State Bank of India, 838 (1977)

Docket Number:13-RC-14061


State Bank of India and Chicago Joint Board,

Amalgamated Clothing and Textile Workers Union, AFL-CIO, Petitioner.' Case 13-RC-14061



On July 15, 1976, the Regional Director for Region 13 issued his Decision and Order in the aboveentitled proceeding in which, relying on the Board's established policy of declining to assert jurisdiction over enterprises that are owned and operated by foreign governments, he concluded that 'it is appropriate to decline to assert jurisdiction over this Employer because of its close relationship to the Central Government of India.' Thereafter, the Petitioner filed a timely request for review, submitting that there are compelling reasons for reconsidering the Board's policy of declining to assert discretionary jurisdiction over employers engaged in commercial activities within the United States of America solely because of their 'close relationship' to a foreign government. The Employer opposed review.

By telegraphic order dated November 4, 1976, the Board granted Petitioner's request for review. Thereafter, both parties filed briefs. On January 17, 1977, the Board's Executive Secretary notified the parties that the Board would hear oral argument.2 Oral arguments were held before all five Members of the Board on February 15, 1977.

Having duly considered the entire record in this case, including the briefs and oral arguments, the Board finds:

This case affords the Board the opportunity to reexamine its past policy of refusing to exercise jurisdiction over commercial activities of foreign governments or their agents occurring within the United States. There are two questions: whether the Board has the power to assert jurisdiction and whether the Board should exercise that power. Since 1967, the Board has consistently declined to assert jurisdiction over such employers and usually found it unnecessary to reach the question whether it had jurisdiction. We now conclude that both questions are to be answered in the affirmative. Accordingly, for the reasons set forth hereafter, we shall reverse the Regional Director, overrule the authorities upon which he relied, and direct an election herein.

'The name of the Petitioner appears as amended at the hearing to reflect the merger of the Amalgamated Clothing Workers of Amenca with the Textile Workers Union.

2 Thereafter, the Board denied Petitioner's request for a postponement of the oral argument. It also denied requests from counsel in SK Products Corp., Case 13-RC-14229, for oral argument in that case and its 229 NLRB No. 137

The Petitioner seeks to represent a stipulated unit of employees employed in the State Bank of India's branch office in Chicago, Illinois. The State Bank of India (herein sometimes called State Bank) took the position that the petition should be dismissed on the grounds that the Board does not have, or should not assert, jurisdiction over it because it is a foreign corporation substantially owned and operated by the Indian Government as an integral part of the monetary policy of that country. In support of these contentions, the State Bank cited McCulloch v.

SociedadNacionalde Marineros,de Honduras[United Fruit Co.], 372 U.S. 10 (1963); British Rail-International, Inc., 163 NLRB 721 (1967), which compared Sociedad Nacional de Marineros; and AGIP, USA,

Inc., 196 NLRB 1144 (1972), which depended upon British Rail-International.In the cited Board cases, the Board majority, in the exercise of its discretion, declined to assert jurisdiction over American corporations operating within the territorial limits of the United States on the basis of such employers' 'close relationship' with an 'agency' or 'an instrumentality' of a foreign government, without reaching the question whether, in fact, the Board had legal jurisdiction over the employers' operations with respect to the employees involved therein.3

The Nature of the Employer's Operations The Employer, which was at one time India's largest privately owned bank, was nationalized in 1955 and incorporated under a special act as the State Bank of India. By law, the government must hold at least 55 percent ofthe State Bank's shares. At present over 92 percent of the State Bank's stock is owned by the Reserve Bank ofIndia, which in turn is a wholly owned and controlled agency of the Indian Government. The State Bank is run by 18 directors, of whom 16 are appointed by, or subject to approval by, the Indian Government. By law, no fewer than nine must be directly appointed by the Central Government. At present, 8 percent of the State Bank's stock is held by, and two of its directors were elected by, private persons of unspecified nationality in India. The goals of the State Bank are largely determined by the State Bank Act, orders of the Reserve Bank, and direct requests by the Indian Central Government. In addition, Indian law provides that the State Bank must act as agent for the Reserve Bank of India (herein sometimes called RBI). RBI performs many of the functions perconsolidation for argument herewith. The instant Employer opposed such consolidation.

3 Chairman Fanning in his dissenting opinion in AGIP, USA, supra, did reach the question of the Board's legal jurisdiction, and would have asserted jurisdiction over the employer therein. He did not participate in British RailInlernational.


STATE BANK OF INDIA formed by the Federal Reserve Bank, the Treasury, and other Federal Government agencies in the United States, e.g., collects taxes, holds Central Government moneys, pays checks for Central Government employees, determines and holds required reserves of banks, prints bank notes which are legal tender, and so on.

The State Bank, with central offices in Bombay,

India, does approximately one-third of the total banking business in India and acts as agent for the RBI in any location where it is established and RBI is not, performing such functions as listed above. In addition, its directors and officers have such governmental functions as the authority to authenticate official documents, to attest pension applications by Indian government employees and to certify passport applications of Indian citizens.

In addition to its domestic Indian banking business, the State Bank of India carries on international banking throughout the world. In 1974, it had overseas branch offices in the United States, the United Kingdom, West Germany, Sri Lanka, and the...

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