Southern Permanente Services, Inc.

National Labor Relations Board - Board Decisions

Jul 30, 1968

172 N.L.R.B. 1399 (N.L.R.B. 1968)

SOUTHERN PERMANENTE SERVICES, INC.
Southern Permanente Services, Inc. and Food, Drug
& Beverage Warehousemen & Clerical Employees
Union , Local 595, International Brotherhood of
Teamsters , Chauffeurs , Warehousemen & Helpers
of America , Petitioner , and Hospital , Institutional,
and Professional Division , Local 399, Building
Service Employees International Union,
AFL-CIO, Intervenor.' Case 31-RC-475
July 30, 1968
DECISION AND ORDER
By CHAIRMAN MCCULLOCH AND MEMBERS JENKINS
AND ZAGORIA
Upon a petition duly filed under Section 9(c) of
the National Labor Relations Act, as amended, a
hearing was held before Paul J . Driscoll , Hearing
Officer. Following the hearing, this case was trans-
ferred to the National Labor Relations Board in
Washington, D.C., pursuant to Section 102.67 of
the National Labor Relations Board Rules and
Regulations and Statements of Procedure , Series 8,
as amended. Thereafter, the Petitioner, Employer,
and Intervenor filed briefs, which have been duly
considered.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its
powers in connection with this case to a three-
member panel.
The Hearing Officer's rulings made at the hearing
are free from prejudicial error and are hereby af-
firmed.
The Board has considered the entire record in
this case, including the briefs, and makes the fol-
lowing findings:
1. Southern Permanente Services, Inc., the Em-
ployer herein and otherwise referred to as SPSI, is a
California corporation registered as other than a
nonprofit corporation; its articles of incorporation
impose a profit limitation of 10 percent on invested
capital. It is organized for and exclusively
i Intervention was permitted on the basis of the Intervenor's contract
with the Employer
I Kaiser Foundation Health Plan , Inc , herein called KFHP , is a Califor-
nia nonprofit corporation whose principal function is to arrange medical
and hospital services for the benefit of health plan members through in-
dividual and group membership contracts
' Kaiser Foundation Hospitals, herein called KFH, is a California non-
profit corporation which builds , equips, and otherwise provides hospital
facilities and services to the health plan members and to other segments of
the general public In the southern California region, KFH owns and
operates community hospitals in the areas of Greater Los Angeles and San
Diego
' Southern California Permanente Medical Group, herein called
SCPMG, is a partnership composed entirely of physicians responsible for
1399
established to provide certain services such as ac-
counting, financial planning, data processing,
purchasing and storekeeping, public relations, pro-
perty management, and employee relations for
Kaiser Foundation Health Plan, Inc.,' Kaiser Foun-
dation Hospitals,' and Southern California Per-
manente Medical Group.' These organizations, as
well as SPSI, have primary responsibility for con-
ducting the health care services in the southern
California region for the Kaiser Foundation Medi-
cal Care Program.' SPSI also operates 12 pharma-
cies for the convenience of health plan members at
outlying clinics.
The parties stipulated that SPSI, during the
calendar year 1966, received revenue in excess of
$2 million from performing services for KFHP,
KFH, and SCPMG, and revenue in excess of $1
million from operating the pharmacies. During this
same period, SPSI received products valued in ex-
cess of $100,000 directly from outside the State of
California. In addition to the foregoing stipulation,
the record shows that the southern California re-
gion of KFHP annually receives in excess of $5 mil-
lion from the United States Government in pay-
ment of membership fees of Government em-
ployees enrolled in the medical care program.
There is also an undetermined amount of revenue
received from the United States Government for
its participation in the Medicare Program for
elderly people.
The only facility of the Employer involved in this
proceeding is its Central Stores and Central Phar-
macy Warehouses located in Vernon, California, at
3333 East 26th Street, where it is engaged in
receiving , storing , and shipping an inventory of
various materials, medical supplies , and related
items , including pharmaceuticals , used in the
operations of the hospitals, medical clinics, and
pharmacies operated as part of the KFMCP. The
Central Stores and Central Pharmacy Warehouse is
located in a building owned by KFHP , and the in-
ventory maintained thereat is also owned by KFHP.
The Employer, which is not exempt from the
Board 's jurisdiction under the provisions of Section
providing quality patient care to health plan members Basically , physician
members of SCPMG and employees of the medical entity perform services
at detached clinics and out-patient departments of hospitals. This indepen-
dent group of doctors contract with KFHP to provide health plan members
with the professional services covered by the health plan
' Kaiser Foundation Medical Care Program , herein called KFMCP, or-
ganizes and provides prepaid health services to the public on a self-sustain-
ing and nonprofit basis
" The Petitioner seeks to sever a unit of all employees employed at this
location At the time of the hearing herein , there was a total work comple-
ment of some 26 employees working in the job classifications of
truckdriver , senior warehouseman , warehouseman , senior stockman. phar-
macy-stockman , order desk clerk, and clerk typist
172 NLRB No. 148
1400 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
2(2) of the Act, urges the Board to decline to assert
discretionary jurisdiction because its operations
are more than sufficiently incidental to, integrated,
and intimately connected with the operations and
purposes of KFMCP in the southern California re-
gion, including the patient care purposes of KFHP,
KFH, and SCPMG. In support of the foregoing, the
Employer relies on the Board's decision in the Flat-
bush General Hospital case.' In this regard, it is to
be noted that the Board recently decided in the
Butte Medical Properties cases to overrule Flatbush
and to assert jurisdiction over proprietary hospitals
receiving at least $250,000 in gross revenues per
annum. Even in the absence of our reversal of Flat-
bush we would not have found that case applicable
to the jurisdiction issue herein because the instant
case involves the performance of services for, as
distinguished from the operation of, a hospital.
In view of the above, the remaining issue for
disposition is whether there is such a close relation-
ship between the operations of the Employer's Cen-
tral Stores and Central Pharmacy Warehouse and
the nonprofit hospitals involved herein so as to war-
rant our declination of jurisdiction. We cannot find
any merit in the Employer's assertion that such a
close relationship exists as we found in the Horn &
Hardart9 case. Rather, in view of the operations in-
volved herein, it appears that they are not so inti-
mately interrelated with the operations or purposes
of the nonprofit hospitals so as to warrant withhold-
ing our exercise of statutory jurisdiction. 10 We find,
therefore, that the Employer is engaged in com-
merce within the meaning of the Act and that it
would effectuate the policies of the Act to assert ju-
risdiction in this proceeding."
2. The labor organizations involved herein claim
to represent certain employees of the Employer.
3. No question affecting commerce exists con-
cerning the representation of certain employees of
the Employer within the meaning of Section
9(c)(1) and Section 2 (6) and (7) of the Act, for
the following reasons:
By letter dated April 22, 1966, the Petitioner
requested recognition for the Employer 's central
warehouse employees. On May 2, 1966, Jerome
Vercruse , secretary-treasurer of the Petitioner, met
with Andrew Gensey and Clifford Dowell,
representatives of the Employer. Gensey advised
Vercruse that the Employer was under contract to
the Intervenor ; that it had a bargaining relationship
over a period of years; and that it wished to con-
tinue bargaining on this single -union basis . Gensey
requested Vercruse to withdraw the petition. On
May 18, 1966, another meeting between the same
parties was held and the discussion ran in a similar
vein. Morris Rubin, a business representative of the
Petitioner , attended this meeting.'
Vercruse contends that at both of the above
meetings Gensey promised that the Employer
would not enter into a new contract with the Inter-
venor, which included the central warehouse em-
ployees sought herein, until the Petitioner and the
Intervenor settled the issue as to which labor or-
ganization should represent these employees. Rubin
corroborated Vercruse that such a promise was
made at the May 18 meeting . Gensey denied having
made any such promise, which denial was cor-
roborated by Dowell.
On June 17, 1966, the negotiations commenced
for a new contract with the Intervenor. Thereafter,
the parties met eight more times before agreement
was finally reached on the terms of the contract.
On August 1, 1966, the contract was executed.
Although Vercruse claims that he did not become
aware of any such negotiations until August 5,
1966, there is uncontradicted testimony by Max
Richardson, executive vice president of the Inter-
venor, that he met with Vercruse and Rubin on
June 22, 1966; that he told Vercruse that negotia-
tions with the Employer for a new contract had
commenced, and that he was not going to involve
some 2,000 employees in "a beef or a strike"
because of some 23 employees in a warehouse.
We find no merit in the Petitioner's contention
that the facts herein are somewhat analagous to the
Greenpoint Sleep Products13 case, and that the ra-
tionale of that case should be applied here. On the
basis of the facts set forth above, we do not find
that the Petitioner has established that it was lulled
into a sense of security leading it to believe that it
had a commitment from the Employer that recogni-
tion would not be granted and a contract would not
be executed with the Intervenor until after the Peti-
tioner and Intervenor had resolved their dispute
over the central warehouse employees. Ac-
cordingly, we find that the contract, executed Au-
gust 1 , 1966, constitutes a bar to this proceeding.
Accordingly, we shall dismiss the petition.
ORDER
It is hereby ordered that the petition filed herein
be, and it hereby is, dismissed.
Flathush General Hospital, 126 NLRB 144
Butte Medical Properties, d/h/a Medical Center Hospital, 168 NLRB 266
The Horn & Hardart Company, 154 NLRB 1368, 1370
Bas Ran Maintenance Corporation ofNese York. 161 NLRB 820
Stenos Mailing .Serv,ce, 122 NLRB 81
No additional demands for recognition were made by the Petitioner
after this May 18 meeting The petition herein was filed February 6, 1967
" Greenponu Sleep Produc is, 128 NLRB 548