Operations In Fiscal Year 1988 - National Labor Relations Board

26 Fffty-Third Annual Report of the National Labor Relations Boardeducational, and informational exchange sponsored and fundedby the Federal Republic of Germany.The petitioner sought to represent all employees who were notGerman nationals. 7 With respect to issues of statutory jurisdiclion,the Board first determined, based on the stipulated facts,that the employer's funding from the Federal Republic met theSection 2(6) test of commerce between "any foreign country andany State" and that its amount demonstrated a substantial effecton commerce. Secondly, the Board discussed congressionalintent regarding coverage of foreign instrumentalities as employers.The Board found that the employer did not come within anyexpress exclusion defined in Section 2(2) of the Act. 8 In responseto the employer's argument that it was engaged in diplomatic activitiesthat took it outside the reach of the Act, the Board concluded,as it did in State Bank of India I, that certain SupremeCourt cases dealing with foreign fiagships 8 did not apply becausethey were limited to disputes among foreign nationals occurringon ships only temporarily within the territorial United States.1°• Having determined that it had statutory jurisdiction over theemployer, the Board addressed the employer's claim that the exerciseof the Board's discretionary jurisdiction was inconsistentwith the intent of the Foreign Sovereign Immunities Act of 1976(FSIA). 11 The Board decided to continue to follow State Bankof India I in resolving sovereign immunity claims against an employerthat is "an agency or instrumentality" of a foreign statewhen that employer is otherwise engaged in commerce withinthe meaning of Section 2(6) and (7) of the Act. The Board alsoexpanded on State Bank of India Ts discussion of the legislativehistory of the FSIA with respect to congressional intent to denysovereign immunity to a foreign state's private or commercialacts occurring within the United States. In particular, the Boardfound that the immunity did not extend to certain labor disputesinvolving foreign government employers. The history states thatthe employment of "laborers, clerical staff or public relations ormarketing agents" is included within "commercial activity" and7 Employees of the employer Who were German citizens were represented for collective-bargainingpurposes by a German union under German law.'See State Bank of India, 229 NLRB 833 (1977) (State Bank of India I). The Board relied on thiscase in deciding State Bank of India, 273 NLRB 264 (1984) and 273 NLRB 267 (1984), enfd. 808 F.2d526 (7th Cir. 1986) (State Bank of India II).'Benz V. Compania Naviera Hidalgo, 353 U.S. 138 (1957), and McCulloch v. Sociedad Nacional deMarineros, 372 U.S. 10 (1963). The Court declined to construe the Act as extending to the internaloperations of foreign flagships employing alien seamen only temporarily located in the United States.'° The Board noted that the court of appeals enforcing State Bank of India II relied on another caseregarding the Board's jurisdiction over a foreign flagship, Longshoremen ILA Local 1416 v. AriadneShipping Co., 397 U.S. 195 (1970). In that case, the Court limited Benz and McCulloch to their facts inholding that a dispute centering on American longshoremen on American docks was outside the internaloperations of the ship and, accordingly, was within the Board's jurisdiction. The Board stated thatAriadne lent further support to its decisions in State Bank of India l and H and to its holding in thisproceeding where the activities of the employer over which it had been requested to assert jurisdictionoccurred solely within the territory of the United States.11 28 U.S.0 § 1602 et seq.