297 F.

2d 94

NATIONAL LABOR RELATIONS BOARD, Petitioner,

v.
RELIANCE FUEL OIL CORPORATION, Respondent.
No. 15, Docket 26806.

United States Court of Appeals Second Circuit.

Argued Sept. 29, 1961.
Decided Nov. 13, 1961, Rehearing Denied Jan. 4, 1962.

Melvin Pollack, Atty., N.L.R.B., Washington, D.C. (Stuart Rothman, Gen.

Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel MalletPrevost, Asst. Gen. Counsel, and Solomon I. Hirsh, Atty., N.L.R.B.,
Washington, D.C., on the brief), for petitioner.
Samuel H. Borenkind, New York City, for respondent.
Before LUMBARD, Chief Judge, and FRIENDLY and SMITH, Circuit
Judges.
J. JOSEPH SMITH, Circuit Judge.

This is a petition of the National Labor Relations Board, pursuant to Section

10(e) of the amended National Labor Relations Act, 29 U.S.C.A. 160(e), for
enforcement of a Board order issued against respondent January 5, 1961
reported at 129 NLRB No. 141. Since the alleged unfair practices occurred in
Massapequa, Long Island, New York, within this judicial circuit, this court has
jurisdiction over the petition for enforcement under Section 10(e). Enforcement
denied. Remanded for taking of further evidence and making of additional
findings.

Respondent is engaged in the sale of fuel oil for heating purposes and in
servicing oil burners and boilers. All of its customers are home owners located
in the State of New York. During the calendar year 1959 the respondent
purchased from Gulf Oil, which is concededly engaged 'in commerce,' fuel oil
and related products valued at more than $650,000. The largest part of the
product sold to respondent is refined outside the State of New York and

delivered into Gulf's storage tanks in New York, from where it is shipped to
Gulf's stationary storage tanks at Oceanside, Long Island without segregation
according to customers. Respondent's trucks withdraw the oil from the
Oceanside tanks and deliver it directly to customers.1
3

The respondent employs two principal groups of workers: oil burner service
employees numbering approximately 10, and fuel oil drivers numbering
approximately 11.

On September 28, 1959, Local 553 of the International Brotherhood of

Teamsters, Chauffeurs, Warehousemen and Helpers of America, filed a petition
with the Board Case No. 2-RC-10280, seeking to represent a unit of
respondent's servicemen which was later changed to include drivers as well.
Previously, in the summer of 1958, Local 355 of the Retail, Wholesale and
Department Store Union, AFL-CIO, had unsuccessfully attempted to organize
the employees of respondent. Pursuant to the representation petition an election
was held; Local 553 received 10 votes, Local 355 received 6 votes, one vote
was cast for neither union and four votes were challenged.

Immediately after the election a socalled 'shape-up' system was instituted

carrying out a threat to institute such a system if Local 553 won the election and
the extra-gallonage bonus previously paid drivers was discontinued. On
February 14, 1960, Union President Flatow sent a letter to Packman, an officer
of the respondent, stating that Local 355 represented a majority of the
employees and demanding contract negotiations. The following day a meeting
was held and after a cursory examination of the signatures on membership
cards held by Local 355 a contract was entered into, immediately following
which the 'shapeup' system was discontinued and the drivers reimbursed for
wages lost. Thereafter the respondent withheld $140.00 in dues from
employees' wages and remitted this sum to Local 355 during the period
February 23 to April 5, 1960. The Board certified Local 553 on March 15,
1960, as the exclusive representative of respondent's employees pursuant to the
findings of the Regional Director overruling the challenges to two of the
challenged votes. Asserting that the employees had chosen another union, with
whom a contract had been signed, respondent refused to bargain collectively
with Local 553.

The Board concluded that by its threats, promises, and changes in working
conditions for the purpose of influencing the choice of a collective bargaining
agent respondent violated Section 8(a)(1) of the Act, 29 U.S.C.A. 158(a)(1);
and that by recognizing and entering into a collective bargaining agreement
with Local 355 respondent violated Section 8(a)(2) and (1) of the Act, 29

U.S.C.A. 158(a)(2) and (1), by rendering unlawful assistance. Moreover

respondent's agreement to, and enforcement of, a contract provision which
required membership in the unlawfully assisted union as a condition of
employment violated Section 8(a)(3), (2) and (1) of the Act, 29 U.S.C.A.
158(a) (3), (2) and (1). Finally, the Board concluded that respondent was guilty
of a refusal to bargain in violation of Section 8(a)(5) and (1) of the Act, 29
U.S.C.A. 158(a)(5) and (1).
7

The Board ordered respondent to cease and desist from the unfair labor
practices found and from interfering, in any other manner, with the rights of
employees guaranteed by Section 7 of the Act, 29 U.S.C.A. 157. The Board
also ordered respondent to withhold recognition from Local 355 and to cease
giving effect to the bargaining agreement with it, unless and until that union is
certified by the Board; to reimburse its employees for the dues checked off; and
upon request to bargain collectively with Local 553.

Respondent resists enforcement on two grounds: (1) the Board failed to show
any evidence of coercion; and (2) the Board was without jurisdiction of the
subject matter since there was no showing of an effect upon commerce.

Granger, one of respondent's servicemen, testified that Packman, respondent's

secretary and treasurer, pursued a course of conduct which was calculated to
coerce the employees to reject Local 553 in favor of Local 355. Respondent
attempts to meet this testimony by arguing that Granger was biased and
inconsistencies in his testimony show he was unworthy of belief. But this is a
question of credibility as to which the Board is normally the sole judge.2
Moreover, Granger's testimony is corroborated by that of Benjamin Mendolia,3
Kershow,4 Graziano,5 Sammis, 6 and Joseph Mendolia.7

10

The findings on the merits are adequate and adequately supported by

substantial evidence. Reimbursement is appropriate under these circumstances.
The Board's order, including the provision for reimbursement, must therefore
be enforced if the Board had jurisdiction over the dispute.8

11

The Board appears to assume that any employer, whose business exceeds the
Board's 'jurisdictional' minimum of $500,000, who purchases materials from
storage within the state the origin of which is without the state, if involved in a
labor dispute necessarily affects commerce within the meaning of the Act.

12

The findings of the Board on effect on commerce here, perhaps because of

reliance on N.L.R.B. v. Pease Oil Co., 279 F.2d 135 (2 Cir.1960), are quite

meager consisting of the following:

13

'The respondent is a New York corporation, with its principal office and place
of business in Massapequa, Long Island, New York. It is engaged in the
business of selling fuel oil for heating purposes, and servicing oil burners and
boilers. All its customers are home owners located in the State of New York.
During the fiscal year ending June 30, 1959, the Respondent's gross sales
exceeded $500,000. During the calendar year 1959 the Respondent purchased
from Gulf Oil Corporation, herein called Gulf, fuel oil and related products
valued at more than $500,000. Most of the product delivered to the Respondent
is refined outside the State of New York and delivered into Gulf's storage tanks
at New York, New York. It is then transferred to Gulf's stationary storage tanks
at Oceanside, Long Island, New York, without segregation according to
customers. The Respondent's trucks load oil from Gulf's Oceanside tanks, and
from there deliver it either directly to the Respondent's customers, or to the
Respondent's tanks at Massapequa, from which it is later withdrawn and
delivered to customers. The Respondent also obtains some fuel oil by exchange
with other fuel oil companies on Long Island. This operates as follows: The
Respondent draws a certain amount of oil from the other firm's tanks;
conversely the other firm draws the same amount of oil from the Respondent's
tanks. It is a barter operation, without the payment of money. The Respondent
has on occasions obtained truck parts directly from outside the State of New
York. In 1959, these purchases totaled 'a couple of hundred dollars at the most.'
Other than this, the Respondent made no purchases of any kind directly from
outside the State.

14

'Gulf is engaged in the nonretail and retail sale of fuel oils and related products.
It operates in New York and in other States. Its gross sales and operating
revenues in 1959, including consumer excise taxes, amounted to in excess of
$3,170,000,000. The Respondent and the Party to the Contract concede, and I
find, that at all material times Gulf was engaged in commerce within the
meaning of Section 2(6) and (7) of the Act.'

15

These findings are based on this statement by the Law Department of Gulf:

16

'Gulf Oil Corporation is engaged in non-retail and retail business; sales and
other operating revenues (including consumer excise taxes) for 1959 according
to Annual Report amounted to $3,170,847,000.

17

Question No. 1: What was the gross amount of sales of all items sold to
Reliance Fuel Oil Corp. during a twelve-month period?

18

Answer: For the year 1959: $669,805.

19

Question No. 2: Were most of the products sold by Gulf Oil Corp. to Reliance
received by Reliance from sources outside the State of New York?

20

Answer: At present time, most of product delivered to Reliance is refined

outside state and delivered into Gulf's terminal storage within state (New York
City); redelivered into local Gulf storage on Long Island (not segregated for
this customer); again redelivered to customer at or from Gulf's local Long
Island storage.'

21

The Supreme Court, however, seems never to have gone so far as to hold that
mere size of a local business or amount of its purchases within the state of
materials the origin of which was outside the state, without relation to other
factors necessarily brings it within the Act.

22

In Consolidated Edison Co. v. Labor Board, 305 U.S. 197, 59 S.Ct. 206, 214,
83 L.Ed. 126 (1938) the Court declined to place its holding on the purchases of
oil, coal, etc., although very large, which came from without the state.

23

'Whether or not particular action in the conduct of intrastate enterprises does

affect that commerce in such a close and intimate fashion as to be subject to
federal control, is left to be determined as individual cases arise.'

24

Black, J., concurring in Polish Nat. Alliance of U.S. of North America v.

National Labor Relations Board, 322 U.S. 643, 652, 64 S.Ct. 1196, 1201, 88
L.Ed. 1509 (1944):

25

'The doctrine that Congress may provide for regulation of activities not
themselves interstate commerce, but merely 'affecting' such commerce, rests on
the premise that in certain fact situations the federal government may find that
regulation of purely local and intrastate commerce is 'necessary and proper' to
prevent injury to interstate commerce. Houston, E. & W.T. Ry. Co. v. United
States, 234 U.S. 342 (34 S.Ct. 833, 58 L.Ed. 1341); Second Employers'
Liability Cases, Co., 223 U.S. 1, 46-47, (32 S.Ct. 169, 56 L.Ed. 327); and see
Wickard v. Filburn, 317 U.S. 111, 121, (63 S.Ct. 82, 87 L.Ed. 122). In applying
this doctrine to particular situations this Court properly has been cautious, and
has required clear findings before subjecting local business to paramount
federal regulation. City of Yonkers v. United States, 320 U.S. 685 (64 S.Ct.
327, 88 L.Ed. 400), and cases therein cited. It has insisted upon 'suitable regard
to the principle that, whenever the federal power is exerted within what would

otherwise be the domain of state power, the justification of the exercise of the
federal power must clearly appear.' Id.; Florida v. United States, 282 U.S. 194,
211-212 (51 S.Ct. 119, 75 L.Ed. 291); cf. Phelps Dodge Corp. v. Labor Board,
313 U.S. 177, 196-197 (61 S.Ct. 845, 85 L.Ed. 1271); Securities & Exchange
Comm'n v. Chenery Corp., 318 U.S. 80, 92-95 (63 S.Ct. 454, 87 L.Ed. 626).'
26

The Supreme Court has stated that the Congress used the full extent of its
power under the commerce clause in this legislation. Polish Nat. Alliance v.
National Labor Relations Board, supra, at 647. The Court has never, however,
held that local regulation of labor relations in local commerce was completely
superseded. At the time of enactment of the Wagner Act the Congress was not
sure of the limits of its power. Since the courts had defined commerce quite
broadly in the interests of employers affected by strikes of miners and stone
cutters, it was felt that regulation of labor relations could be upheld in
industries affecting commerce on the same basis.9 The limits of the concept
'affecting commerce' have since been defined by the Supreme Court on a case
by case basis in a number of instances.10 The federal field, in the process of
definition has appeared to be steadily expanding. See Cox, Federalism in the
Law of Labor Relations, 1954, 67 Harvard Law Review 1297. It may be that
eventually the Congress will attempt more specifically to define the limits. As
yet we cannot be certain of the extent of the exercise of federal power, but must
take each case as it comes up and fit it into the framework so far constructed.

27

On this question the Board relies on two cases in this circuit, N.L.R.B. v. Van
Deusen, 138 F.2d 893, 895 (2 Cir.1943), N.L.R.B. v. Pease Oil Co., supra, and
on N.L.R.B. v. Townsend, 185 F.2d 378 (9 Cir.1950). None of these furnish
very reliable support to the Board. In Van Deusen there was business in
interstate commerce involved, or alternatively an effect on commerce by
diversion of goods from interstate to intrastate business to replace production
halted by the dispute. In Pease Oil the point as to affecting commerce was not
considered. Townsend, an automobile retailer case, does use broad language
supporting the Board's claim here. The Supreme Court, however, in Howell
Chevrolet Co. v. N.L.R.B., 346 U.S. 482, 74 S.Ct. 214, 98 L.Ed. 215 (1953), in
affirming another 9th Circuit case which had cited Townsend, N.L.R.B. v.
Howell Chevrolet Co., 204 F.2d 79 (9 Cir.1953), relied almost wholly on the
interdependence of Howell's local and General Motors' national activities due
to the detailed supervision permitted by the agency agreement.

28

It may be that today the Court would answer in the affirmative the question it
left pending in Consolidated Edison. In view of the caution expressed in
Howell, and in the concurring opinion in Polish Alliance, however, we may be
sure that a reasonably complete picture of the manner in which a work stoppage

would affect commerce should be required before we rule on the jurisdictional

issue. We cannot tell from the meager record before us anything about the
volume of commerce in heating oils in the relevant market, Gulf's participation
therein, Reliance's contract relationship, if any, with Gilf's national distribution
system, Reliance's proportion of Gulf's commerce in the relevant market, or the
number and availability of alternate distributors to Gulf and to Reliance's
customers.11 While volume of commerce affected is not in itself material, such
factual findings might well throw light upon the manner in which a stoppage at
Reliance would affect commerce, if at all. We therefore decline to enforce the
order at this time upon the record before us. Compare N.L.R.B. v. Mid-Co
Gasoline Co., 172 F.2d 974 (5 Cir.1949), Stauffer v. Exley, 184 F.2d 962, 96768 (9 Cir.1950). The case is remanded to the Board with instructions to take
further evidence and make further findings on the manner in which a labor
dispute at Reliance affects or tends to affect commerce.
On Motion of N.L.R.B. for Rehearing
29

Petition for rehearing denied.

30

Section 2(7) of the National Labor Relations Act defines 'affecting commerce'
as 'in commerce, or burdening or obstructing commerce or the free flow of
commerce, or having led or tending to lead to a labor dispute burdening or
obstructing commerce or the free flow of commerce.' Therefore, if the
employer is himself engaged in interstate commerce, without more the
jurisdiction of the Board is established. If the employer is not engaged in
interstate commerce, the acts in question must lead or tend to lead to a dispute
which must burden or obstruct the free flow of interstate commerce. We believe
that in enacting this double test Congress intended the courts to examine
whether or not a labor dispute involving only employers not engaged in
interstate commerce did or did not directly or indirectly burden or obstruct
interstate commerce. Had Congress meant to give the Board jurisdiction of all
labor disputes involving employers who purchased more than a deminimis
amount of supplies which had at one time moved in interstate commerce, it
would have been easy enough to say so.

31

The case of Wickard v. Fillburn, 317 U.S. 111, 63 S.Ct. 82, 87 L.Ed. 122
(1942), urged upon us by the Board's petition for rehearing is inapplicable here.
In that case the Supreme Court was dealing with a statute which was clearly
broad enough to apply to the defendant's activities, and the only question before
the court was the constitutionality of that statute. In the case at bar, the
constitutionality of regulating the defendant's labor dispute is clear, and we are
faced with a question of statutory interpretation. In the resolution of this

question, the findings called for in the opinion are required.

The Board also found that respondent draws a certain amount of oil from other
firms' tanks on a barter basis and that a portion of its purchases of truck parts is
made outside of New York State which totals 'a couple of hundred dollars at
the most.' As the Board did not rest its jurisdiction on these factors they will not
be considered by the court

E.g., N.L.R.B. v. Morris Fishman & Sons, Inc., 278 F.2d 792 (3 Cir.1960);
N.L.R.B. v. Steel, Metals, Alloys and Hardware Fabricators and
Warehousemen, Local 810, 274 F.2d 688 (2 Cir.1960); Paramount Cap Mfg.
Co. v. N.L.R.B., 260 F.2d 109 (8 Cir.1958)

Stenographic Transcript of Testimony, 113

Id. at 81-3

Id. at 137

The witness stated that Packman told him that 'You see what's happened to the
drivers, and you men haven't been hurt as yet.' Id. at 55

146-8

Since the Board's finding of coercion in the selection of a representative is

amply supported by the evidence it is unnecessary to discuss respondent's
contention that it was required to bargain with Local 355 which was found to be
an employer-assisted union. N.L.R.B. v. Revere Metal Art Co., 280 F.2d 96,
99-100 (2 Cir.1960). Even if the employees underwent a genuine change of
attitude based upon a self-induced reappraisal they would be unable to
repudiate informally the outcome of the election, at least after certification, for
a reasonable period. Brooks v. N.L.R.B., 348 U.S. 96, 75 S.Ct. 176, 99 L.Ed.
125 (1954)

70 Cong.Rec. 9682 (Rep. Connery), 74th Cong., 1st Sess. (1935)

'The Supreme Court has said again and again, in the Coronado case and in the
Stonecutters case that anything that affects interstate commerce, as far as a
labor dispute is concerned, which burdens or obstructs interstate commerce,
can be regulated under the commerce clause of the Constitution.'

10

E.g., N.L.R.B. v. Jones & Laughlin Steel Co., 301 U.S. 1, 57 S.Ct. 615, 81
L.Ed. 893 (1937); N.L.R.B. v. Fainblatt, 306 U.S. 601, 59 S.Ct. 668, 83 L.Ed.

1014 (1939); Wickard v. Filburn, 317 U.S. 111, 63 S.Ct. 82, 87 L.Ed. 122
(1942); Howell Chevrolet v. N.L.R.B., infra; Polish National Alliance v.
National Labor Relations Board, supra
11

While we are aware that alternative sources of supply do not necessarily negate
a finding of jurisdiction, N.L.R.B. v. Bradford Dyeing Ass'n, 310 U.S. 318,
326, 60 S.Ct. 918, 84 L.Ed. 1226 (1940), it seems essential that the court be
enlightened as to the factual relationships involved