C.I.M. Mechanical Co.

National Labor Relations Board - Board Decisions

Jun 14, 1985

275 N.L.R.B. 685 (N.L.R.B. 1985)

-
'C.1 M. )MECHANICAL CO. .
C.I.M. Mechanical Co., formerly known - as Egan
Mechanical Co. and United Association ,- of
Journeymen and Apprentices - of the Plumbing
and Pipefitting Industry of the United ,States
and Canada, Local. Union No. -469, AFL-CIO
and United Association of Journeymen and Ap-
prentices of the Plumbing and Pipefitting Indus-
try of the United States " and. Canada, Local
Union No. 741, AFL-CIO: Case:28-CA-7075
14 June 1985
DECISION AND ORDER'-
BY CHAIRMAN DOTSON ANDr MEMBERS"
HUNTER AND DENNIS
On 8 September 1983_ Administrative Law Judge
Russell L. , Stevens issued the attached decision.
The Charging Parties filed exceptions, and the
General Counsel ` filed exceptions` and' a-, supporting
brief. The Respondent filed ' cross-exceptions and a
supporting brief and an answering brief.' i
The Board has considered the decision and the
record in light-of the exceptions and briefs and has
decided to affirm the judge's rulings, findings, 2 and
conclusions and to adopt the recommended Order.
The Respondent's cross-exceptions include a motion to reopen the
record to receive records relating to the distribution of the Respondent's
stock The General Counsel filed a response to the Respondent 's motion
to reopen the record and moved that the Board reject and return to the
Respondent the proposed exhibits offered in support of the motion to
reopen The Respondent also filed a motion to consider errata to,its an-
swering,brief The Charging Parties filed an opposition to the motion,
and the Respondent filed a response to the Charging Parties' opposition
We deny the Respondent 's motion to reopen the record for failure to sat-
isfy the requirements of Sec 102 48(d)(l) of the Board 's Rules and Regu-
lations We grant the Respondent 's motion to consider the errata to its
answering brief
2 In finding that the. Respondent' signed " a memorandum agreement
with the Unions on 8 October 1980, the judge stated that the agreement
bound the Respondent to the Unions-Association' s 1978- 1981 agreement
and all successor agreements until proper notice of termination was given
to the Unions and the Association Chairman Dotson notes that the
memorandum agreement also contained language authorizing the Asso-
ciation to act as the Respondent 's bargaining representative However,
the agreement required that notice of termination be provided only to the
Unions In view of all the surrounding , circumstances , particularly the
memorandum agreement 's failure to require that the Association be pro-
vided with notice of termination , and the clause in the bargaining agree-
ment providing that " [I]n accordance with traditional practices in'the
area, [the] parties realize that this contract in fact may be utilized by the
Union and contractors not members of the Association," Chairman
Dotson agrees with the judge 's finding that the Respondent did not indi-
cate a clear and unequivocal intent to become part of a multiemployer
bargaining unit
Member Hunter agrees that the Respondent did not indicate an intent
to engage in multiemployer bargaining and thus finds it unnecessary to
address the existence of a multiemployer bargaining unit
In addition, as there is no evidence that any of the Respondent's em-
ployees designated the Unions as their collective-bargaining representa-
tives, Member Hunter finds NLRB v Iron Workers Local 103, 434 U.S.
335 (1978), dispositive of the issue regarding the Unions' majority status
685
ORDER
'The recommended Order. of the . administrative
law judge is adopted and the complaint is dis-
missed. .
MEMBER DENNIS, concurring.
I disagree with my' colleagues' analysis of wheth-
er the Respondent expressed a clear-and unequivo-
cal intent to become .part of the` Association's mul-
tiemployer bargaining unit . L agree with my col-
leagues, however, that the Respondent's employees
never became part of the' multiemployer unit,
solely for the following reasons.
An employer cannot bind its employees to repre-
sentation in a multiemployer unit without the em-
ployees' express or implied consent. Mohawk Busi-
ness Machines, 116 NLRB 248, 249 (1956). Typical-
ly, a, union -gives such consent, but to ' do, so, the
union, must be the .employees' statutory. bargaining'
representative. Otherwise, employees could become
part of a preexisting multiemployer unit without in
any way having expressed a desire to select the
union as their collective-bargaining representative,
and would be unable to challenge the union' s status
except in the multiemployer unit. If, however, a
union attains majority support among an employ-
er's own employees, it will have gained the author-
ity to give the employees' consent and to merge.
them into the multiemployer unit.
In the instant case, the relationship between the
Respondent and the Unions is governed by Section
8(f) of the Act, and the memorandum of agreement
does not give rise to a presumption of majority
status. R. J. Smith Construction Co., 191 -NLRB 693
(1971), order set aside and remanded 480 F.2d 1186
(D.C. Cir. 1973); NLRB v. Iron Workers Local 103,
434 U.S. 335 (1978). Because the Unions have
failed to establish that they ever obtained majority
support among the- Respondent's employees, they
have failed to show that they are the statutory col-
lective-bargaining `representatives of these employ-
ees. Thus, the Unions never obtained the authority
to give the employees"iz:onsent to multiemployer
bargaining , and the unit remains the Respondent's
own employees.
'In all other respects, I agree with my colleagues'
adoption of the judge' s decision.
He therefore finds it unnecessary to-rely on the other cases cited by the
judge
In sec III(b) of the judge's decision the employment dates for Bradley
M Swanson and Edward Wilson should read " 10/1/80 to 12/31/81" and
"4/1/81 to 4/2/81," respectively
275 NLRB No. 100
686 DECISIONS OF NATIONAL LABOR RELATIONS- BOARD
DECISION
STATEMENT OF THE CASE
RUSSELL L. STEVENS, Administrative Law Judge. This
case was tried in Phoenix, Arizona, on July 6 and 7,`
1983.1 The complaint issued April 13 and the amended
complaint issued June 14 are based on a charge filed
August 20, 1982, 'by United Association of Journeymen
and Apprentices of the Plumbing and Pipefitting Indus-
try of the United States and Canada, Local Unions Nos.'
469 and 741 (the Unions). The complaint, as amended, al-
leges that C.I.M Mechanical Co., formerly known as
Egan Mechanical' Co. (Respondent) violated Section
8(a)(5), (3), and (1) of the National Labor Relations 'Act
(the Act). - '
All parties were given full -opportunity to participate,
to introduce relevant evidence,--to examine and cross-,ex-
amine witnesses,to argue orally, and to file briefs.--Briefs,
which have been carefully considered, were filed by the
General Counsel and Respondent. . -
On the entire record,2 and from my observation of the
witnesses and their demeanor , I make - the following -
. FINDINGS OF FACT .
1. JURISDICTION
Respondent is, and at all times material has been, a
corporation duly organized under, and existing by virtue
of, the laws of the State of Arizona. About June 9, 1983,
Respondent changed its corporate name from Egan Me-
chanical Co. to C.I.M. 'Mechanical Co. Respondent
maintains its-principal place of business in Tempe , Arizo-
na, and isi now, and at all times material - has been, en-
gaged in business as a' contractor. During the past `calen-
dar year, a period representative 'of its operations gener-
ally, Respondent,- in the course and conduct of its oper-
ations, purchased and received at its Tempe, Arizona fa-
cility and at, its work' `project's in the' State of Arizona
products,. goods , and - materials - valued in ' excess of
$50,000 from other Arizona enterprises; including Payne
Air 'Conditioning , Tenaire , Inc., Pennington Mechanical
Equipment Co., 'and others, each of _ which enterprises
had received , products, goods,,- and materials directly
from points outside the State of Arizona.
I 'find that Respondent is, and at all times material has
been, 'an, employer engaged in commerce within the
meaning of Section 2(2), (6), an d (7) of the Act: ' -
II. THE LABOR" ORGANIZATIONS'IINVOLVED'• -
United -Association of-Journeymen and Apprentices of
the .Plumbing and Pipefitting Industry : of the United
States and Canada, Local Unions Nos. 469 and' 741 are,
and each of them is, labor, organizations within the mean-
ing of Section 2(5) of the Act., ..
All dates hereinafter are within 1983, unless otherwise stated
2 The General Counsel filed a motion to correct record dated August
8, and Respondent filed a motion to correct transcript dated August 4, as
well as a motion to clarify record dated ,July 25 None of these three mo-
tions was opposed, and all are granted. , .
III. THE-ALLEGED-UNFAIR LABOR PRACTICES
A. Background 3 -
Plumbing and Air Conditioning Contractors of Arizo-
na (Association)" is an association of -contractors that,
among other"activities, is a- collective-bargaining agent
fo'r its members and nonmembers who designate it as
their bargaining agent. The'Association's executive direc-
tor since -March 1980 has been Vincent Doyle The As-
sociation presently has 45 dues-paying members; Re-
spondent is not such a member. Approximately 220 non-
member contractors are signatory to the present agree-
ment negotiated between the Association and the Unions
(the Red Book), effective July -1,_ 1981, to June 30, 1984.4
The Red Book's, predecessor (the Brown Book) was ef-
fective July 1, -1978, to June 30, 1981. A metal trades
supplemental agreement 5' was negotiated between the
Association and -the Unions •tb permit some variations
from the Red Book, effective July 1, 1981, to June 30,
1984. The. supplemental agreement is not automatically
effective on a contractor becoming. bound by the Red
Book; it becomes, effective only on.acceptance by a con-
tractor as indicated by signing.a detachable card inserted
in the supplemental agreement. That card is sent to the
Unions in order that appropriate accounting''procedures
can be instituted, to'reflect variations in funds submitted
to the Unions' trust accounts.
Doyle also is executive director of the Arizona Pipe
Trades Industry Program (PIPE), which is a public rela-
tions'agent for the plumbing and air conditioning indus-
try. PIPE is funded from monthly payments contributed
by contractors signatory to the-Red Book. Monthly pay-
ments are -made by all such signatories, 'whether or not
they 'are members of the ' Association. Those payments
are, devoted, ' in part, to' keeping , Red Book signatories
abreast of developments in the plumbing and air condi-
tioning -industry, and they, also 'are used to defray ex-
penses involved in the prenegotiation -solicitation of
ideas , and .in general correspondence of interest to all
Red Book signatories.6 All contracts negotiated by the
Association are subject to -ratification by all signatory
contractors,, whether or not they are dues-paying mem-
bers of the Association. -
Egan -and ' Sons is a large mechanical contractor based
in • Minnesota, but has facilities also in North Dakota.
One of its principal- owners is William Egan. Their busi-
ness is contracting for plumbing, ventilation, air condi-
tioning , insulation , Sand sprinkler work. -
Wayne Biirrell 'formerly -Was a department head for
Egan and Sons. His department consisted of plumbing,
service, .and air conditioning installation. In 1973, while
an employee of Egan and Sons, Burrell came to Phoenix,
where he obtained a C-39 license' which- authorized him
to perform sheet metal, hot 'water ! boiler, and. steam
boiler -work:. Sometime later", he came to ' Phoenix to
3 This background summary is based on stipulations of counsel, and
upon credited testimony and evidence not in dispute
4 G C Exh 2
5 G C Exh 14
9 G C Exh 18 is an example of such correspondence, relating to the
impending negotiations for the Red Book
C I M MECHANICAL CO. 687
survey business possibilities and found them to be quite
depressed, which resulted in his negative recommenda-
tion to Egan and Sons. In 1979 Burrell made another
survey of the area, and recommended that Egan and
Sons expand into the area. -
Egan Mechanical Co.' was organized September 12,
1980. The shareholders were Brad Swanson, Robert
Moore, Jerry Wahl, Burrell, and Egan and Sons, who
owned 51 percent of the stock. Burrell had 25 percent of,
the stock until he became president of Respondent Sep-
tember 8, 1981, as successor to Swanson,8 at which time
Burrell became owner of 49 percent of the stock. Re-
spondent opened for business October 1, 1980, under
Burrell 's contractor's license , which he had transferred
to Respondent on September 23, 1980.
On October 8, 1980, Respondent signed a union
memorandum agreement , whereby it became bound by
the Brown Book and all successor agreements until
proper termination notice was given to the Union and
the Association. At that time Respondent had only three
employees, Burrell, Swanson, and Swanson's son, ' and
only rudimentary tools, equipment, and work space.
They started with no business, and immediately com-
menced solicitation of jobs. They accepted any job that
they successfully bid, without regard to size . On Decem-
ber 31, 1980, Burrell was authorized to take the State of
Arizona examination for a supplement to his C-39 li-
cense, which, if he was successful, would authorize Re-
spondent to engage in installation of solar facilities. The
accompanying bond was in the sum of $375,000 for the
remainder of the fiscal year (a 9-month,period).
Respondent commenced active operations the latter
part of 1980, and after early. 1981 was fairly busy. Re-
spondent's first employee, other than -the three. men-
tioned above, was dispatched from the union- hiring hall
April 9. He was a refrigeration service mechanic. There-,
after, Respondent regularly obtained employees,through
the Unions' hiring halls, and they were paid union wage
rates. Their classifications were refrigeration servicemen,
keyman, fitter, and welder.9 From November 1980,
through 'May 1982 Respondent regularly submitted
monthly reports to the Unions' trust funds, showing
names of employees, remittance amounts, and other per-
tinent information,' including payments into PIPE. Re-
spondent earned gross income the first year of its , oper- ,
ation, totaling approximately $35,000.
Stephen Brooks, a business representative for -Local
469, met Burrell the first. time in January, 1982, at a job
Respondent was doing for Williams Air Force Base out--
side Phoenix They talked about a minor problem. and
engaged in some small talk, and- Brooks, gave Burrell :a
copy of the supplemental agreement,to look over.. They
then agreed to meet at a later date for lunch. They :met
again iii February, and talked about the supplemental:
agreement. Burrell replied to Brooks' questioning that he
7 There is no dispute concerning the fact that C I M Mechanical 'Co.
and Egan Mechanical Co are one and the same business organization
8 There is no dispute concerning the supervisonal status of Burrell and
Swanson at all times relevant
9 Referral slips are G C Exhs 6 through 12
would have to discuss the matter with his partners
before deciding whether or not to sign it. 10
On March 24; 1983, Egan wrote a letter to Martin
Ward of the Unions' International, in-which he stated,
inter alia: -
Several months ago we formed a small air condi-
tioning and refrigeration service shop in Phoenix,
Arizona.- At -the present time we have one refrigera-
tion journeyman and two sheet metal men. Much to
our surprise we find we cannot compete with the
local talent. I have been informed that at least 90%
of the shops we are bidding' against' are non-union
operations and paying their people approximately
one-half of what we are paying. We must have help
from your office if we are going to survive-under
this type of a circumstance, and request that you
give our, plea your earliest possible consideration.
Ward's office sent a copy of the letter to the Unions, and
the subject was discussed on- April 29- at a meeting at-
tended by Brooks, Burrell, Egan, and Don Mattern of
the International, and Bernie McBride of Local 469. The
union representatives asked Egan why Respondent had
not signed the supplemental agreement if it needed assist-
ance, and Egan said he would leave the matter with Bur-
rell. The Union asked Egan to review the agreement,
and Egan said 'he would do, that, and get back to the
Union later."' Egan later read the Blue Book several
times, and he and Burrell decided that it did not give
enough relief to be of value in meeting the bids of com-
petitors. 12 Egan and Burrell therefore decided to "go
non-union," and to hire nonunion employees. On July, 7, '
1982, Burrell wrote the following letter to the Unions:'
Re: Arizona Pipe Trades Agreement .effective July
- ' 1, 1981. . ,
Gentlemen:'
As, you know, Egan Mechanical. Co. does not
consider, itself bound by the 'above agreement„since
it is . n of signatory thereto. Nevertheless, to the
extent of the. agreement or any other prehire, agree-
ment ,-with your,locals (including the memorandum,
agreement dated October 8, 1980, signed ' by J. 'BC
Swanson), it is deemed to be 'in effect between your
locals,and Egan Mechanical at this time , this is to
constitute notice to. you, , that ' Egan Mechanical
hereby cancels, terminates;' .and 'repudiates said
agreement and any 'and all obligations under said
agreements , effective immediately. , ..
Further, to the extent any of said agreements
'constitute an effective delegation-'of the ,bargaining
rights, of'Egan°:Mechanic'aPCo to'the Plumbing and.
"'10 T 'ere'are'discrepancies°ii the testimony-of Brooks and Burrell con-
cerning these two meetings, but those -discrepancies do not affect any
finding or conclusion Burrell's versions of the meetings are credited
i i There are discrepancies among the versions of Brooks, Egan, and
Burrell relative to'this'ineetin ',' but those discrepancies do hot'affect any
finding or conclusion Brooks and Egan generally, agree on the facts
stated in the textual summary above
12 The'supplemental agr'eement'pro"vides for lower wage rates for 'the'
metal trades , and a different ratio of'dppientices to journeymen ' ' '
688 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Air Conditioning Contractors of Arizona (which
Egan Mechanical denies), this is to constitute notice
to your locals and to said association that said dele-
gation of bargaining rights is hereby terminated and
cancelled, effective immediately.
Although Respondent had adhered to the Red Book's
provisions prior to July 7, 1982, including submission of
monthly employee reports to the Union, Respondent did
not, after that, date, adhere to those provisions or use the
Unions' hiring halls. Nor did Respondent after July 7
make any payments into the Unions' trust funds, or pay
employee wages in amounts equal to or as much as those
required by the Red Book.
Approximately 2 weeks after Burrell's letter of.July 7,
Brooks. learned that John Cole had been employed by
Respondent as a plumber supervisor,13 without his refer-
ence through the Unions' hiring halls and at a wage less
than that provided by the Red Book.
B. The Unit
The General Counsel argues that Respondent was a
member of a multiemployer unit, by.reason of its signing
the memorandum agreement on October 8, 1980, and its
subsequent adherence, to the Brown and Red Book pro-
visions.
. There is no dispute concerning the fact that Respond-
ent was not, at any time relevant herein, a member of the
Association. Neither Respondent nor the Unions ever has
contended otherwise. Further, there is no evidence that
Respondent ever participated in group collective-bar-
gaining negotiations , either personally or through the As-
sociation, in any manner . The General -Counsel argues
that there was such participation when the Association
sent out a form letter to all employers, allegedly includ-
ing Respondent, asking for information and suggestions
relative to impending negotiations, 14 but Burrell denied
ever receiving such correspondence. There is no evi-
dence that it was received, and since it was a form letter,
there is no- basis upon which to find that Burrell did not
testify honestly Burrell testified that he never has been
contacted concerning collective bargaining, and that he
never has participated in bargaining with the Unions.
Much testimony, was elicited from witnesses by Re-
spondent, in an attempt to show that Respondent bar-
gained. individually with the Unions relative to Respond-
ent's possible use of the metal trades supplemental agree-
ment , described above._" That testimony, is; given no
weight. The supplemental , agreement did 'not have to be
negotiated. It already had been negotiated by the Asso-
ciation aind:;the Unions as an option for Red Book signa-
tories and association members who might use it.
It has been long established that multiemployer bar-
gaining is consensual in- nature, and that such consent
must be expressed in clear and unequivocal terms.15 It is
's Cole's supervisorial status is immaterial , since that status is included
within the provisions of the Brown and Red Books
'4GC Exh 18
is Morgan Linen Service, 131 -NLRB 420.(1961), Raymond O Lewis,
148 NLRB,249 (1964)
possible to show such expression through actions, as well
as words, but no such expression is shown herein. Re-
spondent designated the Association as its bargaining
agent, but there is no evidence that, by so doing, Re-
spondent intended to or did submit itself as part of a
multiemployer bargaining unit Until the controversy
arose, neither the Unions nor Respondent ever discussed
the possibility that Respondent was within a multiem-
ployer bargaining unit. The only evidence that remains is
the fact that Respondent adopted the Red Book and its
predecessor, the Brown Book, through execution of the
memorandum agreement on October' 8, 1980. That fact,
alone, does not support a conclusion that Respondent
became part of a multiemployer unit.16
Further militating against the possibility that, by sign-
ing the memorandum agreement, Respondent automati-
cally became a part of a multiemployer unit is certain
language of the basic contract itself, i.e., the Red Book,
which is the same as that of the Brown Book. The Red
Book preamble states- '
THIS AGREEMENT entered into this 1st day
of July, 1981, by and. between Plumbing and Air
Conditioning Contractors of Arizona in behalf of all
of its members, hereinafter referred to as the Con-
tractors,
. and
Local Union 469 and Local Union 741 'of the
United Association of Journeymen and Apprentices
of the Plumbing and Pipe Fitting Industry of the
United States and Canada, in behalf of their mem-
bers, hereinafter referred to as the Union.
Article XXI states:
SIGNATURES
A. Any employer becoming a member of.the
Plumbing and Air Conditioning Contractors of Ari-
zona at a time subsequent to the execution of this
Agreement shall as a condition of membership auto-
matically be bound by, and party to, this Agree-
ment
B. Whenever utility or specialty contractors are
signatory to this Agreement, they may sign a sepa-
rate form designed for utility-or specialty contrac-
tors agreeing that the men furnished will be limited
to performing work for this speciality.
C In accordance with traditional practices in the
area, parties realize that this contract in fact may be
utilized by the Union and contractors not'members
of the Association, the Plumbing and Air Condi-
tioning Contractors of Arizona.
If this contract is so utilized, then all of its terms
will be equally applicable to users.
The General Counsel cites several cases for the propo-
sition that signature on a short-form contract such as the
16 Mackey Plumbing Co, 228 NLRB 298 (1977), Gordon Electric Co,
123 NLRB 862 (1959)
C 1 4 MECHANICAL CO.
memorandum agreement here involved makes the signer
a part of the multiemployer unit. Those cases have been
reviewed, and they do not support such a broad conclu-
sion. The language 'of those cases, as well as that of other
cases "on this point not cited, is inexact and ambiguous.
The terms "multiemployer bargaining and multiemployer
unit" often are used 'interchangeably In some cases 17
there are findings and conclusions that the respondents
did not effectively withdraw from multiemployer bar-
gaining units . In other cases it was clear from the evi-
dence that there was, in fact, a multiemployer unit, either
named or apparent, such as 'through association bylaws
when association members were involved.18 Central New
Mexico Chapter, NECA,19 involved a petition to the Na-
tional Labor Relations Board for certification of a multi-
employer unit.
There being no clear and unequivocal evidence that,
by signing the memorandum agreement, Respondent in-
tended thereby to become part of a multiemployer bar-
gaining unit, the finding of such a unit cannot be made as
requested by the General Counsel. However, that does
not conclude the matter. Respondent contends that the
agreement it signed was an.8(f) contract, which could be
repudiated by it without violating the Act. The General
Counsel argues that the agreement was a 9(a) contract
that could not be repudiated by Respondent under the
circumstances involved herein.
C. The Contractual Relationship of the Parties
As of the time Respondent opened its doors for the
first time, on October 1, 1980, and as of the date Re-
spondent signed the memorandum agreement on October
8, 1980, Respondent had only three employees. Two of
the employees, Burrell and Swanson, were part owners
of Respondent,' and one employee was the son of Swan-
son. Between October 1, 1980, and July 7, 1982, Re-
spondent had the following employees in the plumbing
and pipefitting department:20
Bradley M. Swanson 10/1/80 to 12/31/82
Fred Jacobson 4/13/81 to 10/8/81
James R. Keggerreis. 7/1/82 to 5/83
John T. Cole 4/15/82 to 4/20/83
Paul F. Mudd 5/17/82 to 5/28/83
Edward Wilson 4/1/82 to 4/2/82
John Jackson 5/6/81 to 5/29/81. ,
Daniel Sabath 1/19/82 to 2/7/82
Jesse Chatterton 1/19/82 to 2/7/82
Ralph Douglas 3/1/82 to 3/3/82
Counsel stipulated that Swanson, Cole, and Mudd-.were
statutory supervisors at all times relevant herein:
17 E g, Hayden Electric, 256' NLRB 601 (1981), Amado Electric, 238
NLRB 37 (1978): Nelson Electric, 241 NLRB 545 (1979), enfd 638 F 2d
173 (6th Cir 1981), H S Brooks Electric, 233 NLRB 889 (1977)
18 Wayne Electric, 226 NLRB 409 (1976), G & M Lath & Plaster Co,
252 NLRB 969 (1980), Authorized Air Conditioning, 236 NLRB 131
(1978), enfd 606 F 2d 899 (9th Cir 1979)
689
Counsel stipulated that, after July 1, 1982, Respondent
was engaged primarily in the building and construction
industry.'
Respondent contends that it has been engaged in the
building and construction industry since October-1, 1980;
that the memorandum agreement it signed on October 8,
1980, was a, valid prehire agreement; and that its repudi-
ation of the agreement on July 7, 1982, was not a- viola-
tion of the Act because of the existence of Section 8(1) of
the Act.
Section 8(f) provides, in pertinent part:
It shall not be an unfair labor practice under sub-
sections (a) and (b) of this section for an employer
engaged primarily in the building and construction in-
dustry to make an agreement covering employees en-
gaged (or who, upon their employment, will be en-
gaged) in the building and construction industry with a
labor organization of which building and construction
employees are members (not established, maintained,
or assisted by any action defined in section 8(a) of
this Act as an unfair labor practice) because (1) the
majority status of such labor organization has not been
established under'the provisions of section 9 of this Act
prior to the making of "such agreement, or (2) such
agreement requires as a condition of employment,
membership in such labor organization after the
seventh day following the beginning of such em-
ployment or the effective date of the agreement,
whichever is later . . . Provided further, That any
agreement which would be' invalid; but for' clause
(1) of this subsection, shall not be a bar to a 'petition
filed pursuant to section 9(c) or 9(e). [Emphasis
added.]
The term "building and construction industry'.' is very
general in nature, and is susceptible of various interpreta-
tions. The Red Book includes many references to its cov-
erage of the building and constriction industry. Case in-
terpretations of the phrase create as many questions as
they answer. However, it is apparent that the phrase has
outer limits For example, a -general contractor who
builds high rises obviously is in the industry, yet_ one
who merely -manufactures material or equipment that is
incorporated by' someone else into the high rise is not
within the industry. 21
Certain other questions raised by the phrase have been
answered by the Board and courts. 'It is clear, for in-
stance, that a respondent's entire business 'must be consid-
ered when analyzing its nature, rather than just consider-
ing a single department. or section of, the business. 22 It is
equally clear that,: even though' material or equipment
may be manufactured or gold by the same company that
installs it, that fact- does not alter, the'basic''principles, in-
volved. Put another way, -in assessing the portion of a
company's business that is within the building and con-
struction industry, it would be incorrect to include only
19 152 NLRB 1604 (1965) 21 See, e g ; Forest City, 209 NLRB 867 (1974)
20 Sheet metal workers were in another department 22 Frick Co, 141 NLRB 1204 (1963)
690 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
installation costs . The cost of materials and equipment_in-
stalled ,, whatever their source , must be included.23
The reason for Section 8(f) is summarized in Forest
City, supra at 871:
,There is no question that the intention of the leg-
islature was to deal with the special problems ' of .ob-
taining help in an industry where the'workers either
did not work for the same 'employer .and where nor-
mally they would work at a jobsite for a variety of
different employers on different projects of relative-
ly short duration or at least if they worked for, the
same employer such would be at a jobsite on nu-
merous projects , each of relatively short duration. It
was necessary to have a source ' of 'help , usually
through trade unions, in order to carry out this ob-
- jective and as part thereof for the employer to
assure tht he could obtain the necessary help and
know the approximate cost thereof. It 'is also neces-
sary that an employer be able - to obtain help
through specified sources ' so as to complete 'a
project . within a specified time . A further valid con-
sideration was that ' if the normal representation pro-
ceedings applicable- to other ' industries were fol-
lowed , a project would .be completed before there
would be any representation . It is true that persons
employed in the-various contracting operations do
usually maintain _ regular staffs. However , these are
generally skilled persons , as electricians , plumbers,
sheet metal ' workers, carpenters , 'carpet layers,' and
so-forth , and-in addition they work on a number of
different projects and at the jobsite or the buiding site
in order to ' complete their functions. ' ' -
It is clear from ,the list of employees , set forth above,
that RRespondent's"work 'force ' was not permanent and
stable; which is, one, factor ._often looked at,when assess-
ing whether or,not.a-company is, in the building 'and, con-
structioh industry . This :matter-•is further discussed infra.-
As noted above; Respondent;is the extension of an out-
of-state contractor , - albeit in . somewhat different form-
size . Based on Egan 's testimony , credited on this point,
the originating company in Minnesota is the second.larg-
est employer, in. that State, "so: far -as mechanical work, is
concerned , -and clearly is- engaged in the building and
construction industry in-Minnesota . Egan and Burrell tes-
tified that , the idea of the parent company was to estab-
lish. in Phoenix an- organization that would be a :counter-
-part of the one- in Minnesota ;.. small-at first because of ne-
cessity , but, nonetheless oriented ;toward - large projects.
The ifact that -Respondent,ultimately .-accomplished-,what
Egan and Burrell said they started out to do .is acknowl-
edged ' by: the : General : Counsel .,. Asa previously; noted,
there- is-no argumentzabouf the; fact. .that,, as of July 1,
1982;. less : than 2 years after opening - its doors Respond-
ent ^.was',in ,,the building- and -,construction, , industry, ' and
was doing a sizeable , business . The General Counsel asks
that the testimony of-Egan and,Burrell - relative to. the in-
ception of Respondent be discredited because it is self;
serving and contrary to pretrial statements they made to
the Unions, as discussed above, and to NLRB agents. If
there was no evidence, other than the testimony of,Egan
and Burrell 'and the pretrial statements, possibly the Gen-
eral Counsel's request and argument would be persua-
sive. However, it is difficult to reconcile such argument
with what-actually happened. Respondent grew rapidly
and successfuly in the very direction Egan and Burrell
said the parent corporation had wanted it to since 1973,
when the first business survey of the Phoenix area was
made by Burrell. Regardless of the pretrial lay state-
ments .that were made by Egan and Burrell, which on
their face seem damaging to Respondent's case ,'the fact
remains that Respondent. quickly developed into- a sub-
stantial factor in the Phoenix industrial area That fact is
inconsistent with the contention that Respondent came
into the Phoenix area, against a background of industrial
strength in Minnesota and a history of interstate expan-
sion into South Dakota ,'merely to start up a small serv-
ice and repair shop primarily devoted to home air condi-
tioners. Clearly', Respondent's original and continuing'
goal was much the-same as that testified to by Ega_n'and
Burrell.
'The inquiry then presents itself: What kind of agree=
ment did Respondent have with the Union at the outset
of the relationship between the two of -them? As dis-
cussed above, Respondent started with three employees;
two were owners of the business, and one was a son of
an owner: Neither then nor at any time thereafter was
any appreciable ' work done on Respondent's' premises; it
was done almost, entirely at jobsites, which varied from
job to job. There was no work at first, all jobs developed
after October 1, 1980, sometimes after bidding.24 The
nature of the work force fits that described in"Forest
City, supra, i.e., they worked for the same employer."at
a jobsite on numerous projects, each of relatively short
duration." When Respondent signed the Unions' memo-
randum agreement it had no jobs but anticipated- some
and,, clearly, the Union„would be a logical source of
workmen needed- to assist the two owners and their son.
Equally clearly, when Respondent signed the agreement,
a union majority in the employee complement was not a
consideration. Whether or not a majority later developed
was -a question 'to be faced in the future, if at all. What
was needed, and what was obtained by the agreement,
was a source of labor at known cost-both of which fac-
tors were necessary in order to bid on jolis' Obviously,
at the time 'the agreement was signed, Respondent was
not motivated by a-desire to become part of a multiem-
ployer bargaining unit. Respondent was headed toward
the building and construction industry and, en route,
would 'take any job it could get Burrell filed a contrac-
tors'license bond with Arizona State on September 17,
1980, and on September 23, 1980, applied for an upgrad-
ed classification, with which he, filed a bond and an, esti-
mate that Respondent would gross $375,000 for,the 9 re-
maining months of the fiscal year. There is nothing in
24 The General Counsel and Respondent both refer to telephone book
yellow page advertisements, placed by Respondent, as support for their
29. Painters -Local , 1247 (Indio Paint), J56.NLRB ; 951 (1966),,Frick Co., contentions Those advertisements have been considered , and have been
supra given weight deemed appropriate
C.I.M. MECHANICAL CO.
the record to show that Respondent was thinking about
a small service, and, repair shop, at which it would
employ one or two service and repairmen on a more or
less permanent basis. The entire picture is one of a large
contractor starting out small, walking before running, in
an area of the country where it was a stranger That pic-
ture conforms with the idea behind Section 8 (f) of the
Act; as described in Forest City, quoted above.
What followed October 1, 1980, for the 9-month re-
mainder of Respondent's • fiscal year, is consistent with
the pattern of Respondent's conduct prior to that date.
Respondent's jobs primarily were of three kinds: service
and repair work on existing equipment (mostly air condi-
tioning), installation of air conditioning units in existing
buildings (mostly residences), and installation of air con-
ditioning and solar units in new buildings. Respondents
work orders and financial statements are in evidence, and
they show for the 9-month period gross income of
$34,737.10, of which more than 65 percent was derived
from equipment installations in new construction.25 An-
other $2300 was derived from installation of air condi-
tioners in existing homes, for which state building per-
mits were required. It is clear that substantially more
than half of Respondent's business during its first 9
months was done in the building and construction indus-
try, which brings it within the ambit of Section 8(f) of
the Act. Although most was in new construction, some
was in service and repair at existing sites, and that dis-
tinction does not alter the legal principles involved. In
Indio Paint, supra, the administrative law judge, with
Board concurrence, treated the distinction in detail, and
the decision partially was based upon a definition of con-
struction set forth in Construction Review, vol. 3 (1957
supplement), published jointly by the U. S. Departments
of Commerce and Labor:26
Construction covers the erection, maintenance and
repair (including replacement of integral parts), of
immobile structures and utilities, together with serv-
ice facilities which become integral paris of struc-
tures and are essential to their use for any general
purpose. It includes structural additions and alter-
ations. Structures include buildings . . . and all
similar work which are built into or affixed to the
land . Construction covers those types of imm o-
bile equipment which, when installed, become an in-
tegral part of the structure and are necessary to any
general use of structure. This includes such service
facilities as plumbing, heating, air-conditioning and
lighting equipment . . In general, construction
does not include the procurement of special purpose
equipment designed to prepare the structure. for',a
specific use.
Heating and cooling systems are "integral, parts" "of
structures in which they are placed.27 The General
25 Respondent makes no "over-the-counter" sales of air conditioners or
other equipment It purchases those items from third parties for installa-
tion
26 See Bay Area Sealers, 251 NLRB 89 (1980) '
27 Voight v OTT, 86 Ariz 128, 341 P 2d 923
691
Counsel argues that Respondent's construction of plat-
forms for air conditioners, which work is covered by Re-
spondent's gross receipts, is of little moment,'but the fact
remains that such work is within Board-accepted defini-
tions of construction. Some work remains for consider-
ation , i.e., service and repairs for equipment in existing
structures. Such work appears to be in construction
under Board law and 'Voight v. OTT, supra, and if that
work is included herein, all of Respondent' s gross re-
ceipts for its first 9 months were derived from the build-
ing and construction • industry. However, even if the
more restrictive view is adopted, almost two thirds of
Respondent's receipts clearly fall within the building and
construction industry, which brings Respondent within
the purview of Section 8(f) of the Act.28
The situation .for the period July 1, 1981,-to June, 30,
1982, shows continuing fast growth by Respondent, and
its expansion in the building and construction industry.
Gross revenues for that period were $415,978, all of
which were within the broad definition described above.
Even if service and repair work are excluded, more than
80 percent of the revenues clearly resulted from building
and construction. Perhaps most important of all, the
General Counsel acknowledged that,-as of July 1, 1982,
Respondent was in the building and construction-indus-
try, yet there is nothing in the record to 'show that Re-
spondent's work was any different on that date, from any
other date after October 1, 1980. At all times between
those two dates Respondent did the same three types,of
work outlined above. It is found that, at all times rele-
vant herein, Respondent primarily was in the building
and construction industry, as that term is used in Section
8(f) of the Act.
D. The Question of the Union's Majority Status
As noted above, Respondent's work force has been a
shifting and unstable one, 'more appropriate for an em-
ployer engaged in the building 'and 'construction industry,
than one engaged in a stable service and repair' business.
Since, -as found above, the memorandum agreement
signed" by Respondent constituted a valid 8(f) contract,
the Unions must prove actual. majority status in order to
show a violation of Section 8(a)(5) of the Act. It cannot
be presumed that the Unions were the employees' repre-
sentatives.29 It is possible to convert an 8(f) contract to a
9(a) contract but, in order to do so, the Unions must
show that they have obtained majority status in a perma-
nent and stable complement of 'employees.30 Such 'a
showing was not made-herein- Absent a'permanent and
stable'.work force "the Unions could obtain 9(a) status: by
showing their majority- status at a particular ijobsite;31
but that showing was not- made herein either. So far_ as a
permanent and stable work force is-concerned, it:is clear,
as noted' above,' that' Respondent never had+such a force.
The work' force Respondent: had was tof the same general
as"Foresi City, supra.'Cf Frick Co.; supra
29 NLRB Y. Iron Workers Local 103, 434 U S 335 (1978)
30 Giordano Construction Co, 256 NLRB 57 (1981); Precision Striping,
245 NLRB 169 (1979).
. 31'Hageman Underground Construction, 253 NLRB 60 (1980), Davis In-
dustries, 232 NLRB 946 (1977)
692 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
nature as that in Giordano, supra; wherein the, force was
found not to be a permanent and-stable one. Respondent
worked at; different • jobsites with a shifting group of em-
ployees, and did no" substantial work in its own shop. -Ja-
cobson testified that he -did only service work but,' as
shown above, such work was within the building and
construction industry so far as Respondent is concerned.
Jacobson said he once applied for union membership in
1979, but that he is not a member of any union. His testi-
mony does not establish a majority for the Unions. Fur-
ther, there is no evidence that any of Respondent's em-
ployees ever designated "thee Unions as their collective- -
bargaining representatives.
. It is found that Respondent did not'hive; at any time
material herein, a permanent and stable work force and,
further, that the Unions did not show that they -enjoyed
majority status among Respondent's employees' at any
time relevant herein: • • - '
CONCLUSIONS OF LAW' -
1: C.I.M. Mechanical Co., formerly- known as Egan
Mechanical Co. is an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the
Act.
2. Respondent' did -not, as alleged, violate Section
8(a)(3), (5), and (1) of the Act.
On these` findings` of fact and conclusions of law and
on the entire record; I issue the following recommend-
ed32 .
ORDER - -
'The complaint is_ dismissed in its entirety.
32 If no exceptions are filed as provided by Sec 102 46 of the Board's
Rules and Regulations , the findings , conclusions , and recommended
Order shall: as provided in Sec 102 48 of the Rules, be adopted by the
Board and all objections, to them shall be deemed waived for all pur-
Pose
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