Building Material & Dump Truck Drivers Local 36

386 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Building Material and Dump Truck Drivers, Team- sters Local Union No. 36, International Broth- erhood of Teamsters, Chauffeurs, Warehouse- men and Helpers of America; Associated Gener- al Contractors of America, San Diego Chapter, Inc.; San Diego Building Contractors Associ- ation; Engineering and General Contractors As- sociation and California Dump Truck Owners Association Building Material and Dump Truck Drivers, Team- sters Local Union No. 36, International Broth- erhood of Teamsters, Chauffeurs, Warehouse- men and Helpers of America and Larry Shepard and Terra Trucking Company, Party to the Contract. Cases 21-CE-197 and 21-CE-220 May 8, 1980 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS PENELLO AND TRUESDALE On October 30, 1979, Administrative Law Judge Russell L. Stevens issued the attached Decision in this proceeding. Thereafter, both Respondent Union and Respondent Associations filed excep- tions and supporting briefs. Charging Party Califor- nia Dump Truck Owners Association filed a brief in reply to the exceptions. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings, find- ings,' and conclusions of the Administrative Law Judge and to adopt his recommended Order, as modified herein. 2 ' We disavow statements in the Administrative Law Judge's Decision with respect to secs. 4 and 4.4 of Respondents' Master Labor Agreement (MLA) which suggest that offsite activity is per se secondary activity within the meaning of Sec. 8(e) of the Act. The jobsite limitation in the construction industry proviso to Sec. 8(e) has no relevance to the prima- ry or secondary nature of activity as defined by the standard set forth in National Woodwork Manufacturers Association. et al. v. N.L.R.B., 386 U.S. 612 (1967). We agree with the Administrative Law Judge that sec 4.4 has as its object secondary activity, but this is so because it contains a union referral provision directed at furthering general union objectives and regulating labor policies of employers other than those who are par- ties to the agreement. See Local 585 of the Brotherhood of Painters Deco- rators d Paper Hangers of America, AFL-CIO and Galveston Building and Construction Trades Council (Falstaff Brewing Corporation), 144 NLRB 100, 105 (1963). The fact that secs. 4 and 4.4 cover offsite work means only that any related secondary provisions in the MLA are not entitled to protection under the construction industry proviso. Chairman Fanning agrees that the 8(e) proviso does not protect the secondary restrictions here insofar as they affect the work of deliveries to and from the jobsite. He does not agree that proviso protection is inappli- cable to the work of repairing construction equipment on the jobsite. See his dissenting opinion in International Union of Operating Engineers, Local Union Vo. 12 (Acco Construction Equipment, Inc.), 204 NLRB 742 (1973). 2 In accord with past Board practice, we shall divide the recommend- ed Order into separate sections for Respondent Union and Respondent 249 NLRB No. 38 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board adopts as its Order the recommended Order of the Administrative Law Judge and hereby orders that: A. Respondent Building Material and Dump Truck Drivers, Teamsters Local Union No. 36, In- ternational Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, San Diego, California, its officers, agents, and repre- sentatives, shall: 1. Cease and desist from entering into, maintain- ing, giving effect to, or enforcing sections 4.4, 42(B)(1), 42(B)(2), 42(B)(3), 42(B)(4), 42(B)(9), 42(B)(11), 42(B)(12), and 42(B)(13) of the Master Labor Agreement for San Diego County to the extent found unlawful herein. 2. Take the following affirmative action designed to effectuate the policies of the Act: (a) Post at its business offices and meeting halls copies of the attached notice marked "Appendix A." 3 Copies of said notice, on forms provided by the Regional Director for Region 21, after being duly signed by Respondent Union's authorized rep- resentative, shall be posted by said Union immedi- ately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to mem- bers are customarily posted. Reasonable steps shall be taken by Respondent Union to insure that said notices are not altered, defaced, or covered by any other material. Associations. In addition, we shall delete the injunctive language con- tained in par. (c) of the recommended Order. Such language is not usu- ally included in Board orders dealing with 8(e) violations which do not directly involve employees' Sec. 7 rights. Finally, we shall delete lan- guage in the recommended Order requiring Respondents, jointly and sev- erally, to reimburse dump truck owner-operators for the payment of initi- ation fees, dues, and contributions deducted for union benefit funds as a result of the enforcement of unlawful secondary provisions in Respond- ents' Master Labor Agreement. The Board has on one occasion adopted without comment an Administrative Law Judge's recommended Order containing such a remedy. Local 814, International Brotherhood of Team- sters, Chauffeurs, Warehousemen and Helpers of America (Santini Brothers. Inc.), 208 NLRB 184, 201 (1974). In the present case, however, there is insufficient evidence in the record with respect to alleged losses directly attributable to actual coercion by Respondents. Furthermore, we find a reimbursement order, typically used to "make whole" employees for vio- lations of the Act, to be generally overbroad and inappropriate in the context of 8(e) violations. We note that aggrieved owner-operators en- gaged in business as independent contractors may pursue a damage claim under Sec. 303 of the Act. For the foregoing reasons, we find that the reimbursement of owner-operators ordered by the Administrative Law Judge would not effectuate the remedial policies of the Act. See Local 60, United Brotherhood of Carpenters and Joiners of America. AFL-CIO. et al. [Mechanical Handling Systems, Inc.] v. NL.R.B., 365 U.S. 651 (1961). 3 In the event that this Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursu- ant to a Judgment of the United States Court of appeals enforcing an order of the National Labor Relations Board." BUILDING MATERIAL AND DUMP TRUCK DRIVERS, LOCAL 36 387 (b) Sign and mail to said Regional Director suffi- cient copies of the aforementioned notice for post- ing at the premises of Associated General Contrac- tors of America, San Diego Chapter, Inc., San Diego Building Contractors Association, Engineer- ing and General Contractors Association, their re- spective employer-members, and Terra Trucking Company, if willing. (c) Notify the Regional Director for Region 21, in writing, within 20 days from the date of this Order, what steps Respondent Union has taken to comply herewith. B. Respondents Associated General Contractors of America, San Diego Chapter, Inc., San Diego Building Contractors Association, Engineering and General Contractors Association, and their em- ployer-members, San Diego, California, their offi- cers, agents, successors, and assigns, shall: 1. Cease and desist from entering into, maintain- ing, giving effect to, or enforcing sections 4.4, 42(B)(1), 42(B)(2), 42(B)(3), 42(B)(4), 42(B)(9), 42(B)(11), 42(B)(12), and 42(B)(13) of the Master Labor Agreement for San Diego County to the extent found unlawful herein. 2. Take the following affirmative action designed to effectuate the policies of the Act: (a) Post at their places of business copies of the attached notice marked "Appendix B." 4 Copies of said notice, on forms provided by the Regional Di- rector for Region 21, after being duly signed by au- thorized representatives of Respondent Associ- ations, shall be posted by Respondent Associations and their employer-members immediately upon re- ceipt thereof, and be maintained by them for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent Associations and their employer- members to insure that said notices are not altered, defaced, or covered by any other material. (b) Notify the Regional Director for Region 21, in writing, within 20 days from the date of this Order, what steps the Respondent Associations have taken to comply herewith. 4 See fn 3, supra. APPENDIX A NOTICE To EMPLOYEES AND MEMBERS POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT enter into, maintain, give effect to, or enforce sections 4.4, 42(B)(1), 42(B)(2), 42(B)(3), 42(B)(4), 42(B)(9), 42(B)(11), 42(B)(12), and 42(B)(13) of our Master Labor Agreement for San Diego County with Associated General Contractors of America, San Diego Chapter, Inc., San Diego Building Contractors Association, Engi- neering and General Contractors Association, and their employer-members, to the extent that such provisions violate Section 8(e) of the Na- tional Labor Relations Act, as amended. BUILDING MATERIAL AND DUMP TRUCK DRIVERS, TEAMSTERS LOCAL UNION No. 36, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA APPENDIX B NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT enter into, maintain, give effect to, or enforce sections 4.4, 42(B)(1), 42(B)(2), 42(B)(3), 42(B)(4), 42(B)(9), 42(B)(11), 42(B)(12), and 42(B)(13) of our Master Labor Agreement for San Diego County with Building Material and Dump Truck Drivers, Teamsters Local Union No. 36, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, to the extent that such provisions violate Section 8(e) of the National Labor Re- lations Act, as amended. ASSOCIATED GENERAL CONTRACTOR OF AMERICA, SAN DIEGO CHAPTER, INC. SAN DIEGO BUILDING CONTRACTORS ASSOCIATION ENGINEERING AND GENERAL CON- TRACTORS ASSOCIATION DECISION STATEMENT OF THE CASE RUSSELL L. STEVENS, Administrative Law Judge: This case was heard in San Diego, California, on August 27, 1979. The charge in Case 21-CE-197 was filed on De- cember 19, 1977, by California Dump Truck Owners As- sociation (CDFA). The charge in Case 21-CE-220 was filed on October 20, 1978, by Larry Shepard,' an indi- vidual. By order dated January 29, 1979, the Regional ' Individuals are referred to herein by their last names 388 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Director for Region 21 of the National Labor Relations Board consolidated said two cases for hearing. The com- plaint, issued January 29, 1979, alleges that Building Ma- terial and Dump Truck Drivers, Teamsters Local Union No. 36, International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America (Union), and Associated General Contractors of America, San Diego Chapter, Inc. (AGC); San Diego Building Con- tractors Association; Engineering and General Contrac- tors Association (Associations) violated Section 8(e) of the National Labor Relations Act as amended. All parties were given full opportunity to participate, to introduce relevant evidence, to examine and cross-ex- amine witnesses, and to argue orally. Briefs, which have been carefully considered, were filed on behalf of Gener- al Counsel, Shepard, CDTA, Union, and Associations. Upon the entire record, and from my observation of the witnesses and their demeanor, I make the following: FINDINGS OF FACT I. JURISDICTION Respondent Associations, and each of them, are associ- ations comprised of various employers who are engaged in business as contractors or subcontractors in the build- ing and construction industry in southern California, which exist for the purpose of, and do engage in, collec- tive bargaining on behalf of their respective employer- members with various labor organizations, including Re- spondent Union. The employer-members of Associations, in the aggregate, annually purchase and receive goods and products valued in excess of $50,000 directly from suppliers located outside the State of California. I find that Associations and their employer-members are employers engaged in commerce and in businesses af- fecting commerce within the meaning of Section 2(6) and (7) and Section 8(e) of the Act. II. THE LABOR ORGANIZATION INVOLVED Building Material and Dump Truck Drivers, Team- sters Local Union No. 36, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, is, and at all times material herein has been, a labor organization within the meaning of Section 2(5) of the Act. 11l. THE ALLEGED UNFAIR LABOR PRACTICES Background 2 The basic dispute among the parties involves the ques- tion of whether or not the collective-bargaining agree- ment involved herein legally can treat owner-operators of dump trucks as employees of contractors for the pur- poses of that agreement. The dispute and its similar pre- decessors are not new to judicial and NLRB processes; they have been considered in many earlier decisions and opinions. However, the genesis of the controversy goes 2 This background summary is based upon testimony and evidence that is not in dispute, and is based in part upon General Counsel's brief The transcript has been carefully reviewed, with the facts summarized herein having been drawn from the transcript and its accompanying exhibits. back as far as 1965, when the Union proposed for inclu- sion in the collective-bargaining agreement then being negotiated, language similar to that now being consid- ered. The language as proposed was not, however, in- cluded within the agreement. That language later, as ex- panded, was insisted upon by the Union, and included in agreements of 1972, 1974, and in the current 1977-80 agreement. In its Decision of January 17, 1973, based upon repre- sentation proceedings, the Board held in Contractor Members of the Associated General Contractors of Califor- nia, Inc., 201 NLRB 311, that owner-operators were "employees" within the meaning of the Act. The Board reiterated that position on September 23, 1975, in Associ- ated General Contractors of California, Inc., etc., 220 NLRB 540, an unfair labor practice case. In December 1977, the Court of Appeals for the Ninth Circuit re- versed the Board, held that the owner-operators were in- dependent contractors rather than employees, and re- manded the case to the Board. Associated General Con- tractors, etc. v. N.L.R.B., 564 F.2d 271 (1977). In its Sup- plemental Decision and Order dated December 8, 1978, the Board stated "we conclude that the owner-operators who drive the trucks herein are independent contractors and not employees." Further, the Board vacated its De- cision reported in 201 NLRB 311, 209 NLRB 363, and 209 NLRB 366, and dismissed the representation petition. Associated General Contractors of California, Inc., 239 NLRB 686 (1978). In Novemer 1978, prior to issuance of the Board's Supplemental Decision and Order dated December 8, 1978, the parties to the collective-bargaining agreement of 1977-80 amended their agreement, partially in re- sponse to objections raised by the complainants in Associ- ated General Contractors of California, Inc., 239 NLRB 686. Further, the Union executed a settlement agreement in Case 21-CA-195 (Biddle Carter), and agreed to post a notice limiting the force and effect of the subcontracting provisions of the Master Labor Agreement (MLA). That settlement agreement presently is pending before the Board. Provisions of the 1977-80 MLA, some of which the parties amended, and which are the basis of the contro- versy herein, are as follows: SECTION 4 WORK COVERED Work covered by this Agreement shall include all job-site work performed by the EMPLOYER or its subcontractor for the construction, in whole or in part, or the improvement or modification thereof, any building structure or other work and operations which are incidental thereto, and the assembly, op- eration, maintenance and repair of all equipment, vehicles and other facilities used in connection with the performance of the aforementioned jobsite work and services, and shall include without limitation the following types of classes of work: * * * * * BUILDING MATERIAL AND DUMP TRUCK DRIVERS, LOCAL 36 389 4. So far as it is within the control of the EM- PLOYER or his subcontractor, all materials, sup- plies and equipment used on the job shall be trans- ported to or from or on the site of the work by workmen furnished by the appropriate craft UNION signatory hereto. Nothing herein contained shall be construed to prohibit the normal delivery of freight by common carrier. SECTION 42 TEAMSTER WORKING RULES B. OWNER-OPERATOR: I. The EMPLOYER may obtain trucks or equip- ment from any source, however, the operators on such trucks or equipment will be properly cleared before starting to work on the second day. The Owner-Operators of such trucks or equipment must furnish proof of legal or registered ownership. In order for the Owner-Operator to be properly cleared, he must present himself and proof of legal or registered ownership at the UNION'S office, and once properly cleared, such clearance is valid in San Diego County until there is a change in the Owner-Operator's equipment status. 2. The EMPLOYER may procure Owner-Opera- tors from a person, firm, corporation or other busi- ness entity which is signatory to an agreement with the Union, and who are making proper fringe bene- fit payments. Such person, firm, corporation or other business entity will be considered for the pur- poses of this Agreement to be a subcontractor. Should any portion of the Owner-Operator lan- guage contained in this Agreement be ruled null and void or unenforceable by a court of competent jurisdiction or the NLRB, said ruling affecting that section of the Owner-Operator language shall im- mediately be deemed to be incorporated into this Agreement until the provisions of Section 10 (Gen- eral Saving Clause) are invoked. 3. The Contractor expressly reserves the right to control the manner, time, means and details of, and by which, the Owner-Operator performs his serv- ices, as well as the ends to be accomplished, and shall be the sole judge of the capabiity of the Owner-Operator's equipment to perform the work required to be performed and may, if the Contrac- tor determines that the Owner-Operator equipment is not capable of performing the work required to be performed, terminate such Owner-Operator's services. Failure to work the day or one-half (1/2) day out, as directed, shall terminate the Owner-Op- erator's employment, and shall be paid only for actual time worked prior to such failure. The Con- tractor shall not pay for time spent by the Owner- Operator in repairing, servicing, or maintaining his equipment after termination of employment or before or after his shift or half-shift, as the case may be. 4. The Owner-Operator shall be carried on the payroll of the Contractor as an employee and, as such, all the terms and conditions of this Master Agreement and any amendment or amendments thereto, shall be applicable to him, except as pro- vided elsewhere in this Section and except that in the event that it is determined that the services of an Owner-Operator were terminated, any payment for time lost shall be limited to the wage and fringe benefit payments provided in this Agreement, shall not in any event include any payment with respect to the equipment or the loss of use thereof; and except, further, that the Owner-Operator shall not be subject to the provisions of paragraphs 1, 2, 3, 4, 4(a), 4(b), 4(c) of Section 26 of this Agreement. 9. It is further mutually understood and agreed that the intent of this Section is to assure the pay- ment of wages, fringes, and conditions as provided in this Master Agreement and to prohibit the making and carrying out of any plan, scheme or device to circumvent or defeat the payment of wages, fringes and conditions as provided in this Master Agreement. II. Notwithstanding any other provision of this Agreement, this Section 42 shall be applicable only to Owner-Operators performing (or who, upon their employment, will be performing) work to be done under Section 4. 12. If the EMPLOYER through a three man committee, selected in accordance with the proce- dure described in the Stewards Clause contained in Section 14, is found violating any portion of this section, the EMPLOYER shall immediately pay for each Owner-Operator with respect to whom the EMPLOYER is in violation, a sum equal to one day's pay at the highest hourly rate covering wage and fringe benefit costs under this Agreement for each day or portion thereof the violation occurred, such money to be made payable to the Lukemia So- ciety, San Diego Chapter, by check and promptly mailed to Teamsters Local No. 36. 13. When a truck or piece of equipment is driven or operated by its owner and is used on work cov- ered by this Agreement, the Owner-Driver or oper- ator of said truck, or piece of equipment shall re- ceive a rate of pay not less than that specified in this Agreement and shall be subject to the terms and conditions of this Agreement. At the hearing herein, General Counsel introduced the testimony of Shepard; Fred ReCupido, a truck broker re- ferred to as a prime, or overlying, carrier; and Donna Jean Herring, general manager of Kissinger Trucking Company (Kissinger), a truck broker and prime carrier. Shepard, ReCupido, and Herring testified in detail con- 390 DECISIONS OF NATIONAL LABOR RELATIONS BOARD cerning the manner in which truck owner-operators work for contractors through broker arrangements. Their testimony was not contradicted, and is credited. Kissinger operates a trucking business, and acts as a broker for owner-operators in San Diego County. Kissin- ger owns its own trucks, and employs four drivers. The trucks have signs reading "Kissinger Trucking" on the vehicles. The four drivers are employees within the meaning of the Act, and their employment is conducted pursuant to usual employer-employee statutory and other requirements. Kissinger's business as a truck broker is carried on separately from its business as a trucker for hire. Kissinger, in its broker capacity, contracts with owner- operators of dump trucks. Kissinger enters into subhaul agreements with owner-operators. Kissinger has such subhaul agreements with from 75 to 100 owner-opera- tors. The subhaul agreements are not exclusive, and the owner-operators are permitted to, and do, have subhaul agreements with other brokers. Kissinger's subhaul agreement only requires that an owner-operator possess a California Public Utilities Commission (PUC) dump truck permit, carry insurance naming Kissinger as an ad- ditional insured, and possess a truck. Kissinger possesses no ownership interest in any of the owner-operator's equipment. Unlike its own trucks, Kissinger does not pay for the fuel, insurance, or maintenance of the owner-op- erators' truck. Kissinger does not pay or provide repair parts for the owner-operator's truck. Owner-operators call Herring for work, or Herring calls them. She tells them where to report for the next day's work, and provides a freight bill. Owner-Operators may refuse these dispatches, and often do when already working for another broker. Kissinger collects the freight charges from the customers, and pays the owner- operator 95 percent thereof. Owner-Operators are free to substitute another driver on a dispatch. In November 1977 Kissinger entered into a contract with the Penhall Company to haul rubble from a demoli- tion project to a dump site some 10 miles away. Kissin- ger dispatched several owner-operators to the project when it commenced in December 1977. Just after the project began, Jack Hobbs, Penhall's superintendent, called Herring and told her that a Teamsters business agent said that Kissinger could not do the job because it was nonunion. Hobbs told Herring that, unless she could find a way to satisfy the Teamsters, he would remove Kissinger from the job and get a union contractor who could perform. Herring called Bill Burke of the AGC, and asked him why Kissinger could not haul on the Pen- hall project. Burke told Herring that because Penhall was a signatory to the MLA, and since Kissinger was nonunion, it could not haul on the job. Kissinger was re- moved from the Penhall job. Subsequently, in February 1978, Kissinger signed the Master Labor Agreement. ReCupido operates Terra Trucking Company (Terra) as a sole proprietorship. Terra operates as a broker for owner-operator dump trucks, and also rents dump trail- ers. ReCupido maintains contact with approximately 100 to 150 contractor customers, 20 to 30 of whom are regu- lar, and for whom Terra provides owner-operator trucks. Terra, in turn, has subhaul agreements with from 200 to 250 owner-operators, of whom 25 to 30 he regularly uses. These subhaul agreements are not exclusive, and owner-operators can, and do, have subhaul agreements with other brokers. Terra bills the customers for the owner-operators' services, and remits 95 percent of the bill to the owner-operator, keeping 5 percent as a bro- ker's fee. If Terra rents a trailer to the owner-operator, it deducts 20 percent of the bill as trailer rental. Before en- tering into a subhaul agreement, Terra only requires that the owner-operator have a PUC license and carry insur- ance naming Terra as an additional insured. Owner-oper- ators are not required to take a physical examination, fill out an employment application, or fill out an Internal Revenue W-4 form. ReCupido does not go into the field to supervise the work of owner-operators. Owner-opera- tors have no set hours or standard workday, and are not required to call in to Terra if a job ends early. Owner- operators purchase their own fuel. Terra does not deduct any payroll taxes from owner-operators' revenue, and does not carry workmen's compensation insurance for the owner-operators. Owner-operators provide their own insurance. Terra has no financial interest in any of the owner-operators' equipment. Terra, through ReCupido, tells the owner-operators where to show up for the next day's work, and neither specifies the route to take nor compensates the owner-operators for transit time. Owner-operators can negotiate a higher rate once on a job. Owner-operators can, and have, substituted drivers and jobs. ReCupido signed a "short-form" agreement pursuant to provisions of the San Diego County MLA in 1974, when he was engaged in business as an owner-operator. That agreement renews itself from year to year. In August 1978, ReCupido received a letter from the Union stating that several employees, including Larry Shepard, were not members in good standing and requested that Terra remove them from employment until properly cleared. 3 ReCupido told the owner-operators that they would have to join the Union (Local 36), or he would not utilize their services. ReCupido credibly testified that, although this was the first correspondence request- ing that that owner-operators join Local 36, there had been a constant battle with Local 36 since 1975 as to whether owner-operators should join the Union. All of the owner-operators joined Respondent Union in Sep- tember 1978. At no time subsequent to September 1978 has any agent of Respondent Union contacted ReCupido to inform him that owner-operators do not have to be members of Respondent Union. Shepard is an owner-operator who uses Terra for bro- kering services. Shepard owns his own tractor, which he is financing through an Orange County bank. Shepard has a subhaul agreement with Terra. ReCupido usually calls Shepard and offers him several jobs from which to choose. Shepard can, if he so desires, refuse to take the jobs that are offered. Shepard estimated that he hauled for more than 100 customers during the year preceding the hearing. Shepard submits a copy of the freight bill for each job to ReCupido, who deducts 5 percent for a broker's fee and 20 percent for trailer rental, and remits 3 G.C Exh. 6. BUILDING MATERIAL AND DUMP TRUCK DRIVERS, LOCAL 36 391 the remainder to him. Shepard pays the sales tax on his tractor; pays for his own fuel, license fees, and Federal highway use tax; does his own maintenance; pays his own parking rental fees; and pays his taxes quarterly as self-employment tax. Shepard is not covered by work- men's compensation or state disability. He pays for his own PUC permit. He is legally responsible for any spill- age which he may cause. He can negotiate a higher rate for a job, and can substitute another driver on a job. He schedules and controls his own vacation. While on a job, the customer tells Shepard where to deliver his load. The customer's agent tells Shepard where to dump. However, Shepard's contact with the agent is very brief and may consist only of hand signals. Shepard has no fixed hours, and while lunch breaks usu- ally are schedules to coincide with the customers, Shep- ard can elect to work through the lunch hour. Shepard is not supervised on the job by ReCupido, whom he sees very infrequently. Shepard never has hauled on a job which required him to load and dump all within the con- fines of a single project. In September 1978, Shepard joined the Union because of the letter Local 36 sent ReCupido. (G. C. Ex. 6). Shepard went to Respondent Union's hall and asked Union Agent Hugh McDonald why he, an independent businessman, had to join the Union. McDonald replied it was because ReCupido had signed a short-form agree- ment. Shepard joined and paid his dues and fees under protest. Issues The principal issue is whether or not the contractual provisions quoted above violate Section 8(e) of the Act. In order to resolve that issue, it must be determined whether or not owner-operators are independent con- tractors; whether or not the contractual provisions quoted above have a secondary object precluded by Sec- tion 8(e) of the Act; and, if the provisions are secondary in nature, whether or not they are permissible under the construction industry proviso of Section 8(e). A. The Independent Operator Issue Independent contractors are not included within the provisions of the Act defining "employee." 4 The status of owner-operators such as Shepard was determined by the Court of Appeals for the Ninth Circuit in 1977, when the opinion was filed in Associated General Contractors, etc. v. N.L.R.B., supra. The Board later vacated its earli- er determination that the owner-operators were employ- ees, and held that they were independent operators. Asso- ciated General Contractors of California, Inc., 239 NLRB 686. Those two pronouncements, judicial and Board, did not specifically apply to owner-operators in San Diego County, who are involved in this case. However, Respo- dents herein did not contend at the hearing, nor does the record show, that owner-operators in this case occupy a status, or conduct their business, in a manner different from owner-operators outside the San Diego County area. 4 Sec. 2(3) of the Act. The Ninth Circuit considered, inter alia, the following factors in reaching its determination that owner-opera- tors are independent contractors. Hauls are for contrac- tors. Hauls may be arranged personally or though over- lying carriers (brokers). Subhaul agreements are not ex- clusive arrangements. Overlying carriers do not super- vise "in any significant fashion" the work of owner-oper- ators. Broker referrals may be rejected by owner-opera- tors. The relationship between owner-operators and con- tractors is "short-lived." Minimum fees are established by the California PUC, but owner-operators may negotiate for higher rates. Owner-operators may be paid by the hour, or on mileage and tonnage rates. Owner-operators are not paid for time when their equipment is inactive. Contractors make no employee deductions from pay of owner-operators. Owner-operators keep track of their own time, subject to audit. PUC requires that owner-op- erators obtain permits from the PUC, be bonded, and carry liability insurance. Owner-operators are responsible for overloading and spillage. Owner-operators bear the entire cost of their enterprises, including the cost of trucks, equipment, and tools, and pay all their own main- tenance and operational expenses. Owner-operators inde- pendently may hire drivers, or subcontract work to other owner-operators. On site conduct is coordinated with contractor personnel, relative to breaks and dump areas. It is readily apparent from a review of owner-operator functions described at the hearing herein, and summa- rized supra, that the relationship among owner-operators, brokers, and contractors in this case practically is inden- tical to that described by the Ninth Circuit when it reached its determination that owner-operators are inde- pendent contractors. There is no reasonable basis on which to conclude that the owner-operators here in- volved are employees. The law of Associated General Contractors, etc. v. N.L.R.B., supra, and Associated Gener- al Contractors of California, supra, puts this issue to rest. B. The Secondary Conduct Issue Section 8(e) of the Act, sometimes referred to as the "hot-cargo" section, was enacted into law in 1959 as a part of the Landrum-Griffin Act, which amended the National Labor Relations Act. The portion of Section 8(e) that is relevant to this issue is as follows: 5 (e) It shall be an unfair labor practice for any labor organization and any employer to enter into any contract or agreement, expressed or implied, whereby such employer ceases or refrains or agrees to cease or refrain from handling, using, selling, transporting or otherwise dealing in any of the products of any other employer, or to cease doing business with any other person, and any contract or agreement entered into heretofore or hereafter con- taining such an agreement shall be to such extent unenforceable and void. .... Section 8(e) addresses itself to what the Congress consid- ered a defect in the law prior thereto, i.e., the law that permitted contractual provisions directed to unoffending employers, rather than to conditions of work of the con- 5 The proviso portion of the section is discussed infra. 392 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tracting employer. It was the intent of Congress in enact- ing Section 8(e) to preclude secondary boycotts, and a literal reading of the statute indicates that all agreements for secondary action are covered. However, judicial pro- nouncements have resulted in the allowance of some sec- ondary agreements as being outside the intent of the stat- ute. National Woodwork Manufacturers Association v. N.L.R.B., 386 U.S. 612 (1967), rehearing denied 387 U.S. 926, sets forth the basic judicial guidelines in determining the nature of contracts permissible under Section 8(e). That case approves subcontractual limitations on an em- ployer's actions, provided the purpose thereof is to pro- tect and preserve work standards and opportunities of the bargaining unit. These clauses sometimes are referred to as "union standards" clauses. However, provisions that limit subcontracting to employers who are parties to union contracts are secondary and illegal, since their pur- pose is to further union causes outside the ambit of the unit. Such clauses sometimes are referred to as "Union signatory" provisions. Many cases have been decided by courts and the Board pursuant to the guidelines of Na- tional Woodwork, with some types of contractual provi- sions being found lawful, and some being found unlaw- ful. However, those guidelines have not been disturbed and remain the law. In applying Section 8(e) to specific factual situations, established principles relating to sec- ondary boycotts are applied. General Counsel has alleged that certain provisions of MLA involved in this controversy are illegal under Sec- tion 8(e) of the Act. It is necessary to examine those pro- visions individually, as follows: SECTION 4 WORK COVERED Work covered by this Agreement shall include all job-site work performed by the EMPLOYER or its subcontractor for the construction, in whole or in part, or the improvement or modification thereof, any building structure or other work and operations which are incidental thereto, and the assembly, op- erator, maintenance and repair of all equipment, ve- hicles and other facilities used in connection with the performance of the aforementioned jobsite work and services, and shall include without limitation the following types of classes of work: 4. So far as it is within the control of the EM- PLOYER or his subcontractor, all materials, sup- plies and equipment used on the job shall be trans- ported to or from or on the site of the work by workmen furnished by the appropriate craft UNION signatory hereto. Nothing herein contained shall be constructed to prohibit the normal delivery of freight by common carrier. Section 4.4 is the heart of this section, is an important part of the MLA as a whole; and continues a controver- sy that extends back at least as far as 1965. The fact that section 4.4 has as its object secondary activity is appar- ent. Delivery of materials, supplies, and equipment is not jobsite work within the meaning of the provisio to Sec- tion 8(e). 6 So far as the "work covered" paragraph is concerned, the language thereof incorporates section 4.4 by stating that the work described as "jobsite work" shall "include without limitation the following types of classes of work." Not only does that work description unlawfully include deliveries to the site it also embodies within the language an activity that has been held to consititute off- site, thus secondary, activity, i.e., the maintenance and repair of all equipment. Dealer repairs were held in Acco Construction Equipment, Inc., v. N.L.R.B., 511 F.2d 848 (9th Cir. 1975), to constitute secondary activity within the coverage of Section 8(e) of the Act, outside the pro- viso thereto. Section 42(B)(I 1) of the MLA provides: 11. Notwithstanding any other provision of this Agreement, this Section 42 shall be applicable only to Owner-Operators performing (or who, upon their employment, will be performing) work to be done under Section 4. This provision is dependent upon, and specifically in- corporates, sections 4 and 4.4 discussed supra. Those sec- tions being unlawful, this section, too, is unlawful to the extent of its dependence upon sections 4 and 4.4 Section 42(B)(1) of the MLA provides: B. OWNER-OPERATOR 1. The EMPLOYER may obtain trucks or equip- ment from any source, however, the operators on such trucks or equipment will be properly cleared before starting to work on the second day. The Owner-Operators of such trucks or equipment must furnish proof of legal or registered ownership. In order for the Owner-Operator to be properly cleared, he must present himself and proof of legal or registered ownership at the UNION'S office, and once properly cleared, such clearance is valid in San Diego County until there is a change in the Owner-Operators's equipment status. This provision restricts and penalizes both signatory contractors and independent owner-operators. Contrac- tors are limited in their choice of owner-operators, and owner-operators are precluded from working for signato- ry contractors unless, in both instances, the owner-opera- tors first have submitted themselves to, and have been "cleared" by, the Union. This control device is contrary e International Brotherhood of Teamsters. Chauffeurs. Warehousemen and Helper of America, Local 294 (Island Dock Lumber. Inc.). 145 NLRB 484 (1963), enfd. in pertinent part 342 F.2d 18 (2d Cir. 1965); Internarional Brotherhood of Teamsters. Chauffeurs, Warehousemen and Helper of Amer- ica, Local 294, International Brotherhood of Teamsters, Chauffeurs, Ware- housemen and lHelpers of America (Redford Sand and Gravel Co.), 195 NLRB 379 (1972); Local Union No. 282 affiliated with the International Brotherhood of Teamsters, Chauffeurs. Warehousemen and Helpers of Amer- ica (D. ortunato, Inc.), 197 NRB 673 (1972). --- ---- - - - BUILDING MATERIAL AND DUMP TRUCK DRIVERS, LOCAL 36 393 to the provisions of Section 8(e) of the Act, and is il- legal. 7 Section 42(B)(2) of the MLA provides: 2. The EMPLOYER may procure Owner-Opera- tors from a person, firm, corporation of other busi- ness entity which is signatory to an agreement with the Union, and who are making proper fringe bene- fit payments. Such person, firm, corporation or other business entity will be considered for the pur- poses of this Agreement to be a subcontractor. Should any portion of the Owner-Operator lan- guage contained in this Agreement be ruled null and void or unenforcable by a court of competent jurisdiction or the NLRB, said ruling affecting that Section of the Owner-Operator language shall im- mediately be deemed to be incorporated into this Agreement until the provisions of Section 10 (Gen- eral Saving Clause) are invoked. The purpose of this provision patently is to limit con- tractors' choice of truck brokers, to those brokers who are signatories to contracts with the Union. Under the law of National Woodwork Manufacturers Association v. N.L.R.B., supra, as later interpreted in inter alia, Interna- tional Union of Operating Engineers, Local Union No. 12, AFL-CIO (Robert E. Fulton), 220 NLRB 530 (1975), General Teamsters, Chauffeurs, Warehousemen and Help- ers Local 982, et al. (J. K. Barker Trucking Co., et al.), 181 NLRB 515 (1970), such a union signatory clause is within the proscriptions of Section 8(e) of the Act, and is illegal. Section 42(B)(4) of the MLA provides. 4. The Owner-Operator shall be carried on the payroll of the Contractor as an employee and as such, all the terms and conditions of this Master Agreement and any amendment or amendments thereto, shall be applicable to him, except as pro- vided elsewhere in this Section and except that in the event that it is determined that the services of an Owner-Operator were terminated, any payment for time lost shall be limited to the wage and fringe benefit payments provided in this Agreement, and shall not in any event include any payment with re- spect to the equipment or the loss of use thereof; and except, further, that the Owner-Operator shall not be subject to the provisions of paragraphs 1, 2, 3, 4, 4(a), 4(b), 4(c) of Section 26 of this Agreement. As discussed supra, the Union has, since at least 1965, been desirous of treating owner-operators as employees of signatory contractors, and toward that end, has brought economic pressure against the Associations in order to embody in contracts language to attain that goal. The provision quoted above is a part of the Union's continuing efforts to achieve its goal of unionization of owner-operators. Under this provision an owner-operator 7 Local 585 of the Brotherhood of Painters. Decorators & Paper Hangers of America, AFL-CIO, et al. (Falstaff Brewing Corporation), 144 NLRB 100 (1963), and cases cited therein. has only two choices, i.e., he can become an employee against his will and thereby subject himself to all the limitations8 of such status, or he can be precluded from hauling for signatory contractors, thereby effectively taking himself out of the hauling business. As discussed supra, owner-operators involved in this controversy are independent entrepreneurs. The attempt by Respondents Union and Associations to impose union membership on those owner-operators is aimed at the labor policies of businesses that are not a part of labor relations between the Union and its signatory contrac- tors. Such an attempt violates Section 8(e) of the Act, since it is a secondary action.9 Section 42(B)(9), (12), and (13) of the MLA provide: 9. It is further mutually understood and agreed that the intent of this Section is to assure the pay- ment of wages, fringes, and conditions as provided in this Master Agreement and prohibit the making and carrying out of any plan, scheme or device to circumvent or defeat the payment of wages, fringes and conditions as provided in this Master Agree- ment. 12. If the EMPLOYER through a three man committee, selected in accordance with the proce- dure described in the Stewards Clause contained in [Section] 14, is found violating any portion of this section, the EMPLOYER shall immediately pay for each Owner-Operator with respect to whom the EMPLOYER is in violation, a sum equal to one day's pay at the highest hourly rate covering wage and fringe benefit costs under this Agreement for each day or portion thereof the violation occurred, such money to be made payable to the Leukemia Society, San Diego Chapter, by check and prompt- ly mailed to Teamsters Local 36. 13. When a truck or piece of equipment is driven or operated by its owner and is used on work cov- ered by this Agreement, the Owner-Driver or oper- ator of said truck, or piece of equipment shall re- ceive a rate of pay not less than that specified in this Agreement and shall be subject to the terms and conditions of this Agreement. The foregoing provisions are restrictions upon signato- ry employers' right to do business with owner-operators as independent contractors. The quoted provisions sub- ject owner-operators to the pay, terms and conditions of the MLA. As discussed supra, the California PUC sets minimum rates owner-operators may charge, but the latter legally can, and do, negotiate higher rates on some hauling jobs. The first and last sections of the MLA quoted above substitute contractual pay for negotiated pay, without the owner-operators ever having had a part in such a fundamental change. Such restrictions of signa- tory contractors, and their effect upon owner-operators, Including contractual limitations embodies in the MLA. o A. Duie Pyle. Inc. v. N.LR.B., 383 F.2d 722 (3d Cir. 1967), cert. denied 390 U.S. 905 (1968); Highway Truck Drivers and Helpers. Local 107. International Brotherhood of Teamsters. Chauffeurs, Warehousemen and Helpers of America (S & E McCormick Inc.), 199 NLRB 531 (1972); Local 814, International Brotherhood of Teamsters. Chauffeurs. Warehouse- men and Helpers of America. Santini, Brothers, Inc., 208 NLRB 184 (1974). 394 DECISIONS OF NATIONAL LABOR RELATIONS BOARD fall squarely within the proscriptions of secondary activi- ty set forth in Section 8(e) of the Act. As discussed in General Counsel's brief, section 42(B)(12) is a penalty clause applicable to signatory con- tractors who do business with owner-operators as inde- pendent contractors. Clearly, the penalty is intended to force signatory contractors to make certain that owner- operators who work for those contractors become em- ployees subject to all terms and conditions of the MLA Such a penalty clause has an effect similar to the clause considered in Orange Belt District Council #48, AFL-CIO (Calhoun Drywall Company), 153 NLRB 1196 (1965), enfd. 365 F.2d 540 (D.C. Cir. 1966), and is of a second- ary nature in violation of Section 8(e) of the Act. C. The Proviso Issue Section 8(e) states, inter alia: Provided, That nothing in this subsection (e) shall apply to an agreement between a labor organization and an employer in the construction industry relat- ing to the contracting or subcontracting of work to be done at the site of the construction, alteration, painting, or repair of a building, structure, or other work . . . . As discussed supra, several provisions of the MLA either are patently, or in effect, secondary in nature since they are intended to, and do, reach the activities of owner-operators as independent contractors outside the labor relations between the Union and its signatory con- tractors. Those provisions violate Section 8(e) of the Act, unless they are excluded from that section by the proviso clause. The key determination here is whether or not the work of the owner-operators is "to be done at the site of the construction ... ." The legislative history of the proviso shows that Con- gress intended it to be applied solely to work done, or to be done, directly at the site of construction. That history is epitomized by the House Conference Report l ° which stated as follows: It should be particularly noted that the proviso re- lates only and exclusively to the contracting or sub- contracting of work to be done at the site of the construction. The proviso does not exempt from Section 8(e) agreements relating to supplies and ma- terials or other products shipped or otherwise trans- ported to, and delivered, on the site of construction. The Board and the courts consistently have decided cases in the manner indicated by the wording of the stat- ute, and by its legislative history, i.e., narrowly and strictly. Indicative of those decisions are Teamsters Local 294 (Island Dock Lumber), supra (delivery of ready mix concrete to a construction site); Local 294, Teamsters (Rexford Sand and Gravel), supra (delivery of sand and gravel to a construction site). Acco Construction Equip- ment Inc. v. N.L.R.B., supra (dealer maintenance and repair of equipment on a construction site); Operating En- 10 H. Rept. 1147, 86th Cong., Ist sess. 39. gineers, Local 12 (Robert E. Fulton), supra (hauling sand to a construction site). Uncontradicted testimony established that the work of owner-operators involved in this controversy exclusively consisted of hauling to and from construction sites. In no instance did the work involve hauling limited to the con- fines of the worksite. Under such circumstances, it is clear that the proviso is inapplicable to this issue, and that resolution of the controversy must be made upon the basis of secondary considerations under Section 8(e) discussed supra. Respondent's Defenses 1. Respondent Union contends that "on or about August 10, 1978, it came to the attention of Teamsters Local 36 that certain individuals whom Teamsters 36 be- lieved to be employees of Terra Trucking were not members in good standing of the Teamsters Union," and infers that Teamsters Local 36 learned of the individuals through monthly reports filed with the Union and its health and welfare trust fund by ReCupido. That conten- tion is given no credence. The history of this controver- sy, together with the credited testimony of ReCupido and Shepard concerning their contacts with the Union, the reason for and method of submitting reports, and the manner in which owner-operators were forced to join the Union, makes it quite clear that the Union knew what was happening when the reports arrived. The re- ports, as well as union membership of owner-operators, resulted from illegal provisions of the MLA discussed herein. 2. The Union argues that "the offensive portions of the MLA were excised by the November 1978 amendment," and that the Union settled the Biddle Carter controversy by agreeing not to enforce the subcontracting provisions except with respect to jobsite work, hence, that further action by the Board is not necessary. The Associations concur with that argument. That argument is based upon irrelevant facts. First, the fact of entering into an agree- ment in violation of Section 8(e) of the Act gives rise to a course of action, regardless of whether or not the of- fensive language later is deleted or amended. Second, the MLA in its original form was enforced, to the detriment of owner-operators, prior to its amendment. Third, the Associations' Burke testified that the amendment never was published to AGC members. Further, there is no evidence that the amendment ever was placed in effect. 3. The Union and the Associations argue that Shepard is an employee of Terra Trucking Co. (ReCupido). This argument is without merit. As discussed supra, the Ninth Circuit and the Board have decided that owner-operators doing the same work as Shepard are independent con- tractors. 4. The Union argues that the MLA's requirement that signatory employers must use union subcontractors is lawful, and cites Carpenters Local No. 944, United Broth- erhood of Carpenters and Joiners of America, AFL-CIO, et al. (Woelker & Romero Framing, Inc.), 239 NLRB 241 (1978), and Carpenters Local Union #15, et al., 240 NLRB 255 (1979), as authority. Those cases are inappli- " Mary Feifer d/b/a American Feed Company, 133 NLRB 214 (1961). BUILDING MATERIAL AND DUMP TRUCK DRIVERS, LOCAL 36 395 cable to this controversy, since they involve jobsite work. As stated by Administrative Law Judge Welles in Carpenters Local Union #15: . . the questions that have arisen before the Board have concerned only whether the construction in- dustry was involved, and whether the work was "job-site" work. These conditions having been met, it is fair to say that, in the Board's view, anything goes. 5. The Union argues that the owner-operators here in- volved are engaged in jobsite activities. As discussed supra, that argument is not in accord with the law. 6. The Associations argue that a "make whole" remedy against the Employer Associations would not ef- fectuate the purposes of the Act. The brief of Associ- ations comments: "Obviously under the fact of this case, if anyone needs a restraining influence it is Local 36, not the Employer Associations." It may well be that the As- sociations were forced by economic pressure into an agreement which they disliked and disapproved, but they did sign the contract. That signature, and later enforce- ment of the provisions of the contract by both the Union and the Associations, subjects the Associations to liability flowing from the contract. THE REMEDY Having found that Respondent Union and Respondent Associations have engaged in certain unfair labor prac- tices in violation of Section 8(e) of the Act, I shall rec- ommend that they cease and desist therefrom, and take certain affirmative action to effectuate the policies of the Act. It having been found that the Union and the Associ- ations enforced provisions of the MLA requiring owner- operators of trucks to make payment to the Union of dues, initiation fees, assessments, and contributions to trust funds in violation of Section 8(e) of the Act, it will be recommended that the Union and the Associations, jointly and severally, make whole all such owner-opera- tors for such payments, with interest thereon, to be com- puted in the manner prescribed in F W. Woolworth Com- pany, 90 NLRB 289 (1950), and Florida Steel Corporation, 231 NLRB 651 (1977).12 Upon the basis of the foregoing findings of fact and the entire record, I make the following: CONCLUSIONS OF LAW 1. Respondent Employer Associations and their em- ployer-members are, and each of them is, employers en- gaged in commerce and businesses affecting commerce within the meaning of Section 2(6) and (7) and 8(e) of the Act. 2. Building Material and Dump Truck Drivers, Team- sters Local Union No. 36, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, is a labor organization within the meaning of Section 2(5) of the Act. 3. By entering into and maintaining the following sec- tions of the Master Labor Agreement for San Diego County, with respect to any work defined in section 4 of said agreement, Respondents Union and Employer Asso- ciations have engaged in unfair labor practices within the meaning of Section 8(e) of the Act: sections 42(B)(1), (2), (3), (4), (9), (11), (12), and (13). 4. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. [Recommended Order omitted from publication.] 1a See, generally, Isis Plumbing & Heating Ca, 138 NLRB 716 (1962).