Southern Colorado Power Co. v. National Labor Relations Board , 111 F.2d 539 ( 1940 )

HUXMAN, Circuit Judge..

This cause is before the court on the petition of the Southern Colorado Power Company, herein called petitioner, to review and set aside a decision and order of the National Labor Relations Board, herein .called the Board. The cause originates on the complaint of H. H. Stewart and I. L. Watkins. The charge of the complaint is that petitioner engaged in unfair labor practices affecting interstate commerce within the meanings of Subdivisions (1) and (3) of Section 8, and Subdivisions (6) and (7) of Section 2, of the National Labor Relations Act, 49 Stat. 449, 29 U.S.C.A.Supp., Ch. 7, §§ 152(6, 7), 158(1, 3). The Board made extensive findings of fact, and as a result thereof, concluded that:

Conclusions of Law

1. By discriminating in regard to the tenure of employment of H. H. Stewart and I. L. Watkins and thereby discouraging membership in a labor organization, petitioner has engaged in and is engaged in unfair labor practices within the meaning of Section 8(3) of the Act.

2. That by interfering with, restraining and coercing its employees in the exercise of rights guaranteed by Section 7 of the Act [29 U.S.C.A. § 157], the petitioner has engaged in unfair labor practices within the meaning of Section 8(1) of the Act.

3. That the aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2 (6) and (7) of the Act.

The Board thereupon entered its order, as follows:

Order

That petitioner, its officers, agents, successors and assigns, shall:

1. Cease and desist from:

(a) Discouraging membership in any labor organization of its employees by discharging, or threatening to discharge any of its employees, or in any other manner discriminating in regard to their hire or tenure of employment or any term or condition of their employment;

(b) In any manner interfering with, restraining or coercing its employees in the exercise of the rights of self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing and to engage in concerted activities for the purpose of collective bargaining, as guaranteed in Section 7 of the Act.

2. Petitioner was directed to take the following affirmative action :

(a) Offer to H. H. Stewart and I. L. Watkins immediate and full reinstatement to their former positions, without prejudice to their seniority and other rights and privileges;

(b) Make whole H. H. Stewart and I. L. Watkins for any loss which they have suffered by reason of their discharges;

(c) Post immediately in conspicuous places throughout its various plants and places of business notices stating that the respondent will cease and desist in the manner set forth in Section 1(a) and (b), and that it will take affirmative action in Section 2(a) and (b) of this order, and maintain such notices for a period of at least sixty days from the date of posting;

(d) Notify the Regional Director for the Twenty-second Region in writing within ten days from the date of this order what steps petitioner has taken to comply herewith.

From this order an appeal has been taken to this court. The answer of the Board seeks enforcement of its order.

The following points are presented for consideration on appeal:

1'. The Board was without jurisdiction over petitioner for the reason:

(a) That its operations are purely intrastate in character and do not substantially affect interstate commerce;

(b) If petitioner is subject to the jurisdiction of the Board as to part of its employees, the Board does not have jurisdiction over the office employees.

2. Petitioner has not been guilty of interference with, restraining or coercing its-employees with respect to their right under the Act to organize.

3. Stewart and Watkins were not discharged on account of their union activities.

Jurisdiction

Petitioner is a Colorado corporation, having its principal office and place of business at Pueblo, Colorado. It is a subsidiary of the Standard Gas and Electric Company of Delaware, a public utility holding corporation. It is engaged in the business of generating, buying, transmitting, selling and distributing electric energy. It operates a street railway system in Pueblo, Colorado, and also purchases, sells and distributes electric appliances and equipment at retail. It operates steam plants in Pueblo and Canon City, Colorado, and a hydro-electric plant at Skaguay, Colorado. All coal used in the steam plants is produced in Colorada and all water for the hydro-electric plant originates within Colorado. Its property is situated entirely' in Colorado, extending over four counties. It supplies electric energy to the Western Public Service Corporation, operating entirely in Colorado.

Petitioner serves a population of approximately 104,000 persons in an area covering about 7,000 square miles in the southeastern part of Colorado. No competing source of electrical power exists in the territory served by petitioner. During 1937, petitioner generated 84,508,360 kilowatt-hours and purchased 2,390,600 kilowatt-hours of electric energy. Of this amount, 758,630 kilowatt-hours were sold to interstate transportation and' communication agencies; 4,-141,692 kilowatt-hours were sold to manufacturing concerns selling part of their products outside of Colorado; 250,637 kilowatt-hours to newspapers of general circulation in Colorado and other states; 70,701 kilowatt-hours to radio broadcasting stations; and 56,997 kilowatt-hours to United States postoffices. Petitioner employed 399 persons and had an annual payroll of $732,669.90. In 1937 petitioner purchased material and supplies used for construction purposes in the operation of its business, amounting to $564,283.92, 35.6% of which was shipped to petitioner from points outside Colorado. In 1937 it also purchased electrical merchandise, equipment and supplies of a gross value of $122,484.91 for resale, approximately 10% of which came from points outside Colorado. Petitioner furnishes electricity to three railroads engaged in interstate commerce, and used by the roads for the lighting of railroad stations, for power purposes in repair shops, and in the operation of block signal devices, all in Colorado. It supplies energy to the Western Union and Postal Telegraph systems, both receiving and transmitting messages in and out of Colorado. The energy furnished is used by these companies in lighting their offices and stations and in transmitting messages, both local and interstate. Energy is also supplied to the Mountain States Telephone and Telegraph Company, which has telephone lines extending from the state of Colorado into other states. It also furnishes electric energy to a radio station at Pueblo, Colorado, to supply the power for the operation of the broadcasting station. This station broadcasts .programs originated by the National Broadcasting Company. It supplies energy to Airway Radio Service at Pueblo, Colorado, to its airport, used by local airplanes and by planes engaged in carrying United States mail. The daily papers served by petitioner receive Associated Press or United Press Association service and carry a large amount of national advertising originating outside of Colorado. A large number of industries, such as manufacturing industries, situated in the area served by petitioner, are engaged in transporting commodities in interstate commerce and are dependent upon petitioner for electrical power and light, which are essential to the operation of their plants. Seven of the larger of these firms, which ship portions of their finished products in interstate commerce, alone purchased from petitioner in 1937, 4,141,692 kilowatt-hours of electric energy for lighting and power purposes. Some of the concerns furnished electric energy by petitioner had emergency equipment which could be used in the event that the supply of power from petitioner was interrupted. Others had no such emergency equipment.

The scope of the National Labor Relations Act, 29 U.S.C.A. § 151 et seq., and the jurisdiction of the Board in its administration are limited to interstate and foreign commerce, to the exclusion of operations which are essentially intrastate in character and which do not have an effect upon interstate commerce. Where federal control is sought to be exercised over activities which, separately considered, are intrastate in nature, it must appear that there is a close and substantial relation to interstate commerce in order to justify federal intervention for its protection. Unless these facts exist, the Board has no jurisdiction in a controversy between employer and employees. Santa Cruz Fruit Packing Co. v. National Labor Relations Board, 303 U.S. 453, 58 S.Ct. 656, 82 L.Ed. 954; Consolidated Edison Co. v. National Labor Relations Board, 305 U.S. 197, 59 S.Ct. 206, 83 L.Ed. 126.

The question whether operations do or do not affect interstate commerce in such a close and intimate fashion as to confer jurisdiction upon the Board must be determined by the facts as they exist in each case. National Labor Relations Board v. Jones & Laughlin Steel Corp., 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 393, 108 A.L.R. 1352; Consolidated Edison Co. v. National Labor Relations Board, supra.

It is urged that here the percentage of sales to interstate railroads and communication agencies amounts to less than 1% of the total out-put and that the percentage of all sales to concerns engaged in interstate commerce amounts to only 6%. The percent of out-put of any business which goes into interstate commerce is not the true test. If the sale of only a fractional part of 1% of the total out-put of a business going to interstate commerce substantially affects such commerce, then jurisdiction attaches. The question in each case is not the percent of out-put of a business going into interstate commerce, but the effect thereof. National Labor Relations Board v. Fainblatt, 306 U.S. 601, 59 S.Ct. 668, 83 L.Ed. 1014; Santa Cruz Fruit Packing Co. v. National Labor Relations Board, supra.

Evidence was adduced that a labor dispute between petitioner and the office and accounting forces would not in any manner affect the production and distribution of electric power unless a strike of the office and accounting forces extended over a period of ten months, and that there would be no difficulty in replacing office and accounting employees who went out on strike. If the discontinuance of a certain department of a business would have no effect upon interstate commerce, then the Board has no jurisdiction over a labor dispute between such a department and the company. But here it clearly appears that a labor disturbance in this department would affect interstate commerce if it continued for ten months, or unless others could be found to replace those in the department. Under such conditions it cannot be said that the discontinuance of such a department or labor dispute therein does not affect interstate commerce.

An analysis of the testimony as set out above leaves no room for doubt that the nature, kind and quantity of the business of petitioner, the extent and volume of the equipment and supplies shipped to it by manufacturers from outside the state of Colorado, the relationship between the business of petitioner and interstate commerce agencies and the effect upon such agencies by an interruption of the relationship between them and petitioner’s business, would substantially affect interstate commerce within the pronouncements of the Supreme Court. National Labor Relations Board v. Fruehauf Trailer Co., 301 U.S. 49, 57 S.Ct. 642, 81 L.Ed. 918, 108 A.L.R. 1352; Santa Cruz Fruit Packing Co. v. National Labor Relations Board, supra; National Labor Relations Board v. Fainblatt, supra.

The findings of the National Labor Relations Board as to its jurisdiction in the instant case are based upon substantial testimony and are approved.

Unfair Labor Practice

In the spring of 1937, agitation began in petitioner’s plant for increase in wages. The operating employees circulated a petition for an increase. H. H. Stewart was approached by one of the operating employees and asked to solicit the office employees’ signatures to the petition. Stewart discussed the advisability of joining in the petition with other office employees, and together they decided to consult W. J. Ben-ning, a director and officer of- petitioner, before taking any action. Benning requested that they withhold action until he could consult W. N. Clark, president of petitioner. Thereafter Stewart was called by Benning and advised that Clark had expressed the desire that the office employees refrain from becoming involved in the petition, stating that if petitioner decided to grant a wage increase to the operating employees, the office employees would be similarly treated. Lester Morrell, an operating employee, who later became president of the International Brotherhood of Electrical Workers Local, urged the granting of the wage increase on Clark, stating that he feared the employees were becoming “C.I.O.-minded.”

At the suggestion of other employees, Stewart conferred with Benning regarding the organization of the office employees. Benning requested that the matter be held in abeyance until he talked to Clark. Later Benning informed Stewart that Clark disapproved of the plan to include the office workers in the I.B.E.W., and preferred to deal with the office employees on an individual basis. He expressed his opposition to a union for office employees. Benning further advised Stewart that Clark desired the office employees to wait until the pending negotiations with the I.B.E.W. were terminated. Clark went to Europe without any decision as to wage increases for office employees.

Agitation was renewed for a separate union. Stewart discussed with office employees the advisability of organizing themselves into a separate union. A meeting was called for August 9 for the purpose of discussing the organization of a union of office employees. Clark had returned from Europe by this time. Robert Miller, secretary and assistant treasurer of petitioner, called Stewart to his desk and informed him that a conference of petitioner’s officers had been held and that Benning was instructed by Clark that he did not want the office employees to organize a labor union. Stewart told Miller that the office employees were compelled to band together because Clark and Benning had failed to keep their promises with respect to salary increases. Miller then informed Stewart that petitioner had decided to grant pay increases to the office employees, thus making it unnecessary to form a labor union. In this conversation Miller also stated that petitioner could install accounting machines and lay off some of those in the general office. The same morning Miller informed T. F. Roach, an accountant in the general accounting department, of a raise for him, and declared that Clark was against the office organization, and that if they did go ahead and organize they could install accounting machines which would replace possibly a good many in the accounting department. In his testimony Miller stated that he did not recall making these statements, but admitted he might have ■said something in a similar vein to the employees. An attempt was made to have a committee of employees call on Clark, but they were informed that Clark would not see a committee. Clark asserted that he opposed the contemplated organization of office employees and declared that if the workers formed a labor organization no pay increases would be granted, and if such organization should call a strike, the entire office personnel would be replaced. According to Roach, he was instructed by Clark to deliver this message to the other employees. Clark admitted telling Roach of petitioner’s opposition to the formation of the proposed union, but denied directing Roach to deliver any message to the meeting.

On August 16, the office employees received a general wage increase. As a result, Stewart and Watkins, after consulting with other employees, decided to cancel a further meeting looking to an organization of a union.

The Discharge of Stewart and Watkins

November 30, 1937, H. H. Stewart and I. L. Watkins were discharged. Petitioner ■claims a reduction in force was made necessary by the contemplated installation of labor saving machinery. Benning stated that he reviewed the standing of all office employees with the department heads before reaching the decision to release Stewart .and Watkins. The reason given for the discharge of Stewart was that he had been guilty of loafing, lack of civility to his superiors, lack of cooperation, and the belief that he would not fit into the new system. An incident occurring Armistice Day, 1936, was cited against Stewart. On that day, general accounting department employees were ordered by Benning to remain on duty beyond 11 o’clock. Miller observed Stewart advising a small group of his co-workers, war veterans, to remain at their posts in protest against this delay. When Miller informed them that Benning had granted permission for them to leave, Stewart stated that the significance of the day was lost and that Miller might tell “that pro-German (Benning) to go to hell, I’m staying.” Roach and Sheets and other employees remained on duty with Stewart. Later Miller approached Stewart and apologized in behalf of Benning, saying he had forgotten it was Armistice Day. It was also charged that Stewart had assaulted an employee in 1921 or 1922. This Stewart denied. It was admitted that the alleged assault had been forgotten, that Stewart had never been disciplined for any of his alleged misconduct, no charge had ever been lodged against him. Although Miller testified that Stewart’s short-comings continued to the date of his discharge, petitioner increased his salary as late as September, 1936, and again in August, 1937. Miller stated that Stewart was thoroughly competent. Of 15 employees in Stewart’s department at the time of the discharge, only one had seniority over him. Stewart had been with petitioner uninterruptedly since 1916, save a period of 22 months when he served in the World War. Of four accountants in the department, Stewart had most seniority. He ranked as the third highest paid employee in the entire department and second highest paid accountant. When Stewart charged that he was being dismissed for his attempts to organize a union, Benning refused to discuss the matter.

The reason given for Watkins’ discharge waá that it was found necessary to transfer Sheets from the accounting department and it was determined to give Watkins’ position to Sheets because Sheets was a better collector and had an invalid wife and needed work. The evidence reveals that Watkins also had a wife and also had a minor child to support. Watkins was generally recognized by the employees in the accounting department as the departmental leader. Watkins ranked sixth in seniority in the department. He was the fourth highest paid employee in his department. No objection was ever made to Watkins’ work. Benning testified that Watkins was perfectly capable. During his employment Watkins received nine individual pay increases, one general increase, and one general decrease, which was later restored.

Stewart and Watkins were most active in the efforts to organize a union. Sheets seems to have taken an active part in opposition to the formation of a union, in the Labor Temple meeting on August 9. He warned the employees that they owed their jobs to their employer. On three occasions during the meeting Sheets called on Roach to address the meeting, saying that Roach knew Clark’s attitude on the matter. Upon the repeated requests of Sheets, Roach took the floor and announced to the assembled employees that he had been informed by Clark that he was absolutely against the office organization. Sheets’ part in the union meeting on August 9 was known to Benning.

The Board concluded that petitioner selected Stewart and Watkins for discharge in order to deprive the office employees of the leadership which they provided and to destroy the movement for union organization among the office employees. While the Board found that the labor saving machinery was not installed for the purpose of dismissing Stewart and Watkins, it did find that petitioner used the installation of labor saving devices to rid itself of the two employees whose activities directed toward the self-organization of the office employees.

The respective findings of the Board relating to the unfair labor practices of petitioner and to the discharge of Stewart and Watkins are challenged. The evidence relating to these issues is in sharp conflict, as are the inferences that can be drawn from the same. The Board resolved the conflict in each instance against petitioner.

The findings of the Board in each instance are supported by substantial testimony and are binding upon the reviewing court. National Labor Relations Board v. Waterman Steamship Co., 309 U.S. 206, 60 S.Ct. 493, 84 L.Ed. —, decided February 12, 1940.

A decree will he entered enforcing the order of the Board.