M. L. Townsend

National Labor Relations Board - Board Decisions

Feb 16, 1949

81 N.L.R.B. 739 (N.L.R.B. 1949)

In the Matter of M . L. TOWNSEND and INTERNATIONAL ASSOCIATION
OF MACHINISTS
Case No. 21-CA-13j.-Decided February 16, 1949
DECISION
AND
ORDER REMANDING CASE TO TRIAL EXAMINER
On October 27, 1948, Trial Examiner Martin S. Bennett issued his
Intermediate Report in the above-entitled matter, recommending that
the complaint be dismissed for the reason that the Respondent is not
engaged in commerce, within the meaning of the Act, as set forth in
the copy of the Intermediate Report attached hereto. Thereafter, the
General Counsel and the Union each filed a motion to reopen the record
for the purpose of adducing additional evidence with respect to the
Respondent's operations. A statement in opposition thereto was filed
by the Respondent.
As set forth in the Intermediate Report, the record made at the
hearing, upon which the Trial Examiner recommended dismissal of
the complaint, reveals the following facts bearing on the jurisdictional
issue. Respondent Townsend buys and sells new and used automo-
biles and also operates a garage-repair service and gas station located
at Santa Maria, California. During the year 1947, the Respondent's
total volume of business amounted to $346,341; used cars sales
amounted to $111,803; parts sold over the counter and installed in cars
amounted to $85,093; labor and sales of gas and oil amounted to
$97,737; new car sales amounted to $70,770. All of the Respondent's
purchases and sales of goods and services were transacted within the
State. The new autos (Hudsons) were purchased from Hudson Sales
Corporation, of Los Angeles, California, herein called Hudson Sales,
and were picked up by the Respondent in that city.
As pointed out by the Trial Examiner, no evidence was adduced
at the hearing by the General Counsel concerning the business opera-
tions of Hudson Sales, especially as to the point of origin of the auto-
mobiles sold by Hudson Sales to the Respondent. In our opinion,
neither the General Counsel nor the Union has shown sufficient cause
to warrant the reopening of the record to adduce such evidence. How-
ever, we take judicial notice of a prior proceeding before the Board,
81 N. L. R. B., No. 122. 739
829595-50-vol. 81-48
740 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
in which we asserted jurisdiction over Hudson Sales.' In that pro-
ceeding, we found that during 1946, Hudson Sales purchased Hudson
automobiles, parts, and accessories, valued in excess of $1,000,000, of
which more than 75 percent was received from points outside the State
of California.
On the basis of the record herein and the findings in the above-
mentioned prior proceeding, we find that a substantial portion of the
Respondent's business involved the sale of new Hudson automobiles
which were originally shipped from points outside the State of Cali-
fornia. The Trial Examiner concluded, however, as the Respondent
in its opposition to the motion to reopen the record now urges, that
even assuming such findings of fact, this is nevertheless not a proper
case for asserting jurisdiction. This conclusion is based largely on
the fact that none of the cars came to the Respondent directly, or were
shipped by the Respondent, across State lines. While this is a cir-
cumstance to be considered, we do not give it controlling significance
in a business involving the national distribution of new automobiles
on a franchise basis, which we have found not to be local in character?
We accordingly find, contrary to the Trial Examiner and in accord
with our prior decisions,3 that the Respondent is engaged in commerce
within the meaning of Section 2 (6) and (7) of the Act and that it
would effectuate the policies of the Act to assert jurisdiction here, for
the purpose of resolving the substantive issues raised by the complaint
and of issuing an appropriate order with respect thereto.
ORDER
IT IS HEREBY ORDERED that the above-entitled proceeding be, and it
hereby is, remanded to the Trial Examiner for the preparation and
issuance of a Supplemental Intermediate Report, setting forth his
findings of fact, conclusions of law, and recommendations with respect
to the unfair labor practices alleged in the complaint herein .4
I Matter of Hudson Sales Corporation , 77 N. L. R. B. 378.
2 Matter of Harrys Cadillac-Pontiac Company, et al, 81 N. L it. B. 1 ; Matter of Midtown
Motors, et al, 80 N L. R B. 1679; Matter of Valley Truck and Tractor Co , 80 N. L. it. B.
444 ; Matter of Earl McMillian Company, 81 N. L R B 639
Chairman Herzog, although reluctant to exercise the Board's jurisdiction over an
enterprise with so many local attributes, joins in reversing the Trial Examiner , for the
reasons he stated separately in the Earl McMillian case. The Chairman believes that
once the Board took the step it did, over his dissent , in assuming jurisdiction over retail
automobile dealers in the Laddon-White case (76 N. L R. B. 1181), it chose a path which
should now be followed without regard to minor factual distinctions between one case
and another. Any other course can only lead to confusion and uncertainty among those
whose affairs are brought to the attention of the Board and Its Regional Offices.
3 See cases cited in footnote 2, supra.
4 Permission is hereby granted to the parties , if they so desire, to file exceptions to this
Decision, within 20 days after service of the Trial Examiner's Supplemental Intermediate
Report.
I
M. L. TOWNSEND
INTERMEDIATE REPORT
741
Mr. George H. O'Brien, for the General Counsel.
Mr. Earl C. Henwne, of San Luis Obispo, Calif., for the Union.
Canfield d Westwick, by Messrs. T. H. Canfield and T. H. Cornwall, of Santa
Barbara, Calif., for the Respondent.
STATEMENT OF THE CASE
Upon charges duly filed on April 20, 1948, and on August 20, 1948, by Inter-
national Association of Machinists, herein called the Union, the General Counsel
of the National Labor Relations Board, herein called the General Counsel and
the Board, respectively, by the Regional Director for the Twenty-first Region
(Los Angeles, California) issued a complaint dated August 20, 1948, against
M. L. Townsend, herein called Respondent, alleging that Respondent had engaged
in, and was engaging in unfair labor practices affecting commerce within the
meaning of Section 8 (a) (1) and (3) and Section 2 (6) and (7) of the National
Labor Relations Act, as amended, 61 Stat. 136, herein called the Act. Copies
of the complaint, the charges, and notice of hearing thereon were duly served
upon the parties.
With respect to the unfair labor practices, the complaint alleged in substance
that Respondent: (1) discharged, and thereafter refused to reinstate, Ace
Hutchins on April 9, 1948, and Ross Hassix and Aaron A. Thomason on April 12,
1948, because of their union activities, and (2) from on or about March 22,
1948, and continuing to the date of the complaint, (a) engaged in surveillance
of meetings of his employees where matters of mutual aid and protection were
discussed, (b) interrogated his employees concerning their union membership
and activities, (c) threatened with discharge his employees who participated in
union activity, and (d) advised his employees to relinquish their membership
in the Union and refrain from participating in union activities. On or about
September 10, 1948, Respondent filed an answer wherein he denied the com-
mission of any unfair labor practices.
Pursuant to notice, a hearing was held on September 30 and October 1, 1948,
at Santa Maria, California, before the undersigned Trial Examiner Martin S.
Bennett, duly designated by the Chief Trial Examiner. The General Counsel and
Respondent were represented by counsel, the Union by its representative, and
all participated in the hearing. Full opportunity to be heard, to examine and
cross-examine witnesses, and to introduce evidence bearing on the issues was
afforded all parties. During the hearing, Respondent moved that the complaint
be dismissed on the ground that he was not engaged in interstate commerce.
The motion was denied with leave to renew, and was removed at the conclusion
of the hearing, at which time ruling was reserved. The motion is disposed of
by the findings hereinafter made. At the conclusion of the hearing the under-
signed granted a motion by the General Counsel to conform the pleading to the
proof with respect to formal matters. The parties were then afforded an oppor-
tunity to argue orally before the undersigned and to file briefs and/or proposed
findings of fact and conclusions of law. Oral argument was waived by the
parties and, subsequent to the close of the hearing, a brief has been received from
Respondent in support of his motion to dismiss the complaint.
Upon the entire record in the case, and from his observation of the witnesses,
the undersigned makes the following :
742 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
FINDINGS OF FACT
I. THE BUSINESS OF RESPONDENT
M. L. Townsend is an individual doing business as M. L. "Red" Townsend's Ga-
rage at Santa Maria, California, at which garage he is engaged in the purchase
and sale of new and used automobiles, automotive parts and supplies, and fuels
and lubricants, and also in the repair and painting of automotive vehicles. His
purchase and sale of new automobiles is confined to Hudson automobiles, for
which Respondent is a Master Dealer, with exclusive rights to sell Hudson
vehicles within the limits of Santa Maria.
During the year 1947, Respondent's total sales for his entire business or-
ganization were in the amount of $346,341, which included used cars valued at
$111,803, new automobile parts valued at $84,093, and service sales valued at
$79,737.' All used cars handled by Respondent were bought within the State of
California and sold locally in Santa Maria. This is also the case with respect to
all parts purchased by Respondent, as well as his gasoline and oil sales. It is clear,
and the undersigned finds that these operations of Respondent, exclusive of sales
of new Hudson automobiles, are intrastate operations which do not affect inter-
state commerce.'
As the only other business operation of Respondent is his dealership in Hudson
automobiles, a decision as to whether his business operations affect interstate
commerce turns upon an analysis of said purchases and sales the facts with re-
spect to which are as follows :
Respondent sells these automobiles through a "Hudson Distributor-Master
Dealer Sales Agreement," under which he, as the Master Dealer, purchases the
cars from a "Hudson Sales Corporation" of Los Angeles, California, which is the
distributor and the other party to the above-named agreement. This agreement
was first entered into by Respondent and the Hudson Sales Corporation of Los
Angeles in 1945, at which time Respondent expanded his previously existing auto
repair business to include a Hudson dealership. Respondent and the distributor
are at present signatories to and operate under a renewal of the original agree-
ment entered into on July 15, 1947. During the year 1947, the value of the new
Hudson automobiles sold by Respondent was $70,770, all of which were purchased
from the distributor, Hudson Sales Corporation of Los Angeles, California, and
all of which were sold by the Respondent in and about Santa Maria. All of the
new Hudson automobiles which Respondent purchases from the distributor, are
picked up by Respondent at the premises of the distributor in the city of Los
Angeles although on one occasion in 1947 new automobiles were sent by rail to
the Respondent at Santa Maria by the distributor.3 In 1948, up to the date of the
hearing herein, all such purchases had been picked up by the Respondent at the
premises of the distributor in Los Angeles.
The distributor, Hudson Sales Corporation, is the direct distributor in the area
for the Hudson Motor Car Co., which apparently manufactures the cars, although
there is no direct or indirect evidence as to the business relationship between the
distributor, Hudson Sales Corporation, and the Hudson Motor Car Co., and there is
no evidence of any corporate connection between the two concerns . The record is
also silent as to the place of manufacture or assembly , as the case may be, of the
automobiles sold by the dealer, Hudson Sales Corporation, to Respondent. The
record indicates only that the distributor has no factory, manufactures no parts,
I Service sales include the labor of mechanics and sale of gas and oil.
2 The record does not indicate where these parts were manufactured.
3 This shipment amounted to 1 boxcar.
M. L. TOWNSEND 743
and assembles no automobiles . Insofar as this record is concerned , there is no
evidence of any business transactions of any sort between Respondent and the
Hudson Motor Car Co., although presumably there are such. In fact, not only
are all purchases of automobiles by Respondent made from the distributor, Hudson
Sales Corporation, but payment is also made to the latter.4
The General Counsel relies upon, as an admission against interest, a mime-
ographed form sent to Respondent by the Regional Office of the Board, request-
ing certain information concerning the business operations of Respondent. In
,his form, which was signed by Respondent and returned to the Regional Office,
the statement was made that 29 percent of Respondent's purchases of equip-
ment which amounted to $194,835, was new cars shipped directly to the plant
from outside the State. Townsend, while on the witness stand, explained that
this form was filled in by his office manager and that when he signed it there
was doubt in his mind as to the accuracy of the statement concerning the pur-
chase of new cars. In the view of the undersigned, and it is so found, Respond-
ent's direct testimony on the stand in explanation of this form together with
his independent testimony on the subject of his purchases of automobiles out-
weighs any adverse inference that might be drawn from the form submitted
by him to the Regional Office of the Board.
Conclusions
The cases which most closely support the contention of the General Counsel
that Respondent is engaged in commerce within the meaning of the Act appear
to be the Puritan Chevrolet decision,b and the Liddon-White decisions In the
Liddon-White case the Board took jurisdiction over a retail truck dealer, all
of whose trucks were shipped to it from points outside the State, and some of
whose sales were made to purchasers outside the State in which it was located.
In the Puritan Chevrolet decision, which is probably the closest on the facts
to the subject case, the Board took jurisdiction over a retail car dealer, all of
whose purchases of new automobiles, valued at $254,000 annually, were received
from outside the State within which it was located, and all of whose sales were
delivered within the State.
Using the above cases as a criterion, the subject case would not support a
finding that Respondent engaged in operations affecting commerce within the
meaning of the Act. This is so because, as found above, all of his business op-
erations save the purchase of new automobiles are intrastate operations, trans-
acted within the State of California, and with respect to his dealership in Hud-
son automobiles, there is no evidence to show that the automobiles purchased
by him from a distributor within the State of California, all of which Re-
spondent sells locally, are manufactured or assembled outside of the State of
California. The fact that Hudson Sales Corporation, located in Los Angeles,
does not manufacture or assemble the Hudson cars does not constitute affirma-
tive evidence that these cars emanate from without the State of California.
Two court decisions i cited by the General Counsel in support of his position are
not strictly applicable herein. In these cases the respective courts took juris-
diction, firstly, over an automobile dealer engaged in the retail and wholesale
sale of automobiles, and in the second case, over a dealer who was actually a
4 The findings herein above are largely based upon the testimony of M. L. Townsend.
Matter of Puritan Chevrolet, Inc., 76 N. L R B. 1243.
Matter of Liddon-White Truck Co., 76 N. L. R. B. 1181.
i Williams Motor Company v. N. L. R. B., 128 Fed. (2d) 960 (C. C A. 8), and N. L. R B.
v. Henry Levaur, Inc., 115 Fed. (2d) 105 (C. C. A 1), cert. denied 312 U. S. 682.
744 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
distributor who delivered cars to subsidiary dealers. In both cases, there was
clear evidence that the automobiles were shipped to the respective Respondents
therein across State lines. In the instant case, the record lacks such evidence,
and in the opinion of the undersigned, it is a fatal defect.
The instant case is perhaps closer to the Hom-Ond Food Stores case,' where
the Board declined jurisdiction over a Texas corporation operating 13 retail
grocery stores in that State and purchasing goods annually valued at approxi-
mately $3,000,000 from wholesalers and distributors located within the State
of Texas. There the Board said
Here, unlike Matter of Liddon-White Truck Co., Inc., . . . none of the
goods purchased by the employer come to it directly across State lines and
none of its sales are made to out-of-state customers. Accordingly, we shall
dismiss the petition herein. [Emphasis supplied.]
The undersigned accordingly finds and concludes, in view of the above, and
upon the entire record in this case, that there is insufficient evidence to support
a finding that Respondent is engaged in business operations affecting commerce
within the meaning of Section 2 (6) and (7) of the Act.
RECOMMENDATION
For the reasons indicated above the undersigned recommends that the com-
plaint herein be dismissed.
As provided in Section 203.46 of the. Rules and Regulations of the National
Labor Relations Board-Series 5, as amended August 18, 1948, any party may,
within twenty (20) days from the date of service of the order transferring the
case to the Board, pursuant to Section 203.45 of said Rules and Regulations,
file with the Board, Rochambeau Building, Washington 25, D. C., an original and
six copies of a statement in writing setting forth such exceptions to the Inter-
mediate Report and Recommended Order or to any other part of the record
or proceeding (including rulings upon all motions or objections) as he relies
upon, together with the original and six copies of a brief in support thereof;
and any party may, within the same period, file an original and six copies of
a brief in support of the Intermediate Report and Recommended Order. Im-
mediately upon the filing of such statement of exceptions and/or briefs, the
party filing the same shall serve a copy thereof upon each of the other parties.
Statements of exceptions and briefs shall designate by precise citation the por-
tions of the record relied upon and shall be legibly printed or mimeographed,
and if mimeographed shall be double spaced. Proof of service on the other
parties of all papers filed with the Board shall be promptly made as required
by Section 203.85. As further provided in said Section 203.46 should any party
desire permission to argue orally before the Board, request therefore must be
made in writing to the Board within ten (10) days from the date of service
of the order transferring the case to the Board.
In the event no Statement of Exceptions is filed as provided by the aforesaid
Rules and Regulations, the findings, conclusions, recommendations, and recom-
mended order herein contained shall, as provided in Section 203.48 of said Rules
and Regulations, be adopted by the Board and become its findings, conclusions,
and order, and all objections thereto shall be deemed waived for all purposes.
Dated at Washington, D. C., this 27th day of October 1948.
MARTIN S. BENNETT,
Trial Examiner.
8 Matter of Hom - Ond Food Stores , Inc., 77 N . L. R. B. 647.