
accomplished through the REA (cf. Tishomingo County Electric Power Association, 74
NLRB 864, 873) ; or that funds in excess of $50,000 were transmitted out-of-State in re-
payment of REA loans ( cf. Chain Service Restuarant, Luncheonette & Soda Fountain
Employees, Local 11, AFL-CIO, 132 NLRB 960.
KINGSBURY ELECTRIC COOPERATIVE, INC. 585
C. Power purchases of East River and Respondent-the integrated system
During the calendar year 1960, the Respondent made purchases of electrical
energy from East River, totaling $43,228.80 which it in turn sold and distributed
over its own system to its residential and farmer-owners and commercial customers.
East River obtains its power requirements principally from the U.S. Bureau of
Reclamation from which it purchases electrical energy in the calendar year 1960,
totaling $1,065,023, payments for which were made in the Regional Office of the
Bureau at Billings, Montana. To provide a supplemental source of power, East
River in the calendar year 1960, under a power contract in effect until October 1960,
secured a small amount of power from Nebraska Public Power Company, head-
quartered in Columbus, Nebraska.
The Bureau of Reclamation operates a system of generating and transmission
facilities encompassing portions of a Six-State area, including South Dakota and
areas in North Dakota, Montana, Nebraska, Iowa, and Minnesota. The system is
operated as a single, integrated one, having interconnections with approximately 10
private utilities throughout the Six-State area, and principally, for pertinent pur-
poses, with four U.S. Corps of Engineers hydroelectric power dams situated on the
Missouri River at which power for the integrated system is generated.1° The four
dams are Fort Randall in South Dakota, Fort Peck in Montana, Garrison in South
Dakota, and Gavins Point between Nebraska and South Dakota.ii The total
installed capacity of the four U.S. Corps of Engineers dams serving the Bureau's
Missouri River complex is 985,000 kilowatts.12 The installed capacity of Fort
Randall Dam in South Dakota is 320,000 kilowatts; of Gavins Point in South
Dakota and Nebraska, 100,000; of Garrison Dam in North Dakota, 400,000; and
Fort Peck in Montana, 800,000.
Gavins Point is linked to the Bureau system of 115,000-volt transmission line,
while the other three are joined thereto by larger capacity 230,000-volt transmission
lines. At Bureau substations, these lines are joined to the 115,000-volt Bureau
transmission lines comprising the Bureau's East River Loop, which serves East River
and other customers. The Bureau's power supply to East River is delivered to East
River at Bureau substations where it is reduced to a 69,000-volt level and metered
into the East River system. At this point, it is carried over East River's 69,000-volt
transmission facilities and at East River substations delivered and metered to
member-cooperatives. The deliveries to Respondent are at Lake Preston substation
in Kingsbury County, South Dakota.
From the composite testimony of expert witnesses Harrison Baker and Everett
Dill,13 certain salient but rudimentary principles essential to a proper understanding
of the matters at issue were established, namely, electric power is generated at hy-
droelectric sites as needed, and only at times when water is being released from
behind the dam; the amount of power actually generated at any of the four U.S.
Corps of Engineers dams varies during a single day, depending upon demand; elec-
tric power generated cannot be stored but flows into the system and is carried ulti-
mately to purchasers over transmission lines; and the power generated at one Bureau
source is indistinguishable from that generated at another Bureau source once it flows
into the system. In addition to the foregoing, three axioms were established which,
in final analysis, influenced the ultimate determination herein. They are: (1) The
larger the transmission line, or conductor, the greater the amount of power that
can be transmitted over it; (2) on two parallel transmission lines of different size,
"In addition to the power generated over its own system, the Bureau In December
1960 and January, February, and March 1961, purchased from Nebraska Power System
and Montana-Dakota Utilities Company supplemental power which was brought into and
intermingled with the Bureau 's system intermittently , as needed , to meet supplemental
power commitments.
11 The generating facility at Gavins Point Is in Nebraska , and the dam runs north and
south across the river touching South Dakota on the north and Nebraska on the south.
12 Installed capacity is the capacity of generating machines to produce power at any
given time at normal water level, or head, behind the dam When the water level is
higher than normal, the machines are capable of producing an amount of power some-
what but not substantially in excess of installed capacity : while the converse is true,
when the water level, or head, is below normal. The amount of power actually produced
depends upon the level of the water and the demand for power
12 Baker, called by the General Counsel, is the chief of the power division of the Bureau's
Missouri-Oahe project. Dill , called by Respondent , is an engineer for East River. By
reason of their education, training, and occupational experience both qualify as experts in
matters relating to the generating and transmitting of hydroelectric power.
586 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
power will flow or divide in proportion to the capacity of the line; and (3) as
between two or more sources of electrical energy, the closest one is the most likely
source of supply.
Power generated at the four U.S. Corps of Engineers dams at the generating sites
of the connected private utilities and the power purchased from supplemental sources
becomes intermingled or pooled in the Bureau's integrated system. Power thus
integrated into the system from any of the diverse sources in the Bureau's system
will flow over the system and it is not possible with certainty to trace, the source of
any given supply of power; or to determine the exact flow through a particular
transmission line into a paiticular substation.14 It follows, therefore, that it is
not possible to ascertain from which of the four U.S. Corps of Engineers dams or
integrated private utilities Respondent's power supply was at any one time derived.i5
Rather, the conclusion reasonably to be drawn is that it derives from "a complex of
all [generating] sources operating as an integral operation." 16 Implicit in the
foregoing conclusions (that it is impossible to ascertain with precision the source of
any given supply of energy and that it originates at points over the entire system)
is a concomitant conclusion that at least a portion of Respondent's power purchases
during the calendar year 1960 originated at and flowed directly from Fort Randall
Dam in the State of South Dakota to the Lake Preston substation in South Dakota
without leaving the State. To conclude otherwise would be to ignore the record
evidence establishing that the Fort Randall Dam has installed capacity closely ap-
proximating one-third of the total installed capacity of the four U.S. Corps of
Engineers dams pertinent herein; that Fort Randall Dam is interconnected with
the Bureau's East River Loop by a large capacity 230,000-volt transmission line; that
Fort Randall Dam is the most proximate Bureau source to East River's Lake Preston
substation which serves the Respondent (although, in comparison with Gavins Point,
only slightly so); that Gavins Point, the second most proximate of the four dams, is
interconnected to the Bureau's East River Loop only by a smaller capacity 115,000-
volt transmission line; and that there is produced in the State of South Dakota more
power than is required to meet demand within the State.17 From these facts con-
sidered together with the general principles and axiom above set forth it becomes
apparent that a significant portion of Respondent's 1960 power supply originated
directly from Fort Randall Dam in the State of South Dakota and accordingly was
not "inflow" within the definition of the term . But a conclusion less general and
more precise as to what part of Respondent's supply of electrical power was inflow
is not permissible . 18 Bureau expert Baker credibly testified it was not possible to de-
termine what portion of East River ( and prorata , Respondent 's) power supply origi-
nated within the State of South Dakota and what portion from combined sources
outside. Dill agreed with Baker but rendered the opinion that Fort Randall and
Gavins Point in Nebraska were the likely sources 19
On direct examination Baker testified as follows:
Q. Is it possible , Mr. Baker , to state how much of the power sold by the Bu-
reau to East River during 1960 , or during any other period, originated within the
State of South Dakota?
A. No.
Q. Is it possible to determine , Mr. Baker , what portion of that power origi-
nated at any other source or combination of sources?
A. No, it isn't.
"The credited testimony of Harrison Baker.
is Baker so testified.
ie Baker testified to this effect and on analysis of all pertinent testimony I adopt this
conclusion.
is Regarding the last factor, Dill so testified without contradiction and I adopt this
conclusion The fact that East River which had exhausted its contracted amount of
"firm" power had to seek a small amount of supplemental power from out-of-State does
not alter the conclusion, for it is apparent that when this contract was undertaken all
Bureau power had been previously committed by contract to other purchasers
IS The significance of a more precise determination is readily apparent from the fact
that a 51 percent but not less of Respondent's 1960 power purchases are treated as hav-
ing been inflow, the resulting amount combined with the $28,337 of purchases I have
found to be inflow, would be sufficient to meet the Board's standards.
i9 Fort Randall, in addition to being slightly closer than Gavins Point and being con-
nected to the East River Loop by transmission lines twice the capacity of those connect-
ing Gavins Point, has over three times the installed capacity
KINGSBURY ELECTRIC COOPERATIVE, INC. 587
On cross-examination Baker testified as follows:
Q. You cannot say one way or another that this electricity used by Kingsbury
could not come from other dams and by the same token you could also state
that it could come from Fort Randall?
A. That's right.
Q. You can't state either way the source of this power?
A. It isn't distinguishable.
Q. Is it more likely, Mr. Baker, that the power obtained and consumed by
Kingsbury Electric is more likely to come from Fort Randall than any other
sources?
A. That is a very general question. I think the closer the sources, the more
likely it would be to come from that source.
Mr. SCHULTZ: That's all.
In the face of this testimony I find no warrant for determining arbitrarily that any
given or ascertainable percentage of Respondent's power purchases was derived as
inflow directly or indirectly from outside the State of South Dakota. I may not do
what Baker, an expert, credited and disinterested witness with intimate professional
knowledge of the subject testified he was unable to do.
The Board requires proof that its relevant jurisdictional standard has been satis-
fied and mere allegations to that effect are not sufficient (see Frank Schafer, Inc.,
127 NLRB 210; Fred L. Roberts, 130 NLRB 392). In each case before the Board
the pertinent jurisdictional standard must be fully met as to dollar amount and a slight
deviation or falling short is not waived. (See Pelmck Wrecking Company, Inc., 126
NLRB 259; Frank Schafer, Inc., supra.) When the matter is in issue, the General
Counsel has the burden of adducing sufficient evidence to establish the proper method
of allocating established dollar volume to the jurisdictional year, and absent such
a showing a Trial Examiner may make an allocation which on the record established
he deems reasonable and warranted (cf. Pelnick Wrecking Company, Inc., supra).
On these principles, it is apparent that the General Counsel must do more than
allege and prove that the electrical energy Respondent purchased originated from
combined sources within and without the State of South Dakota. He had the
additional burden under the rationale of Pelmck, deemed here applicable by analogy,
of establishing sufficient basis for reasonably ascertaining what portion of the total
purchases was inflow and what portion was not. This he failed to do. Supposition,
surmise, conjecture, and intuition are not substitutes for proof. In this case, contrary
to Pelnick the record suggests no clearly reasonable method of allocation available
to the Trial Examiner. Here, also contrary to Pelnick, the testimony of a credited
expert witness interposes.
While the Board may, in its discretion, assert jurisdiction in a properly filed case
involving interstate commerce where legal jurisdiction alone is established (Tropicana
Products, Inc, 122 NLRB 121; Plant City Welding and Tank Company, 123 NLRB
1146),20 these prerogatives are the Board's alone; for it is clear that I must be guided
solely by the jurisdictional standards which the Board has established and promul-
gated and by the decisions it has rendered thereunder. The standard of the Sioux
Valley case constitutes the only basis for the assertion of jurisdiction over local and
REA public utilities. In the absence of a sufficient gross volume of business to fall
within the established standard, the General Counsel had the burden of adducing
evidence sufficient to show Respondent's operations meet the alternative $50,000
inflow-outflow standard. The requisite showing is absent here.
While it may well be, as the General Counsel contends in its briefs, that impact
upon interstate commerce of purchases made by Respondent through its agent East
River from a multistate generating and distributing system operated by the Bureau
alone warrant invoking the Board's jurisdiction, he cites no precedent (and I am
aware of none) wherein the Board has under established jurisdictional standards,
absent proof that its dollar volume standard had been met, asserted jurisdiction on
an impact criteria alone 21 I have no discretion in the matter. I will accordingly
recommend that the complaint herein be dismissed.
20 That the Board has legal jurisdiction over Respondent is established by a virtue of
those undisputed and stipulated amounts expended in 1960 for purchases of goods from
out-of-State. (See Willard's Shop Rite Markets, Inc, 128 NLRB 710 )
' The General Counsel appears to urge a return to the 1950 standards covering the
public utilities enunciated in W. C. King, d/b/a Local Transit Lines, 91 NLRB
which the Board , by adopting the Sioux Valley standards , implicitly declined to do
623,
588 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
APPENDIX A
SUMMARY AND ALLOCATION OF RESPONDENT 'S 1960 CAPITAL EXPENDITURES
FOR SYSTEM IMPROVEMENT PROGRAM *
A. PRIMARY LINE CONVERSION
Firm name and location
Wisconsin Electric Cooperative, Madison, Wis_ _ _ _ _________
Month of
purchase
Amount of
purchase
$944 50
4 40
71 40
5, 034 78
177 96
36 87
249 20
6,955 55
174 81
185 63
232 09
7,202 96
8, 871 27
162 21
21 83
Tianscript
citation
McCormick and Baxter ••_____________________________________
J H. Larson Electrical Company, Watertown, S. Dak-----
'Crescent Electric Supply Company, Sioux Falls, S. Dak_____
McLaughlin Electric Supply Company, Aberdeen, S. Dak_ -
Total---------------------------------------------------
March__________
March__ ________
April ------------
August ---------
August ---------
September ------
October---------
September------
September______
September------
December_______
September------
September______
July-------------
December_______
30,335 46
B. VOLTAGE REGULATORS AND RELATED MATERIALS
J R Kearney Corporation"_________________________________ July------------- $644
J. H. Larson Electrical Company, Watertown, S. Dak______ March----------_________ 11,217
Maloney Electric Company, St Louis, Mo__________________ December-------r 11, 732
Total--------------------------------------------------- 23, 593
240
240
241
241
243
244
---------244
248
248
250
252
252
252
253
00
42
00
245
246
253
42
C SECONDARY OR SERVICE IMPROVEMENTS
J. H. Larson Electrical Company, Watertown, S Dak_______ February------- $129 69 245
March__________ 16 37 246
August__________ 206 00 248
Tri-State Electric Company, Sioux Falls, S. Dak_____________ January 67 07 250
February....... 757 20 250
February------- 533 64 251
April------------ 498 50 251
May------------ 83 75 251
August__________ 152 32 251
September------ 140 83 251
October_________ 387 05 251
November------ 766 17 251-252
December ------- 198 54 252
Crescent Electric Supply Company, Sioux Falls, S. Dak_____ March ---------- 242 76 252
May------------ 213 02 252
Maloney Electric Company, St. Louis, Mo--------------- -__ April------------ 2,064 00 253
_ _ _ _ _ _December------- 936 00 253
Total--------------------------------------------------- 7, 393 00
*The parties stipulated all purchases were made either directly or indirectly from outside the State of
-South Dakota
**The location of the firm is not shown in the record.
KINGSBURY ELECTRIC COOPERATIVE, INC. 589
SUPPLEMENTAL INTERMEDIATE REPORT
STATEMENT OF THE CASE
On January 18, 1962, Trial Examiner James T. Barker issued his Intermediate
Report wherein he found and concluded that the operations of Kingsbury Electric
Cooperative, Inc., herein called the Respondent, did not meet the Board's juris-
dictional standards. Accordingly, without passing upon the merits of the complaint
alleging violations of Section 8(a)(1) and (5) of the Act, I recommended that the
complaint be dismissed.
On April 20, 1962, the Associate Executive Secretary, by direction of the Board,
issued an Order Remanding Proceeding to Trial Examiner, reversing his jurisdic-
tional findings and conclusions and remanding the case to him for the submission
of a Supplemental Intermediate Report on the merits of the case.'
Upon consideration of the entire record in the case, and upon my observation
of the witnesses, I make the following:
FINDINGS OF FACT
1. THE LABOR ORGANIZATION
Local Union No. 426, International Brotherhood of Electrical Workers, affiliated
with the International Brotherhood of Electrical Workers, AFL-CIO, herein called
the Union , is admitted by Respondent to be a labor organization within the meaning
of Section 2(5) of the Act, and I so find.
It. THE UNFAIR LABOR PRACTICES
A. Prefatory facts
Respondent's governing body is its seven-member board of directors which regu-
larly meets on the second Thursday of each month. At times pertinent, manage-
ment of the day-to-day affairs of Respondent was vested in Robert Monkman, whose
supervisory capacity was admitted. Respondent's employee complement is a small
one and includes six employees who at times material comprised its line crew.
Employee organizational efforts commenced on March 31, 1961, when five of
the line crew employees-Harold Stover, Hilbert Schardin, Ronald Wynn, James
Jensen, and Dean Pierlett-attended a meeting with Clement Rush, International
representative of the Union. The five employees signed union authorization cards
and thereafter, on March 5, the Union filed a representation petition, a copy of
which was received by Manager Monkman on April 6 or 7. On April 18, Re-
spondent and the Union entered into a consent agreement which was approved by
the Regional Director of the National Labor Relations Board for the Eighteenth
Region, hereinafter called the Regional Director, on April 24.2 Thereafter, on
May 16, an election was held among the six employees in the agreed appropriate
unit. A majority of the employees cast ballots in favor of the Union. Subse-
quently on May 26, the Regional Director certified the Union as collective-
bargaining representative of Respondent's line crew employees.
B. Interference, restraint , and coercion
The General Counsel contends that in violation of Section 8(a)(1) of the Act
(1) Respondent commencing on or about April 5, through Manager Robert Monk-
man, interrogated its employees concerning their union membership, activities,
and desires and threatened them with layoff or other reprisals for becoming or
remaining members of the Union; and (2) in April 1961, in order to defeat the
Union, Respondent granted wage increases to its employees to become effective
May 1. Respondent denies indulging in any threats or interrogation and contends
that the wage increases were granted pursuant to a previous plan and in the normal
course of business at a time when it had no knowledge of its employees' union
activities.
1. Interrogation and threats
a. Monkman conversations
During the month of April Manager Monkman had conversations with four of
the six employees comprising the line crew wherein, the General Counsel asserts,
he engaged in conduct violative of the employees' Section 7 rights.
1 See Appendix A.
2 Case No. 18-RC-4671
590 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The initial conversation occurred during the first week or 10 days of April be-
tween Manager Monkman and employee Ronald Wynn, which Wynn related as
follows:
Well, I stopped in and it was about five o'clock and he was working on some
maps. I was looking at these maps of the project and we talked a little bit
about the maps and I started to leave and he hollered at me. He said, "Just
a minute, I want to ask you something, I've heard the rumor you have signed
or are trying to join the Union." I said, "Yes, that's right," and then he asked
me, he said, well, was there any one particular person behind this trying to
get the Union in. I told him, no, there wasn't. I said the men got together
and talked about it and all went together and all did as one, there was no one
individual that tried to get the Union in.
Monkman informed Wynn he thought Wynn's joining the Union was "a good
idea." 3
In mid-April, employee Schardin conversed with Monkman asking him "what he
thought about the Union." Monkman answered that "he didn't really have any-
thing against the Union, but he didn't think the Union would solve the problem." 4
Thereafter, in early May, Manager Monkman had a conversation with employees
James Jensen, Ronald Wynn, and Harold Stover in Respondent's office. Monk-
man informed Jensen that at the April board of directors' meeting, he (Jensen)
had received a 5-cent per hour raise. There followed a discussion of the Union
wherein Monkman stated "if the Union got in" that in the fall when line construc-
tion was completed Jensen and the employee in the tree trimmer classification would
be laid off 5
Monkman, on the other hand, testified that in April he informed Jensen that:
Probably at the end of this year we would be done with this construction and
that we would probably have to let him go or would be laying him off and to
look for a job in the meantime and if he could find one to take it for his own
good.
Monkman further testified, in effect, that his advice to Jensen on the occasion in
question was consistent with the terms of Jensen's original employment, in that
when Jensen was at first engaged he was told that he was being employed on a
temporary basis for the duration of Respondent's primary construction project
only. Jensen denies he was employed on those terms.
b. Attorney Green conversations
In context of the foregoing, in mid-April and, subsequently, in late April or early
May, Project Attorney Green also met and conversed with employees Schardin and
Stover, respectively.6
Thus, in mid-April, employee Schardin discussed the Union with Attorney Green
in Green's office. They "discussed the Co-op in a general way and why it was
running in the red and what we thought we could do about it." During the con-
versation Attorney Green asked Schardin "Why he had joined the Union." Schardin
answered that he thought he would get "a little more representation and more
benefits." 7
6 The foregoing is based upon Wynn's uncontradicted and credited testimony
' The uncontradicted, credited testimony of Schardin.
6 The credited testimony of Jensen and Stover. Wynn. and at one point in his testi-
mony, Stover, in effect, testified that Monkman predicated the layoffs on Respondent's
having to pay union wages. I am convinced upon an evaluation of Stover's entire testi-
mony and that of Jensen and Wynn that the testimony I have credited accurately relates
the conversation.
6 The complaint does not allege these conversations to be violative of the Act and I make
no finding that they were . I have considered the testimony not as evidence of an unfair
labor practice but only to the extent it cast light upon Respondent's course of conduct
during the pertinent preelection organizational period
' The undenied and credited testimony of Schardin
The General Counsel adduced other evidence, which I credit, that at a meeting of the
board of directors ( the precise time of which was not established but which I find occurred
in the period April through September) a member of the board raised the question whether
"something should be done" about Hilbert Schardin and Attorney Green advised that
nothing should be done because it would be illegal. In late September, Monkman, upon
meeting him socially , informed Schardin of his ( Monkman's ) recent resignation as manager
KINGSBURY ELECTRIC COOPERATIVE, INC. 591
Also in mid-April, Stover was asked by Henry Smith, a member of Respondent's
board of directors, to meet and talk with Project Attorney Green. Stover did so
in late April or early May at Green's office. No one else was present. According
to Stover's uncontradicted testimony, which I credit, Attorney Green conversed con-
cerning matters of general interest relating to Respondent's organization. Green
wanted to know "what the difficulty was up there." Stover (who testified that there
had been friction between employees during the period in question) answered that
the employees did not feel that they were being represented fairly. Green further
wanted to know "if the trouble was between one or two employees" and that if so
.,we should get rid of" the one who is causing the trouble.
2. Wage increases
At the regular meeting of Respondent's board of directors in March, held on
Thursday, March 9, before the commencement of employee organizational efforts
on March 31, Respondent's employees were called into the meeting and were given
the opportunity to express themselves concerning their feelings toward their work
and to air any grievance that they might have. One employee expressed a desire
for improved wages. Employees Wynn and Pierlett had received their last pay raise
in August 1960; Schardin in February 1960; Boystadt in April 1959; and Stover in
October 1958. Jensen had received no raise since initially employed in August 1960.
Subsequently, at the meeting, the board discussed the subject of wages and the
wage committee was instructed to prepare a new wage schedule for presentation at
the regular board of directors' meeting in April. Thereafter, at the board meeting
on April 13, the board, after discussion, adopted the report of the wage committee
recommending a wage increase for each of the six employees comprising the line
crew .8 The increase in wage rates became effective May 1.9 Stover received a
monthly raise of $5 while the other employees received hourly raises as follows:
Schardin, 8 cents; Wynn, 4 cents; Pierlett, 10 cents; Boystadt, 4 cents; and Jensen, 6
cents.
The employees were subsequently apprised of the board's action by Manager
Monkman. Thus, in one instance, 3 or 4 days after the April board meeting, Monk-
man informed employees Wynn and Schardin of the pending increase and said, in
substance, that in his opinion if it had not been for the employees joining the Union
the wage increases would not have been granted; and further that the board in ini-
tially discussing the matter decided that "only the two office girls" would receive
increased wages, but when "the Union was brought up" it was decided all employees
would be given a small raise.10
On another occasion in early May, Monkman informed Stover, Wynn, and Jensen
of the wage increases. Stover credibly testified as follows: 11
Well, he [Monkman] told us that they weren't in favor of giving us an increase,
that being we had signed with the Union that they gave us an increase.
This credited testimony of Schardin, Wynn, and Stover demonstrates the board
of directors had knowledge of the employees' union activity when the decision to
of Respondent and further said, "It won 't be long until it will be you ." According to
Schardin , Monkman further stated that:
They were going to lay you o8 at one of the board meetings , there was discussion
they were going to let you off and they were advised by Paul Green that they had
better wait until this died down and then get rid of you.
The evidence is sufficient merely to support a conclusion that there was, at an undefined
juncture during the period found , a desire on the part of one of the seven members of the
board to illegally lay off Hilbert Schardin which invoked discussion but no action. As the
time of the occurrence of the board of directors ' incident and the degree of consensus
among the board members is not adequately shown, I have accorded the evidence no
weight in arriving at my findings and conclusions.
9 The two office employees appear also to have received a salary increase.
9 The undisputed and credited testimony of Carl Weerts, a member of Respondent's
board of directors , and Robert Monkman.
10 The credited testimony of Schardin and Wynn . Monkman did not testify concerning
this incident.
u In its record context , I do not consider Monkman 's denial of Stover's testimony suffi-
cient to overcome the credited testimony of Stover.
592 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
grant improved wages was made; and is probative of the considerations underlying
the Board 's decision.lz
Conclusions
1. Interrogation and threats
On the basis of the foregoing, I am convinced and find that upon receipt of the
Union's representation petition Respondent launched coordinated efforts to combat
the organizational efforts of its six line crew employees. If Attorney Green's role
was exploratory only, Manager Monkman's conduct was not as circumspect. Al-
though not personally hostile to the employees' attempts to organize, Manager
Monkman sought unlawfully in his official managerial capacity as agent of Re-
spondent to (a) confirm employee Wynn's suspected union activity and through
him learn the identity of the employee leader of the union effort and (b) to dissuade
employees from selecting the Union as their bargaining representative by conveying
to Jensen, Wynn, and Stover the knowledge that Jensen's continued employment
(and that of the tree trimmer) would be adversely affected if the Union prevailed
in the pending election.
In this latter regard, I do not deem it necessary to resolve the conflict as to the
nature of Jensen's original employment, for, although I found Monkman to be
generally a credible witness, I am convinced that his advice to Jensen on the occa-
sion in question was rendered in the context of additional remarks not encompassed
in his testimony but credibly testified to by Jensen and Stover, predicating the
prospective fall layoff of Jensen and the tree trimmer employee upon unionization
and not upon the temporary nature of their employment. This, 'I find, constituted a
threat and not a mere prediction; and transpiring as it did during the pendency of a
representation election it was clearly calculated to be coercive.
Viewed in the context of other unfair labor practices found herein, I conclude
and find that Monkman 's conduct on the two occasions specified above interfered
with, restrained, and coerced employees in the rights guaranteed them in Section 7
of the Act and violated Section 8(a) (1) thereof.13
2 Wage increases
I conclude and find also that the action of the board of directors in granting the
wage increase in question was taken not in conformance with established practice
or in fulfillment of its previously initiated study, but for the purpose it might have
in frustrating the known efforts of its line crew employees to freely organize. The
evidence or record indicates that in making past wage adjustments Respondent has
followed no fixed pattern either as to amount, interval, or time of year. The credited
evidence of record establishes that the board of directors had initially decided against
a wage increase for the line crew and that, but for the advent of the Union, no
wage increase would have been forthcoming to them in May. Timed as it was,
the wage action served as a powerful inducement calculated to emphasize to the
employees the Respondent's unilateral generosity and to discount the need for a
collective-bargaining representative. I find these dual considerations motivated
Respondent's wage action. Accordingly, I further find and conclude that in granting
the wage increases and in placing them in effect during the pendency of the repre-
sentation proceeding, Respondent violated Section 8(a)(1) of the Act.14
12 The testimony of Board Member Weerts denying awareness on the part of the hoard
of directors of employee union activity is not sufficient to overcome the import of the
credited testimony of employees Stover and Wynn I do not credit Weert's denial Nor
does the testimony of Manager Monkman relating to when he personally informed the
board of directors of the receipt of the Union's representation petition, negate knowledge
on the part of the members of the board of employee organizational activity
13 See the Plastic Molding Company, Inc, 110 NLRB 2137; Rural Electric Company,
Inc, 130 NLRB 799, 812, enfd as mod. 296 F 2d 523 (CA 10) ; Marval Poultry Com-
pany, Inc., 129 NLRB 803, 807, enfd 292 F. 2d 454 (CA. 4); of T C Wagster, d/b/a
ABC Machine and Welding Service, 122 NLRB 944; Cook Paint & Varnish Company, 129
NLRB 427, 434; Blue Flash Express, Inc, 109 NLRB 591.
14 See Allure Shoe Corporation, 123 NLRB 717, enfd as mod. 277 F 2d 231 (C A. 5) ;
May Department Stores d /b/a Famous-Barr Company v N.L R B , 326 U S. 376, 385.
The wage action is not alleged in the complaint as violative of Section 8(a) (5) of the
Act. Accordingly, I need not decide whether, in the circumstances prevailing on April 13
(including the absence of a specific request for recognition or to bargain), the Respondent
violated the Act in raising employee wages without consulting the Union Cf Sherry
KINGSBURY ELECTRIC COOPERATIVE, INC. 593
C. The refusal to bargain
The complaint further alleges that since on or about June 13, 1961, the Respond-
ent-has refused to meet and bargain collectively with the Union, despite the Union's
proper request that it do so and the Union's status as exclusive representative of
the Respondent's employees in an appropriate unit.
On May 26, 1961, as found above, pursuant to an election in which a majority
of the employees cast ballots in favor of the Union, the Regional Director certified
the Union as collective-bargaining representative of the employees in a unit con-
sisting of all production, maintenance, and operating employees of the Company,
excluding janitors, office clerical employees, temporary and casual employees, pro-
fessional employees, guards, and supervisors as defined in the Act.
I find that as of May 26, 1961, and at all times material thereafter the Union
was the majority representative of all the employees in an appropriate unit.
Following the Union's certification on May 26, Union Business Manager Sandberg,
by letter addressed to Manager Monkman and dated June 13, requested a meeting
with representatives of Respondent for the purpose of negotiating a collective-
bargaining contract. A proposed agreement was enclosed. There followed there-
after an exchange of correspondence and one meeting between Sandberg and Monk-
man, wherein the Union continued to press its request for a meeting with Respond-
ent's board of directors for the purpose of negotiating a collective-bargaining con-
tract. However, no meeting was ever held.
The Respondent rests its defense solely upon the alleged invalidity for lack of
jurisdiction of the Regional Director's May 26 certification of the Union.
As the Board has rejected Respondent's jurisdictional claim, I conclude that the
Respondent by refusing to bargain with the Union as the certified representative of
its employees in an appropriate unit, has committed unfair labor practices within
the meaning of Section 8(a)(1) and (5) of the Act, as alleged in the complaint.15
III. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the Respondent set forth in section II, above, occurring in con-
nection with its operations described in the Trial Examiner's Intermediate Report
issued in this proceeding on January 18, 1962, have a close, intimate, and substantial
relation to trade, traffic, commerce, and transportation among the several States, and
tend to lead to labor disputes burdening and obstructing commerce and the free
flow thereof.
IV. THE REMEDY
Having found that Respondent has engaged in unfair labor practices, I shall
recommend that it cease and desist therefrom and take certain affirmative action
designed to effectuate the policies of the Act.
Upon the basis of the foregoing findings of fact, and upon the entire record in
the case, I make the following:
CONCLUSIONS OF LAW
1. Local Union No. 426, International Brotherhood of Electrical Workers, affili-
ated with the International Brotherhood of Electrical Workers, AFL-CIO, is a labor
organization within the meaning of Section 2(5) of the Act.
2. Kingsbury Electric Cooperative, Inc., is an employer within the meaning of
Section 2(2) of the Act.
3. All production, maintenance , and operating employees of the Respondent,
excluding janitors, office clerical employees, temporary and casual employees, pro-
fessional employees, guards, and supervisors as defined in the Act, constitute a unit
appropriate for the purposes of collective bargaining within the meaning of Section
9(b) of the Act.
4. The above-named -labor organization was, on May 26, 1961, and at all times
thereafter, the exclusive representative of all employees in the aforesaid appropriate
unit for the purposes of collective bargaining within the•meaning of Section 9(a) of
the Act.
5. By refusing, on and since June 13, 1961, to bargain collectively with the above-
named labor organization as the -exclusive representative of its, employees in the
Manufacturing. Company, Inc., 128 NLRB 739; Tampa Crown Distributors ; Inc., 121
NLRB 1622, enforcement denied 272 F 2d 470 (C.A. 5) ; Rural Electric Company, Inc,
supra.
15 Cat teret Towing Company, Inc, 135 NLRB 975.
594 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
aforesaid appropriate unit, the Respondent has engaged in and is engaging in unfair
labor practices within the meaning of Section 8(a)(1) and (5) of the Act.
6. By interrogating its employees concerning their union activities and member-
ship and the identity of the employee leader of the union movement; threatening
its employees with layoff if the Union were selected as collective-bargaining repre-
sentative of its employees; and in granting wage increases to its employees for the
purpose of discouraging their union activities Respondent committed unfair labor
practices within the meaning of Section 8(a) (1) of the Act.
7. The aforesaid unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2(6) and (7) of the Act.
RECOMMENDED ORDER
Upon the basis of the foregoing findings of fact and conclusions of law, it is
recommended that Respondent, Kingsbury Electric Cooperative, Inc., its officers,
agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Refusing to bargain collectively concerning rates of pay, wages, hours and
other terms and conditions of employment with Local Union No. 426, International
Brotherhood of Electrical Workers, affiliated with the International Brotherhood of
Electrical Workers, AFL-CIO, as the exclusive representative of all its employees
in the following appropriate unit : All production, maintenance , and operating
employees of the Respondent, excluding janitors, office clerical employees, tem-
porary and casual employees, professional employees, guards, and supervisors as
defined in the Act.
(b) Interrogating and threatening employees concerning their union activities
and those of other employees in a manner constituting interference, restraint, or
coercion in violation of Section 8(a)(1) of the Act.
(c) Granting wage raises to discourage union activity.
(d) In any like or related manner interfering with, restraining, or coercing its
employees in the exercise of the right to self-organization, to form labor organiza-
tions, to join or assist Local Union No. 426, international Brotherhood of Elec-
trical Workers, affiliated with the International Brotherhood of Electrical Workers,
AFL-CIO, or any other labor organization, to bargain collectively through repre-
sentatives of their own choosing, to engage in concerted activities for the purpose
of collective bargaining or other mutual aid or protection, or to refrain from any
and all such activities.
2. Take the following affirmative action which it is found will effectuate the
policies of the Act:
(a) Upon request, bargain collectively with the above-named labor organization
as the exclusive representative of all Respondent's employees in the unit found ap-
propriate and, if an understanding is reached, embody such understanding in a
signed agreement.
(b) Post at its De Smet, South Dakota, establishment, copies of the notice at-
tached hereto marked "Appendix B."16 Copies of said notice, to be furnished by
the Regional Director for the Eighteenth Region, shall, after being duly signed by
the Respondent, be posted immediately upon receipt thereof, and be maintained
for a period of 60 consecutive days thereafter, in conspicuous places, including all
places where notices to employees are customarily posted. Reasonable steps shall
be taken to insure that said notices are not altered, defaced, or covered by any other
material.
(c) Notify said Regional Director, in writing, within 20 days from the receipt of
the Trial Examiner's Intermediate Report, what steps the Respondent has taken
to comply therewith.17
Ie In the event that this Recommended Order be adopted by the Board, the words "A De-
cision and Order" shall be substituted for "The Recommendations of a Trial Examiner"
in the notice In the further event that the Board's Order is enforced by a decree of a
United States Court of Appeals, the words "Pursuant to a Decree of the United States
Court of Appeals, Enforcing an Order" shall be substituted for the words "Pursuant to
a Decision and Order "
17 In the event that this Recommended Order be adopted by the Board, this provision
shall be modified to read: "Notify said Regional Director in writing, within 10 days from
the date of this Order , what steps the Respondent has taken to comply herewith."
KINGSBURY ELECTRIC COOPERATIVE, INC. 595
APPENDIX A
ORDER REMANDING PROCEEDING TO TRIAL EXAMINER
On January 18, 1962, Trial Examiner James T. Barker issued his Intermediate
Report in the above-entitled proceeding, and on the same date the proceeding was
transferred to the Board. The Trial Examiner found and concluded that the opera-
tions of Kingsbury Electric Cooperative, inc., herein called the Company, do not
meet the Board's standards for assertion of jurisdiction. He, therefore, did not pass
upon the merits of the unfair labor practice allegations of the complaint. There-
after, the General Counsel filed exceptions to the Intermediate Report and a brief
in support thereof, and Respondent filed a brief and a supplemental brief in support
of the Intermediate Report.
The Board has duly considered the matter and finds that the Trial Examiner erred
in finding and concluding that the complaint should be dismissed for lack of
jurisdiction.' His jurisdictional findings and conclusions are hereby reversed, and
the case shall be remanded to the Trial Examiner for the submission of a Supple-
mental Intermediate Report on the merits of the case. Accordingly,
IT IS HEREBY ORDERED that the above-entitled proceeding be, and it hereby is,
remanded to Trial Examiner James T. Barker for the preparation and issuance
of a Supplemental Intermediate Report, setting forth findings of fact, conclusions
of law, and recommendations with respect to the unfair labor practices alleged in
the complaint issued by the Regional Director for the Eighteenth Region on October
6, 1961. Copies of such Supplemental Intermediate Report shall be served upon
all parties, after which the provisions of Sections 102.46 and 102.114 of the Board's
Rules and Regulations shall be applicable.
'We shall not make findings with respect to the issues relating to our assertion of
jurisdiction until after issuance of the Supplemental Intermediate Report
APPENDIX B
NOTICE To ALL EMPLOYEES
Pursuant to the Recommendations of a Trial Examiner of the National Labor
Relations Board, and in order to effectuate the policies of the Labor Management
Relations Act, we hereby notify our employees that:
WE WILL NOT induce or encourage our employees by granting wage increases
to refrain from joining or retaining membership in the Union, or any other
labor organization
WE WILL NOT interrogate our employees as to their membership or activities
in the Union or as to the identity of the employee leader of the union organiza-
tional efforts.
WE WILL NOT threaten our employees with layoffs or any other economic
reprisals for engaging in union activities
WE WILL bargain collectively upon request with Local Union No. 426, Inter-
national Brotherhood of Electrical Workers, affiliated with the International
Brotherhood of Electrical Workers, AFL-CIO, as the exclusive representative
of our employees described in the following unit:
All production, maintenance, and operating employees, excluding janitors,
office clerical employees, temporary and casual employees, professional
employees, guards, and supervisors as defined in the Act.
WE WILL NOT in any like or related manner interfere with, restrain, or coerce
employees in the exercise of their right to self-organization, to form labor
organizations, to join or assist any labor organization, to bargain with repre-
sentatives of their own choosing, and to engage in any other concerted activities
for the purpose of collective bargaining or other mutual ,aid or protection, or
to refrain from any or all such activities.
KINGSBURY ELECTRIC COOPERATIVE, INC.,
Employer
Dated, ------------------- By-------------------------------------------
(Representative) (Title)
This notice must remain posted for 60 days from the date hereof, and must not be
altered, defaced, or covered by any other material.
Employees may communicate directly with the Board's Regional Office, 316
Federal Building, 110 South Fourth Street, Minneapolis, Minnesota, Telephone
Number, 339-0112, Extension 2601, if they have any question concerning this
notice or compliance with its provisions.
G62353-63-vol 138-39