Shamrock Dairy Inc.

494 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Shamrock Dairy, Inc., Shamrock Dairy of Phoenix, Inc., and Shamrock Milk Transport Co. and International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local Union No. 310. Case No. 21-CA-2292. Augvst 13, 1959 DECISION AND ORDER ON REMAND On December 16, 1957, the National Labor Relations Board, act- ing through a panel composed of Chairman Boyd Leedom and Mem- bers Abe Murdock and Stephen S. Bean issued its Decision and Order in the above-entitled proceeding.' A majority of the panel, consisting of Chairman Leedom and Member Murdock, found that the Respondent had refused and was refusing to bargain collectively with International Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America, Local Union No. 310, the Charg- ing Union, and ordered the Respondent to cease and desist therefrom and take certain affirmative action. Member Bean dissented from that portion of the Decision and Order. Another majority of the panel, consisting of Chairman Leedom and Member Bean, found that the Respondent had not violated Section 8 (a) (3) of the Act by dis- charging six drivers and dismissed the remaining allegation of the complaint alleging such a violation. Member Murdock dissented from that portion of the Decision and Order. Thereafter, on November 5, 1958, after hearing oral argument on the Union's petition to review and modify the Board's Order in this case, the United States Court of Appeals for the District of Columbia "concluded that it cannot properly review the Order of the ... Board without specific findings" on certain questions which are hereinafter set forth, and directed the Board to make such findings and transmit them to the court. Thereafter, on February 26, 1959, upon the Board's application 2 the court rescinded the remand previously ordered and remanded the case to the Board "with directions to reconsider the entire cases in- cluding, but not limited to, the questions specified in the Order of November 5, 1958." The questions specified in the court's remand are as follows : (1) Whether, upon the facts of this case, the drivers retained their employee status notwithstanding the negotiation of the in- dividual contracts between the employer and the drivers,.or whether their status changed to that of independent contractor. 1119 NLRB 998. 2In the interim, the composition of the Board's membership had changed. Member Murdock's term of office expired on December 16, 1957; he was succeeded by Member John H. Fanning. 124 NLRB No. 63. SHAMROCK DAIRY, INC. 495 (2) Whether, if the Board should find that the drivers became independent contractors, the employer, Shamrock Dairy, Inc., violated Section 8(d) of the National Labor Relations Act when it negotiated the individual contracts with the drivers. (3) . .. should the Board find that Section 8(d) was vio- lated, ... whether Section 8(a) (3) was violated by the em- ployer's discharge of the six employees. Pursuant to the court's remand order, the entire Board, with the exception of Member Rodgers who disqualified himself,, has con- sidered the case de novo. The Chairman, Member Bean, and Mem- bers Jenkins and Fanning, respectively, have divergent views as to the disk osition of this case. In accordance with such views, there is herewith transmitted to the court the following findings and determinations : With respect to jurisdiction, the Board hereby makes the same find- ings and determinations made in the Board's Decision and Order of December 16, 1957. The Board hereby denies the Respondent's request for oral argu- ment, as the record, exceptions, and briefs adequately present the issues and the positions of the parties. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. Ac- cordingly, the rulings are hereby affirmed. The Board has considered the Intermediate Report, the exceptions and briefs, and the entire record in this case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner set forth in his Intermediate Report, a copy of which is attached hereto, only to the extent con- sistent herewith.' The Board hereby makes the same findings of fact which were set forth as the essential facts in this case in the Board's Decision and Order of December 16, 1957. A majority of the Board, consisting of the. Chairman and Members Jenkins and Fanning, find that the Union had majority status and was at all times material the exclusive representative of the employees involved here. The Respondent granted exclusive recognition to the Union as the representative of the Respondent's employees in the 2- year contract, executed on October 1, 1953. Such recognition raises a presumption of regularity, namely, that the Union was the majority representative of the employees at the time of the execution of the contract; for, otherwise, it would have been unlawful for the Respond- ent to have extended such recognition. There is no evidence to rebut 3 Aniong other things, the Trial Examiner found that, by "making credits in the re- tirement fund immediately available to those who purchased routes," the Respondent independently violated Section 8(a) (1). There is no such allegation in the complaint and the record evidence does not support such an allegation. 496 DECISIONS OF NATIONAL LABOR RELATIONS BOARD this presumption. Nor is there any evidence that the Union lost such majority status at any time after execution of the contract. By virtue of the existence of the contract, the Union was entitled to exclu- sive recognition for at least the term of the contract. Hextron Furni- ture, 111 NLRB 342. N.L.R.B. v. Dorsey Trailers, Inc., 179 F. 2d 589 (C.A. 5), relied on by the Respondent, is inapposite. There, unlike here, the contract had terminated before the time of the alleged refusal to bargain. On the basis of the foregoing, the Respondent was obli- gated to treat with the Union as the majority representative of the employees at the time of the alleged unfair labor practices which occurred in the period from sometime in July to October 3, 1955, inclusive. Member Bean finds that the Union did not represent a majority of the employees at the time of the alleged unfair labor practices, as more fully set forth in his separate opinion filed herewith. Member Bean states therein that "the contract can be of no value as an indication of the Union's status among the Respondent's employees considered as a separate unit" because, in substance, the contract covered other employers as well as the Respondent. However, as pointed out in the decision of December 16, 1957, the complaint alleged that the Respondent's employees alone constituted an appropriate unit and the Respondent's answer admitted that the Respondent contracted with respect to such unit in the contract of October 1953. Moreover, the Respondent's answer further admitted that such contract unit was "an appropriate unit"; the Trial Examiner found that the Respond- ent's employees alone constituted an appropriate unit; and the Re- spondent at no time took the position that a more comprehensive unit was appropriate. Adhering to his previously expressed position in the Decision of December 16, 1957, and for the reasons stated therein, the Chairman finds that the Respondent, which had theretofore distributed its prod- ucts through driver-salesmen, entered into individual contracts with the bulk of its driver-salesmen which converted their status from that of employees to that of independent contractors, without any notice and without bargaining with the Union, the recognized exclusive representative under an existing contract. The Chairman further finds that the Respondent adopted the new distributorship system for economic reasons and that, in discharging the six drivers who refused to sign independent distributorship contracts, the Respondent was motivated by economic reasons and thus did not violate Section 8 (a) (3) of the Act. In addition, the Chairman finds, even though the drivers became independent contractors under the individual con- tracts, that the Respondent violated Section 8(a) (5) and (1) of the Act in that it failed to bargain with the Union as to whether the inde- pendent contractor system of distribution should be adopted. SHAMROCK DAIRY, INC. 497 In the Decision of December 16, 1957, the Chairman stated that, as he had found a violation of Section 8 (a) (5) on another ground, he had no occasion to pass on whether the Respondent also violated Section 8(a) (5) by reason of a violation of Section 8(d). Accordingly, in the Decision of December 16, 1957, the Chairman did not pass on whether the Respondent violated Section 8 (d). Pursuant to the court's remand, the Chairman now makes a determination of that issue and, in doing so, finds that the Respondent did not violate Sec- tion 8 (d) for the following reasons : Insofar as pertinent, Section 8 (d) provides that : "... where there is in effect a collective-bargaining contract covering employees . . ., the duty to bargain collectively shall also mean that no party to such contract shall terminate or modify such contract, unless the party de- siring such termination or modification" serves written notices 60 days prior to the expiration date of the contract and, continues in full force and effect, without resorting to strike or lockout, "the existing con- tract for a period of sixty days after such notice is given or until the expiration date of such contract, whichever occurs later . . . ." At the time of the establishment of the independent distributorship plan here in July 1955, there was in existence a collective-bargaining con- tract which was to expire on October 1, 1955. No statutory notices were served by the Respondent. However, although the Respondent executed individual contracts with the bulk of the drivers, these con- tracts were not contracts of employment and the Respondent con- tinued in full force and effect the provisions of the collective-bargain- ing contract until October 1, 1955, with respect to those drivers who did not sign individual contracts and as to plant employees (non- drivers) who were covered by the collective-bargaining contract but not directly affected by the institution of the independent distributor- ship system for drivers. The execution of the individual contracts was not inconsistent with the collective-bargaining contract as the individual contracts pertained not to terms or conditions of employ- ment but involved the termination of the employment status of the drivers who signed the individual contracts and substitution therefor of the status of independent contractor. Thus, no provision in the individual contracts conflicted with or changed the collective-bargain- ing contract in any respect. See Sloan v. Journal Publishing Co., 42 LRRM 2490; Adams Dairy Co. v. Dairy Employees Union, 363 Mo. 182, 250 S.W. 2d 481, 30 LRRM 2128. As the Respondent did not modify or terminate the collective-bargaining contract, the Chairman finds that there was no violation of Section 8 (d). Members Jenkins and Fanning agree with the Chairman for the reasons stated hereinafter that the Respondent violated Section (a) (5) and (1) by failing to bargain with the Union as to whether 525543-60-vol. 124--33 498 DECISIONS OF .NATIONAL LABOR RELATIONS BOARD the so-called independent-contractor system of distribution should be adopted. The Respondent adopted the so-called independent distributorship plan without notice to the Union and entered into individual contracts with the drivers without giving the Union, the exclusive bargaining representative, a chance to negotiate with regard to the tenure of the employees to be affected by the alleged independent distributorship plan. Thereafter, the Respondent ignored the Union's letter request- ing rectification of the change and notified the Union that the Re- spondent 'would. not bargain with respect to those drivers who had signed individual contracts. By this course of conduct, the Respond- ent failed to performed its duty to bargain collectively. This duty includes the obligation to notify the collective-bargaining representa- tive and to :give such representative a, chance to negotiate with respect to a contemplated change concerning the tenure of the employees and their conditions of employment. Brown Truck and Trailer Manufac- turing Company, Inc., 106 NLRB 999. In Brown Truck, where the employer. moved its Charlotte plant to Monroe, North Carolina, for economic reasons, discharged its Charlotte employees, and did not em- ploy them at Monroe, the Board found that the employer violated Sec- tion 8(a) (5). Here, as in Brown Truck, the employer did not give the Union an opportunity to bargain with respect to the contemplated change as it affected the tenure of the employees. The Union was en- titled to such opportunity, and the Respondent failed and refused to accord it. By such conduct, the Respondent violated Section 8 (a) (5) and (1) of the Act.4 In addition thereto, Members Jenkins and Fanning also find, as did the Trial Examiner, that the Respondent violated Section 8 (a) (5) and (1) of the Act on the following two grounds : (1) The drivers re- tained their employee status under the individual contracts, and thus the Respondent engaged in unlawful individual bargaining by execu- tion of the individual contracts; and (2) as the drivers retained their employee status under the individual contracts, the Respondent modi- fied or terminated the collective-bargaining contract by the execution of the individual contracts without complying with the notice re- quirements of Section 8(d). 4 The Respondent contends that the Union waived its bargaining rights with respect to the institution of the so-called independent distributorship plan by not requesting bar- gaining concerning it, by advising the drivers to consult a lawyer as to whether they should sign the individual contracts offered , and by taking no action other than out- lined in the statement of facts referred to above. However, as the Trial Examiner found, the Union made an adequate request to bargain in its letter of July 29 , 1955. On August 2, 1955, the Union promptly filed refusal-to-bargain charges based upon institu- tion of that plan. At the bargaining meeting of October 3, 1955, ,the Respondent expressly stated that it would not recognize the Union with respect 'to those drivers who had signed individual contracts . And, as the Trial Examiner found, any attempt by the Union thereafter to bargain with respect to those drivers would have been futile. For these reasons, the Board finds no merit in the waiver contention. SHAMROCK DAIRY, INC. 499 With respect to the first of the foregoing two additional grounds, Members Jenkins and Fanning are of the view that the drivers re- tained their employee status under the individual contracts for the following reasons. An employer-employee relationship exists where the person for whom the services in question are performed reserves .the right to control not only the result to be achieved but also the means to be used in reaching such result. An examination of the provisions of the individual distributorship contract reveals that the Respondent's drivers who signed such a contract did not lose their existing employee status by execution of the individual contracts. In the individual contract, the Respondent granted to the drivers the exclusive right to distribute its products upon express terms set forth therein . These terms included (1) in the event that the Respondent determined that the territory assigned to a driver was too large for the driver adequately to service , the Re- spondent at any time could alter the boundaries of the territory to assure to the Respondent's satisfaction that customers were properly serviced; (2) that a driver must not sell any product in his territory not manufactured by the Respondent ; ( 3) that the Respondent would set the prices at which its products are sold to a driver, and the Re- spondent reserved the absolute right to change those prices ; (4) that the Respondent could prescribe the time and places at which delivery of its products to the drivers must be received as well as prescribe the times and places for delivery of its products to customers ; ( 5) that the Respondent retained the "continuing, unconditional and irrev- ocable option to purchase at any time the entire distribution business" of a driver, including the truck , route, clientele, and good will, at a preestablished price, and that the driver had no right to sell or assign any rights under the contract without the Respondent's consent; (6) in the event the Respondent exercised the option to purchase the business, the driver could not reenter the business of distributing dairy products for a period of 2 years; (7) that, if the Respondent determined that customers would not receive prompt delivery of its products because of "any accident , strike, emergency or any other cause, " the Respond- ent would take over a driver's route and equipment , without notice to him, and operate and continue same during these periods ; ( 8) that a driver must diligently and faithfully promote sales of the Respond- ent's products, complying with all laws, rules, and regulations relating to health and sanitation , and maintain a neat and tidy appearance; (9) that drivers were required to insure their trucks for property damage in certain stated substantial amounts , all insurance policies to be approved by the Respondent ; ( 10) that in the event a driver's truck broke down, the Respondent would furnish a spare truck at no s Sec, for example, Oklahoma Trailer Convoy, Inc., 99. NLRB 1019, 1022; Nu-Car Carriers, Inc., 88 NLRB 75, 83, enfd. 189 F. 2d 756 (C.A. 3). 500 DECISIONS OF NATIONAL LABOR RELATIONS BOARD expense to the driver except for gasoline and oil ; however, if the driver chose to use a vehicle other than that provided by the Respond- ent, the Respondent must first approve the use of such vehicle; and (11) in the event that a driver became incapacitated and was unable to perform his duties, the driver must select a substitute named and approved by the Respondent and the driver was required to compen- sate the substitute at a wage and commission fixed by the Respondent. Thus, the individual contracts reserved to the Respondent the right to terminate unilaterally the services of the driver for any cause, the right unilaterally to name and appoint substitutes for the driver and to fix the compensation of such substitutes, the right unilaterally to determine the times and places at which the drivers'. services are to be performed, and the right to police the manner in which those services are rendered. Moreover, under the terms of the individual contract the driver was required to deal exclusively in the Respondent's prod- ucts. Under all the circumstances, Members Jenkins and Fanning conclude that the individual contracts here involved did not convert the status of the drivers who signed them from that of employees to that of independent contractors and that the drivers retained their employee status under the individual contracts. Members Jenkins and Fanning further find that the execution of the individual contracts with such drivers who were and remained employees of the Respondent constituted individual bargaining with those individual employees at a time when they were represented by the Union as their statutory representative, and thus the Respondent violated Section 8(a) (5) and (1) of the Act. With respect to the second of the two additional grounds referred to above, Members Jenkins and Fanning are of the view that the Respondent, by the execution of the individual contracts, modified or terminated the collective-bargaining contract, without complying with the notice requirements of Section 8(d) of the Act, for the following reasons. By enactment of Section 8(d), the terms of which are set forth above, Congress intended to insure that parties to contracts in industries covered by the Act resort to collective bargaining to resolve differences regarding modification or termination of such contracts rather than to engage in strikes or lockouts which would obstruct commerce. To this end, parties to such contracts are obli- gated by Section 8(d) to give proper notice of their intention to modify or terminate them and to offer to meet to resolve their dif- ferences. When the Respondent adopted its so-called independent distributorship plan by executing individual contracts with its drivers, it was under contract with the Union which was the statuory repre- sentative of its drivers. That contract expressly provided that "no employee shall be required to make a verbal or written contract which in any way conflicts with.the articles of this agreement." When the SHAMROCK DAIRY, INC. 501 Respondent required its drivers to execute the individual contracts on pain of discharge, the Respondent was acting to modify the collective- bargaining contract with the Union, as the terms of the individual contracts changed the terms of the collective-bargaining contract and were inconsistent therewith. Nevertheless, the Respondent gave no notice to the Union of intent to modify its contract and did not offer to meet with the Union to discuss this determination. Thus, the Re- spondent failed to discharge the duties imposed upon it by Section 8(d). Members Jenkins and Fanning, therefore, find that, by such conduct, the Respondent violated Section 8 (a) (5) and (1) of the Act. Members Jenkins and Fanning also find, as did the Trial Examiner, that the six drivers, who refused to sign individual contracts, retained their status as employees, and that the Respondent violated Section 8(a) (3) by discharging the six drivers. Members Jenkins and Fan- ning reach this conclusion on the basis of the following rationale. As the Union was the exclusive bargaining representative-, the six drivers had a right to refuse to deal with the Respondent on an individual basis; the drivers were exercising such right in refusing to enter into individual contracts; and they were discharged for so doing. Even if the Respondent did not violate Section 8(a) (3) by dis- charging the six drivers, Members Jenkins and Fanning would order their reinstatement with back pay to remedy the 8 (a) (5) violation hereinafter 'found. West Boylston Manufacturing Company of Ala- bama, 81 NLRB 808. Such relief is not limited by the Act to those cases in which the Board has found that Section 8(a) (3) has been violated. The statute empowers the Board to fashion the remedy to the situation which calls for redress. In West Boylston, the Board found that an employer violated Section 8 (a) (5) by failing to confer with a union as to the recall of laid-off employees. Here, as in West Boylston, where the Board ordered reinstatement with back pay for the employees not recalled but not found to have been discriminated against within the meaning of Section 8(a) (3), the six drivers lost their jobs as a direct consequence of the Respondent's failure to confer with the Union, and, by parity of reasoning, they should be restored to their jobs and made whole. Member Bean finds that the Respondent engaged in no unfair labor practice alleged and votes to dismiss the entire complaint for the rea- sons stated in his separate opinion filed herewith. Based on the combined vote of the Chairman and Members Jenkins and Fanning, the Board hereby finds that the Respondent violated Section 8 (a) (5) and (1) of the Act, as set forth above. . As indicated above, the. Chairman and Member Bean have found that the Respondent did not violate Section 8(a) (3) by discharging the six drivers, while Members Jenkins and Fanning have found that the Respondent committed such unfair labor practices. Under these 502 DECISIONS OF NATIONAL LABOR RELATIONS BOARD circumstances, as a majority of the Board does not find that the Respondent violated Section 8(a) (3) of the Act, the Board will dis- miss the allegation of the complaint that the respondent violated Section 8 (a) (3) of the Act by discharging the six drivers. THE REMEDY 'Chairman Leedom and Members Jenkins and Fanning have found that, by not according the Union an opportunity to bargain with respect to the adoption of the individual distributorship system as it affected the tenure of the employees, the Respondent violated Section 8(a) (5) and (1). Members Jenkins and Fanning are of the view that the remedy, which is set forth below, does not go far enough to remedy the violation found. As the remedy in this case does not abrogate the unlawful individual contracts, they are of the view that it fails to restore the status quo ante and permits the Respondent to retain the fruits of its unlawful conduct. Accordingly, Members Jenkins and Fanning would order abrogation of these contracts so that effective bargaining on this subject may take place. However, Members Jenkins and Fanning, of course, go at least as far as the remedy ordered, and, therefore, they concur in this remedy for the purpose of framing a majority order in the case. To remedy this violation, the Board finds that it will effectuate the policies of the Act to require that the Respondent accord the Union such an opportunity to bargain. Accordingly, we shall order that the Respondent bargain with the Union as the exclusive representative of the employees in the appropriate unit, including the employees who signed individual distributorship contracts, concerning the subject matter stated above; and we shall enjoin the commission of the unfair labor practices found through the usual cease and desist provisions in our Order. Pending fulfillment of its obligation to bargain, we shall require that the Respondent refrain from entering into any new independent distributorship contract with any person.' ORDER Upon the entire record in this case, and pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent, Shamrock Dairy, a The Board is aware that It has not resolved, by majority vote, the questions pro- pounded by the court in its remand order, but this is due to the fact that despite care- ful and persistent Board deliberations extending over a considerable period of time, a majority of the Board has been unable to reach agreement as to how these questions should be answered. In lieu thereof, each signatory to the instant Decision has sub- mitted his individual views. SHAMROCK DAIRY, INC. 5 '03 Inc., Tucson, Arizona, its officers, agents, successors, and assigns, shall : 1. Cease and desist from : (a) Refusing to bargain collectively with International Brother- hood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local Union No. 310, as the exclusive representative of all regular relief and special drivers, and all plant men employed at the dairy of Shamrock Dairy, Inc., at Tucson, Arizona, but excluding all office and clerical employees, guards, and supervisors as defined in the Act, with respect to adoption or continuance of a system of prod- uct distribution known as the independent distributorship plan inso- far as it affects the tenure of its employees. (b) Entering into any new independent distributorship contract with any person unless and until it bargains with the aforesaid labor organization as stated above. (c) In any like or similar manner interfering with, restraining, or coercing its employees in the exercise of the right to self-organization, to form labor organizations, to join or assist International Brother- hood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local Union No. 310, or any other labor organization, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purposes of col- lective bargaining or other mutual aid or protection, or to refrain from any or all such activities, except to the extent that such rights may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in Section 8(a) (3) of the Act. 2. Take the following affirmative action, which the Board finds will effectuate the policies of the Act : (a) Bargain, upon request, with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local Union No. 310, with respect to adoption or continuance of a system of product distributorship known as the independent distribu- torship plan insofar as it affects the tenure of its employees in the aforesaid appropriate unit, in accordance with the section of this Decision and Order On Remand entitled, "The Remedy." (b) Post at the dairy in Tucson, Arizona, copies of the notice at- tached hereto marked "Appendix." 7 Copies of such notice, to be furnished by the Regional Director for the Twenty-first Region, shall, after being duly signed by. the Respondent's authorized repre- sentative, be posted by the Respondent immediately upon receipt thereof and be maintained by it for 60 consecutive days in conspicu- 7 In the event that this Order is enforced by a decree of a United States Court of Appeals , there shall be substituted for the words "Pursuant to a Decision and Order on Remand" the words "Pursuant to a Decree of the United States Court of Appeals, Enforcing an Order." 504 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ous places, including all places where notices to employees are cus- tomarily posted. Reasonable steps shall be taken by the Respondent to insure that said notices are not altered, defaced, or covered by any other material. (c) Notify the Regional Director for the Twenty-first Region in writing, within 10 days from the date of this Order, as to what steps the Respondent has taken to comply herewith. IT IS FURTHER ORDERED that the complaint be, and it hereby is, dis- missed insofar as it alleges that the Respondent violated Section 8 (a) (3) of the Act by discharging John Foley, Dave Egleston, Robert Pry, Alexander Toro, Frank Koenig, and John Kozacki. MEMBER BEAN, dissenting in part and concurring in part : This case is now before this Board on remand from the Court of Appeals for the District of Columbia under directions to reconsider the entire case, including certain questions set forth in a previous order of the court. Pursuant to this remand I have given the entire case my careful reconsideration and again am impelled to the conclu- sion which I set forth in my original dissenting opinion, that the record presents a material issue as to the fact of the Charging Union's majority status which is crucial to the entire case and which can only be answered in the negative. In this case, the Charging Union's majority status was put in issue by the complaint's allegation that at all material times the Union represented a majority of the Respondent's employees, and the Re- spondent's answer asserting a lack of knowledge or information as to such majority, by reason of which it denied the allegation and de- manded strict proof thereof." The Respondent did not abandon this position but continued to maintain it at the time this case was origi- nally considered by the Board, as shown by its filing of an exception to the Trial Examiner's finding of the Union's majority status based upon the Respondent's execution of the contract in 1953. The record shows that the Respondent has dealt with the Union, apparently on a multiemployer basis, since 1937. In October 1953 the Respondent, together with Borden Company, Carnation Company, and Sunset Dairy, all of Tucson, Arizona, entered into a contract with the Union covering the drivers and plantmen of these four employers together in a single unit, for a 2-year term to October 1, 1955. The record contains not a bit of evidence that at any time from the begin- 8 Paragraph 6 of the complaint alleged that : At all times material herein, the Union has represented a majority of the em- ployees of Respondent Dairy, Inc., in the unit described . . . above. The following appears in the Respondent's answer : Answering Paragraph 6 of the complaint, Respondent Dairy, Inc. alleges that it is without knowledge or information sufficient to form a belief as to the truth of the allegations contained therein and therefore denies the same and demands strict proof thereof. SHAMROCK DAIRY, INC. 505 nirig of, or during, this contractual relationship did the Union offer or the Respondent request any sort of proof of the Union's right to serve as a majority bargaining representative, either for the employees in a multiemployer unit or for a unit limited to the Respondent's employ- ees. Nor does the record contain any evidence that the Union was in fact such a representative.' Indeed, insofar as the Respondent's own employees are concerned, I can only judge from the Respondent's answer formally denying knowledge of possession by the Union of majority status, that at least on the Respondent's part its recognition of and dealing with the Union must have been purely a "sweetheart" arrangement. This is a matter not to be taken lightly, for in this state of the record the Board is entirely without authority to order the Respondent to bargain with the Union, and in doing so the Board is in fact doing nothing more than requiring the Respondent, under legal compulsion, to adhere to an unlawful arrangement. As indicated above, I would not find the Respondent to have violated Section 8(a) (5) by failing in any manner to deal with a labor organization as to which there is a complete negation of ma- jority status.10 As to the allegations of a Section 8(a) (3) violation, 9In lieu of evidence , my majority colleagues have relied upon two presumptions that: (1) possession by the union of majority representative status may be presumed from the mere fact of the Respondent's recognition of and dealing with the union ; and (2) such status , thus established, is presumed to continue thereafter in the absence of evidence to the contrary . With the latter of these two presumptions I could, as a matter of general legal principle , agree ; but I cannot agree that such a presumption as the former one exists, or, if it did exist, that it would not be completely rebutted by the Respondent's denial of knowledge that the union possessed , at any material time, such status. Moreover , in law , the presumption that a state of things once shown continues to exist does not arise merely upon the basis of some prior presumption . The existence of that which is presumed to continue , must originally have been established by evidence. 'See American Jurisprudence, vol. 20, p. 205 , at § 207, which states the proposition as follows : It is well established that when the existence of a person , a personal relation, or a state of things is once established by proof, the law presumes that the person, rela- tion, or state of things continues to exist as before, until the contrary is shown, or until a different presumption is raised from the nature of the subject in question. [Emphasis supplied.] In the present case the possession of majority status by the union was as of no time established by proof , and hence the finding of such majority in this case is only by a departure from established legal principle and amounts to no more than piling the Pelion of one presumption upon the Ossa of another to reach a result which is not supported by the record. 10 Even assuming the theory of my colleague 's decision , that the existence of majority representative status can be deduced from the fact merely of execution of a collective- bargaining contract , there is yet another reason why it is error to apply It in this case. As above indicated , an examination of the 1953-55 contract in the record discloses that it was executed by four dairy firma in the Tucson area, and by its terms covers the Respondent 's employees in a single unit which Includes also the employees of the other employers . In situations Involving a multiemployer unit such as this , Board standards require only that the contracting union be the majority representative of the employees in the unit as a whole , and it is not necessary, for a contract in such larger unit to be lawful , that the contracting union be designated b a majority among the em to of each separate emp r, us, in any event, the contract can be of no value as an indication, of- the Union's status among the Respondent 's employees considered as a separate unit. 506 DECISIONS OF NATIONAL LABOR RELATIONS BOARD I would dismiss them also because, in the absence of a showing of majority representation by the Union, the discharge of employees for failure to sign individual contracts governing their relationship with the Respondent cannot, as the General Counsel contends, be found to discourage a right to bargain through the Union. In view of the disposition which I believe should be made of this case as shown by my opinion above, I do not reach the questions whether the Respondent complied with Section 8(d) in negotiating individual contracts with the drivers, whether such contracts were effective in converting the status of employees to that of independent contractors. I shall therefore, with all deference and respect for the Court of Appeals which has remanded this case to the Board, refrain from attempting to resolve what in my view of the case have become only hypothetical issues. APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to a Decision and Order on Remand of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Relations Act, we hereby notify our employees that : WE WILL bargain collectively, upon request, with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local Union No. 310, with respect to adop- tion or continuance of a system of product distribution known as the independent distributorship plan. The appropriate unit is: All regular, relief, and special drivers and all plantmen employed at our dairy in Tucson, Arizona, excluding all office and clerical employees, guards, and supervisors as de- fined in the Act, as amended. WE WILL NOT in any manner interfere with, restrain, or coerce our employees in the exercise of the right to self-organization, to form labor organizations to join or assist International Brother- hood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local Union No. 310, or any other labor organization, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the pur- poses of collective bargaining or other mutual aid or protection, or to refrain from any or all such activities, except to the extent that such rights may be affected by an agreement requiring mem- "bership in •a labor organization as a condition of employment as authorized in Section 8 (a).(3) of the Act. All our employees are free to become, remain, or refrain from becom- ing members of any labor organization except to'the extent that such SHAMROCK DAIRY, INC. 507 right may be affected by an agreement requiring membership in a labor organization as a condition to employment, as authorized in Section 8(a) (3) of the Act. SHAMROCK DAIRY, INC., Employer. Dated---------------- By------------------------------------- (Representative ) (Title) This notice must remain posted for 60 days from the date hereof, and must not be altered , defaced, or covered by any other material. INTERMEDIATE REPORT AND RECOMMENDED ORDER STATEMENT OF THE CASE Upon a charge duly filed by International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local Union No. 310, AFL-CIO, herein the Union, the General Counsel of the National Labor Relations Board issued his complaint against Shamrock Dairy, Inc., Shamrock Dairy of Phoenix, Inc., and Shamrock Milk Transport Co., herein, respectively, the Respondent, Phoenix, and Transport, alleging that the Respondent had engaged in and was engaging in certain unfair labor practices affecting commerce within the meaning of Section 8(a)(1), (3), and (5) and Section 2(6) and (7) of the National Labor Relations Act, 61 Stat. 136, herein the Act. In respect to unfair labor practices, the complaint alleges in substance that on and after July 12, 1955, the Respondent although then required by the Act to recog- nize and bargain with the Union nonetheless negotiated with its employees indi- vidually and entered into individual contracts with them, thus refusing to bargain collectively in good faith with the Union. It is further alleged that on or about October 3, 1955, the Respondent discriminatorily discharged Dave Egleston, Robert Pry, Alexander Toro, Frank Koenig, John Foley, and John Kozacki. Respondent's answer duly filed denies the commission of unfair labor practices and denies that it is or has been engaged in commerce within the meaning of the Act. Pursuant to notice a hearing was held before the duly designated Trial Examiner from October 8 through 18, 1956, in Tucson, Arizona. All parties were represented by counsel and participated in the hearing. Counsel for a number of so-called in- dependent distributors sought intervention to the end that no order might issue from the Board invalidating in any respect contracts which those individuals had with the Respondent. Because this proceeding is narrowly restricted to the protec- tion and enforcement of public rights not deriving from or dependent upon any contract between the Respondent and its one-time employees, the petition to inter- vene was denied. Those who have contracts with the Respondent and whose status may be affected by the enforcement of any final order of the Board in this proceeding are left free to assert such legal rights as they may have acquired thereby in another forum.' A brief has been received from counsel for the Respondent. Upon the entire record in the case and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT Phoenix and Transport although nominally Respondents in this proceeding are not here so treated. It is not alleged that either of them severally or jointly with the Respondent has committed an unfair labor practice. The Respondent is the owner and operator of a dairy plant and distribution business in Tucson, Arizona, and is a corporation beneficially owned and actively managed by members of the McClelland family. Transport, a corporation beneficially owned and actively man- aged by the same family group, hauls milk to and from the Respondent and from the Respondent to Phoenix. Phoenix, a corporation similarly owned and man- aged, is engaged in the distribution of milk in Phoenix, Arizona, and secures all of its milk in packaged form from the Respondent. Deliveries from the Respondent 1 National Licorice Company- v. N.L.R.B., 309 U.S. 350, 363-366. 508 DECISICNS OF -NATIONAL LABOR RELATIONS BOARD to Phoenix are made by Transport. Not alone are the. three corporations under substantially the same ownership and family management, but it is evident consti- tute a single integrated enterprise. The milk from the producers is gathered by Transport and delivered to the Respondent for processing and packaging. Respond- ent handles the distribution in the Tucson area and Phoenix performs the same function in the Phoenix area. In urging that the three should not be regarded as a single employer, counsel for the Respondent relies upon the apparent fact that there is no transfer of employees between the three corporations, and that there is no common labor.policy applicable to them. There is support in some Board de- cisions for the argument that these criteria have some weight affecting such a deter- mination, but where, as here, integration is complete, I consider and find that the lack of uniform labor policy and absence of transfers is of little consequence. It seems obvious that a group of corporations owned by substantially the same interests and wholly integrated in operation do constitute a single employer. The conditions for establishing a uniform labor policy exist, even though no such step has been taken. On the considerations outlined above I find that the Respondent, Phoenix, and Transport constitute for purposes of jurisdiction a single employer within the meaning of the Act. The parties stipulated and I find that during the calendar year 1955 the Respondent made purchases from concerns outside the State of Arizona which were shipped directly to it at Tucson, having a value of $548,000; that Phoenix, during the same period, made such purchases, having a value of $73,000; and that Transport, for the same period, made purchases in the same circumstances having a value of $438. Counsel for the Respondent argues in his brief that certain purchases of trucks and other materials totaling approximately $116,000 were not in fact made by the Respondent for its own account and should not therefore be considered in arriving at the total purchases. Although I do not consider the argument so advanced to be meritorious, it is unnecessary here to consider the question raised. Even if this amount were deducted from the purchases of the three corporations, there would remain as direct purchases from without the State during the year 1955 an amount in excess of $500,000, and thus the Board's jurisdictional criteria are satisfied. I find that the Respondent's business operations are in commerce and affect commerce within the meaning of the Act. II. THE ORGANIZATION INVOLVED The Union is a labor organization admitting to membership employees of the. Respondent. III. THE UNFAIR LABOR PRACTICES In October 1953 the Respondent and the Union entered into a collective-bargaining agreement covering wages, rates of pay, hours of employment, and other conditions of employment affecting all regular, relief, and special drivers and all plant men employed by the Respondent.2 Within the coverage of this agreement were all drivers who delivered milk in and near Tucson to retail and wholesale customers. The agreement, by its terms, was to be in effect until October 1, 1955. Without con- sulation with the Union, in July 1955 the Respondent began discussing with its drivers the establishment of a so-called independent distributors plan whereby the milk routes, both wholesale and retail, would be sold to .the individual drivers along with the trucks. The drivers would receive as compensation the difference between the price charged to them for the packaged milk and the price at which they could sell it to their customers. The Respondent then had in effect a profit-sharing and retirement plan covering most of the drivers. The drivers were told by the Re- spogdent•that all credits due each of them under the retirement plan, would-be paid immediately in cash which could be used to purchase a route. Those who did not desire to enter into this arrangement would be paid their credit in five annual install- ments. Of the Respondent's approximately 70 drivers, almost all by October 3, 1955, had signed individual agreements. The Union soon learned of this development and by letter dated July 29, 1955, the Union's president, Howard Grant, wrote the Respondent as follows: Please be advised that by reason of your recent action with certain employees of your Company, members of this Organization, you have breached our Agreement. Unless you are willing to meet with Representatives of this Organization in the immediate future to rectify this situation, we will be forced to take necessary action. 9 The Union has been recognized by the Respondent continuously since 1937. SHAMROCK DAIRY, INC.' 509 .Certainly this message is. cryptic and does not unmistakably call to. the attention of the Respondent just what is the subject of complaint. 1 think, however, there. can be no doubt but that the Respondent recognized this to be a protest by the Union against the institution of the independent distributor system. No other matter occasioning a possible dispute with the Union is revealed by this record to have existed at this time. Other than the communication of July 29, no attempt was made by the Union ,to gain a meeting with the Respondent until in September when the Union sent the ,Respondent proposed amendments to the existing contract which it hoped might be put in effect at,the expiration of that agreement. On October 3, 1955, Grant met with representatives of the Respondent. Grant, noting that the Respondent had his attorney present, said that he was not in a position to negotiate as his counsel was out of the city. He received from Respondent's counsel a proposal that the Respond- ent not recognize the Union as the collective-bargaining agent for persons who dis- tributed the Respondent's products under individual contracts. No further meeting 'has taken place between the Respondent and the Union, and the Union has made no request that such a meeting occur. Individual drivers, faced with the problem of deciding whether to accept the proffered individual contracts or to refuse them, consulted with Grant. There is testimony that he advised them to refuse the offers in their own interests and in any event to consult an attorney to see to what extent the offers were advantageous or ,otherwise. To the suggestion that Grant negotiate with the Respondent in that con- nection, he replied that the Respondent had to come to him. On October 3, 1955, Dave Egleston, Robert Pry, Alexander Toro, Frank Koenig, John Foley, and John Kozacki, each of whom until that time had been an employee of the Respondent as a driver in the delivery of milk products and within the unit represented by the Union, were told individually that since each had expressed dis- interest in purchasing a route and becoming an independent distributor their services no longer were required. Individuals who were working as retail milk distributors were offered a contract with the Respondent providing that the driver would have the exclusive right to dis- tribute Respondent's products at retail within a described territory, the boundaries of which by mutual agreement could be changed from time to time; that the driver would purchase at an agreed figure the customers already existing in the territory and buy all the accounts receivable in that connection; the Respondent reserved the right to change the prices it would charge the driver for its products by giving notice in writing, and the driver agreed to pay in cash for all products given to him for resale; the driver covenanted that he would not in any manner sell or distribute any products of any kind within the territory other than those manufactured, produced, distributed, or offered for sale by the Respondent. Additionally, the driver agreed to operate and maintain his own truck and other equipment: The driver granted an uncondi- .tional and irrevocable option to the Respondent to purchase the entire distribution business at any time after a 30-day notice by registered mail of intention to do so. The driver agreed that he had no right to sell or assign the business or any part thereof to any person without the consent in writing of the Respondent. Should for any reason the individual contract be terminated, the driver agreed to hold all in- formation pertaining to the route and customers in confidence for a period of 2 years and not to disclose such information without the prior consent of the Respondent. The driver also agreed that upon termination of his contract for whatever reason he would not within a period of 2 years after that date, directly or indirectly, on his own behalf or for any other person, engage in the distribution of dairy products within the territory where he had operated. It was agreed in the event of any accidents, strike, or other emergency threatening to interfere with the proper distribution of products, the Respondent would have the right in such event without notice to the driver to take over the route, his equipment, and business, and to operate it during the continuation of such an emergency. An agreement substantially the same in all important respects was offered to and accepted by most of the wholesale drivers. The General Counsel argues that all drivers signing these agreements were and re- mained employees of the Respondent and as such continued to be represented by the Union whose majority status in July 1955 is not questioned. The Respondent con- tends that by accepting these individual contracts the drivers become in truth and in fact independent contractors; that thereafter the Respondent's control over them was not that of an employer. There is no real dispute in the evidence concerning the changes accomplished by the individual contracts. Before July 1955 each group of drivers was under the supervision of a route supervisor who recommended promotions and dismissals and .in general directed the drivers' activities. After July the supervisors 'were' employed as sales promotion men and no longer undertook to supervise the work of the drivers. 510 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Before the change drivers were required to attend training classes. Afterward they were not. Before, they were required to make a certain number of solicitations of new accounts each day; afterward not. Some of the drivers now purchase their own advertising media and have their names painted on their trucks. If they desire to take a-vacation they must hire someone as a replacement for that time. Their trucks are their own property and the maintenance expense is upon them. A few augment their income by selling ice cream, oleomargarine, eggs, bacon, hams, and turkeys. None of these items are handled by the Respondent. They procure and carry their own public liability insurance and pay taxes to the city of Tucson. Before, all were re- quired to wear a uniform. Now, although it appears that most of them wear a uni- form quite the same or at least similar to that worn before, the requirement does not exist. Because the Respondent has relaxed its controls over the drivers, because each of them has a substantial investment of his own money or money borrowed with the aid of the Respondent's endorsement in the purchase of route and equipment, and because the earnings of each individual is determined entirely by the difference be- tween what he pays for Respondent's products and the return he gets from his sales, the Respondent argues that the drivers are now in all respects independent business men. In early 1956 the contracts between the wholesale and retail drivers and the Re- spondent were amended in certain respects. However, the irrevocable option to pur- chase still remained with the Respondent and the drivers in each situation agreed that they would not be engaged in the delivery of milk within the territory assigned for a period of 2 years after the termination of their agreement with the Respondent. I find that no change in the contractual relation between the Respondent and its drivers of controlling significance here was accomplished by the 1956 amendments. Since the time that the routes have been serviced by drivers under individual contracts, the Respondent has not made deductions from payments to drivers for income tax purposes and has not paid to the State of Arizona the taxes levied in connection with unemployment benefits. Sometime in August or September 1955 the Respondent brought an action against the Union in the Superior Court of the State of Arizona seeking to enjoin the Union from picketing its establishment. There is no evidence in this record in connection with that picketing. The Respondent's action was based upon a section of the Arizona Code reading: It shall be unlawful for any labor organization to picket any establishment unless there exists between the employer and the majority of employees of such establishment a bona fide dispute regarding wages or working conditions. The theory of the Respondent was that as its drivers were now working under individual contracts, they were not employees, and hence could not within the meaning of the Arizona statute be parties to a bona fide dispute regarding wages or working conditions. In denying the prayer for injunction the court held that the individual contracts did not change the status of the drivers from employees to independent contractors. The Employment Security Commission of Arizona has issued two proposed (tentative) determinations, to the effect that the drivers under the individual contracts are still employees of the Respondent and that the Respondent is liable to the State of Arizona for contributions for unemployment insurance in respect to them. The decision of the court and the proposed determinations of the Employment Security Commission are, of course, not based upon the Act and presumably give effect to the public policy of the State of Arizona as set forth in the statutes applicable to the litigation as well as other guides to decision. It has sometimes been found that the relation between one who sells his labor and one who uses it is that of employee-employer where common-law tests would indicate an independent contractor relationship. For example, it has been held that an employee of the lessee of a gasoline service station is the servant of the corporate lessor, thus making the lessor liable for his negligence.3 Such a holding appears to be based upon the assumed economic desirability of finding such responsibility as the lessees are frequently in no better economic position than the usual minor employee.4 The Board, however, has in all cases coming before it uniformly applied the common law test of "right to control" to decide what the relationship in fact is. This is the test which will be applied to the facts set forth above. Obviously, it is of paramount interest to the Respondent that milk be delivered to its customers in the various territories which make up the Tucson area promptly, regularly, and efficiently, to the end that the customers will remain satisfied and will 8 Dockens V. La Caze, 78 F. Supp. 515 (W.D. La. 1948). 4 Subagents and Subservants , by Warren A. Seavey, Harvard Law Review, voL 68, No. 4, 658-670. SHAMROCK DAIRY, INC. 511 not be tempted to switch their business to a competing dairy. In order to keep this customer relationship unbroken, it is to the advantage of the dairy that its drivers be personable and presentable; that the equipment used in making the deliveries be reliable and appropriate. Before entering into the individual contracts the Respond- ent had the unquestioned right to accomplish by means of selecting employees, by supervising them, and by purchasing and maintaining equipment to insure that these conditions would prevail. Has it divested itself of this right? And has it made a genuine sale of the distribution business to its drivers? I conclude that it has not. The core of the matter is the reservation of the irrevocable right in the Respondent to terminate the contractual relation at any time and for any reason, with the lack of any right on the part of the driver should he become dissatisfied with his arrangement to terminate it without also losing the customer clientele. Upon analysis, the driver has actually purchased nothing from the Respondent, except a truck. The purported sale of the customer accounts is no more than a sale of a right to service the accounts as long as the Respondent is satisfied with the manner of servicing.5 The driver in simple fact has done no more than to sell his labor to the Respondent on terms and conditions which differ from those existing at the time that he was concededly an employee. Much was made at the hearing of the fact that some of the drivers chose not to wear the uniforms which had been standard prior to July 1955, and that some of them found it advantageous to sell, in addition to products of the Respondent, certain other items, such as ice cream and oleo- margarine. These manifestations of independence are possible only because of Respondent's sufferance. Wielding the club of unilateral decision to terminate the contract, the Respondent can impose upon these drivers any conditions that could have been imposed when they were in the employee relationship. It can insist that they wear designated uniforms, that they not sell products other than those supplied by it, that deliveries be made only during certain hours and in a specified sequence, and that trucks be painted in a style and with emblems satisfactory to the Respond- ent. Any driver who might persist in disregarding any direction or suggestion of the Respondent in connection with any such matter would, of course, recognize that he might be imperiling his right to continue servicing Respondent's customers. I find that Respondent's right to control its drivers has not been diminished by reason of the individual contracts and that the drivers are now and at all times have been employees of the Respondent within the meaning of the Acts The complaint alleges that all regular, relief, and special drivers, and all plant men employed by the Respondent, excluding office and clerical employees and guards, and supervisors, constitute a unit appropriate for purposes of collective bargaining within the meaning of Section 9(b) of the Act. Respondent's answer concedes that this was the unit concerning which it had contracted with the Union in October 1953. The unit described appears to be a usual one in the dairy business and there is no contention that if the drivers are employees the unit is not an appropriate one. I find that the unit set forth above is now, and at all times material herein has been, one appropriate for purposes of collective bargaining. Presumably, the Union represented a majority of the Respondent's employees in the appropriate unit at the time that the 1953 contract was made and there is no evidence tending to indicate that the Union has since in any way lost its status as such representative except possibly by reason of Respondent's unfair labor practices. I find that the Union is now and at all times material herein has been the majority representative of Respondent's employees in the appropriate unit. In July 1955 the Respondent was in contractual relation with the Union and was under an obligation imposed by Section 8(d) of the Act not to terminate or modify the contract without giving written notice to the Union and offering to meet and confer with the Union in connection with the proposed modification. This, of course, the Respondent did not do, choosing rather to ignore the requirements of the contract and of the Act and to seek out the employees individually to contract with them. By this conduct the Respondent denied to the employees the right to be represented by an organization of their own choosing and thus refused to bargain in good faith with the Union, in violation of Section 8(a) (5) of the Act. By depriv- ing the employees of their right of representation in this fashion, and by making credits in the retirement fund immediately available to those who purchased routes, the Respondent interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act and thereby violated Section 8(a) (1) of the Act. 5 The right to terminate is unlimited and is not conditioned upon any default by the driver. 6 See The H. E. Koontz Creamery, Inc., 102 NLRB 1619. 512 DECISIONS OF NATIONAL LABOR- RE, BOARD Each of the!six employees named -earlier in this report who-were. discharged on October 3_1955, either had refused' or had otherwise expressed- disinterest in signing an individual contract witht the Respondent. Each of them had a right to rely upon his collective-bargaining representative to take care of such matters with the Re- spondent and a right to refuse to deal individually with the Respondent. Because they exercised this right they were discharged.. I find that by, the discharge of Dave Egleston, Robert Pry,. Alexander Toro, Frank Koenig; '-John Foley, and John Kozacki the Respondent interfered with, restrained, and coerced those individuals, in the exercise of their rights under Section 7 of the Act and thereby violated Section 8( . a),( I) of the Act. - By these discharges the Respondent discouraged 'membership in a labor organization and thereby *violated Section 8,(q)(3) of the Act.7 On October 3, 1955, as has been said, the Respondent and Grant, the Union's president, met. No bargaining took place on this occasion and-no request to bar- gain has been made by the Union since. However, the Respondent, by proposing then not to include the drivers in any negotiations and by its action before in dealing with them as individuals, manifested an intent not to bargain concerning the drivers. It is apparent that an attempt by -the Union to engage in bargaining with the Re- spondent in that connection would have been futile. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent set forth in section III, above, occurring `in connection with its operations described in section I, above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. . V. THE REMEDY - Having found that the Respondent has engaged in certain unfair labor practices, it will be recommended that it be ordered to cease and desist therefrom and take cer- tain affirmative action designed to effectuate the policies of the Act. Having found that the Respondent has refused to bargain collectively with the Union and has, on the contrary, engaged in individual bargaining with its employees in derogation of the Union's representative status, it will be recommended that the Respondent cease and desist therefrom and that it no longer offer, solicit, enter into, continue, enforce or attempt to enforce the individual contracts with its drivers, with- out prejudice to any assertion, by the drivers of any legal rights they may have ac- quired under such contracts, and that upon request it bargain collectively with the Union in respect to wages, hours, and other terms and conditions of employment affecting employees within the appropriate unit and, if understanding is reached embody such understanding in a signed agreement. Having found that the Respondent has discriminated in regard to the hire and tenure of employment of certain employees, it will be recommended that each be offered full reinstatement to his former or substantially equivalent position,8 as an employee, without prejudice to seniority or other rights and privileges, and that each be made whole for any loss of earnings he may have suffered by reason of the dis- crimination against him by payment to each of a sum of money equal to that which he normally would have received in Respondent's employ as -a route driver from October 3, 1955, to the date of offer of reinstatement, less his net earnings during such period.9 The Respondent is not excused from taking this step as to Foley on 7N.L.R.B. v. Stewart Oil Co., 207 F. 2d 8 (C.A. 5). 'It is contemplated that each of the named individuals will be offered reinstatement to the same route that he operated at the time of his discharge unless for some reason, entirely unconnected with the unfair labor practices found, such an assignment is' im- possible. The Chase National Bank of the City of New York (San Juan, Puerto Rico, Branch), 65 NLRB 827. - U Robert Pry, Dave Egleston, Frank Koenig, Alexander Toro, and John Kozacki received letters from the Respondent in April 1956 indicating that each upon application would be reemployed in a substantially equivalent position to that which he had occupied prior to termination. No such offer was made to John Foley. Toro and Kozacki Ignored the letter. Pry, Egleston, and Koenig spoke with the Respondent in connection with reemployment. At most, each was offered 'a job as a relief driver with earnings possibly the equivalent of what they made before discharge. However, in April 1.956 and at all times since all routes were for sale. The Respondent was in no position to offer and did not offer to,any of them the route which he had 'held prior-to discharge with any assurance that at some later date it would not be sold. I do not consider that in -the case of any of the drivers a bona fide offer of reinstatement has been extended. INTERNATIONAL IDLEWILD CATERING CORPORATION 513 the ground that-the latter has expressed unalterable opposition to the independent distributor plan. Back pay shall be computed in the manner established by the Board:and the Respondent shall make available to the Board payroll and other records to facilitate the checking of the amount due. The character and scope of the unfair labor practices engaged in by the Respond- ent, indicate an intent to defeat self-organization of its driver-employees. It will therefore be recommended that the Respondent cease and desist from in any manner interfering with, restraining, and coercing its employees in the exercise of rights guaranteed by the Act. Upon the basis of the foregoing findings of fact and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. International' Brotherhood of Teamsters, Chauffeurs, Warehousemen and Help- ers of America, Local Union No. 310, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. 2. By, discriminating in regard to the hire and tenure ' of employment of John Foley, Dave Egleston, Robert Pry, Alexander Toro, Frank Koenig, and John Kozacki, thereby discouraging membership in the Union, the Respondent has en- gaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(3) of the Act. 3. All regular, relief, and special drivers, and all plant men employed by the Respondent, excluding office and clerical employees, guards, and supervisors, con- stitute a unit appropriate for purposes of collective bargaining within the meaning of Section 9(b) of the Act. :. 4. The Union was,' in July 1955, and at all times material since has been, the exclusive bargaining representative of all employees in the aforesaid unit within the meaning of Section 9(a) of the Act. . 5. By refusing to bargain collectively with the Union as the exclusive bargaining representative of the employees in the appropriate unit and by entering into indi- vidual contracts with the drivers, the Respondent has engaged in and, is engaging in unfair labor practices within the meaning of Section 8(a)(5) of the Act. 6; By the discharges, by refusing to bargain, and by offering financial inducements to its employees to enter into individual contracts, the Respondent has interfered with, restrained, and coerced its employees in the exercise of rights guaranteed in Section 7 of the Act and has thereby engaged in and is engaging in unfair labor practices within the meaning of Section 8(a) (1) of the Act. 7. The aforesaid unfair labor practices are unfair 'labor practices affecting com- merce within the meaning of Section 2(6) and (7) of the Act. [Recommendations omitted from publication.] International Idlewild Catering Corporation and International Association of Machinists, AFL-CIO. Case No. 2-CA-6124. Augvist 14, 1959 DECISION AND ORDER " On March 13, 1959, Trial Examiner Sydney S. Asher issued his Intermediate Report in the above-entitled proceeding finding that the Respondent had engaged in and was engaging in certain unfair labor practices and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the copy of the Inter- mediate Report attached hereto. Thereafter, the Respondent filed exceptions to the Intermediate Report and a supporting brief. Pursuant to the provisions of.Section 3(b) of the Act, the Board "has delegated its powers in connection with these cases' to a' three- .member panel [Members Rodgers, Jenkins, and Fanning].'.. 124 NLRB No. 66. 525548-60-vol. 124-34