S. A. Kendall, Jr.

National Labor Relations Board - Board DecisionsFeb 10, 1942

38 N.L.R.B. 1071 (N.L.R.B. 1942)

In the Matter of S. A. KENDALL, JR., H. E. REAM, STANLEY ASHBY, AND LESTER YUTZY, STANLEY COAL COMPANY, KRAY COAL COMPANY, OR WHATEVER NAME DOING BUSINESS, AND J. P. WRIGHT and UNITED MINE WORKERS OF AMERICA, DISTRICT #31, AFFILIATED WITH C. I. O. In the Matter of S. A. KENDALL, JR., H. E. REAM, STANLEY ASHBY, AND LESTER YUTZY, STANLEY COAL COMPANY, KRAY COAL COMPANY, OR WHATEVER NAME DOING BUSINESS, AND OTr MILLER and UNITED MINE WORKERS OF AMERICA, DISTRICT #31, AFFILIATED WITH C. I. O. In the Matter of S. A. KENDALL, JR., H. E. REAM, STANLEY ASHBY, AND LESTER YUTZY, STANLEY COAL COMPANY, KRAY COAL COMPANY, OR WHATEVER NAME DOING BUSINESS, AND SHERMAN HELMS and UNITED MINE WORKERS OF AMERICA, DISTRICT #31, AFFILIATED WITH C. I. O. In the Matter of S. A. KENDALL, JR., H. E. REAM, STANLEY ASHBY, AND LESTER YUTZY, STANLEY COAL COMPANY, KRAY COAL COMPANY, OR WHATEVER NAME DOING BUSINESS, AND JESSE SALISBURY and UNITED MINE WORKERS OF AMERICA, DISTRIUr #31, AFFILIATED WITH C. I. O. Cases Nos. R-3305 to R-3338, inclusive, respectively. -Decided February 10, 1942 Jurisdiction : coal mining industry. Investigation and Certification of Representatives : existence of question: re- fusal to accord union recognition ; election necessary. Unit Appropriate for Collective Bargaining : all employees at several mines of the Company each of which are operated by several individual contractors. Definitions : corporation owning the mines, and the persons who have contracted to operate them, held to be employers within the meaning of the Act. Frank E. Parrack, and F. Evan Parrack, of Kingwood, W. Va., for Ott Miller, Sherman Helms, and Jesse Salisbury. Mr. J. P. Wright, of Kingwood, W. Va., pro se. Mr. J. T. Dailey, of Kingwood, W. Va., for Stanley and Kray. Mr. Louis D. Meisel, of Fairmont, W. Va., for the Union. Mr. Dexter Delony, of counsel to the Board. 38 N. L. R. B., No. 201 1071 1072 DECISIONS OF NATIONAL LABOR RELATIONS BOARD DECISION DIRECTION OF ELECTIONS AND ORDER STATEMENT OF THE CASE On November 18, 1941, the United Mine Workers of America, Dis- trict #31, affiliated with C. 1. 0., herein called the Union, filed with the Regional Director for the Sixth Region (Pittsburgh, Pennsylva- nia), four second amended petitions alleging that a question affecting commerce had arisen concerning the representation of employees of the Kray Coal Company, herein called Kray, and the Stanley Coal Company,, herein called Stanley, both of Crellin, Maryland, and the respective officers of each Company, all of Crellin, Maryland, and J. P. Wright, Ott Miller, Sherman Helms, and Jesse Salisbury, all of Howesville, West Virginia, herein collectively referred to as the con- tractors, and requesting an investigation and certification of repre- sentatives pursuant to Section 9 (c) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. The National Labor Rela- tions Board, herein called the Board, acting pursuant to Section 9 (c) of the Act, and Article III, Sections 3 and 10 (c) of National Labor Relations Board Rules and Regulations-Series 2, as amended, issued an order and an amended order on November 5 and 18, 1941, respec- tively, consolidating the cases, ordering an investigation, and author- izing the Regional Director to conduct it and to provide for an ap- propriate hearing upon due notice. The Regional Director issued a notice of hearing and a supple- mental notice of hearing on November 10 and 19, 1941, respectively, copies of which were duly served upon Kray, Stanley, each one of the contractors, and the Union. Pursuant to notice, a hearing was held on November 17 and 25, 1941, at Kingwood, West Virginia, be- fore W. G. Stuart Sherman, the Trial Examiner duly designated by the Chief Trial Examiner. All parties were represented and partici- pated in the hearing. Ott Miller, Sherman Helms, Jesse Salisbury, and Stanley filed separate answers at the hearing. Full opportunity to be heard, to examine and cross-examine witnesses, and to intro- duce evidence bearing on the issues was afforded all parties. During the course of the hearing, the Trial Examiner made rulings on motions and objections to the admission of evidence. The Board has reviewed the rulings of the Trial Examiner and finds that no ' The correct names of the two companies are Kray Coal Co, Inc, and Stanley Coal Company, Inc. S. A. KENDALL, JR. 1073 prejudicial errors were committed. The rulings are hereby affirmed. Kray and Stanley also moved in substance that the proceeding be dismissed as to them; for reasons hereinafter' stated in Section I, the the motion of Stanley is granted but that of Kray is denied. On November 29, 1941, the Union filed a brief, and on December 9, 1941, Kray and Stanley filed a joint brief, both of which the Board has considered. Upon the entire record in the case, the Board makes the following : FINDINGS OF FACT I. THE BUSINESS OF THE EMPLOYERS Stanley Coal Company, Inc. and Kray Coal Co., Inc., West Virginia corporations having their principal office in Crellin, Maryland, are engaged in the production and sale of bituminous coal. This proceed- ing concerns the workers employed at four coal mines in Preston County, West Virginia, known as Ream Mines Nos. 1, 3, 4, and 5. At all times material herein these mines have been owned either by Stanley or Kray and have been operated, respectively, by Wright, Miller, Helms, and Salisbury, the contractors, pursuant to contract with the owning corporation. On or about September 1, 1941, Stanley "sold" the coal mines to Kray, a newly formed corporation, which thereafter entered into mining contracts, the terms of which are set out below, with the contractors. The Union contends that Stanley and Kray and the contractor at each mine are the joint or co-employers of the employees at the mine; and that Stanley and Kray are in effect "one and the same corporation," by-reason of the fact that the organ- ization of Kray and the transfer to it of the ownership of the mines were effected to defeat the jurisdiction of the Board and the efforts of the Union to be designated as the representative of the employees. Stanley and Kray in substance deny such purpose. Stanley contends that it does not own the property here involved, has no interest in the proceeding, and, therefore, should not be a party. Kray contends that the workers at the various mines involved are not its employees. On August 25, 1941, after the Union had filed its original petitions therein naming Stanley as employer, a majority of the stockholders of Stanley met and authorized the formation of Kray and the transfer to Kray of the four coal mines and certain other property, having a total value of $60,000, which was owned by Stanley.2 Kray was incorporated on August 27, 1941. So far as appears, no capital or assets were contributed to Kray by its organizers or stockholders. The "sale" of the mines and other property to Kray was made, according to H. E. Ream , vice president of both corporations, on or about 2 Stanley retained certain other mining properties , not here involved. 438861-42-vol. 38-69 1074 DECISIONS OF NATIONAL LABOR RELATIONS BOARD September 1, 1941. However the deed conveying the property is dated October 7,1941. Kray has no property other than that obtained from Stanley. The officers of Stanley and Kray, and a majority of the members of the board of directors of each, are the same persons. The stock of Kray and Stanley is held by the same persons in the same proportions. The offices of each company are in the same build- ing and rooms , and the customers of each are substantially the same persons. Kray entered into separate contracts, dated September 2, 1941, with Wright, Miller, Helms, and Salisbury, covering, respectively, Ream Mines No. 1, No. 3, No. 4, and No. 5. The terms of all the contracts are identical and are substantially similar to the contracts theretofore in existence between Stanley and the same contractors for the same mines. The contracts provide that each contractor shall properly mine and load the coal from the designated mine into railroad cars at the Howesville, West Virginia, siding of the West Virginia North- ern Railroad, or into the crusher owned by Kray. For mining and loading the coal, Kray agrees to pay the contractors $1.60 per net ton f. o. b. railroad cars or the crusher, railroad weights to govern settle- ments. The contracts also provide that the coal shall be mined in a manner satisfactory to Kray and in conformity with the mining laws of the State of West Virginia. In practice, the contractors are re- quired to perform their mining operations according to a general plan formulated by Stanley Ashby, an officer of Kray and Stanley. Ashby makes periodic inspections of each of the four mines. His instructions and suggestions respecting the method of operating are followed by the contractors. The contracts can be terminated on 7 days' written notice by either party. Each contractor hires and pays the employees 3 working at the mine operated by him, pays the Social Security levies, keeps his own books, and bears other operating expenses. However, certain permanent fixtures and heavy equipment at the mines, such as rail tracks, fans and motors, coal tipple, some mine cars, and a cutting machine, are owned by Kray and used by the contractors. The con- tractors own such equipment as ponies or mules, harness, black- smith equipment, picks, mine cars, motor trucks, and haulage equipment. The raw materials used, which include the usual mining equip- ment and materials, such as powder, oil, gasoline, and machinery, the value of which does not appear, are purchased in approximately 9 At the time of the hearing, there were about 42 employees at Ream Mine No. 1, 23 at No. 3, 7 at No. 4, and 7 at No. 5. S. A. KENDALL, JR. 1075 equal quantities in the States of West Virginia and Maryland. The record does not reveal the amount of such purchases. During 1940 Ream Mine No. 1 and Ream Mine No. 3 produced about 10,345 and 8,233 tons of coal, respectively. During about a 5-month period ending September 1, 1941, Ream Mine No. 4 produced ap- proximately 3,261 tons, and during about a 3-month period ending September 1, 1941, Ream Mine No. 5 produced approximately 1,829 tons. All the mines are producing coal at approximately the same rate at the present time. The contractors deliver over 90 percent of all coal produced to Kray 4 at Kray's crusher or to railroad cars at a siding at Howesville, Preston County, West Virginia. The major portion of the coal so delivered is transported to points in other States pursuant to sales made by Kray. Kray admits that it is engaged in commerce within the meaning of the Act. We are convinced that the facts recited above establish that an employment relationship exists between Kray and the employees concerned as well as between the contractors and the employees. The interest and control of Kray in the operation of the mines are substantial. Kray owns the mines and a substantial portion of the mining equipment; aside from the small quantities of coal sold by the contractors and for which they make an accounting, it receives and sells the entire output of the mines; and it retains a substan- tial degree of control over the operations of the contractors and the employees in the mines not only by virtue of the power to cancel the contracts on 7 days' notice but also by reason of the supervision exercised through Ashby. The contractors also have a proprietary interest in the business and exercise more authority than in the usual case of ordinary supervisory employees, inasmuch as they have capital invested in materials and equipment and are free to hire and discharge the employees without prior consultation with Kray. Although the evidence shows that Stanley and Kray are closely related and controlled by the same officers, we find upon the state of the present record that Stanley and the officers are not employers, within the meaning of the Act, of the employees here involved, and we shall accordingly dismiss the petitions as to them. We find that Kray and the contractor at each of the coal mines are the employers of the employees working at such mine, within the meaning of Section 2 (2) of the Act.5 4 Kray permits the contractors to make direct sales of small quantities of coal , for which sales they pay Kray a so-called "royalty " 5 Matter of H. F. Wi lcox Oil & Gas Company , Wtilcoa Refining Division and/or W. M. Fraser and Oil Workers International Union Local 257, 28 N L. R. B. 79; Matter of Long Lake Lumber Company and F. D. Robinson , et al., 34 N. L. R. B ., No. 90. 1076 DECISIONS OF NATIONAL LABOR RELATIONS BOARD II. THE ORGANIZATION INVOLVED District #31, United Mine Workers of America, affiliated with the Congress of Industrial Organizations, is a labor organization admitting to membership employees of Kray and the contractors. III. THE QUESTIONS CONCERNING REPRESENTATION On or about September 1, 1941, a representative of the Union and a representative of the Board met with Ream, vice president of both Kray and Stanley, for the purpose of arranging consent elections among employees at the mines. The contractors agreed to the elections, but Ream refused. A statement of the Trial Examiner shows that the Union repre- sents a substantial number of employees at each of the mines .r. We find that questions have arisen concerning the representation of employees at Ream Mines Nos. 1, 3, 4, and 5. IV. THE EFFECT OF THE QUESTIONS CONCERNING REPRESENTATION UPON COMMERCE We find that the questions concerning representation which have arisen, occurring in connection with the operations of Kray and the contractors described in Section I above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States, and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE APPROPRIATE UNIT The Union and the contractors stipulated that all employees at each of the mines, respectively, excluding clerical and supervisory employees, constitute a unit appropriate for the purposes of col- lective bargaining. We see no reason for departing from the fore- going stipulation. We find that all employees of the Kray Coal Co., Inc., and J. P. Wright at Ream Mine No. 1; the Kray Coal Co., Inc., and Ott Miller at Ream Mine No. 3; the Kray Coal Co., Inc., and Sherman Helms at Ream Mine No. 4; the Kray Coal Co., Inc., and Jesse Salisbury at Ream Mine No. 5, excluding clerical and supervisory employees at each mine, constitute, respectively, a unit appropriate for the purposes of collective bargaining and that each one of said units will insure to employees of the respective employers the full benefit of their right to self-organization and to- ' The Union submitted membership cards , dated between February and September 1941, hearing apparently genuine original signatures of 17 of the 42 employees at Mine No. 1, 8 of the 23 employees at Mine No . 3, 2 of the 7 employees at Mine No . 4, and 3 of the 7 employees at Mine No . 5, listed on the pay rolls of November 15, 1941. S. A. KENDALL, JR. 1077 collective bargaining and otherwise will effectuate the policies of the Act. VI. THE DETERMINATION OF REPRESENTATIVES We find that the question which has arisen concerning the repre- sentation of employees of the Kray Coal Co., Inc., and J. P. Wright ; the Kray Coal Co., Inc., and Ott Miller; the Kray Coal Co., Inc., and Sherman Helms; and the Kray Coal Co., Inc., and Jesse Salisbury can best be resolved by elections by secret ballot, and we shall so direct. In accordance with our usual practice, we shall direct that all employees of the respective employers as shown above in each ap- propriate unit who were employed during the pay-roll period imme- diately preceding the date of this Direction of Elections, subject to the limitations and additions set forth in the Direction, shall be eligible to vote. Upon the basis of the above findings of fact and upon the entire record in the case, the Board makes the following : CONCLUSIONS OF LAW 1. The Kray Coal Co., Inc., of Crellin, Maryland, and J. P. Wright, Ott Miller, Sherman Helms, and Jesse Salisbury, all of Howesville, West Virginia, are employers within the meaning of Section 2 (2) of the National Labor Relations Act. 2. A question affecting commerce has arisen concerning the repre- sentation of employees of the Kray Coal Co., Inc., and J. P. Wright, Ott Miller, Sherman Helms, and Jesse Salisbury, within the mean- ing of Section 9 (c) and Section 2 (6) and (7) of the National Labor Relations Act. 3. All employees of Kray Coal Co., Inc., and J. P. Wright at Ream Mine No. 1; of the Kray Coal Co., Inc., and Ott Miller at Ream Mine No. 3; of the Kray Coal Co., Inc., and Sherman Helms at Ream Mine No. 4; and of the Kray Coal Co., Inc., and Jesse Salisbury at Ream Mine No. 5, exclusive of clerical and supervisory employees at each mine constitute, respectively, a unit appropriate for the purposes of collective bargaining, within the meaning of Section 9 (b) of the National Labor Relations Act. DIRECTION OF ELECTIONS By virtue of and pursuant to the power vested in the National Labor Relations Board by Section 9 (c) of the National Labor Relations Act, 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 ordered by the Board to ascertain representatives for the purposes of collective bargaining 1078 DECISIONS OF NATIONAL LABOR RELATIONS BOARD with Kray Coal Co., Inc., of Crellin, Maryland, and J. P. Wright, Ott Miller, Sherman Helms, and Jesse Salisbury, all of Howesville, West Virginia, elections by secret ballot shall be conducted as soon as possible but not later than thirty (30) days from the date of this Direction, under the direction and supervision of the Regional Di- rector for the Sixth Region, acting in this matter as agent for the National Labor Relations Board and subject to Article III, Section 9, of said Rules and Regulations, among all employees of the Kray Coal Co., Inc., and J. P. Wright at Ream Mine No. 1; the Kray Coal Co., Inc., and Ott Miller at Ream Mine No. 3; the Kray Coal Co., Inc., and Sherman Helms at Ream Mine No. 4; and the Kray Coal Co., Inc., and Jesse Salisbury at Ream Mine No. 5, who were employed during the pay-roll period immediately preceding the date of this Direction, including employees who did not work during the said pay-roll period because they were ill or on vacation or in the active military service or training of the United States, or temporarily laid off, but excluding clerical and supervisory employees and those who have since quit or been discharged for cause, to determine whether or not they desire to be represented by District #31, United Mine Work- ers of America, affiliated with C. I. 0., for the purposes of collective bargaining. ORDER IT IS HEREBY ORDERED that the petitions, be, and they hereby are, dis- missed, with respect to Stanley Coal Company, Inc., and S. A. Ken- dall, Jr., H. E. Ream, Stanley Ashby, and Lester Yutzy.