Seattle Real Estate Board

National Labor Relations Board - Board Decisions

Feb 21, 1961

130 N.L.R.B. 608 (N.L.R.B. 1961)

608 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
in good faith. On the basis of the evidence summarized above, I find that Respond-
ent reasonably and in good faith believed that the bargaining unit on January 26 con-
sisted of 141 employees.
D. Concluding findings
Although the failure of a majority of the employees voluntarily to sign dues
checkoff authorizations which, as here, the Employer by contract has agreed to
honor, will not necessarily furnish the Employer with a reasonable basis for
asserting a doubt as to the certified Union's continuing majority status, it is one
factor to be considered." In this case I consider it an important factor for the
Union itself took the position and notified Respondent that the checkoff cards which
it furnished Respondent constituted proof of its majority status. As already noted,
Respondent had in its possession only 36 of such cards when it first questioned the
Union's majority status on January 26 and, later in the day, after the Union delivered
32 additional authorization cards, only 28 of which I have found valid, Respondent
still had before it the cards of less than a majority. This picture does not change
even assuming, as General Counsel argues, that Respondent should have counted,
in addition to the 64 cards in its possession, (1) David Doyle, whose card was
rejected on January 26 for the alleged reason that he was no longer working for
Respondent but whose name appears on the January 26 payroll list; (2) R. G. Mc-
Donald whose card had been misplaced by office personnel; and (3) Frank Dillard,
known by Respondent as the Union's financial secretary, who had never signed a
checkoff authorization.
In concluding that Respondent was motivated by a good-faith doubt of the Union's
continuing majority status when it refused on and after January 26 to bargain
further with the Union, I have taken into consideration not only the circumstances
enumerated by Respondent as the basis for its doubt but also the fact there is no
evidence in the record that Respondent independently engaged in any unfair labor
practice or other conduct which would preclude the employees from expressing a
free choice in a Board-conducted election.'
1. Respondent is engaged
(7) of the Act.
2. The Union is a labor
the Act.
CONCLUSIONS OF LAw
in commerce within the meaning of Section 2(6) and
organization within the meaning of Section 2(5) of
3. Respondent did not engage in an unfair labor practice
8(a)(5) and (1) of the Act, as alleged in the complaint.
[Recommendations omitted from publication.]
in violation of Section
11 Cf. N.L.R.B. v. Darlington Veneer Co., Inc., 236 F. 2d 85, 87-88 (C.A. 4).
12 In a letter to Its employees, dated February 3, Respondent assured them that state-
ments which had been made to the effect that Respondent would reduce wages or deprive
employees of existing benefits were untrue ; reminded the employees that Respondent in the
past had granted benefits which the Union had not even requested ; and stated that Union
or no Union, contract or no contract, Respondent intended to maintain the employees' pay
and benefits on a high level, to Improve them whenever possible, and to deal with the
employees reasonably and fairly. Similar assurance were given the employees in a notice
posted at the plant on February 17. I find nothing in these statements which would pre-
elude the conduct of a free election.
Seattle Real Estate Board, MacPherson Realty, Inc., Picture
Floor Plans, Inc., Benton 's Realty, Inc., and Benton 's Realty
and Real Estate Salesmen 's Local 154 A, Division of Trucking
and Equipment Clerks, Report Clerks and Clerical Employees
Local Union 154 . Case No. 19-CA-1857. February 21, 1961
DECISION AND ORDER
On May 20, 1960, Trial Examiner Eugene K. Kennedy issued his
Intermediate Report in the above-entitled proceeding, recommending
130 NLRB No. 79.
SEATTLE REAL ESTATE BOARD, ETC. 609
dismissal of the complain for jurisdictional reasons, as set forth in the
copy of the Intermediate Report attached hereto. Thereafter, the
General Counsel, Charging Party, and Benton's Realty, Inc., filed
exceptions to the Intermediate Report. The General Counsel and the
Charging Party filed supporting briefs. Seattle Real Estate Board
and Picture Floor Plans, Inc., have filed briefs in support of the Inter-
mediate Report.'
The Board has reviewed the rulings made by the Trial Examiner
at the hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. The Board has considered the Intermedi-
ate Report, the exceptions and briefs, and the entire record herein, and
hereby adopts the findings, conclusions, and recommendations of the
Trial Examiner, with the following additions and modifications.
The Trial Examiner found that the record does not establish an
adequate legal basis for the assertion of jurisdiction over the Respond-
ents. We do not agree.
As set forth in the Intermediate Report, Respondent MacPherson,
by agreement with Tropic Estates, Ltd., a Hawaiian company, was
given exclusive rights to sell 300 Hawaiian lots. During 1958, Mac-
Pherson sold about $80,000 worth of these lots to buyers in the State
of Washington, for which it received about $12,000 in commissions.
Similar dollar volumes of sales and commissions were made and re-
ceived during 1959. In connection with such sales, MacPherson
transmitted approximately $11,700 and $4,450 to Tropic Estates, Ltd.,
during 1958 and 1959, respectively. Also, in connection with these
Hawaiian lots, MacPherson transferred in 1959 to Austin, Ltd., It
company in British Columbia, Canada, the exclusive right to sell 100
lots, and for this transaction MacPherson received about $2,300 from
Tropic Estates, Ltd. Contrary to the Trial Examiner, we find these
arrangements and sales involving Hawaiian real estate sufficient to
establish the Board's legal jurisdiction.
The Trial Examiner also found that, even if legal jurisditcion were
shown, none of the Board's existing discretionary jurisdictional stand-
ards is applicable to the business engaged in by the Respondents. We
agree. The Board has never asserted jurisdiction over the type of
business engaged in by the Respondents-that of a real estate broker-
' Respondents Seattle Real Estate Board , Picture Floor Plans, Inc., and Benton ' s Realty,
Inc., agree with the Trial Examiner ' s ultimate finding that the Respondents ' operations
are neither in, nor do they affect, commerce within the meaning of the Act. However,
these Respondents ( Benton's Realty, Inc , by specific exceptions , and the other two by
their briefs ) except, inter alia, to the Trial Examiner 's subsidiary finding that the Re-
spondents constitute a multiemployer bargaining group. The General Counsel admittedly
offered no evidence as to the multiemployer status of the Respondents . Instead, the
General Counsel requested that it be assumed that proof of such would have been offered
had their been litigation of the merits of the case . Although we would otherwise find,
the Respondents ' exceptions well taken , we have, in order to resolve the more important
issue here , and for purposes of this decision only, made the assumption requested by the
General Counsel
597254-61-vol. 130----40
610 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and when the existing Board standards were established it was not
contemplated that anyone of them would apply to such business.
Moreover, upon a consideration of the nature of the Respondents'
business, we have determined that, as it would not effectuate the poli-
cies of the Act to assert jurisdiction, the establishment of a new stand-
ard applicable to the real estate brokerage business is not warranted.
As discussed in the Intermediate Report and as shown by the record,
it is the prime function of the Respondent real estate firms to bring
together a buyer and seller of real estate. The real estate broker does
not own the real estate, and he does not participate in any closing
transaction. Once the real estate broker has brought the parties to-
gether, his role is completed. While the success of a seller may ulti-
mately result in a financing of the sales by out-of-State firms and the
ultimate interstate transmittal of moneys, such financial arrangements
are not participated in by the real estate broker. Such matters are
handled by the closing agent who is in no way associated with the real
estate broker.
Considering the fact that the services are rendered primarily at the
local level, and are therefore essentially local and have at best only a
remote relationship to interstate commerce, we find that it would not
effectuate the policies of the Act to assert jurisdiction over the real
estate business. Accordingly, we shall dismiss, in its entirety, the
complaint against all Respondents.
[The Board dismissed the complaint.]
MEMBERS JENKINS and FANNING took no part in the consideration
of the above Decision and Order.
INTERMEDIATE REPORT AND RECOMMENDED ORDER
STATEMENT OF THE CASE
This matter was tried in Seattle, Washington , on various dates between February
14 and April 4, 1960.
The sole question now presented is whether the combined business activities of
Respondents make this an appropriate case for the Board to assert jurisdiction for
the purpose of determining the other issues framed by the complaint and answers.,
Upon the entire record, my observation of the witnesses , and oral argument pre-
sented by all parties, I make the following:
FINDINGS OF FACT
Respondents Seattle Real Estate Board , a nonprofit corporation , is an association
of real estate brokers and salesmen which does not itself sell real estate.
1 The unopposed motion of Respondents to have a resolution of the jurisdictional ques-
tion before proceeding to a trial on the merits has been adopted , and the hearing is
ordered closed . This was done in view of the uncertainty as to the Board ' s eventual
treatment of the novel jurisdictional question and because the balance of the litigation
promised to be extensive with a large number of witnesses and involving several compli-
cated issues . The question presented has been treated in the form of an Intermediate
Report and Recommended Order as this affords some procedural advantages to the parties
and because it will insure that this matter will be available to the Board as a possible
vehicle for an expression on jurisdictional standards in connection with activities involv-
ing the sale of real estate.
SEATTLE REAL ESTATE BOARD, ETC. 611
Respondents MacPherson Realty, Inc., Picture Floor Plans, Inc., Benton's Realty,
Inc., and Benton's Realty, are real estate firms located in Seattle, Washington, en-
gaged primarily in the business of selling residential real estate situated in the State
of Washington. For the purpose of determining jurisdiction on the present state of
the record, the combined operations of the Respondents will be considered as one
and for this purpose the Respondents will be regarded as constituting a multi-
employer collective-bargaining unit, as the complaint alleges.
Dunng 1959, Respondents effected sales of real property having a sales price ap-
proximating $60,000,000. The gross commissions received by Respondents approxi-
mated $2,000,000. With a qualification noted below, all the property sold was located
in the State of Washington. During 1959, Respondents effected sales for out-of-
State owners of Washington real property. As a result of such sales, various escrow
agents forwarded approximately $119,000 to out-of-State owner-sellers. In the
State of Washington the real estate salesman effects a binding arrangement between
the seller and buyer by having them execute an earnest money receipt. After the
earnest money receipt is signed, the transactions are then in the hands of the escrow
agents where the terms of the sale may be altered or abandoned without any par-
ticipation by the real estate salesman or broker. Substantially all sales handled by
Respondents are closed by using an escrow agent.
During 1958, Respondent MacPherson entered into an arrangement with an
Hawaiian company, giving MacPherson the exclusive right to sell 300 lots in a sub-
division located on the Island of Hawaii. Thereafter, Respondent MacPherson, in
1958, sold real property situated in Hawaii effecting the sales in the State of Wash-
ington to individuals in that State. The selling price of these residential lots in
1958 approximated $80,000 and the gross commission received by MacPherson was
approximately $12,000. The same dollar volume of sales was made and commis-
sions were received in 1959. In 1958, MacPherson sent approximately $11,700 in
receipts to Hawaii and in 1959, approximately $4,450. The reduced amount sent
in 1959 was due to MacPherson receiving an increased incentive commission which
was retained from the downpayment. In connection with the Hawaiian sales, there
was an arrangement made in January 1959, whereby MacPherson transferred its
exclusive right to sell 100 lots to a real estate firm in Canada. MacPherson received
about $2,300 from this transaction from Canada. In addition to the money trans-
mitted there was correspondence incident to the sales between Hawaii, the State of
Washington, and Canada.
During 1959, Respondents sold homes for builders of residential homes in the
State of Washington having a gross selling price in excess of $10,000,000. Of this
amount, approximately $7,000,000 represented sales pursuant to an exclusive sales
agreement between Respondents and the hamebuilders. The prototype exclusive
sales agreements in evidence contain provisions for 30- or 60-day cancellations.
During 1959, Respondent MacPherson sold parcels of land near an airport which
is now planned to be used for a 112-unit motel. The record does not establish that
this was the projected use at the time of the sale. The record also establishes that
additional commercial real property, with a gross sales price approximating $700,000,
was sold by Respondents during 1959, but is silent as to whether this property was
utilized for any purpose or whether its potential use would be related to or affect
interstate commerce.
The Seattle Home Builders Association includes builders or general contractors as
regular voting members. It also includes, as associate members, a wide variety of
individuals or firms interested in or connected with the homebuilding industry, in-
cluding banks, title companies, attorneys, financing institutions, and a miscellany of
other businesses. These associate members have no vote in the affairs of the
Association. Included as an associate member is the B & B Hardwood Company,
which during 1959, imported directly into the State of Washington, hardwood valued
in excess of $100,000. In connection with B & B Hardwood, the parties stipulated
that some of the homebuilders, for whom Respondents sold homes, had entered into
an arrangement with B & B Hardwood to perform work on such homes as a sub-
contractor in 1959.
Although the Seattle Home Builders Association acts as a collective-bargaining
representative for its builder members, who employ general carpenters, the record
does not establish that it was a collective-bargaining agent for all its associate
members. In the case of B & B Hardwood, counsel for the Charging Party stated,
on the record, that there was a separate agreement executed between the Home Build-
ers Association and the Hardwood Floor Layers Carpenters Local. Members of
this local are employed by the subcontractors installing hardwood floors and not by
612 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the builders . It is found that B & B Hardwood Company is not in the same multi-
employer bargaining unit as the builders?
Vahlbusch, the business agent for the Hardwood Floor Layers Carpenters local,
testified to the effect that the hardwood floor layers employed by B & B Hardwood
were covered by the agreement of his union with the Home Builders Association;
based on the fact that B & B Hardwood was listed as an associate member.
The record establishes that although the Seattle Real Estate Board and
MacPherson Realty, Inc., are associate members, the Home Builders Association
has never executed a collective -bargaining contract on their behalf . An explanation
for this apparently loose arrangement may be found in the testimony of Harry Carr,
business representative for the District Council of Carpenters for the Seattle area.
He testified that he did not bother to sign individual agreements as 98 percent of the
carpenters belonged to his organization . Implicit in this, is the probability that the
contract with the Home Builders Association set a pattern with other employers
of carpenters were expected to and did follow.
Discussion and Analysis
a. The issues
The General Counsel contends that on the basis of the record facts, there is a
constitutional basis for the Board asserting jurisdiction inasmuch as Respondents
are in , or their business affects, interstate commerce . He further contends that
Respondents ' business activities meet the Board 's discretionary standards in (1) the
retail industry ; ( 2) nonretail enterprises ; ( 3) standards applicable to links in inter-
state commerce ; and (4 ) if none of these standards are applicable the Board
should establish one.
With all this, Respondents take issue contending they do not meet any of the
Board's discretionary standards and that the sale of real property is a local activity
not subject to Federal regulation.
b. The question of legal jurisdiction
It is settled that purely intrastate operations come within the reach of the Federal
power to regulate commerce by virtue of its actual or potential effect on commerce.
N.L.R.B. v. Jones and Laughlin Steel Corporation, 301 U.S. 1. The Act evidences
congressional intent to make available to the Board the full scope of the Federal
interstate commerce power .3 It is also settled that the amount of interstate activity
requisite for Federal jurisdiction need not be any particular amount except that it
must exceed de m[mmis.4 In Yakima Cascade Fuel Co., et al., 126 NLRB 1316,
the Board held that $5,246 in wholesale sales was de minimis as it constituted only
4 percent of the employers' business . Another facet of jurisdictional de minimis is
the nonrecurring nature of the activity under scrutiny. In this connection , Justice
Douglas, writing for the Court, in Mabee, et al. v. White Plains Publishing Co., 327
U.S. 178, 181, states that the nonrecurring or isolated nature of a transaction is a
basis for applying de minimis.
The appellate division applied the maxim de minimis to exclude respondent
from the provisions of the Act. We think that was error . The Court indicated
in N.L.R.B. v. Fainblatt, 306 U.S. 601, 607, 59 S. Ct. 668, 672, 83 L. Ed. 1014,
that the operation of the National Labor Relations Act (49 Stat. 449, 29 U.S C.
§ 151, 29 U S.C.A. § 151) was not dependent on "any particular volume of
commerce affected more than that to which courts would apply the maxim
de minimis." That Act, unlike the present one (Walling v. Jacksonville Paper
2 The printed contract form in evidence includes as signatories other associations and
unions It is apparent, on examination, that it contains several contracts which for
convenience incorporate , by reference , the terms of another contract and that the printed
form is not a single contract for all the associations and unions named therein
8 Section 2 ( 6) of the National Labor Relations Act defines commerce as follows :
. .. trade, traffic , commerce , transportation , or communication among the several
States , or between the District of Columbia or any Territory of the United States and
any State or other Territory. . . .
Section 2 ( 7) of the National Labor Relations Act defines "affecting commerce" as:
. .. in commerce , or burdening or obstructing commerce or the free flow of commerce,
or having led or tending to lead to a labor dispute burdening or obstructing commerce
or the free flow of commerce.
+ N L R B. v. Fainblatt, 306 U.S 601.
SEATTLE REAL ESTATE BOARD, ETC. 613
Co., 317 U.S. 564, 570-571, 63 S. Ct. 332, 336, 87 L. Ed. 460), regulates labor
disputes "affecting" commerce. 49 Stat. 450, 29 U.S.C. § 152, 29 U.S.C.A.
§ 152. We need not stop to consider what different scope, if any, the maxim
de minimis might have in cases arising thereunder. Here Congress has made
no distinction on the basis of volume of business. By § 15(a)(1) 29 U.S.C.A.
§ 215 (a) (1) it has made unlawful the shipment in commerce of "any goods in
the production of which any employee was employed in violation of" the over-
time and minimum wage requirements of the Act. Though we assume that
sporadic or occasional shipments of insubstantial amounts of goods were not
intended to be included in that prohibition, there is no warrant for assuming
that regular shipments in commerce are to be included or excluded dependent
on their size . [ Emphasis supplied.]
In N.L.R.B. v. Shawnee Milling Company, 184 F. 2d 57 (C.A. 10), where the
employer had imported raw material only for 1 year amounting to 1 percent of its
purchases, the court concluded that this was not sufficient to put what was otherwise
essentially local activities within the jurisdiction of the Board.
In the case at hand in connection with the Hawaiian sales, the commissions received
by Respondent MacPherson and the amounts forwarded out of the State of Wash-
ington are less than 1 percent of Respondent's total commissions. They are of
course greatly less than 1 percent of the gross sales prices of all the real property sold
in 1959 by Respondents. In addition, the Hawaiian sales, as far as the record goes,
were an isolated occurrence that had not previously occurred and there does not
appear any indication that this type of out-of-State transaction will again occur.
Accordingly it is found on the basis of this record that there has not been demon-
strated an adequate legal basis for the assertion of jurisdiction based on the Hawiian
transactions.
c. The effect on commerce and the Board's discretionary standards
Having determined that resource must be had to other activities of Respondents to
find legal jurisdiction as well as relevant discretionary standards, the $10,000,000
sales price of new homes sold by Respondents for builders would appear to be the
most significant consideration. However, on this record no finding can be made
that any builder, whether or not a member of the Home Builders Association, is sub-
ject to the Board's jurisdiction. The General Counsel argues that because some
of the builders for whom Respondents sell homes have a subcontractor on their
projects who meets the Board's jurisdictional standards, that this operates to bring
in the builders and since Respondents sell homes for the builders, they are also
brought in. This theory has no support in any decisional precedent or any statement
of the Board with respect to jurisdiction. Because this service to the builders ren-
dered by Respondents must rest on the speculation that the builders' operations affect
commerce, it cannot provide a basis for a finding the Respondents render an adequate
amount of dollar volume service to an enterprise within the jurisdiction of the Board
under the direct inflow standard. Siemons Mailing Service, 122 NLRB 81. The
record does not establish any service was performed on behalf of builders in com-
merce or whose activities affect commerce, unless it is assumed that construction
industry, by its nature, affects commerce.
Assuming arguendo, legal jurisdiction can be established here, the Board's retail
standard does not appear relevant.5 Aside from the rather incongruous conception
that selling real estate is a retail enterprise and that the Respondents do not own the
real property sold, there appears to be a more significant reason why the sale of real
estate does not logically fit within the retail standard. Recognizing that the Board
has seen fit to include taxicab companies within the retail standard, it is assumed
this was done on the Board's past experience in connection with retailers or taxicab
companies grossing more than $500,000 annually. This experience has demonstrated
that in a business of this size typically there were out-of-State imports or revenues
derived in commerce or as a link in commerce, warranting assertion of the Board's
jurisdiction, assuming some proof of legal jurisdiction was proved.6 Here the
identity of the purchaser and seller and the location of the real property are readily
ascertained and are in the record with respect to sales for builders and out-of-State
owners. The mechanical time-consuming problems of proof do not parallel that in
' Carolina Supplies and Cement Co , 122 NLRB 88.
6 International Longshoremen 4 Warehousemen's anion, et al. (Catalina Island Sight-
seeing Lines ), 124 NLRB 813; James D . Jackson, d/b/a Jackson's Party Service, 126
NLRB 101.
614 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the retail and taxicab industries, and there does not appear to be a similar reason
for including real estate sales under the retail standard.
The contention that the activities of Respondents form part of a link in the chain
of commerce, in addition to resting on the sale of homes for builders, relies on the
fact that various escrow agents sent in excess of $100,000 in funds to out-of-State
sellers for whom the Respondents sold homes. Inasmuch as these services and trans-
mittals were not rendered to Respondents but to the buyer and seller and there is no
showing in the record that these companies were in or affected commerce, it seems
clear that no relevant jurisdictional standard applies to Respondents in this connec-
tion. The link in commerce standard has heretofore been restricted to transporta-
tion activities. H P 0 Service, Inc., 122 NLRB 394, and I do not believe the facts
of this record provide a persuasive argument for extending it here, particularly in
view of the fact that the escrow agents render services not to Respondents but to the
buyers and sellers of real property.
In conclusion, the Respondents' business activities here presented in the judgment
of the Trial Examiner, are properly regarded as local activities contemplated by
the Supreme Court in passing on the extent of the interstate power. N.L.R.B. v. Jones
and Laughlin, 301 U.S. 1, 37.
Undoubtedly the scope of this power must be considered in the light of our
dual system of government and may not be extended so as to embrace effects
upon interstate commerce so indirect and remote that to embrace them, in view
of our complex society, would effectually obliterate the distincition between what
is national and what is local and create a completely centralized government.
It is recognized that the substantial volume of new home sales on behalf of the
builders might provide a basis for another presumptive standard akin to the retail
sales standard. However, it would require proof of jurisdiction over the builders
which is not in the record.
The real estate business ranging from a major developer to a minor local real
estate salesman listing only previously occupied homes, covers a broad spectrum
of enterprise, national and local, and it is not believed, on the basis of this record,
that the real estate business is properly susceptible to a blanket declination of juris-
diction as the Board may do in the recently amended Act 7 unless the generic term,
real estate business, is qualified as to the type of operation involved.
Inasmuch as it is found that .the evidence here does not preponderate in establish-
ing legal jurisdiction, it would serve no purpose to speculate as to what new dis-
cretionary standard might be applied to the type of real estate business reflected by
this record.
CONCLUSIONS OF LAW
1. Respondents are, and at all times material herein have been, employers within
the meaning of the Act.
2. The business operations of Respondents are not in or do not affect commerce
within the meaning of the Act.
[Recommendations omitted from publication.]
'' Section 14(c) (1) :
The Board, in its discretion may, by rule of decision decline to assert jurisdic-
tion over any labor dispute involving any class or category of employers, where, in
the opinion of the Board, the effect of such labor dispute on commerce is not suffi-
ciently substantial to warrant the exercise of its jurisdiction : Provided, That the
Board shall not decline to assert jurisdiction over any labor dispute over which it
would assert jurisdiction under the standards prevailing upon August 1, 1959.
International Ladies Garment Workers Union, AFL-CIO and
Twin-Kee Manufacturing Co., Inc.; Josephine Sheehan; Mary
Cuilla. Case No. 1-CB-651-2-3. February 21, 1961
DECISION AND ORDER
On November 17, 1960, Trial Examiner Ramey Donovan issued his
Intermediate Report in the above-entitled proceeding, finding that the
130 NLRB No. 77.