Combined Century Theatres, Inc.

National Labor Relations Board - Board Decisions

Jun 12, 1958

120 N.L.R.B. 1379 (N.L.R.B. 1958)

COMBINED CENTURY THEATRES, INC. 1379
Combined Century Theatres , Inc.; Century Circuit, Inc., a Dela-
ware Corporation ; Sunny-Bliss Realties, Inc.; Rock-Brook
Realties, Inc.; Frankstram Realties, Inc.; Century Circuit, Inc.,
a New York Corporation ; Century Theatres , Inc.; Andrews,
Inc.;, Conwall Realty Corp.; Queens Park Operating Corp.;
Homack Construction Corp .; Huntstay Operating Corp.; and
Century Management Corp . and Alfred J. Steinberger, Jr. and
International Alliance of Theatrical Stage Employees and
Motion Picture Machine Operators of the United States and
Canada, AFL-CIO, Local No. 640, Party to the Contract
International Alliance of Theatrical Stage Employees and Mo-
tion Picture Machine Operators of the United States and
Canada, AFL-CIO, Local No. 640 and Alfred J . Steinberger,
Jr. and Combined Century Theatres, Inc.; Century Circuit,
Inc., a Delaware Corporation ; Sunny-Bliss Realties , Inc.; Rock-
Brook Realties , Inc.; Frankstram Realties , Inc.; Century Cir-
cuit, Inc., a New York Corporation ; Century Theatres, Inc.;
Andrews, Inc.; Conwall Realty Corp .; Queens Park Operat-
ing Corp.; Homack Construction Corp .; Huntstay Operating
Corp.; and Century Management Corp ., Parties to the Con-
tract. Cases Nos. 2-CA-41615 and 2-CB-1620. June 12, 1958
DECISION AND ORDER
On July 5, 1957, Trial Examiner Arthur E. Reyman issued an order
in the above-entitled proceeding dismissing the complaint for juris-
dictional reasons, as set forth in the copy of the Order Dismissing
Complaint attached hereto. Thereafter the General Counsel and the
Charging Party filed requests for review of the order together with
supporting briefs. The Respondent Union filed a brief in support of
the Trial Examiner's order 1 and the Respondent companies adopted
as their own the brief of the Respondent Union.
The Board has reviewed the rulings of the Trial Examiner made
at the hearing and finds that no prejudicial error was committed.
The rulings are hereby affirmed. The Board has considered the Order
Dismissing Complaint, the requests for review, the briefs, and the
entire'record in the case, and finds merit in the requests for review.
Accordingly, the Board adopts the Trial Examiner's findings of fact,
but not his conclusions or recommendations.
I The -Respondent Union requested oral argument in the event the Board is "disposed in
this proceeding to re -examine its jurisdictional standards applicable to motion picture
theaters . . . The request is denied as the record and briefs, in our opinion , adequately
present the issues and the positions of the parties.
120 NLRB No. 182.
1380 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
A. The Respondent Companies
The 13 Respondent Companies are engaged generally in the manage-
ment and operation of 35 neighborhood motion picture theaters on
Long Island, New York. Century Circuit, Inc., a Delaware corpora-
tion, herein called Delaware Circuit, is a holding company which con-
trols the other 12 companies. It owns one-half the stock of Rock-
Brook Realties, Inc., Sunny-Bliss Realties, Inc., and Frankstram
Realties, Inc. (Skouras Theatres, Inc., owns the other half), and all
the stock of the remaining Respondent Companies?
The Respondent Companies are all engaged in some phase of theater
operation. Six companies (Combined Century, Queens Park, Hunt-
stay, Rock-Brook, Sunny-Bliss, and Frankstram) operate the chain
of theaters. Conwall is a real estate corporation which owns theater
buildings. Century Management acts as agent of the various real
estate companies. Andrews operates and manages refreshment stands
at the theaters. -Homack is a contractor for the building and altera-
tion of theaters and other buildings. New York Circuit acts as ac-
counting and disbursing agent for Andrews and the six theater-
operating corporations. It also performs minor repairs in the
theaters.
Queens Park operates the Alan theater, where the Charging Party
worked, and five other theaters.' Frankstram owns the Alan theater
building. Andrews operates a concession there.
Delaware Circuit has its office in Wilmington, Delaware. All the
other companies have a common office and principal, place of business
in Queens Village, Long Island.
All the Respondent Companies, except Frankstram, Sunny-Bliss,
and Rock-Brook, have the same officers. These three exceptions have
the same president, treasurer, and first assistant secretary as the others
but have a different vice president and secretary. Again excluding
the 3 named corporations, all the others have 8 directors who are
identical. Frankstram, Sunny-Bliss, and Rock-Brook have only 4
directors, of whom 2 are directors in the other 10 companies, and
are the treasurer and secretary of those 3 companies.
The administrative services for all theaters are performed by New
York Circuit. These services include bookkeeping,, secretarial, tele-
phone, accounting and auditing, and booking and buying films Em-
ployees who perform this work and the two district managers in gen-
eral charge of all theaters are on the payroll of the respective theater-
operating companies.
2 Delaware Circuit owns all the stock of Combined Century Theatres , Inc. Combined
Century in turn owns all the stock of Century Theatres, Inc.
3 The Order Dismissing Complaint erroneously names Combined Century as operating
these theaters. The order is corrected accordingly.
COMBINED CENTURY THEATRES, INC. 1381
A "Manager's Manual of Instructions" governs operations in all
theaters. Premiums for hospitalization insurance are remitted by
New York Circuit in one check for all employees, although coverage
is on an individual employee basis. One workmen's compensation
policy, insuring Combined Century, blankets in employees in most
of the theaters and in some of the real estate corporations in which
the Century chain holds an interest.
One individual, who is an officer in all the Respondent Companies,
is in charge of labor relations for all the companies.
The Trial Examiner found, and we agree, that "The management
and operation of each of these neighborhood motion picture theaters
constitutes a part of an integrated operation in the sense that policies
governing theater management, furnishing of supplies, advertising,
handling of funds, scheduling films for exhibition, labor relations
and related matters are applied uniformly and according to rules or
standards established by the parent management."
In view of the above, we find that the Respondent Companies con-
stitute a single employer within the meaning of the Act .4
B. Volume of business
The motion pictures exhibited by theater companies are usually made
in California. The production activities result in a master negative
and a sound track. Positive films are made from the negative by
independent laboratories located both, in and out of New York State.
The film laboratories send the positive prints to the distributors in
New York City on order of the producers, who may also be their own
distributors. On receiving the positive print the distributor checks its
physical condition, makes necessary repairs or replacements, edits it
to conform with local censorship or other laws, incorporates local seals
of approval when necessary, and coats it with a protective substance.
Thereafter the distributor issues a license to the theater-operating com-
pany permitting exhibition of the motion picture for a designated
period.' At the end of the designated period, the theater-operating
A York Coca Cola Bottling Works, Incorporated, 119 NLRB 147; Standard Furniture
Company, 118 NLRB 35; Warrior Cooperative Mercantile Company, 117 NLRB 1773.
"The following are typical provisions in the license agreements :
Under this agreement [with Warner Brothers] (a) the term "flat rental picture"
shall mean a picture for which the film rental is a fixed sum ; (b) the term "per-
centage picture" shall mean a picture for which the film rental is to be deter-
mined . . . upon a percentage of the gross receipts or upon a guaranty and percentage
of the gross receipts . .
Loew's grants to Exhibitor . .. and Exhibitor accepts a license under copyright to
exhibit publicly the motion picture specified in the Schedule, but only at the theater,
for the run, and on the play dates . . . provided for in this agreement.
• • s ♦ o •
Exhibitor shall pay to Distributor [Paramount] a sum equal to the cost of replace-
ment at Distributor's Branch Office of any print . . . lost, stolen, destroyed or in-
jured. . . . Such payment shall not transfer title to or any interest in any such
positive print. . . .
1382 -DECISIONS OF NATIONAL LABOR RELATIONS BOARD
company returns the film to the distributor who reissues it to other
theaters.
In the 1-year period ending August 31, 1956, the theater-operating
corporations paid $2,228,288 to various distributors in New York City
as license fees for the right to exhibit pictures. Of this sum, $1,300,911
represented fees paid for the use of prints made by laboratories located
outside New York State. The remaining prints used were made in
laboratories within New York State. More than $2,000,000 of the fees
paid were for the right to exhibit pictures which were produced out-
side New York State. During the same period, the Respondent Com-
panies purchased candies, cigarettes, and supplies valued at approxi-
mately $500,000 from suppliers within the State of New York who,
however, received such products from outside the State. During the
year ending March 1, 1957, gross box office receipts for the entire chain
amounted to approximately $7,000,000.
C. Contention of the parties
The Respondents contend that the Board should decline to assert
jurisdiction for the following reasons : (1) The intrastate neighbor-
hood movie theater business is essentially local and without impact
upon commerce. Even if the Board has jurisdiction of neighborhood
theaters, it should decline to assert such jurisdiction for the reasons,
that it has declined to take jurisdiction of hotels, taxicabs, racetracks,
and sports arenas. (2) The retail jurisdictional standards are inap-
propriate for an intrastate theater chain because a theater exhibits,
but does not sell, a picture to customers. (3) Even if the retail stand-
ards are applicable, the business done by the Respondent Companies
is insufficient to meet those standards. Of the $2,000,000 paid in li-
cense fees, approximately $900,000 represents fees paid for positive
films printed in independent laboratories in New York State. These
New York State printed films cannot be treated as indirect inflow
because, like the automobiles manufactured in one State from parts
received from other States,6 the positive film is an entirely different
product from the master negative film produced out of State. (4)
Each positive print is used many times at different theaters operated
by different companies both before and after exhibition in the theaters
operated by the Respondent Companies. As the latter may be sub-
sequent users of the prints they exhibit, they should be held to be
twice removed from commerce.'
The General Counsel argues, on the other hand, that the emphasis
which the Respondents place on the prints is misleading. What is
actually sold is the right to reproduce the spectacle produced in Cali-
"Kenneth Chevrolet Company, 110 NLRB 1615.
7 Brooks Wood Products , 107 NLRB 237.
COMBINED CENTURY THEATRES, INC. 1383
fornia. The prints are no more than a medium for carrying out the-
licensing of the spectacle and a mere incident of that license.
D. Conel ion
A single neighborhood motion picture theater, like a single,
neighborhood grocery store, may have only a slight impact upon-
commerce, but when the single theater, like the single grocery store,
is multiplied many times to constitute it chain of theaters or of-
grocery stores, the impact of the business of the chain upon commerce-
is no longer slight and the enterprise is no longer essentially local.-
The truth of this general observation is established by the facts in,,
this case. The Respondent Companies operate not 1 but 35 theaters.
They have gross box office receipts aggregating $7,000,000, pay more
than $2,000,000 as film license fees, and purchase more than $500,000,
worth of candy, cigarettes, and other items which originate outside-,
New York State. , This is not an essentially local enterprise.
The Board has never considered theaters in the same category as-
hotels and refused to assert its jurisdiction regardless of business
done. On the contrary, the Board has asserted jurisdiction of some-
motion picture theater companies 8 and has declined to assert such
jurisdiction of others .9 In the Rainier Theatre case,10 the Board indi-
cated that under the present jurisdictional plan, it would treat motion
picture theaters as if they were retail enterprises, i. e., it would assert-
jurisdiction of such enterprises if they had direct inflow of $1,000,000,,
indirect inflow of $2,000,000, or direct outflow of $100,000.11
Whether the Respondent Companies meet any of the foregoing
retail standards depends on the nature of their purchases from the
film distributors. The Trial Examiner has assumed that exhibitors
purchase positive film reproduced from the master negative, and that
to the extent that this printing takes place within the State, the print
is a local product." We do not agree with this assumption or analysis.
8 Fox Midwest Amusement Corporation et al, 98 NLRB 699; American Federation of
Musicians, Local No 24, of Akron, Ohio (Gamble Enterprises, Inc.), 92 NLRB 1528;
Balaban & Katz (Princess Theatre), 87 NLRB 1071
°Moving Picture Machine Operators Local No 159 et at (Rainier Theatre Corp ), 115
NLRB 952; Moving Picture Projectionists, Local No. 150, I. A T S E (Southside
Theatres), 109 NLRB 259; Keamco, Inc. (Royal Theatre), 90 NLRB 652.
10 Moving Picture Machine Operators Local No. 159 et at. (Rainier Theatre Corp.), supra.
"The T. H. Rogers Lumber Company, 117 NLRB 1732 -
i2 The Trial Examiner considered the positive print made in New York from the Cali-
fornia produced master negative as a different product from the latter, in the sane way
that an automobile assembled locally from out-of-State produced parts is different from
the parts Kenneth Chevrolet Company, 110 NLRB 1615, 1616. We do not believe that
the analogy is apt, even were we to assume that the exhibitors purchase the positive film
prints, rather than merely the right to reproduce and exhibit the spectacle embodied
therein A positive film print is an exact duplicate of the negative but in reverse It is
not an "entirely different product" as an automobile is different from the parts of which
it is made Insofar as changes in the print are made in order to conform with local
requirements or to make the film ready for showing, these are minor and do not change
the nature of the product They are similar to the adjustments made in an automobile
by a local distributor before delivering it to a retail customer,
1384 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
What the distributor sells to the local exhibitor is not a film, but the
right to reproduce a spectacle as it was ^ created by the producer in
California, the print or film simply being the means by which such
reproduction is made possible. This is made clear by the exhibition
agreements. The exhibitor does not purchase and acquires no title
to the print used for reproduction purposes. He has only a "license
under copyright" to exhibit the picture under terms and conditions
prescribed in the exhibition agreement. When the picture run is
completed, the exhibitor returns the film to the distributor who may
then reissue it to another exhibitor." The license fees paid-often a
percentage of box office receipts-illustrate the same point. They are
related not to the cost of making the positive print from the negative,
which is relatively insignificant, but to the value of the entertainment
licensed. In short, during the year ending August 31, 1956, the
Respondent Companies paid more than $2,000,000 to local distributors
acting for out-of-State producers for the right temporarily to exhibit
to paying audiences spectacles created and received from out of State.
We find that thereby the Respondent Companies met the inflow
requirements of the present jurisdictional standards and that it will
effectuate the policies of the Act to assert jurisdiction herein.
Accordingly, we shall reverse the Trial Examiner's order dismissing
the complaint, deny the Respondents' motion to dismiss the com-
plaint for jurisdictional reasons, and remand the case to the Trial
Examiner for the preparation and issuance of an Intermediate
Report.
[The Board overruled the Trial Examiner's order of July 5, 1957,
discussing the complaint; denied the Respondents' motion to dismiss
the complaint for jurisdictional reasons; and remanded the case to
the Trial Examiner for the preparation of an Intermediate Report.]
CHAIRMAN LEEDOM and MEMBER RODGERS, dissenting :
We would dismiss the complaint herein on the ground that the
Respondent's operations do not meet the Board's jurisdictional stand-
ards for a retail enterprise. In order to find that these standards are
met here it is necessary to count as indirect inflow, as the majority
does, the rental fees paid by the Respondents for positive films printed
within the State (New York) from a master negative produced out-
side the State.
In the Kenneth Chevrolet case , supra, where automobile parts were
brought into a State and there assembled by the manufacturer into
automobiles, which were sold to the employer in that case, the Board
(Member Murdock dissenting) regarded the whole transaction as a
13 The twice-removed argument made by the Respondents has no merit In view of the
fact that, as we have found, the distributors sell not a print, but the right to exhibit a
spectacle.
COMBINED CENTURY THEATRES, INC. 1385
sale to the employer of locally produced automobiles and not as a sale
to him of goods originating out of State. The Board majority there
stated, in part (p. 1616), "We consider a product as being part of an
indirect stream of inflowing commerce only when it is delivered to the
ultimate purchaser in the same form as when it entered the State. The
flow is stopped when the form is materially altered...." The ma-
jority here seeks to distinguish that case from the case at bar on the
ground that the difference between a positive film and its negative
is not as great as the difference between an automobile and its com-
ponent parts. However, in both cases the difference is one of form,
and in both cases the product in its original form-a mass of auto
parts or a negative film-is of no value to the prospective buyer of the
auto or of the positive film until the local operation of assembling the
auto or printing the positive has been completed.
Moreover, the view of the majority that there is insufficient change
in the'form of the product here because the positive is an exact dupli-
cate of the negative, but in reverse, proves too much, in our opinion.
It would require'the Board to hold, for example, that, where plates of
type are brought into a State and books are printed therefrom and
sold to a dealer, the books constitute indirect inflow to the dealer be-
cause of the out-of-State origin of the plates. Similarly, if a die was
fabricated in one State and used in another State by a manufacturer
to produce a machine part, it would presumably be necessary, under
the majority's view, to impute out-of-State origin to the machine part,
because it would be a reverse duplicate of the die, and to hold that
for that reason the part constitutes indirect inflow to a purchaser
thereof. The foregoing examples illustrate the difficulties inherent
in the position of the majority. We believe that if we are to adhere
to the principle of Kenneth Chevrolet and refuse to count as indirect
inflow articles which are "materially altered" within the State before
they are delivered to an employer or respondent, we should construe
"material alteration" as embracing any operation which is necessary
to render the product usable by such employer or respondent. We
believe that the film involved herein has been materially altered in
that sense, and, as it was so altered after its arrival in New York, we
would find that it does not constitute indirect inflow to the
Respondents.
ORDER DISMISSING COMPLAINT
Upon a charge and amended charges against Combined Century Theatres, Inc.,
and the other corporations named in the caption hereof in Case No. 2-CA-4615,
and upon a charge and amended charges against International Alliance of Theatrical
Stage Employees and Motion Picture Operators of the United States and Canada,
AFL-CIO , and the same corporate Respondents in Case No. 2-CB-1620 , the General
Counsel of the National Labor Relations Board, on behalf of the Board, by the
Regional Director for the Second Region , on August 31, 1956 , issued a consolidated
complaint against all corporate Respondents and the above-named labor organization.
The complaint was issued under Section 10 (b) of the National Labor Relations
Act, as amended, 61 Stat. 136, and alleges that the Respondent Corporations engaged
1386 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
in and are engaging in unfair labor practices within the meaning of Section 8 (a)
(1), (2), and (3) of the Act and that the Respondent Union engaged in and is en-
gaging in unfair labor practices within the meaning of Section 8 (b) (1) (A) and
(b) (2). Answers to the complaint filed on behalf of each respondent deny the
alleged violations of the Act.'
On the issues raised by the complaint and the answers thereto and pursuant to
notice a hearing was held at New York, New York, beginning on March 11, 1957,
and declared closed on May 20, 1957. During this time, I1 days actually were
hearing days, there being adjournments taken from time to time to permit counsel
to attempt to stipulate certain facts regarding the business operations of the several
corporate Respondents.
All parties have been afforded full opportunity to be heard, to examine and
cross-examine witnesses, to introduce relevant evidence, to argue the issues orally,
and to file briefs and proposed findings of fact and conclusions of law. Counsel
argued upon the record at the close of the hearing and thereafter counsel for the
Respondent Union, on behalf of the Union, filed a brief which, the Trial Examiner
is informed, has been adopted and approved by counsel on behalf of the Respondent
Corporations. Arguments and briefs have been carefully considered.
The General Counsel by counsel presented his case-in-chief, during the course
of which all parties entered into certain stipulations with respect to the business
operations of the corporate Respondents. The Respondents then rested, and joined
in motions to dismiss the complaint on the grounds that: (1) The facts disclosed
show that the operations and business of the Respondents Corporations are local
(intrastate) in character or, in the alternative if it were to be found that the business
operations of these Respondent Corporations are interstate in nature and therefore
subject to the jurisdiction of the Board under the Act, nevertheless the present
jurisdictional standards of the Board are not met; (2) it would not effectuate the
policies of the Act for the Board to assume jurisdiction; and (3) in any event the
General Counsel has failed to prove violations of the Act as set forth in the allegations
of the complaint.
The respective motions made on behalf of Respondents to dismiss the complaint
on jurisdictional grounds are now granted for reasons stated below.
The Respondents Combined Century, Delaware Circuit, Sunny.-Bliss, Rock-Brook
and Frankstram are Delaware corporations; the Respondents New York, Circuit,
Century, Andrews, Conwall, Queens Park, Homack, Century Management, and
Huntstay are New York corporations. The Respondent Delaware Circuit owns all
of the capital stock of the Respondent Combined Century and through such ownership
Respondent Delaware Circuit owns all of the capital stock of Respondents New
York Circuit, Century, Andrews, Conwall, Queens Park Huntstay, Homack, and
Century Management. Delaware Circuit owns one-half the capital stock of Sunny-
Bliss, Rock-Brook, and Frankstram, the other half of the capital stock of each of
these corporations being owned by Skouras Theatres, Inc. It appears that the
Respondents Delaware Circuit and Combined Century are served by the same
officers and directors, and that these officers and directors or some of them are
officers and directors of New York Circuit, and the other corporate Respondents
except Sunny-Bliss, Rock-Brook, and Frankstram. The Respondents Combined
Century, New York Circuit, Sunny-Bliss, Rock-Brook, Frankstram, Century,
Andrews, Conwall, Queens Park, Huntstay, Homack, and Century Management
are each controlled by, and the instrumentality of, the Respondent Delaware
Circuit; and each named corporation is operated for the benefit of the Respondent
Delaware Circuit.
The Respondent Combined Century operates and manages the Alan Theatre, a
motion picture theater in New Hyde Park, Long Island, New York, and approximately
35 other motion picture theaters located in the counties of Kings, Queens, Nassau,
and Suffolk, in the State of New York; the Respondent Frankstram owns the building
in which the Alan Theatre is located; the Respondents Sunny-Bliss, Rock-Brook,
Conwall, Queens Park and Huntstay own buildings in which other theaters of the
3 For convenience the corporate Respondents whose names are set forth in full in the
complaint will be referred to as follows : Combined Century Theatres, Inc., as Combined
Century ; Century Circuit, Inc., a Delaware corporation, as Delaware Circuit ; Sunny-Bliss
Realties, Inc., as Sunny-Bliss ; Rock-Brook Realties, Inc , as Rock-Brook ; Frankstram
Realties, Inc., as Frankstram ; Century Circuit, Inc., a New York corporation, as New
York Circuit ; Century Theatres, Inc , as Century ; Andrews, Inc., as Andrews ; Conwall
Realty Corp as Conwall ; Queens Park Operating Corp. as Queens Park ; Homack Con-
struction Corp. as Homack ; Huntstay Operating Corp. as Huntstay ; and Century Man-
agement Corp as Century Management and are referred to collectively as the Respondent
Corporations.
COMBINED CENTURY THEATRES, INC. 1387
chain of theaters operated by Combined Century are located; the Respondent Andrews
operates and manages refreshment stands in theaters of this chain; the Respondent
Homack is engaged in the construction of motion picture theaters and related
buildings; and the Respondent Corporations and each of them maintains its principal
office and place of business at a central office located in Queens Village in the County
of Queens in the State of New York.
The General Counsel in his complaint asserts that the Respondent Companies
are a single integrated enterprise and a single employer, engaged in the construction
and operation of motion picture theaters, the operation of theater refreshment
facilities, and in related activities, with its principal office and place of business in
Queens Village, New York.
The complaint further alleges:
9. (a) During the past year, Respondent Companies and each of them, in
the course and conduct of their business operations, caused to be rented, trans-
ferred and delivered to the various theaters of the Century Chain, for exhibition
therein, motion-picture films, the rental value of which was in excess of
$2,000,000, all of which were produced outside the State of New York and all
of which were transported to said theaters in interstate commerce directly from
States of the United States other than the State of New York, or were trans-
ported to said theaters from, and received from, other enterprises located in
the State of New York, including inter alia, Allied Artists Products, Columbia
Pictures Corp., Paramount Pictures Corp., Universal Film Exchanges, Inc., and
Warner Brothers, which other enterprises had received the said films in inter-
state commerce directly from States other than the State of New York.
(b) During the past year, Respondent Companies and each of them, in
the course and conduct of their business operations, caused to be purchased,
transferred and delivered to theater refreshment stands and to other places,
all located in the State of New York, candy, popcorn, chewing gum, tobacco
products, and other goods and materials , valued at in excess of $500,000, of
which goods and materials valued at in excess of $250,000 were produced
outside the State of New York and were transported to said refreshment stands
and other places in interstate commerce directly from States of the United
States other than the State of New York, or were transported to said stands
and other places from, and received from, other enterprises located in the
State of New York, which other enterprises had received the said goods and
materials in interstate commerce directly from States other than the State
of New York.
(c) During the past year, Respondent Companies and each of them, in
the course and conduct of their business operations, caused to be purchased,
transferred and delivered to sites in the State of New York building materials,
motion-picture-theater equipment, and other goods and materials, valued at
in excess of $1,000,000, which were produced outside the State of New York
and were transported to said sites in interstate commerce directly from States
of the United States other than the State of New York, or transferred to said
sites from, and received from, other enterprises located in the State of New
York, which other enterprises had received the said goods and materials in
interstate commerce from States other than the State of New York.
The principal business activities of the Respondent Corporations embrace the
management and operation of neighborhood motion picture theaters, where admis-
sions are sold to the general public entitling them to view the current motion picture
being shown in the particular theater. Incidental to the exhibition of a film, these
theaters sell candy, refreshments, cigarettes and other such commodities to their
patrons from concession counters located within each theater. The management
and operation of each of these neighborhood motion picture theaters constitutes a
part of an integrated operation in the sense that policies governing theater manage-
ment , furnishing of supplies, advertising, handling of funds, scheduling of films for
exhibition, labor relations and related matters are applied uniformly and according
to rules or standards established by the parent management.
At the hearing, the parties by counsel stipulated as follows:
A. The following terms, as used in this Stipulation in relation to a motion
picture, shall have the following meanings, respectively:
1. The term "produce" means technical research, writing the script,
building sets, making "props," designing and making costumes and cloth-
ing, directing, casting, preparing music (including arrangement, orchestra-
tion, and/or composition), performing, making the sound, "shooting,"
developing the negative, making positive "rushes" and test prints, editing,
1388 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and all other activities incident to the making of a picture with sound
track , all of which activities result in a negative photographic film with
appurtenant sound track hereinafter called the "master negative ," which
is not and cannot be used for exhibition purposes.
2. The term "producer" means the company by which a motion picture
is produced as above defined.
3. The term "print" means a positive film with appurtenant sound track
made from a master negative in a film laboratory by a process known
as "printing," a number of prints being made from one master negative.
4. The term "exhibit" means the process of running a print through a
projection machine in a theater and thus causing a series of pictures suc-
ceeding one another in rapid sequence to appear on a screen as a moving
picture with sound for the entertainment of the theater audience.
5. The term "exhibitor" means the operator of the theater in which
exhibition takes place.
6. The term "distributor" means the company from which an exhibitor
receives a license and print for such exhibition. Some producers act as
their own distributors.
7. The term "license agreement" means the contract between an ex-
hibitor and a distributor substantially in the form hereto annexed.
8. The term "license fee" means the amount specified in a license agree-
ment as the consideration therefor to be paid by the exhibitor to the dis-
tributor.
9. The term "inspection process" means the steps and procedures taken
by a distributor prior to the delivery of a print to an exhibitor in checking
the physical condition of the print, including the appurtenant sound track,
making all necessary or appropriate repairs or replacements therein, doing
such editing and effecting such changes, if any, as may be required by
local censorship or other laws, incorporating into the print such official
seals of approval as may be required by local laws, coating the print with
a protective substance, and in doing such other things as may be neces-
sary or appropriate to placing the print 'in lawful and proper condition
for exhibition.
10. "Combined," "Delaware Circuit," "Sunny-Bliss," "Rock-Brook,"
"Frankstram," "New York Circuit," "Century," "Andrews," "Conwall,"
"Queens Park," "Homack," "Huntstay," and "Century Management," mean
the respective corporations thus referred to in the Complaint herein.
"Respondent Companies" means said corporations referred to collectively.
Combined, Huntstay, Queens Park, Rock-Brook, Sunny-Bliss, and Frank-
strain are hereinafter collectively called the theater-operating corporations.
B. Qualified witnesses , if called, would testify under oath with respect to the
1-year period ending August 31, 1956, and findings may be made herein as
though such witnesses had so testified , as follows:
1. In the course and conduct of their business operations the theater-
operating corporations paid to various distributors, all located in New York
City, fees totaling $2 ,228,288 under license agreement pursuant to which
said distributors delivered to said corporations in New York State prints
of the feature motion pictures exhibited during said 1-year period in the
theaters operated by said corporations.
2. Included in said sum of $2,228 ,288 were fees totaling more than
$2,000,000 paid under such license agreements referring to pictures pro-
duced, as hereinabove defined, outside New York State. All said fees
totaling more than $2,000,000, including substantially all of the $1,300,911
shown in the center columns of annexed Schedules A and B, were so paid
to those producers of the respective pictures which acted as their own
distributors, or to distributors which acquired the right to distribute said
pictures to the theater-operating corporations and other exhibitors directly
from the respective producers thereof.
3. Substantially all prints used by the theater-operating corporations
for such exhibition were received by the theaters from distributors in New
York City. Said distributors received said prints from independent film
laboratories which made the prints for the respective producers and shipped
them to the distributors by order of said producers. All prints underwent
inspection process by the distributor in New York before being released
for exhibition.
4. Schedule A annexed hereto shows in the first column of figures thereof,
headed "Total-All Feature Rentals," the total amount of said fees so paid
COMBINED CENTURY THEATRES, INC. 1389
to each distributor dealt with. [Total-24 distributors-$2,228,288.]
Schedule B shows in the first column of figures thereof, headed "All fea-
tures Rentals," the total amount of said fees so paid with respect to each
of the theaters said corporations operated. [33 theaters $2,228,288.] On
each said schedule the center column of figures, headed in part "per NLRB
list," shows the total of said fees so paid in those cases where the prints
used by the theater-operating corporations were made in laboratories
located outside New York State [$1,300,911] and the last column of figures
shows the total of said fees paid in those cases where such prints were
made in laboratories located in New York State [$927,377].
5. The greater part of the fees referred to in B1, above, were paid
under license agreements referring to pictures produced by producers
which, while conducting their producing operations outside New York
State, have their principal offices in New York State.
C. This Stipulation may be introduced and received in evidence at the hear-
ing herein without prejudice to the right of any party to introduce additional
oral or documentary evidence on any matter covered hereby not contradicting
any of the foregoing. Neither the grouping nor the separating in this Stipula-
tion of the various Respondent Companies or their operations shall be deemed
to affect the issue of whether or not all or any constitute a single integrated
enterprise or a single employer.
The motion pictures displayed in the several theaters usually are made in Cali-
fornia. The master negative of the film recording the picture story is not usable
for purposes of exhibiting a picture in a movie theater. The positive film printed
from the negative and the sound track printed in independent laboratories in New
York State is a different product from the master negative film produced out of
State. Almost any number of film prints can be made from master negatives and
each positive print made is used many times at many different theaters. The positive
film print manufactured in New York State may be exhibited at many and different
times in theaters other than those with which we are here concerned.
The positive films are distributed under license agreements between distributors and
the theater operating corporations, these license agreements according to the theaters'
rights to exhibit a positive film, are made from the master negative. It seems clear
enough that the positive film and sound track printed in independent laboratories
in New York State is a different product than the master negative film produced
out of the State. This is demonstrated by the fact that negative films undergo
substantial change within the State, although the printing may be done outside the
State, as shown by paragraph 9 in the stipulation between the parties. After the
inspection process the films go back and forth from the distributor to many ex-
hibitors, including the theater operating companies here involved. In short, a motion
picture is "shot" outside of the Stater of New York, a master negative is made
outside of the State of New York, positive prints are made either within or without
the State of New York in independently owned and operated laboratories, and
substantial changes are made in the making up of the finished positive print of any
motion picture. As shown at the hearing, the producers of motion pictures generally
maintain their main offices in the City of New York, and it appears that all of
the distributors who license motion pictures for showing to the exhibitors are
located within the city.
The parties by counsel also entered into the following stipulation:
A. 1. The respondent, Andrews, Inc., is referred to in this stipulation as
"Andrews."
2. Respondents referred to respectively in the complaint as Combined,
Queens Park, Huntstay, Sunny-Bliss, Rock-Brook and Frankstram are re-
ferred to collectively in this stipulation as the "theater operating
corporations."
3. All the corporations named as respondents in the complaint herein
are referred to collectively in this stipulation as the "respondent companies."
B. Witnesses, if called, would testify with respect to the one-year period end-
ing August 31, 1956, and findings may be made herein as though qualified wit-
nesses had so testified under oath , as follows:
1. (a) In the course and conduct of its business operations, Andrews
purchased and received from Metropolitan Tobacco Distributors, which is
located in New York State, cigarettes which were purchased by Metro-
politan Tobacco Distributors from manufacturers located outside New York
State, and shipped by the manufacturers to public warehouses in New York
1390 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
State from which deliveries were made to Metropolitan Tobacco Distribu-
tors by order of said respective manufacturers. The purchase price paid
by Andrews to Metropolitan Tobacco Distributors was in excess of $110,000.
Said cigarettes bore federal, state and city excise tax stamps, placed thereon
by the manufacturers and/or Metropolitan Tobacco Distributors, the cost
of which was approximately $71,000. If said taxes had not been required,
the purchase price paid by Andrews would have been proportionately
reduced.
(b) In the course and conduct of its business operations, Andrews pur-
chased and received from Bard & Margolies, which is located in New York
State, candies and related products for which Andrews paid in excess of
$275,000, which were purchased by Bard & Margolies from firms located
outside New York State and shipped by said firms to said Bard & Margolies
directly from outside New York State.
2. In the course and conduct of their business operations, the respondent
companies, other than Andrews, purchased and received from sellers located
in New York State carpeting, seats, projection equipment, sound equipment,
carbons, screens, cups, cleaning supplies, uniforms, fuel oil, house supplies,
giveaways and theater tickets, for which said respondent companies paid in
excess of $107,000, which articles had been purchased by said sellers from
firms located outside New York State and shipped to said sellers, or by their
order to said theater operating corporations directly from outside New York
State.
3. In the course and conduct of the business operations of the respondent
companies, other than Andrews, contractors located in New York State de-
livered to said respondent companies, other than Andrews, materials, sup-
plies, equipment and other articles, valued in excess of $29,000 in connec-
tion with the performance by said contractors of contracts providing for the
alteration, repair or installation of plumbing, heating, air conditioning, elec-
trical equipment, roofing and roof tanks, in theaters of the theater operating
corporations, which materials, supplies and other articles were purchased by
said contractors outside New York State and shipped to them directly from
outside New York State.
C. This stipulation is without prejudice to the right of any party to introduce
additional oral or documentary evidence on any matter covered thereby not
contradicting any of the foregoing. Neither the grouping nor separating in this
stipulation of the operations of the various respondent companies shall be deemed
to affect the issue of whether or not all or any constitute a single integrated
enterprise or a single employer.
Andrews is a separate corporate entity engaged in the operation of concessions at
motion picture theaters operated and managed by the several Respondent Corpora-
tions and also of concessions at other motion picture theaters in which the Respondent
Corporation has no interest. There is a degree of control of the activities of the
employees of Andrews in the several theaters operated by the Respondent Corpora-
tion, although it clearly appears that the employees of Andrews are exactly that and
not the employees of the theater wherein the concession stand may be located where
these employees work. The Respondents say that the mere fact that capital stock of
Andrews is owned by Century of Delaware does not show the kind of integration such
as to make Andrews a part of the "employer." The General Counsel, to complete
the meeting of the standards laid down by the Board for indirect inflow would in-
clude purchases of cigarettes by Andrews in the amount of $110,000, and sales of
candies and sundries of $275,000, for a total of $385,000.
Because Andrews' purchases were all made from New York warehouses of goods
shipped to these warehouses from within and without the State of New York, it is
doubtful that such purchases by Andrews constituted or constitute "indirect inflow,"
even assuming that Andrews is "a part of" the employer. Adding the Andrews'
purchases of $385,000 to the total license fees paid for rights to exhibit films printed
outside the State of New York, $1,300,911, the total indirect inflow so calculated is
$1,685,911. If expenditures for miscellaneous supplies in the amount of $136,000
were added to the foregoing total the indirect inflow would total $1,821,911, exclud-
ing only the license fees paid for rights to exhibit film printed in New York State.
Under the standard and the principle adopted by the Board in Kenneth Chevrolet
Company, 110 NLRB 1615, 1616, the license fees paid for rights to exhibit film
printed within the State should not be included in determining the amount of indirect
inflow.2 Under the principles enunciated by the Board in T. H. Rogers Lumber
9 No amounts of total direct outflow are involved herein.
KRAMBO FOOD STORES, INC . 1391
Company, 117 NLRB 1732, the General Counsel has failed to establish the minimum
jurisdictional standards sufficient to sustain his case.
Absentee ownership of the capital stock of the New York operating and manage-
ment corporations in itself is not enough to show that the employer , whether con-
sidered as Combined Century or any other of the Respondent Corporations or to
establish that the Respondent Corporations are engaged in activities affecting com-
merce within the meaning of the Act. The Board, in Modern Linen & Laundry
Service, Inc., 110 NLRB 1305, refused under the standards established by it in 1954
to assume jurisdiction of a Vermont laundry and dry cleaning service whose stock-
holders also controlled some other nine New York corporations engaged in the same
or related business operations . The Board said in that case that the Vermont laundry
business was not an integral part of a multistate enterprise . On the question of
multistate operations and ownership of stock , Modern Linen would seem to be
controlling here.
The Board heretofore has held that it would not effectuate the policies of the Act
to assert jurisdicition over instrastate motion picture theaters . Keamco, Inc., 90
NLRB 652; Wilpert Amusement Company, Inc., 90 NLRB 1866; Moving Picture
Projectionists ' Local No. 150, etc. (Southside Theatres, Inc., etc. ), 109 NLRB 259.3
The prior refusals of the Board to assert jurisdiction in this type of case has im-
plicit approval of the Supreme Court of the United States in Guss V. Utah Labor
Relations Board, 39 LRRM 2567, where the Court recognized the right of the Board
in its discretion to choose not to exercise jurisdiction conferred upon it by the Con-
gress within standards laid down by the Board. The Respondents in support of
their motions to dismiss the complaint , call attention (among others ), to cases in
which the Board has declined to accept jurisdiction over hotels, race tracks, and
other enterprises essentially local in character although not unrelated to commerce .4
On the facts disclosed at the hearing herein , it has been shown that the display
or exhibition of films in neighborhood motion picture houses in New York, under
license agreements made between distributors and exhibitors , presents a factual
situation where the Board by precedent and jurisdictional standard can refuse
to assert jurisdiction.
For the reasons stated, the motion to dismiss the complaint upon jurisdictional
grounds is hereby granted.
8 Cf. Balaban & Katz, 87 NLRB 1071.
4 See Hotel Employees Local No. 255 etc. v. Boyd Leedom, 147 F. Supp. 306 (D. C.,
D. C.) ; Miami Beach Hotel Association, 36 LRRM 1447; N. L. R. B. v. Denver Building
and Construction Trades Council , et at, 341 U. S. 675, 684; Los Angeles Turf Club, Inc.,
90 NLRB 20; Checker Cab Co, 110 NLRB 683; see also Federal Baseball Club of Balti-
moie, Inc. v. National League , 259 U. S. 200 and Martin v. National League Baseball
Club, 174 F. 2d 917 (C. A. 2).
Krambo Food Stores, Inc. and Krambo Independent Union, Peti-
tioner. Case No. 13-11C-5505. June 12, 1958
SUPPLEMENTAL DECISION AND DIRECTION OF SECOND
ELECTIONS
Pursuant to a Decision and Direction of Elections,' elections by
secret ballot were conducted in the above proceeding on December
59 1957. The results were as follows : In voting group 2, with approxi-
mately 70 eligible voters and 63 valid votes cast, the tally was 41
votes for Intervenor Retail Clerks, 20 votes for Intervenor Teamsters
Local 158, 2 challenged ballots, and no votes against participating
unions. In accord with the Board's direction that the ballots of this
group were to be pooled with those of voting group 1, unless group
2 voted against representation, the ballots were pooled. Thus the
1 119 NLRB 369.
120 NLRB No. 188.