McAlbert Oil Co., Inc.

National Labor Relations Board - Board Decisions

Mar 22, 1940

21 N.L.R.B. 863 (N.L.R.B. 1940)

In the Matter of MCALBERT OIL COMPANY , INC., AND D. B. MCDANIEL,
DRILLING CONTRACTOR 1 and OIL WORKERS INTERNATIONAL UNION,
LOCAL 227
Cases Nos. C-1087 and R-1039.-Decided March 20, 1940
Crude Oil Production Industry-Jurisdiction: sustained • respondents' entire
oil production sold to pipe-line company which pumps oil 60 miles within State
to storage tanks of refining company, owner of pipe-line company ; refining
company purchases respondents' oil, comingles it with oil of other producers,
and stores it within State; most of oil thus stored ultimately shipped to re-
finery outside State-Interfei ence, Restraint, and Coercion: interrogation of
employees by supervisors concerning union activities ; anti-union statements by
supervisors; threlits to shut down operations and discharge employees if they
joined Union ; attempts to deal with employees directly so as to avoid Union-
Di,scrnaination: charges of, sustained; discharge of union leader-Reinstate-
inent Ordered: employee found to have been discriminatorily discharged-Back
Pay: awarded-Investigation of Representatives: controversy concerning repre-
sentation of employees : refusal of employer to recognize Union ; controversy
as to appropriate unit-Unit Appropriate for Collective Bargai'n'ing: produc-
tion and maintenance employees, excluding drilling, supervisory, and executive
employees ; employer's request for inclusion of drillers and employees of an-
other employer rejected-Election Ordered: time for and eligibility date to be
fixed after effects of unfair labor practices dissipated.
Mr. Harry C. Duncan, Jr., and Mr. Charles M. Brooks, for the
Board.
Fouts, Amerman di Moore, by Mr. Joseph W. Moore, of Houston,
Tex., for the respondents.
Mandell di Combs, by Mr. Arthur J. Mandell, of Houston, Tex.,
for the Union.
Mr. Wallace Cooper, of counsel to the Board.
DECISION
ORDER
AND
DIRECTION OF ELECTION
STATEMENT OF THE CASE
On March 31, 1938, Oil Workers International Union, Local 227,
herein called the Union, filed charges, on July 5, 1938, amended
'This respondent was incorrectly named in the second amended charges and also in the
complaint as D B. McDaniel Drilling Corporation. At the hearing, the complaint was
amended , on motion of the Board 's counsel , so as to correct this error
21 N. L. R. B., No. 89.
863
864 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
charges, and on August 12, 1938, second amended charges, with the
Regional Director for the Sixteenth Region (Fort Worth, Texas), the
second amended charges alleging that Mc Albert Oil Company,, Inc.,
and D. B. McDaniel, Drilling Contractor,' Barbers Hill," Texas,
herein called the respondents, had engaged in and were engaging in
unfair labor practices affecting commerce within the meaning of
Section 8 (1) and (3) of the National Labor Relations Act, 49 Stat.
449, herein called the Act.
On May 21, 1938, tha Union filed with the Regional Director a
petition, and on July 5, 1938, an amended petition, alleging that a
question affecting commerce had arisen concerning the representation
of employees of the respondents and requesting all investigation and
certification of representatives pursuant to Section 9 (c) of the Act.
On July 30, 1938, the National Labor Relations Board, herein
called the Board, acting pursuant to Section 9 (c) of the Act and
Article III, Section 3, of National Labor Relations Board Rules and
Regulations-Series 1, as amended, ordered the Regional Director to
conduct an investigation and to provide for an appropriate hearing
upon due notice, and, acting pursuant to Article II, Section 37 (b),
and Article III, Section 10 (c) (2), of said Rules and Regulations,
further ordered that the representation proceeding and the proceed-
ings with respect to the alleged unfair labor practices be consolidated
for the purpose of hearing and that one record of the hearing be
made.
On September 13, 1938, the Board, by the Regional Director, issued
its complaint alleging that the respondents had engaged in and were
engaging in unfair labor practices affecting commerce, within the
meaning of Section 8 (1) and (3) and Section 2 (6) and (7) of the Act.
Copies of the complaint and an accompanying notice of hearing were
duly served upon the respondents and upon the Union. The complaint
alleged in substance with respect to the unfair labor practices that the
respondents had (1) since about February 18, 1938, by and through
their officers and agents, made various anti-union statements and
threatened employees with discrimination and loss of employment if
they insisted on dealing with the-respondents through a union; (2)
discharged J. H. Spear, about April 1, 1938, and at all times since
refused to reinstate him for the reason that he had joined and assisted
the Union; and (3) by the foregoing and other acts interfered with,
restrained, and coerced their employees in the exercise of the rights
1 This respondent was incorrectly named in the second amended charges and also in the
complaint as D. B McDaniel Drilling Corporation At the hearing, the complaint was
amended, on motion of the Board's counsel, so as to correct this error
2 The second amended charges alleged that the respondents' operations involved herein
were conducted at Mt. Belvieu, Harris County, Texas. The complaint contained no alle-
gation in that regard. At the hearing, the proof showed that these operations were con-
ducted at Barbers Hill , Chambers County, Texas. On a general motion ` made by' the
Board's counsel , the complaint was amended so as to conform to the proof
MCALBERT OIL COMPANY, INC. 865
guaranteed in Section 7 of the Act. On September 19, 1938, the
respondents filed an answer containing a general denial of the material
allegations of the complaint, together with affirmative allegations (1)
that J. H. Spear had been discharged for cause and (2) that the Board
lacked jurisdiction to proceed in the matter.
Pursuant to notice, a hearing was held at Houston, Texas, on Sep-
tember 22, 23, 24, 26, and 27, 1938, before William P. Webb, the Trial
Examiner duly designated by the Board. The Board, the respondents,
and the Union were represented by counsel and participated in the
hearing. Full opportunity to be heard, to examine and cross-examine
witnesses, and to produce evidence bearing on the issues was afforded
all parties. During the course of the hearing, the complaint was
amended, on motion of the Board's counsel, so as to conform to the
proof and more particularly to allege the sale of crude oil by the
respondents to Sun Pipe Line Company instead of to Sun Oil Com-
pany, as was previously alleged. During the course of the hearing, the
Trial Examiner made several rulings on motions and on objections to,
the,admission of evidence. In addition, the. Trial Examiner reserved
decision on other motions made by the respondents to dismiss the com-
plaint (1) on jurisdictional grounds and (2) because of a variance
between the allegations of the complaint and the proof with respect to
the "purchaser of the crude oil produced by the respondents. These
motions were denied by the Trial Examiner in his Intermediate Report.
The Board has reviewed all rulings made during the course of the hear-
ing and in the Intermediate Report on motions and on objections to the
admission of evidence and finds that no prejudicial errors were com-
mitted. These rulings are hereby affirmed. The Trial Examiner also
reserved decision upon a motion made by the respondents at the com-
mencement of the hearing for particulars with respect to the general
allegations of paragraphs 8, 9, and 10 of the complaint. This motion
is hereby denied.
On December 8, 1938, the Trial Examiner filed an Intermediate
Report in which he found that the respondents had engaged in unfair
labor practices within the meaning of Section 8 (1) and (3) of the Act,
and recommended that the respondents be ordered to cease and desist
therefrom and to reinstate J. H. Spear with back pay. Copies of the
Intermediate Report were duly served upon the respondents and the
Union. Thereafter the respondents filed exceptions to the Inter-
mediate Report. and a brief in support of such exceptions.
On November 14, 1939, the Board ordered the record herein reopened
for the purpose of taking further evidence with respect to the business
of the respondents. Pursuant to notice, a hearing was held at Beau-
mont. Texas, on January 15. 1940. before Albert L. Lohm, the Trial
Exanminem dui\- designated by the Board. The Board and the respond-
866 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ents were represented by counsel and participated,in the hearing.. Full
opportunity to be heard, to examine and cross-examine witnesses, and
to produce evidence bearing on the business of the respondents was
afforded all parties. At the commencement of the hearing, the
respondents filed objections to the Board's order reopening the record
and moved to dismiss the proceeding. These objections are hereby
overruled and the motion to dismiss is denied. During the course of
the hearing, the Trial Examiner made several rulings on other motions
and on objections to the admission of evidence. These rulings are
hereby affirmed.
Pursuant to notice, a hearing for the purpose of oral argument was
held before the Board at Washington, D. C., on, February 12, 1940, in
which the Union participated. The respondents failed-to appear and
participate therein.
The Board has considered the exceptions to the Intermediate Report
and, except in so far as they are consistent with the findings, con-
clusions, and order set forth below, finds them to be without merit.
Upon the entire record in the case, the Board makes the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENTS
McAlbert 3 Oil Company, Inc., herein called McAlbert, is a corpora-
tion organized and doing business under the laws of the State of Texas.
D. B. McDaniel, Drilling Contractor, herein called McDaniel, is the
name under which the respondent D. B. McDaniel conducts an unin-
corporated business described below.
The respondents are jointly engaged in the production of crude oil
from leased lands located near Barbers Hill, Chambers County, Texas.
These lands, aggregating approximately 30 acres, are operated by the
respondents under the provisions of three leases,4 two of which are held
by McAlbert and one by McDaniel. Five wells have been drilled on
the McAlbert leases and four on the McDaniel lease, seven of which
were producing crude oil at the time of the first hearing herein. The
respondents operate these leases jointly with a single crew of employees
whose wages and salaries are apportioned between the respondents.
S,wn Pipe Line Company
All crude oil produced by the respondents from the Barbers Hill
leases is pumped into stock tanks situated on the leases and sold
3 "McAlbert" is a combination of portions of the names of D. B . McDaniel and Albert
Plummer , the incorporators McDaniel and Plummer own substantially all of the capital
stock of the corporation , McDaniel owning approximately 58 percent theteof McDaniel
has been president of McAlbert since its incorporation in 1929
1 These leases terminate upon cessation of production
McALBERT OIL COMPANY, INC. 867
daily to Sun Pipe Line Company, herein called Sun Pipe Line 6
Since 1930, Sun Pipe Line has purchased substantially all crude oil
produced by the respondents from said leases.6 Sun Pipe Line also
purchases substantially all of the entire crude oil production of the
Barbers Hill area, which it considers to be its "choice bank." 7 The
crude oil produced by the respondents and other producers in this
area is classified as "grade B" by Sun Oil Company, herein called
Sun Oil, and is suitable for the refining of gasoline at Sun Oil's
Marcus Hook, Pennsylvania, refinery, referred to below.
The respondents' crude oil is turned daily from their stock tanks
into the pipe line of Sun Pipe Line and there comingled with the
crude oil of other producers in the Barbers Hill area. This mass
of crude oil then flows through the main pipe line of Sun Pipe
Line, for approximately 60 miles entirely within the State of Texas
until it reaches the terminus of the line at Sun Station,8 , Texas.
Swn Oil Company
At Sun Station all crude oil gathered by Sun Pipe Line through
its pipe-line facilities is sold and delivered to Sun Oil at the price
paid for it by Sun Pipe Line plus a transportation charge .9 Sun
Oil has 52 storage tanks at Sun Station ranging in capacity from
55,000 to 177,000 barrels. During the period from January 1, 1936,
to August 31, 1939, inclusive, all crude oil purchased from the
respondents was pumped into "one or another" of these 52 tanks
along with the grade B crude oil purchased from other producers.
These tanks have an aggregate storage capacity in excess of 4 million
barrels, and Sun Oil receives and stores in certain of them several
grades of crude oil other than grade B crude. Grade B flows more
regularly than any other grade of crude oil in and out of Sun
Station-"
Sun Oil is engaged in purchasing and refining crude oil and in
the sale and distribution of refined oil products in various States of
the United States. It operates three refineries located in Oklahoma,
Ohio, and Pennsylvania. The refinery located at Marcus Hook,
8 Sun Pipe Line is a wholly owned subsidiary of Sun Oil Company
9 From January to August 1938 , Inclusive , these purchases amounted to 126,351 53 bar-
rels of crude oil at an aggregate price of $139,495 45 . Sun Pipe Line purchases this crude
oil on a "gravity basis" at a price posted by it each day
7The respondents ' crude oil is of a similar "gravity" to that produced in the entue
Barbers Hill area
8 Situated on the Neches River approximately 7 miles south of Beaumont, Texas
.Since July 1, 1939 , the respondents ' crude oil has been purchased directly by Sun Oil
io Although the flow of grade B crude into these tanks has since January 1, 1936 , ranged
from approximately 3,268 ,000 to 5,707 ,000 barrels annually, these « eie in storage only
698,434 barrels on January 1, 1936, 324,741 barrels on January 1, 1937, 520,235 batiels
on January 1, 1938, and 431,262 barrels on January 1, 1939 At no time since January 1,
1936, has the amount of grade B crude in storage been in excess of 1.150 ,000 barie]s
868 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Pennsylvania, which refines gasoline and lubricating oil, receives
approximately 75 per cent of its crude oil from Sun Station or be-
tween 80 and 90 per cent of all crude oil gathered at Sun Station.
The practice of Sun Oil is to ship grade B crude via its own tankers
from Sun Station to Marcus Hook "dependent on the circumstances
and the best convenience and transactions of the Sun Oil Com-
pany." 11 The remaining 10 to 20 per cent of crude oil gathered at
Sun Station is sold to other oil companies and delivered to them
within the State of Texas.
The flow of grade B crude oil into and from Sun Station from
January 1, 1936, to August 31, 1939. inclusive, was as follows :
1936-Received at Sun Station------------------------- 3,268 , 454 barrels
Shipped to Marcus Hook------------------------- 3,640,475
Sold to others ----------------------------------- None
1937-Received at Sun Station--------------- ------- 4,562,787
Shipped to Marcus Hook------------------------- 3,575,758
Sold to Humble Oil & Refining Company --------- 786,762
1938--Received at Sun Station ------------------------- 5,707,841
Shipped to Marcus Hook------------------------- 5,482,041
Sold to Humble Oil & Refining Company --------- 75, 095 i 13
Sold to The Pure Oil Company 243, 275
1939- ( first 8 months.)
Received at Sun Station------------------------- 4,251,175
Shipped- to Marcus Hook------------------------- 3,880,157
Sold to others ----------------------------------- None
Although the record contains no evidence that the respondents
have knowledge of the ultimate destination of the crude oil produced
by them, D. B. McDaniel testified that he had been informed by Sun
Pipe Line that this oil is sold to Sun Oil,' which stores it on the
Texas coast and ultimately pumps it into tankers and barges for
shipment.
On the basis of the foregoing facts, we find that there is a con-
tinuous flow of grade B crude oil from the respondents' oil wells
situated near Barbers Hill, Chambers County, Texas, to points out-
side the State of Texas.15
"Testimony of Donelson Caffery, assistant to the general manager of the Beaumont
Division of Sun Oil
12 This oil was sold f. o. b steamship Donelson Caffery testified that crude oil pur-
chased by Rumble Oil & Refining Company from Sun Oil goes "beyond the Neches River"
and "out into the Gulf"
11 See footnote 12 above.
"This oil was deliver ed by pipe line from Sun Station to The Pure Oil Company' s refin-
ery tanks at Smith' s Bluff, Texas, which adjoins Sun Station In Matter of The Pure Oil
Company and Oil Workers' International Union, Local 228 , 6 N. L R B 818. we found,on
the basis of a stipulation entered into between the Board and The Pure Oil Company that
"Approximately 95 percent of the products of the Smith' s Bluff refinery are transported
for sale to points outside the State of Texas "
15 See National Labor Relations Board v Fainblatt , 306 U. S 601; Consolidated Edison
Co v National Labor Relations Board, 305 U S 197 ; Santa Cruz Fruit Packing Co. v.
National Labor Relations Board, 303 U S 453 : National Labor Relations Board v . (irowe
Coal Co , 104 F (2d) 633. cert den 308 U S. 584; Clover Fork Coal Co. v National
McALBERT OIL COMPANY, INC.
H. THE LABOR ORGANIZATION INVOLVED
869
Oil Workers International Union, Local 227, affiliated with the
Committee for Industrial Organization' 16 is a labor organization
admitting to membership "any person employed in the Petroleum
Industry."
III. THE 1 ' N FAIR LABOR PRACTICES
A. Interference, restraint, and coercion
Union activities among the respondents' production and mainte-
nance employees commenced in February 1938.17 J. H. Spear, an
e_ectrician employed by the respondents, became a member of the
Union on about February 7, and between that date and February 18
talked with several of his fellow employees concerning the Union.
As a result of his efforts, Euclide East, Louis C. McClung, and
Emmett Flowers were induced to go with him on the latter date to
talk with James B. Thornbury, an officer of the Union, at Huffman,
Texas, about 20 miles from Barbers Hill, concerning affiliation with
the Union. These employees joined the Union on that occasion and
during the latter part of February they, together with Spear, sought
to interest several other employees in becoming members. J. A.
Samuels and Ernest Laughlin declined to join at that time, but Frank
Bergeron joined about March 3, 1938. On about March 1, 1938, the
union employees formed a union grievance committee composed of
Spear, East, and Flowers, and designated Spear as chairman.
Late in February, Samuels had a conversation concerning the
aforesaid union activities of his fellow employees with George Hurst,
the respondents' production superintendent, in which Samuels told
Hurst that he "had a family to take care of" and did not want to lose
his job. Hurst replied that he thought that Samuels'' attitude was
"right." Subsequently, Samuels and Laughlin had other conversa-
tions in this same regard with Hurst. On about March 15, 1938, East
had a conversation with Hurst concerning the employees' union ac-
tivities. The following is East's uncontradicted testimony in that
regard :
I walked to the home of Mr. George Hurst, and we sat down
there and we talked. So he asked me, and he said : " East, I
Labor Relations Board, 97 F . ( 2d) 331; Mooresville Cotton Mills v National Labor Rela-
tions Board, 94 F . ( 2d) 61 ; Matter of Botany Worsted Mills and Textile Workers Organ-
izing Committee, 4 N. L. R. B. 292 , remanded to Board on other grounds . 106 F. ( 2d) 263;
Matter of David Strain Company, Inc and International Lathes' Garment Workers Union,
8 N. L. R B 310 ; Matter of Sunshine Mining Company and Inter national Union of Mine.
Mall and Smelter Workers , 7 N. L R B. 1252
10 Now Congress of Industrial Organizations
17 The number of such employees duting February 1938 does not appear in the record,
but there were eight such employees , exclusive of supervisors, on March 31, 1938, and nine
on September 21, 1938
2 8 3 0 3 2--41-v o f 21--50
870 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
understand that all of you joined the union." And I says:
'-George; not necessarily." "Well," he says, "Don't you know tJje
company can shut down for ninety days and then when they get
ready to go back to work they could rehire a new bunch?"
On. about March 17, 1938, Spear and Hurst had a conversation in
which Hurst inquired as to the number of employees who had joined
the Union. When Spear replied that he and the roustabout crew 18
belonged, Hurst said that O. C. Russell, the respondents' general
superintendent, was "very sore" because the employees had not in-
formed him of their intentions before joining. During the course
of this conversation, Hurst stated that he had joined a union in
Louisiana in 1917 and that it cost him his job, his money, and his
friends. He replied to Spear's remark that "maybe, this is not the
same union then that you joined back in Louisiana," saying, "yes,
it is the same thing, and I don't believe there is anything to a union,"
and that Spear had better be careful about agitating the employees
as they had worked, for the respondents from 2 to 8 years and had
always been satisfied. During the course of this conversation, Spear
informed Hurst that he had been appointed chairman of a union
committee. A few days later, Hurst told Spear that his services
would be terminated at the end of the month.
On March 23, 1938, Russell and Hurst found Spear, East, Bergeron,
Flowers, and McClung working together and engaged them in a
conversation concerning their union activities. East testified 10 that
during this conversation Russell told the employees that Hurst had
informed him that they had joined the Union, that they could have
had "those benefits without joining the union" if they had come to
him instead of going to the Union, and that he would not talk with
the union representatives concerning hours of employment as. such
representatives did not work for the respondents and he did not
know whether they were citizens of the United States, "or own
property, or help build communities." Russell also expressly stated
to the employees, according to East, that the respondents would send
them to the "company doctor" and they could not "come back" if
they joined the Union, and, concerning the individual employees, that
"There is Mr. Spear, he has got a bad eye"; "There is a man that
can't come back," referring to East; "Ain't you got bad eyes, Frank
(Bergeron) ?"; and "Flowers, ain't you ruptured?" Russell also in-
formed Flowers, who lived on the respondents' property, that he,
would be forced to cut . . . (Flower's) lights and water and gas"'
and charge him "ground rent" on his house.20
11 Production and maintenance employees
1°
East's testimony was substantially corroborated by the testimony of McClung, Ber-
geron, Flowers, and Spear
20 See Matter of Good Coal Company and United Mine Workers of America, District 19,
12 N L R B 136
McALBERT OIL COMPANY, INC. 871
Russell testified concerning this conversation that he informed the
employees that they could have a 6-hour day if that was what they
wanted, but that it would be necessary for them to take a wage cut
since production was falling. He also testified that he said, "Don't
this (sic) whereby we will have to get rid of some of you boys, for
two reasons : First, we don't want to get rid of you and, second, the
insurance company examination'is much stricter than it has been . . ."
and "Mr. Spear, you have one eye, and Lam pretty sure if you lose
this job here that you will not be able to stand an examination for
any of.the other companies."
Hurst did not testify concerning this conversation. The Trial
Examiner, although not, expressly resolving the above conflict in
testimony,- found the conversation= as testified by East and the other
employees. We find that it occurred substantially as testified by
East.
On March 31, 1938, the respondents discharged Spear, effective
that day. Russell also on March 31 had another conversation with
the same group of employees referred to above. Flowers' testimony
concerning this conversation, substantially corroborated by East,
McClung; Bergeron, and Spear, is as follows:
Well, lie (Russell) said . . . "Boys, have I ever threatened
to fire any of you all for joining the union?" J. H. Spear
replied that he hadn't threatened to fire us for joining the
union, but that he would"send-us'to a company doctor and we
wouldn't come back and Russell said, "Whoever is telling this
is telling a lie." He said, "Here is two men that have been
working for me for a long time." That is East and Bergeron.
He said, "We aren't going to fire them, it don't make any dif-
ference what they do." He said, "They can set a tank afire or
a well afire. We are going to take care of these two men."
Russell admitted having had the aforesaid conversation and did
not dispute Flowers' testimony.
The day -following Spear's discharge, Russell and Hurst had
another conversation with Flowers, East, Bergeron, and McClung.
Flowers testified, without contradiction, that Russell informed the
employees during this conversation that they could work shorter
hours if they so desired, `but that McDaniel and his lawyer were
'`awful hat" and wanted him to "force" them on a 36-hour week;
that, they were all "fine boys" and he hated to see them misled, but.
that someone had made them lie; and that he had been mad at Spear
the previous day, but was no longer mad at anyone and they could
join "a hundred unions" if they so desired. Russell also informed
the employees that he was going to give them what they were "ask-
ing for but the C. I. O. didn't have a thing to do with it," and that
872 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
they were in the same union that, "cost him a thousand dollars and
an automobile and came damn near starving" him.
- On the basis of the foregoing facts and the entire record, we find
that during February, March, and April, 1938, the respondents, by
interrogating their employees regarding their union activities and
those of other employees, by remarks made to their employees derog-
atory to labor organizations and particularly the Union, by their
plain-spoken attempts to discourage their employees from resorting
to the processes of collective bargaining through a representative of
their own choosing, by attempting to deal with their employees di-
rectly so as to avoid dealing with the Union,21 and by express and
clearly - implied threats to discharge • their employees provided they
continued their union activities, have interfered with, restrained,
and coerced their employees in, the exercise of the rights guaranteed
in Section 7 of the Act.
B. The discharge, of J. H. Spear
J. H. Spear was initially employed by the respondents on Sep-
tember 16, 1937, and worked continuously on production, mainte-
nance, and electrical work until he was discharged on March 31,
1938. On the latter date, the respondents had eight production and
maintenance employees, exclusive of supervisors, all of whom had
more seniority than Spear. During the period of his employment,
Spear was engaged approximately one-half of his time as an elec-
trician, maintaining electric pumping units and repairing power
lines, electric motors, switches, controls, and the like, for which he
was solely responsible. The remainder of his time was spent as a
roustabout, cutting grass, trucking materials to the wells, painting,
cleaning ditches, and building and repairing roads. He was paid
$5.50 per 8-hour day, 6 days per week.
As noted above, Spear was notified of his discharge by Hurst 2
days after his conversation with Hurst about March 17, 1938, con-
cerning the union activities of the respondents' employees. When
Spear inquired concerning the reason for the discharge, Hurst re-
plied, "I don't know. You will have to talk with Mr. Russell about
that." On March 31, Hurst confirmed to Spear the fact that he was
to be discharged that day and when Spear asked if it was because
of his union activities, Hurst replied, "I don't know, I guess it is."
During this same conversation, Hurst made an offer to Spear, pur-
suant to Russell's direction, of a few days' employment on the drill-
ing rig which was then operating on the respondents' leases.22 Spear
21 See Matter of Williams Coal Company and United Mine lVo,kems of America , Dtistrwt
No. 23, 11 N L. R B. 579.
22 These drilling operations ceased on April 16, 1938, and had not been resumed at the
time of the first hearing herein
McALBERT OIL- COMPANY, INC. 873
refused this offer on -the grounds (1) that he was improperly being
laid off the job for which he had been hired, and (2) that he did
not care to risk working on the drilling rig since prior to his em-
ployment by the respondents one of his eyes had been injured while
working as a driller's helper.23 Spear subsequently was recalled as
an extra employee on May 2 and 6, and June 7 and 24, 1938.24
The respondents urge that the discharge of Spear was not dis-
criminatory but was merely a lay-off as a consequence (1) of a drop
in production and earnings, and (2) of, an insufficient amount of
electrical work to justify his retention. Hurst and Russell also
testified that about February 25, 1938,25 before Russell departed on
an 18-day trip to Hot Springs, Arkansas, Russell informed Hurst
that it would be necessary in the interest of economy to lay Spear
off. In corroboration, Paul H. Bowdoin, an employee, testified that
he was present and heard this conversation and that Hurst re-
quested that Spear be retained during the operation of the drilling
rig for use in hauling supplies to the rig, but that Russell' replied,
"Well, we will see about it." On the basis of this testimony, the
respondents contend that the decision to discharge Spear was made
before the respondents had knowledge of the union activity of
which Spear was the leader. The testimony, however, conflicts with
Hurst's statements to Spear about March 17 and 31, that he did not
know why Spear was being discharged but guessed that it was be-
cause of his union activity. In any event, if the decision to lay off
or discharge Spear in fact was made about February 25, we find
that it was made with knowledge of Spear's union activities. As
already noted, Hurst previously had had several conversations with
Samuels concerning the union activities of the respondents' em-
ployees. We are convinced that the decision to discharge Spear was
reached only after the respondents became aware of his leadership
in the union activity then in progress.
Russell further testified (1) that since production had fallen,
Spear's salary had become an excessive charge to the operation of the
electric pumps, (2) that the respondents already had more employees
on the leases than they needed, but kept them on the pay roll pur-
suant to their policy of "taking care" of their older employees, and
(3) that in view of these facts and also the fact that Spear had less
seniority than the other employees he considered it advisable to lay
The respondents are not relieved of the consequences of their discrimination against
Spear, as found below , by his refusal to accept a discriminatory change in his status of
employment . See Matter of Continental Oil Company and Oral Workers International
Union, 12 N. L R. B. 789.
24 The only other work done by Spear up until the date of the first hearing was the
wiring of four houses for electricity , for which work he derived a profit of from $10 to $12
on each job. He desires reinstatement to his former position with the respondents
25 This was one week after Spear had induced three fellow employees to join the Union
874 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Spear off. At the outset, we note that on neither occasion when Spear
'inquired as to the reason for his 'discharge did Hurst. mention any
shortage of work. It appears, moreover, that during the latter part
of February 1938, it actually became necessary to increase the num-
ber of production and maintenance employees by calling in several
drilling employees to assist for a few days.26 In addition, the num-
ber of the respndents' production and maintenance employees was in-
,creased between March 31 and September 21, 1938, by the addition
of Aaron Avant and P. H. Rippenhagen. Both these men, old and
trusted employees with more seniority than Spear, were transferred
to production upon the cessation of drilling operations on April 16,
1938. Although they probably would have been added to the pro-
duction-employee force under normal circumstances, it is significant
that, despite the alleged lack of ^ work, the respondents did not see fit
to discharge anyone to make a place for them.27 It further appears
that the respondents employed W. W. Davis as a roustabout from
April 1f; to May 15, 1938, to do the same type of work previously done
by Spear, except electrical work. Davis' only previous employment
by the respondents had been on the drilling rig from March 16 to
April 16, 1938. Garrett Logan, who had previously been employed
by the respondents during 1935 and 1938 on the drilling rig and very
occasionally as a production employee, was employed regularly in
production from June 16 to September 15, 1938.28 We find that Spear
was not discharged because of any lack of work to be performed or
because business conditions made his continued employment
inexpedient.
After April 1, 1938, the respondents contracted out the electrical
work previously done by Spear at a cost of $50 a month, or consider-
ably less than Spear's monthly wages.29 Since Spear was in effect
supplanted as a production employee first by Davis and then by
Logan, however, it seems clear that as a result of Spear's discharge the
respondents must have increased, rather than decreased, their total op-
"It is true that the respondents ' crude oil production declined from 18,990 barrels in
January 1938 to 15,807 barrels in February 1938 . There was a temporary increase in
production in March 1938 to 16 ,769 barrels , but the decline was resumed in April 1938
and continued until production stood at 14 ,782 barrels in August 1938 Over this period,
the net value of the ail produced by the respondents declined from $20 , 246 in January to
$16,31699 in August This decline in pioduction was caused , in part at least, by the
cessation of production from two of the nine wells on the respondents ' leases. As appears
from the record in this case , a decline in the output of the respondents ' wells does not
necessarily decrease the amount of production work which must he performed
2' McClung and Samuels had very little mole seniority than Spear They could seaieely
be classed as old employees who ni ould be kept in the absence of the respondents' need for
their services.
28 Employment records in evidence do not go beyond September 15, 1938, and it does not
appear that Logan ' s services had terminated on that date
29 O. C . Russell testified that the electrical contractor is paid $50 , per month "to take
care of our interests, Gulf Coast , Wilburn and the McAlbert properties ,'.and furnishes all
supplies except automatic switches.
McALBERT OII. COMPANY , INC. 875
eratmg costs . We find that no saving was effected by the displacement
of Spear. It is. clear on the record , moreover, that the electrical work
would not have been contracted out but for Spear 's discharge and that
Spear would not have been discharged had he not enlisted the re-
spondents ' employees in the Union. The respondents ' hostility to-
ward the Union and threats of reprisal against the employees, and
particularly Spear, leave no doubt that Spear was discharged be-
cause he was the leader of the Union , which the respondents desired
to destroy . The various reasons assigned by the respondents for
Spear's discharge are not persuasive. We are not impressed with
the respondents ' further contention that Spear was not discharged
on March 31, but merely laid off . The contention is lent color by
virtue of the offer of temporary employment to Spear on the drilling
rig. As shown in his speech to the employees on March 31 , however,
Russell recognized that his statements made to the employees on
March 23 had caused them to believe that the respondents would dis-
criminate against them because of their union activities . The re-
spondents made no serious effort to dispel those fears until on April 1,
after Spear 's discharge , when Russell stated to the employees that
he had been "mad" at Spear on the previous day but was no longer
mad at anyone . Doubtless Russell , by that time , felt that since he had
accomplished his major objective of eliminating the leader of the
Union, he could safely proceed to smooth over , his difficulties with
the remaining employees . Knowing from the attitude of the em-
ployees that the dismissal of Spear might lead to a charge of dis-
crimination , Russell no doubt was eager to prevent the discriminatory
character of the change in Spear's employment from being immedi-
ately apparent should the question of discrimination against Spear
subsequently be raised before the Board. In any event, even were
it conceded that the respondents intended merely to demote Spear to
temporary employment , such action was motivated by a desire to
punish Spear and was, therefore , discriminatory.
On the basis of the above facts and the entire record, we find
that the respondents , by discharging and thereafter refusing to rein-
state Spear to his former or substantially equivalent position, have
discriminated in regard to his hire and tenure of employment , thereby
discouraging membership in a labor organization , and interfering
with, restraining , and coercing their employees in the exercise of the
rights guaranteed in Section 7 of the Act.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
We find that the activities of the respondents set forth in Section
III above , occurring in connection with the operations of the re-
spondents described in Section I above, have a close , intimate, and
876 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
substantial relation to trade, traffic, and commerce among the sev-
eral States and tend to lead to labor disputes burdening and obstruct-
ing commerce and the free flow of commerce.
V. THE REMEDY
Having found that the respondents have interfered with, restrained,
and coerced their employees in the exercise of the rights guaranteed
in Section 7 of the Act, we shall order them to cease and desist
therefrom and to take certain affirmative action designed to effectuate
the policies of the Act and to restore as nearly as possible the con-
ditions which existed prior to the commencement of the unfair labor
practices.
Since J. H. Spear was discharged as the result of the respond-
ents' unfair labor practices and desires reinstatement, we shall order
his reinstatement to his former or substantially, equivalent-,position
in the respondents' production and maintenance department, with
back pay in the amount he has suffered by reason of his discrimina-
tory discharge by payment to him of a sum equal to the amount
which he normally would have earned as wages during the period
from the date of his discharge to the date of the offer of reinstate-
ment, less his net earnings 30 during said period.
VI. THE QUESTION CONCERNING REPRESENTATION
On about April 4, 1938, Roy B. Sessions, president of the Union,
notified the respondents that the Union represented a majority of
the production and maintenance employees and requested a confer-
ence for the purpose of discussing collective bargaining. Subse-
quently, during April and May 1938, two conferences were held be-
tween representatives of the Union and the respondents. During
the latter of the conferences, the respondents refused to recognize
the Union as the bargaining representative of their production and
maintenance employees.
We find that a question has arisen concerning the representation
of employees of the respondents.
"By "net earnings " is meant earnings less expenses , such as for transportation, room,
and board , incurred by an employee in connection with obtaining work and working else-
where than for the respondents, which would not have been incurred but for his unlawful
discharge and the consequent necessity of his seeking employment elsewhere . See Matter
of Crossett Lumber Company and United Brotherhood of Carpenters and Joiners of Amer-
ica, Lumber and Sawmill Workers Union, Local 2590, 8 N L R B 440 Monies received
for work performed upon Federal , State , county , municipal , or other work -relief projects
are not considered as earnings , but, as provided below in the Order, shall be deducted
from the sum due the employee , and the amount thereof shall be paid over to the appro-
priate fiscal agency of the Federal , State, county , municipal , or other government or
governments which supplied the funds for said work -relief projects
MCALBERT OIL COMPANY, INC. 877
VII. THE EFFECT OF THE QUESTION CONCERNING REPRESENTATION
UPON COMMERCE
We find that the question concerning representation which has
arisen, occurring in connection with the operations of the respond-
ents described in Section I above, has a close, intimate, and substan-
tial relation to trade, traffic, and commerce among the several States,
and tends to lead to labor disputes burdening and obstructing com-
merce and the free flow of commerce.
VIII. THE APPROPRIATE UNIT
The Union urges that the appropriate unit should consist of the
respondents' production and maintenance employees, exclusive of
drilling, supervisory, and executive employees. All workers in the
oil industry, including drillers, are eligible for membership in the
Union. The respondents contend that, provided the Board has juris-
diction over their activities, the appropriate unit should include all
their employees and also the employees of Gulf Coast Drilling Cor-
poration, herein called Gulf Coast. Gulf Coast is a corporation
owned and controlled by D. B. McDaniel and Albert Plummer.
It is engaged in the production of crude oil at Conroe, Texas, 80
miles from Barbers Hill, operating with a production and mainte-
nance crew of about eight or nine men.
The respondents' production and maintenance employees are en-
gaged in pumping and gauging crude oil from the respondents'
wells, pulling rods and tubes from the wells, and in such mainte-
nance work as cutting grass, painting, repairing roads, digging and
cleaning ditches, etc. The crew of production and maintenance
employees working on the respondents' leases is entirely separate
from the crew of such employees engaged on Gulf Coast's leases,
although there have been very occasional transfers of employees
between these leases and their operations are to some extent coordi-
nated.
The respondents use the same drilling crew on their leases as is
occasionally used on Gulf Coast's leases, but a regular drilling crew
is not maintained since no new wells have been drilled on any of the
leases since about 1936.31 However, when the drilling rig is operat-
ing it has a crew of about 15 men, consisting of extra employees,
formed around a nucleus of from one to three drillers. These drillers
are highly skilled employees and are paid substantially more than
the production and maintenance employees.32 At the time of the
81 Insofar as the record shows , the last drilling was in March and April 1938, in connec-
tion with "working over" an old well belonging to one of the respondents.
32 The production and maintenance employees were paid $ 5.50 per day . At the time of
the hearing , the only driller on the respondents' pay roll, then temporarily engaged in
production and maintenance work, was paid $ 300 per month
878 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
hearing, P. H. Rippenhagen was the only driller employed by the
respondents, and, although there were no drilling operations then
in progress, was retained as the nucleus of a drilling crew. He was
at that time temporarily engaged in the production and mainte-
nance department, but was paid driller's wages and retained his
status as such.
On the basis of the foregoing facts, we conclude that the respond-
ents' production and maintenance employees constitute an appro-
priate unit, and on the request of the Union, the only labor organ-
ization here involved, we shall exclude the drillers and also the
employees of Gulf Coast from the bargaining unit.33
The Union requests that Aaron Avant be excluded from the unit
on the grounds that (1) he was transferred to the production and
maintenance department to assist in defeating the Union, and (2) he
is a driller. The record contains no evidence in support of the first
contention and, on the second contention, it appears that-Avai3t,,pur=
suant to his own request, was transferred on April 16, 1938, to a
permanent position in the respondents' production and maintenance
department. We accordingly find that he is a permanent employee
in that department and should be included in the appropriate unit.
The Union also requests that O. C. Russell, superintendent of all
the operations of the respondents, and George Hurst, superintendent
of the respondents' production and maintenance department, be ex-
cluded from the appropriate unit. The respondents take no position
in that regard. It is clear that both are supervisory employees and
we shall exclude them from the appropriate unit.
We find that all production and maintenance employees of the
respondents on their leases situated at or near Barbers Hill, Cham-
bers County, Texas, excluding drilling, supervisory, and executive
employees, constitute a unit appropriate for the purposes of collective
bargaining and that said unit will insure to employees of the respond-
ents the full benefit of their right to self-organization and to collec-
tive bargaining and otherwise effectuate the purposes of the Act.
IX. THE DETERMINATION OF REPRESENTATIVES
There were introduced in evidence a pay roll of the respondents
dated March 31, 1938, containing the names of eight employees
within the appropriate unit, and also a pay roll dated September 21,
1938, containing the names of eight employees, in addition to J. H.
Spear, within the appropriate unit. On the latter date, five of the
nine employees, including Spear, were members of the Union. We
s3 See Matter of Armour and Company and United Packing House TFoikers Industrial
Union, Local 198, affiliated with C 1 0.. et al., 14 N. L R B 682; Matter of The Middle
West Corp and Int Brotherhood of Electrical Workers, 10 N L R. B 618
McALBERT OIL COMPANY, INC. 879
find that the question which has arisen concerning the representation
of the employees of the respondents can best be resolved by the
holding of an election by secret ballot.
The Union urges that the representatives should be determined
upon the basis of the pay roll dated March 31, 1938. The respond-
ents object to this pay roll as the basis for that determination, and
insist that the September 21, 1938, pay roll should be used. Since
the respondents have, by engaging in various unfair labor practices,
interfered with the exercise by their employees of the rights guar-
anteed them by the Act, we shall not now set the date for the elec-
tion. We shall hold the election , however, upon receipt of information
from the Regional Director that the circumstances permit a free choice
of representatives unaffected by the respondents ' unlawful acts. We
shall , at the time we specify the date on which the election is to be
held , also specify the date on the basis of which eligibility to vote in
the election shall be determined.
Upon the basis of the foregoing findings of fact and upon the
entire record in the proceeding , the Board makes the following :
CONCLUSIONS OF LAW
1. Oil Workers International Union, Local 227, affiliated with the
Congress of Industrial Organizations, is a labor organization within
the meaning of Section 2 (5) of the Act.
2. By discriminating in regard to the tenure of employment of
J. H. Spear and thereby discouraging membership in a labor organ-
ization, the respondents have engaged in and are engaging in unfair
labor practices within the meaning of Section 8 (3) of the Act.
3. By interfering with, restraining, and coercing their employees
in the exercise of the rights guaranteed in Section 7 of the Act, the
respondents- have engaged in and are-engaging in unfair labor.-prac-
tices within the meaning of Section 8 (1) of the Act.
4. The aforesaid unfair labor practices are unfair labor practices
affecting commerce within the meaning of Section 2 (6) and (7) of
the Act.
5. A question affecting commerce has arisen concerning the repre-
sentation of employees of McAlbert Oil Company, Inc., and D. B.
McDaniel, Drilling Contractor, Barbers Hill, Chambers County,
Texas, within the meaning of Section 9 (c) and Section 2 (6) and
(7) of the Act.
6. All production and maintenance employees of the respondents,
excluding drilling, supervisory, and executive employees, constitute
a unit appropriate for the purposes of collective bargaining, within
the meaning of Section 9 (b) of the Act.
880 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ORDER
Upon the basis of the foregoing findings of fact and conclusions
of law, and pursuant to Section 10 (c) of the National Labor Rela-
tions Act , the National Labor Relations Board hereby orders that the
respondents , McAlbert Oil Company , Inc., and D. B. McDaniel,
Drilling Contractor , and their officers, agents, successors , and assigns
shall :
1. Cease and desist from :
(a) Discouraging membership in Oil Workers International Union,
Local 227, affiliated with the Committee for Industrial Organization,
or any other labor organization of their employees , by discriminatorily
discharging or refusing to reinstate any of their employees or in any
other manner discriminating in regard to their hire or tenure of em-
ployment because of their membership in or activity in behalf of any
such labor organization ;
(b) In any other manner interfering with, restraining , or coercing
their employees in the exercise of the right to self -organization, to
form, join, or assist labor organizations , to bargain collectively
through representatives of their own choosing , and to engage in
concerted activities for the purpose of collective bargaining or other
mutual aid or protection.
2. Take the following affirmative action, which the Board finds -
will effectuate the policies of the Act :
(a) Offer to J. H. Spear immediate and full reinstatement to
his former or substantially equivalent position in the respondents'
production and maintenance department , without prejudice to his
seniority or other rights and privileges previously enjoyed;
(b) Make whole J. H. Spear for any loss of pay he has suffered
by reason of his discharge by payment to him of a sum equal to the
amount which he normally would have earned as wages during the
period from the date of his discharge to the date of the offer of rein-
statement , less his net earnings during such period; provided that
the respondents shall deduct from the back pay due him a sum equal
to that received by him for work performed upon Federal , State,
county, municipal , or other work -relief projects during the period for
which back pay is due him under this Order, and they shall pay any
such amount deducted to the appropriate fiscal agency of the Federal,
State, county , municipal , or other government or governments which
supplied the funds for said work -relief projects;
(c) Immediately post notices in conspicuous places throughout the
respondents ' leases stating (1) that the respondents will cease and
desist as provided in paragraphs 1 (a) and (b) of this Order, and
that the respondents will take the affirmative action set forth in para-
graphs 2 (a) and (b) of this Order ; and (2) that the respondents'
JIcALBERT OIL COMPANY, INC. 881
employees are free to become or remain members of Oil Workers
International Union, Local 227, and that the respondents will not
discriminate against any employee because of membership or activity
in that organization;
(d) Maintain such notices for a period of at least sixty (60)
consecutive days from the date of posting;
(e) Notify the Regional Director for the Sixteenth Region in
writing within ten (10) days from the date of this Order what steps
the respondents have taken to comply herewith.
DIRECTION OF ELECTION
By virtue of and pursuant to the power vested in the National
Labor Relations Board by Section 9 (c) of the National Labor Rela-
tions Act, 49 Stat. 449, and pursuant to Article III, Section 8, of
National Labor Relations Board Rules and Regulations-Series 2, as
amended, it is hereby
DIRECTED that, as part of the investigation directed by the Board
to ascertain representatives for the purposes of collective bargaining
with McAlbert Oil Company, Inc., and D. B. McDaniel, Drilling
Contractor, an election by secret ballot shall be conducted at such
time as the Board shall hereafter direct, under the direction and
supervision of the Regional Director for the Sixteenth Region (Fort
Worth, Texas), acting in the matter as agent for the National Labor
Relations Board and subject to Article III, Section 9, of said Rules
and Regulations, among all production and maintenance employees
of McAlbert Oil Company, Inc., and D. B. McDaniel, Drilling Con-
tractor, who were employed within a period to be determined by the
Board in the future, excluding drilling, supervisory, and executive
employees, to determine whether or not they desire to be represented
for the purposes of collective bargaining by Oil Workers Interna-
tional Union, Local 227, affiliated with the Congress of Industrial
Organizations.
Ma. WILLIAM M. LEISEESON took no part in the consideration of the
above Decision, Order, and Direction of Election.