Union Furniture Co.

National Labor Relations Board - Board Decisions

May 9, 1946

67 N.L.R.B. 1307 (N.L.R.B. 1946)

In the Matter Of UNION FURNITURE COMPANY and UNITED FuRNITuRE
WORKERS OF AMERICA (CIO)
Case No. 11-B-943.-Decided May 9,1946
Mr. Fac W. Patrick, of Indianapolis, Ind., and Mr. Paul V. Wycoff,
of Batesville, Ind., for the Company.
Mr. Frank T. Douthitt, of Bloomington, Ind., and Messrs. Ed
Frensemeier and William Crowell, of Batesville, Ind., for the Union.
Mr. Arnold Ordman, of counsel to the Board.
DECISION
AND
DIRECTION OF ELECTION
STATEMENT OF THE CASE
Upon a petition duly filed by United Furniture Workers of America
(CIO), herein called the Union, alleging that a question affecting
commerce had arisen concerning the representation of employees of
Union Furniture Company, Batesville, Indiana, herein called the Com-
pany, the National Labor Relations Board provided for an appropriate
hearing upon due notice before Arthur R. Donovan, Trial Examiner.
The hearing was held at Batesville, Indiana, on April 2, 1946. The
Company and the Union appeared and participated. All parties were
afforded full opportunity to be heard, to examine and cross-examine
witnesses, and to introduce evidence bearing on the issues. The Trial
Examiner's rulings made at the hearing are free from prejudicial
error and are hereby affirmed. All parties were afforded opportunity
to file briefs with the Board.
Upon the entire record in the case, the Board makes the following :
FINDINGS OF FACT
1. THE BUSINESS OF THE COMPANY
Union Furniture Company is an Indiana corporation maintaining
its place of business in Batesville, Indiana, where it is engaged in the
manufacture of bedroom furniture. During the year 1945, the Com-
pany made purchases of raw materials exceeding $100,000 in value,
more than 66 percent of which was shipped from points outside the
67 N. L. R. B., No. 172.
1307
1308 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
State of Indiana. During the same year, the finished products of the
Company exceeded $250,000 in value, more than 90 percent of which
was shipped to points outside the State of Indiana.
The Company admits that it is engaged in commerce within the
meaning of the National Labor Relations Act.
H. THE ORGANIZATION INVOLVED
United Furniture Workers of America is a labor organization affili-
ated with the Congress of Industrial Organizations, admitting to
membership employees of the Company.
III. THE QUESTION CONCERNING REPRESENTATION
The Company has refused to grant recognition to the Union as the
exclusive bargaining representative of certain of its employees until
the Union has been certified by the Board in an appropriate unit.
A statement of a Board agent, introduced into evidence at the hear-
ing, indicates that the Union represents a substantial number of em-
ployees in the unit hereinafter found appropriate.:'
We find that a question affecting commerce has arisen concerning
the representation of employees of the Company, within the meaning
of Section 9 (c) and Section 2 (6) and (7) of the Act.
e IT. THE APPROPRIATE UNIT
The Union seeks a unit embracing all production employees of the
Company, excluding office and clerical employees, maintenance em-
ployees, firemen, watchmen, employees who are members of the Com-
pany's Board of Directors, employees who are stockholders of the
Company, foremen, superintendents, and all other supervisory em-
ployees. The Company urges, however, that all Director employees,
stockholder employees, and working foremen should also be included.
The Company was originally incorporated in 1867 as a mutual
stock company, and has been in continuous operation since that time.
Originally, it had 30 or 35 stockholders, all of whom, it appears,
worked in the plant. As time went on, these stockholders either sold
their stock or it passed to their heirs. The bylaws of the Company
provide that no stockholder may own less than 80 or more than 160
shares of stock. They further provide that in the event a stockholder
should die, the Company has an option of purchasing his stock at its
then current value. A similar option exists when a stockholder desires
to sell his stock. There are now 2080 shares outstanding, and there
are 26 stockholders in the Company.2
1 The Field Examiner reported that the Union submitted 40 authorization cards dated
February 1940. There are approximately 90 employees in the appropriate unit.
2In view of the facts stated above, it would appear that each stockholder holds 80
shares.
UNION FURNITURE COMPANY 1309
The Company's Board of Directors is elected annually by the stock-
holders from among themselves. Four of the seven members of the
Board of Directors are non-supervisory production employees of the
Company. In 1923, the Company, through its Board of Directors
and pursuant to resolution of its stockholders, entered into a 5-year
contract with its President and Secretary-Treasurer whereby it vested
substantial control of all the Company's affairs in their hands. This
contract was subsequently renewed for 1-year periods, and is in exist-
ence at present with no change in terms except as to salary and the
tenure of 1 year instead of 5.3
The identity of the Director employees is common knowledge among
Company's personnel. However, the Company contends that by virtue
of the above-mentioned contract, the Board of Directors relinquished
its authority, and is now relegated to the status of a formal body
lacking any real authority. But it is quite clear that the Board of
Directors has the power annually to elect officers of the Company, and
to renew, or refuse to renew the contract hereinbefore described.
Moreover, it is conceded that important matters of labor policy would
be referred to the Board of Directors.4
Finally, an examination of the bylaws 5 fails to sustain the Com-
pany's contention that the Directors lack effective powers. We are of
the opinion, therefore, that the interests of the Director employees are
incompatible with those of the rank and file employees. Consequently,
we shall exclude Director employees from the unit hereinafter found
appropriate.
In addition to the Director employees there are five non-supervisory
employees of the Company who are stockholders. These stockholders
(10 not, naturally, enjoy the authority exercised by the Board of Direc-
tors. Moreover, the Company argues that in view of the nature of the
supervision of the Company's business, the control of the stockholders
is exceedingly remote.
It is true that the mere ownership of stock in a corporation does not
preclude the inclusion of a stockholder in a collective bargaining unit
3 The President named in the 1923 contract has been replaced by Harvey H. worming.
4 Also to the stockholders.
s Section 5 of the bylaws of the Company reads as follows :
The Board of Directors shall have charge of and direct the affairs of the Company
in all matters not herein otherwise provided for. They shall have the right to fill
vacancies in office until the next annual election ; to fix the amount of bonds and
compensation and salaries of all officers of the Company and employees and may
at any time demand of any officer or employee , for inspection, any book, paper or
property of the Company in his possession . They shall have the right to adopt such
rules not inconsistent with these bylaws or the spirit thereof as in their discretion
they may deem necessary for the general welfare of the Company . The Board of
Directors shall also have the right , at the expiration of the contract entered into at
this date , to employ a manager or managers to superintend the business of said Com-
pany. (The contract referred to herein is the one described in the text )
1310 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
of the corporation's employees e Yet, patently a distinction must be
drawn between the fact pattern here present and a situation where
stock ownership is so dispersed or disparate as to afford a given stock-
holder a negligible interest in determining corporate policy. In this
case the Company is a small corporation with but 26 stockholders, of
whom 5 are rank and file employees, and 4 are Director employees.
The interest of the stockholder employees is generally recognized by
the rank and file workers who number approximately 90, and cannot
fail to have considerable impact upon their behavior. Moreover, each
stockholder, by terms of the Company's charter, owns not less than 80
shares of stock, and consequently has a substantial interest in the
Company and a strong voice in the election of directors. At least 2
of the stockholder employees not presently on the Board of Directors
have at one time or another served thereon. Furthermore, matters of
fundamental labor policy, such as granting or refusing a closed shop,
would be referred to the stockholders. Under all these circumstances
therefore, and on the basis of the entire record, we shall exclude the
stockholder employees from the unit hereinafter found appropriate.
The Company employs five working foremen, who, the Company
contends, ought more properly to be called leadmen. These men
spend from 70 to 90 percent of their time in production work. They
are paid on an hourly basis, receive overtime pay, and cannot hire,
promote, discipline, or discharge, or effectively recommend such action.
Employees under them vary from two to no more than six in number.
A few of these working foremen may on occasion release employees
for brief periods when they have no work to perform. In view of all
these facts, and on the basis of the entire record, we are of the opinion
that the working foremen are not supervisory employees within the
meaning of our customary definition, and, consequently, we shall in-
clude them in the unit hereinafter found appropriate.
We find that all production employees of the Company,7 including
working foremen," but excluding office and clerical employees, main-
tenance employees, firemen, watchmen, Director employees, stock-
holder employees, foremen, superintendents, and all other supervisory
employees with authority to hire, promote, discharge, discipline, or
otherwise effect changes in the status of employees, or effectively rec-
ommend such action, constitute a unit appropriate for the purposes
of collective bargaining within the meaning of Section 9 (b) of the
Act.
6 See Matter of Cordiano Can Co., Inc., 38 N. L. R. B. 905; Matter of The Steel Storage
F,le Company, 27 N. L. R. B. 210.
1Including, by stipulation of the parties, the two yard workmen, Alvin Praket and
Herbert Meister.
8 Charles Green , one of the working foremen , is nevertheless excluded, inasmuch as he
is a stockholder . The parties stipulated that Ervin Green, Laudick , Thielkug, Baas, and
LeMasters are recognized foremen and should be excluded from the unit. We so find.
UNION FURNITURE COMPANY 1311
V. THE DETERMINATION OF REPRESENTATIVES
We shall direct that the question concerning representation which
has arisen be resolved by an election by secret ballot among employees
in the appropriate unit who were employed during the pay-roll period
immediately preceding the date of the Direction of Election herein,
subject to the limitations and additions set forth in the Direction.
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 Relations
Act, and pursuant to Article III, Section 9, of National Labor Rela-
tions Board Rules and Regulations-Series 3, as amended, it is hereby
DIRECTED that, as part of the investigation to ascertain representa-
tives for the purposes of collective bargaining with Union Furniture
Company, Batesville , Indiana, an election by secret ballot shall be
conducted as early as possible, but not later than thirty ( 30) days
from the date of this Direction , under the direction and supervision
of the Regional Director for the Eleventh Region, acting in this mat-
ter as agent for the National Labor Relations Board, and subject to
Article III, Sections 10 and 11, of said Rules and Regulations, among
employees in the unit found appropriate in Section IV, above, who
were employed during the pay-roll period immediately preceding the
date of this Direction, including employees who did not work during
said pay-roll period because they were ill or on vacation or temporarily
laid off , and including employees in the armed forces of the United
States who present themselves in person at the polls , but excluding
those employees who have since quit or been discharged for cause and
have not been rehired or reinstated prior to the date of the election,
to determine whether or not they desire to be represented by United
Furniture Workers of America ( CIO), for the purposes of collective
bargaining.