NATIONAL LABOR RELATIONS BOARD, Petitioner,
v.
RANDOLPH ELECTRIC MEMBERSHIP CORPORATION, Respondent.
NATIONAL LABOR RELATIONS BOARD, Petitioner,
v.
TRI-COUNTY ELECTRIC MEMBERSHIP CORPORATION, Respondent.
Nos. 9437, 9438.
United States Court of Appeals Fourth Circuit.
Argued Oct. 7, 1964.
Decided March 3, 1965.
Melvin J. Welles, Atty., National Labor Relations Board (Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Assoc. Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, and Hans J. Lehmann, Atty., National Labor Relations Board, on brief), for petitioner.
Thornton H. Brooks and Thos O. Moore, Jr., Greensboro, N.C. (Deane F. Bell, Asheboro, N.C., William T. Crisp, Raleigh, N.C. and Herbert B. Hulse, Goldsboro, N.C., оn brief), for respondent.
Before SOBELOFF, Chief Judge, and HAYNSWORTH and BOREMAN, Circuit judges.
SOBELOFF, Chief Judge.
The National Labor Relations Board has petitioned for enforcement of its orders entered against the Randolph Electric Membership Corporation and the Tri-County Electric Membership Corporation in two separate proceedings, requiring them to bаrgain with the union it had certified.
Both Randolph and Tri-County are incorporated under the provisions of the Electric Membership Corporation Act of North Carolina1 and have obtained substantial loans from the Rural Electrification Administration, a federal instrumentality created by the Rural Electrification Act of 1936.2 Both are nonprofit corporations whose rural memberships consist predominantly of farm and residential consumers of electricity. Each is engaged in the distribution and sale to its members of electric power which it has purchased from the Carolina Power and Light Company, a privately owned utility, and the Southeastern Power Administration, an agency of the federal Government.
Following Board certification of Local Union No. 485 of the International Brotherhood of Electrical Workers as bargaining representative of the employees of both Randolph and Tri-County, the union requested the start of bargaining negotiations. Both refused to grant recognition аnd bargain with the union on the sole ground that they are not 'employers' within section 2 of the National Labor Relations Act, 29 U.S.C.A. 152 (1956), but 'political subdivisions' of the state of North Carolina and thus expressly excluded from coverage by the terms of the Act.3 The Board held that they are 'employers' within the meaning of the Act, and not 'political subdivisiоns' as contended. It consequently found that their refusals to bargain with the union constituted unfair labor practices violative of sections 8(a)(5) and (1) of the Act, 29 U.S.C.A. 158(a)(5) and (1) (1956).
The case turns then on the sole issue, whether Randolph and Tri-County are 'political subdivisions' within the meaning of the National Labor Relations Act.
The term 'political subdivisiоn' is not defined in the Act and its legislative history is silent as to the purpose of Congress in using these words. We do not, however, write on a clean slate in construing their meaning. Congress has assigned that function to the National Labor Relations Board, and we look to what it has decided in this and in earlier cases. Here the Board's initial determination as to the specific application of broad statutory terms rests on its familiarity with labor problems and its experience in the administration of the Act. To the extent that it has taken into account economic realities as well as the statutory purposes, the Board's determination is entitled to great respеct. National Labor Relations Board v. E. C. Atkins & Co.,
For the reasons to be stated we conclude that the Board's orders were properly issued and are entitled to enforcement.
The main thrust of the electric corporations' argument is that by excepting 'political subdivisions' from the Act's coverage, Congress wished to disclaim federal jurisdiction and also evidenced an intention that state law declarations and interpretations should control in determining whеther an organization is a 'political subdivision.' The corporations assert that it is only in situations:
'where Congress has statutorily asserted federal jurisdiction over enterprises that had theretofore been exclusively under state control * * * that courts will disregard state law in an effort to derive a construction of uniform national аpplication.'
Their argument then continues that, because North Carolina's legislature declared and several successive Attorneys General have ruled that corporations formed under the Electric Membership Corporation Act of North Carolina are 'political subdivisions,' it follows that they are exempt frоm coverage by the National Labor Relations Act.
There are, of course, instances in which the application of certain federal statutes may depend on state law. Examples are seen in the Reconstruction Finance Corporation Act,4 and in the assimilative crimes statute.5
But this is controlled by the will of Congress. In the absence of a рlain indication to the contrary, however, it is to be assumed when Congress enacts a statute that it does not intend to make its application dependent on state law. Jerome v. United States,
The argument of the electric corporations fails to persuade us that Congress intended the result for which they contend. Furthermore, it ignores the teachings of the Supreme Court as to the congressional purpose in enacting the national labor laws. In National Labor Relations Board v. Hearst Publications,
'Both the terms and the purposes of the statute, as well as thе legislative history, show that Congress had in mind no * * * patchwork plan for securing freedom of employees' organization and of collective bargaining. The Wagner Act is federal legislation, administered by a national agency, intended to solve a national problem on a national scale. * * * Nothing in the statute's background, history, terms or purposes indicates its scope is to be limited by * * * varying local conceptions, either statutory or judicial, or that it is to be administered in accordance with whatever different standards the respective states may see fit to adopt for the disposition of unrelated, local problems.'
Thus, it is clear that state law is not controlling6 and that it is to the аctual operations and characteristics of Randolph and Tri-County that we must look in deciding whether there is sufficient support for the Board's conclusion that they are not 'political subdivisions' within the meaning of the National Labor Relations Act.
Like all other North Carolina electric membership corporations, Rаndolph and Tri-County are organized and operate pursuant to the provisions of the North Carolina Electric Membership Corporation Act. This authorizes the formation of a rural electric membership corporation upon approval of its feasibility by the North Carolina Rural Electrification Authority. The Authority is an agency created directly by the state, whose members are appointed by the Governor; and after the Authority has found the feasibility of the proposed formation of an electric membership corporation and approved any application for loans from the federal Rural Electrification Administrаtion, the Authority exercises no regulatory control over the corporation. The directors of each rural electric corporation are elected independently of the Authority by the corporation's own members. The directors of the corporation, not the Authority, conduct the corporate business. Each electric membership corporation possesses the usual powers of a private corporation except that it is under a duty to make membership available without arbitrary or unreasonable limitations.
The Board held that Randolph and Tri-County are not 'political subdivisions' because they are neither created directly by the state nor administered by state-appointed or publicly elected officials.7 Its decision rested also on the facts (1) that the North Carolina statute does not subject operations of electric membership corporations to substantial control or supervision, either by thе state or by its Rural Electrification Authority, (2) that these corporations are formed for the exclusive benefit of its own members, (3) do not have the power of eminent domain, and (4) are not empowered to exercise any portion of the sovereign power of the state of North Carolina.
In a series of casеs beginning with Gibson County Electric Membership Corporation,
Randolph and Tri-County concede that their operations are similar to those of electric cooperatives in other states. They are neither owned nor operated by the state; their officers are not publicly appointed but elected by their own members, as in every privately owned utility; they are regulated in their day-to-day operations in the same manner as other privately owned public service corporatiоns. They stress, however, that, unlike other states, North Carolina had labeled them 'political subdivisions.' The fact that North Carolina sees fit to characterize such corporations as 'political subdivisions' and to accord them certain benefits in respect to state taxation and otherwise, which are normally enjoyed only by municipal corporations, counties and political subdivisions, is not decisive of the question before us, since their relation to the state and their actual methods of operation do not fit the label given them.
The argument is made that several rulings of the United States Treasury Department indicate that Randolph and Tri-Cоunty are 'political subdivisions.' These rulings, however, point in several directions,9 and are not helpful to the argument. In any event, these rulings of the Internal Revenue Service are not determinative of the meaning of the section 2(2) exemption for purposes of the National Labor Relations Act.
Nor do we perceivе any force in the argument advanced by Randolph and Tri-County that it would be illegal under the law of North Carolina10 for them to recognize, bargain with, or enter into collective bargaining agreements with the union, for under the Supremacy Clause of the Constitution, the state's jurisdiction to regulate labor relations is limited to matters not prе-empted by federal labor legislation. Division 1287 Amalgamated Ass'n of St. Elec. Ry. etc., Employees v. Missouri,
Urging that they are truly 'political subdivisions,' Randolрh and Tri-County further show that upon dissolution their assets would revert to the state.13 This contingency is too remote to the entitled to controlling significance and cannot outweigh all of the evidence upon which the Board concluded that Randolph and Tri-County are not 'political subdivisions.'
For these reasons, we are of the firm opinion that there was ample support in fact and in law for the Board's order. It will therefore be.
Enforced.
Notes
General Statutes of North Carolina, Ch. 117, Art. 2, 6 et seq. (Public Laws of 1935, Ch. 291 as amended)
7 U.S.C.A. 901 et seq. (1964)
Section 2(2) of the Act provides:
'(2) The term 'employer' * * * shall not include * * * any State or political subdivision thereof, * * *.'
15 U.S.C.A. 607 (1963). The meaning of the term 'real property' as used in that statute is to be detеrmined by state law. See RFC v. Beaver County,
18 U.S.C.A. 13 (1950), which provides that acts or omissions performed or omitted on a federal reservation which are not otherwise punishable by federal law are federal crimes if punishable under the law of the state in which the reservation is located
The Board's opinion to the contrary in Nеw Bedford, Wood's Hole, Martha's Vineyard, etc. Steamship Authority,
Because the purpose of Congress in enacting the National Labor Relations Act was to deal with national problems (National Labor Relations Board v. Hearst Publications,
The Board has long required the existence of at least one of these two factors for the section 2(2) exemption to be applicable. See Mobile Steamship Assn.,
Tishomingo County Electric Power Assn.,
In these cases the Board has consistently applied the rule that, for purposes of the National Labor Relations Act, rural electric cooperatives shall be treated as public utilities, and it has exercised its jurisdiction over all such cooperatives as meet the Board's jurisdictional standards. Since Sioux Valley, supra, the jurisdictional standard has been a gross volume of business of at least $250,000.00 per annum.
In none of these cases, however, did the Board deal with the issue of whether these rural electric cooperatives are 'political subdivisions' within section 2(2).
In 1942, the Internal Revenue Service rejected Randolph's claim to exemption from employment taxes under the Social Security Act made on the ground that it is a 'political subdivision.' D. v. L. 5785, A & C: RR: 2-PAM. In 1957, Internal Revenue ruled that North Carolina electric membership corporations come within the scope of the exemption from certain federal excise taxes provided for states or political subdivisions thereof. Int.Rev.Bull., Cum.Bull., 1957-1, p. 364; Rev.Rul. 57-193. Then on March 10, 1961, it ruled that Randolph was nоt subject to federal income taxation as an 'instrumentality of the State of North Carolina.'
General Statutes of North Carolina, Ch. 95, Art. 12, 97 (Public Laws of 1959, Ch. 742), prohibits any 'employee' of the state of North Carolina or its instrumentalities from becoming a member of a labor union. Section 98 of that chapter declares that collective bargaining agreements between 'units of government' and labor unions acting as bargaining agents for such 'employees,' are against the public policy of the state, illegal and void. Section 99 declares that any violation of Article 12 is a misdemeanor
Cf. Amalgamated Association of Street Electric Ry. & Motor Coach Employees of America v. Dade County,
Moreover, Article 12 defines the terms 'employee' and 'employees' as 'any regular and full-time employee engaged exclusively in law enforcement or fire protection activity.' Because the employees of Randolph and Tri-County are not engaged exclusively in these activities, Article 12 appears inapplicable
Section 117-24 of the North Carolina Electric Membership Corporation Act provides:
'Dissolution.-- * * * Any assets remaining after all liabilities or obligations of the corporation have been satisfied or discharged shall pass to and become the property of the State.'