American Advertising Distributors

640 DECISIONS OF NATIONAL LABOR RELATIONS BOARD spondent Union had participated with Knowlton Construction Com- pany in an unlawful agreement, understanding, or practice that re- quired applicants for employment with the Company who were not members of the Respondent to obtain referrals from the Respondent as a condition of employment; and (2) pursuant thereto, the Respond- ent had caused the Company to refuse to employ two individuals. The Board ordered the Respondent to cease and desist from such conduct with respect to that Company or any other employer over whom the Board would assert jurisdiction. Thereafter, the Supreme Court of the United States declared that where the Board found that a union had engaged in this kind of un- lawful conduct against the employees of one employer, it was im- proper, without proof of violations against employees of any other employer, to order the union to cease and desist from such conduct with respect to "any other employer." 1 Accordingly, we hereby amend our Order in this case by deleting the phrase "or any other em- ployer over whom the Board would assert jurisdiction" from para- graphs a (1) and (2) thereof, and amend the notice which paragraph b(4) requires the Respondent to post by deleting the phrase "or any other employer over whom the Board would assert jurisdiction" from the first two paragraphs thereof. MEMBERS JENKINS and KIMBALL took no part in the consideration of the above Supplemental Decision and Amended Order. 1 Communications Workers of America, AFL-CIO and Local No. 4372 v. N.L.R.B., 392 U.S. 479. American Advertising Distributors and Charles Edward Fleming Circular Distributors Union , Local B.B. 5, International Alli- ance of Bill Posters, Billers and Distributors of the United States and Canada, AFL-CIO and Paul D. Gamble. Cases Nos. 7-CA-2458 and 7-CB-636. November 4, 1960 DECISION AND ORDER On April 29,1960, Trial Examiner John C. Fischer issued his Inter- mediate Report in the above-entitled proceedings, finding that the Re- spondents had engaged in and were engaging in certain unfair labor practices and recommending that they 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 Com- pany filed exceptions to the Intermediate Report and a supporting brief. 129 NLRB No. 60. AMERICAN ADVERTISING DISTRIBUTORS 641 Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, the Board has delegated its powers in connection with this case to a three-lnember panel [Chairman Leedom and Members Rodgers and Jenkins]. The Board has considered the entire record in this case, including the Intermediate Report, the exceptions, and the brief, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner except as modified herein.' In his recommendations, the Trial Examiner does not clearly state the affirmative steps the Respondents shall be required to take to remedy the discriminatory pay scale which granted union employees 21/2 cents more per hour than nonunion employees. We shall provide that the Respondents make whole the nonunion employees employed during the period in question for any loss of pay they may have suf- fered by reason of the Respondent Company's failure to pay them on the same wage scale as it did its union employees. The charge in Case No. 7-CB-636 against the Respondent Union was filed subse- quent to the filing and service of the charge in Case No. 7-CA-2458 against the Respondent Company. For this reason, the liability periods of the two Respondents are not the same. The Company's liability shall be for the period beginning 6 months prior to the filing and service of the charge in Case No. 7-CA-2458, and the liability of the Respondent Union shall be for period beginning 6 months prior to the filing and service of the original charge in Case No. 7-CB-636. To the extent that these varying liability periods coincide, the two Re- spondents shall be jointly and severally liable. We shall also order, as recommended by the Trial Examiner, that all employees be reimbursed for all dues, initiation fees, and assess- ments paid in order to maintain their employment. In light of the nature of the violations, we rely not only upon those cases cited by the Trial Examiner, but also upon Virginia Electric and Power Company v. N.L.R.B., 319 U.S. 533.2 As in the case of the Respondents' liability for remedying the discriminatory pay scale, the liability of each Re- spondent for reimbursement of dues, initiation fees, and other assess- ments shall be for the period beginning 6 months prior to the filing and service of the charge on that Respondent, and to the extent that these liability periods coincide the Respondents shall be jointly and severally liable for such reimbursement. :'The Trial Examiner found, inter alga, that the parties had a contract and arrangement constituting the Union as "the exclusive source" of employees for the Company. While the evidence does support all other findings by the Trial Examiner, the record does not indicate that the Union was the exclusive source of employees. Accordingly, we do not adopt the Trial Examiner's findings in this regard. 2 Member Jenkins relies only on Virginia Electric and Power Company v. N L R B , 319 U S 533, but not on the other cases relied on by the Trial Examiner in applying the remedy. 586439-61-vol. 129-42 642 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ORDER Upon the entire record in these cases, and pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that : A. Respondent American Advertising Distributors, Detroit, Michi- gan, its officers, agents, successors, and assigns, shall: 1. Cease and desist from : (a) Maintaining, enforcing, or giving any effect to any agreement, understanding, or practice with Circular Distributors Union, Local B.B. 5, or any other labor organization, which requires membership in Circular Distributors Union, Local B.B. 5, or any other labor or- ganization as a condition of employment, except as authorized in the proviso to Section 8(a) (3) of the Act, as modified by the Labor- Management Reporting and Disclosure Act of 1959. (b) Encouraging membership in Circular Distributors Union, Local B.B. 5, or any other labor organization of its employees, by dis- criminating in regard to hire or tenure of employment or any term or condition of employment, except to the extent permitted by the proviso to Section 8(a) (3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. (c) In any other manner interfering with, restraining, or coercing its employees in the exercise of the rights guraanteed in Section 7 of the Act, except to the extent that such rights may be affected by an agreement requiring membership in a labor organization as a con- dition of employment, as authorized in Section 8 (a) (3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act : (a) In the manner and to the extent set forth in our Decision herein, make whole its employees for any loss of pay they may have suffered as the result of the discrimination against them. (b) Reimburse all distributors and distributor apprentices em- ployed, for moneys illegally exacted from them in the manner and to the extent set forth in the section of the Trial Examiner's Intermedi- ate Report entitled "The Remedy" and our Decision herein. (c) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social secu- rity payment records, timecards, personnel records and reports, and all other records necessary to compute the amount of backpay due the em- ployees and the moneys illegally exacted from them. AMERICAN ADVERTISING DISTRIBUTORS 643 (d) Post at its office copies of the notice attached hereto marked "Appendix A." 3 Copies of said notice, to be furnished by the Re- gional Director for the Seventh Region (Detroit, Michigan), shall, after being duly signed by Respondent Company's representative, be posted by Respondent Company immediately upon receipt thereof, and be maintained by it for a period of 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respond- ent Company to insure that said notices are not altered, defaced, or covered by any other material. (e) Post at the same places and under the same conditions as set forth in paragraph lettered (d), above, and as soon as they are for- warded by the Regional Director, copies of Respondent Union's notice marked "Appendix B." (f) Notify the Regional Director for the Seventh Region, in writ- ing, within 10 days from the date of this Order, what steps it has taken to comply herewith. B. Respondent Circular Distributors Union, Local B.B. 5, its offi- cers, representatives, agents, successors, and assigns, shall: 1. Cease and desist from : (a) Maintaining, enforcing, or giving any effect to any agreement, understanding, or practice with American Advertising Distributors, or any other employer over whom the Board would assert jurisdiction, which requires membership in it or any of its subordinate units as a condition of employment, except as authorized by the proviso to Sec- tion 8(a) (3) of the Act, as modified by the Labor-Management Re- porting and Disclosure Act of 1959. (b) Causing or attempting to cause Respondent Company, or any other employer over whom the Board would assert jurisdiction, to dis- criminate against employees or applicants for employment in violation of Section 8(a) (3) of the Act. (c) In any other manner, restraining or coercing employees of, or applicants for employment with, the Respondent Company, or any other employer over whom the Board would assert jurisdiction, in the exercise of the rights guaranteed in Section 7 of the Act, 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, as modified by the Labor- Management Reporting and Disclosure Act of 1959. 3 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" the words "Pursuant to a Decree of the United States Court of Appeals, Enforcing an Order." 644 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act : (a) Jointly and severally with Respondent Company make whole the employees of Respondent Company for any loss they may have suffered in their wages as a result of the discrimination against them in the manner set forth in our Decision herein. (b) Jointly and severally with Respondent Company reimburse all distributors and distributor apprentices employed by the Respondent Company, for moneys illegally exacted from them in the manner and to the extent set forth in the section of the Trial Examiner's Inter- mediate Report entitled "The Remedy" and in our Decision herein. (c) Preserve and, upon request, make available to the Board or its agents, for examination and copying; all dues, initiation fees, assess- ment fees, and other records necessary to compute the moneys illegally exacted from employees of Respondent Company. (d) Post at its office and meeting hall in Detroit, Michigan, copies of the notice attached hereto marked "Appendix B." 4 Copies of said notice, to be furnished by the Regional Director for the Seventh Re- gion, shall, after being duly signed by the Respondent Union's repre- sentative, be posted immediately upon receipt thereof, and be main- tained by Respondent Union for 60 consecutive days thereafter, in con- spicuous places, including all places where notices to members 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. (e) Mail to the Regional Director signed copies of Appendix B, for posting by Respondent Company as provided above herein. Copies of said notice, to be furnished by said Regional Director, shall, after being signed by Respondent Local B.B. 5's representative be forthwith returned to the Regional Director for such posting. (f) Notify the Regional Director for the Seventh Region, in writ- ing, within 10 days from the date of this Order, what steps it has taken to comply herewith. * See footnote 3, supra APPENDIX A NOTICE TO ALL EMPLOYEES Pursuant to a Decision and Order 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 : AMERICAN ADVERTISING DISTRIBUTORS 645 WE WILL NOT maintain, perform, or enforce with Circular Dis- tributors Union, Local B.B. 5, International Alliance of Bill Posters, Billers and Distributors of the United States and Can- ada, AFL-CIO, or any other labor organization, any agreement, understanding, or practice which requires membership in Circular Distributors Union, Local B.B. 5, International Alliance of Bill Posters, Billers and Distributors of the United States and Canada, AFL-CIO, or any other labor organization, as a condition of employment, except as authorized in the proviso to Section 8(a) (3) of the Act, as modified by the Labor-Management Re- porting and Disclosure Act of 1959. WE WILL NOT encourage membership in Circular Distributors Union, Local B.B. 5, International Alliance of Bill Posters, Billers and Distributors of the United States and Canada, AFL- CIO, or in any other labor organization, by discriminating in regard to hire or tenure of employment or any term or condition of employment, except to the extent permitted by the proviso to Section 8 (a) (3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. WE WILL NOT in any other manner interfere with, restrain, or coerce our employees in the exercise of the rights guaranteed them in Section 7 of the Act, 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 Sec- tion 8(a) (3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. WE WILL reimburse all our distributors and distributor appren- tices at our Detroit, Michigan, office for all dues, initiation fees, and assessments they were unlawfully required to pay to Circular Distributors Union, Local B.B. 5, International Alliance of Bill Posters, Billers and Distributors of the United States and Can- ada, AFL-CIO, as a result of the unlawful provisions in our con- tracts with the aforementioned labor organization and our prac- tices under these contracts. WE WILL make whole all employees for any loss of pay suffered by them as a result of the discrimination practiced against them. All our employees are free to become or remain, or to refrain from becoming or remaining, members in good standing of Circular Dis- tributors Union, Local B.B. 5, International Alliance of Bill Posters, Billers and Distributors of the United States and Canada, AFL-CIO, or any of its subordinate district councils or local unions or any other labor organization, except to the extent that this right may be affected 646 DECISIONS OF NATIONAL LABOR RELATIONS BOARD by an agreement in conformity with Section 8(a) (3) of the National Labor Relations Act, as modified by the Labor -Management Report- ing and Disclosure Act of 1959. AMERICAN ADVERTISING DISTRIBUTORS, 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. APPENDIX B NOTICE TO ALL MEMBERS OF CIRCULAR DISTRIBUTORS UNION, LOCAL B.B. 5, INTERNATIONAL ALLIANCE OF BILL POSTERS , BILLERS AND DISTRIBUTORS OF THE UNITED STATES AND CANADA, AFL-CIO, AND TO ALL EMPLOYEES OF, AND APPLICANTS FOR EMPLOYMENT WITH, AMERICAN ADVERTISING DISTRIBUTORS Pursuant to a Decision and Order of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify you that: WE WILL NOT maintain, perform, or enforce with American Advertising Distributors, or any other employer over whom the Board will assert jurisdiction, any agreement, understanding, or practice which requires membership in our labor organization as a condition of employment except as authorized in the pro- viso to Section 8(a) (3) of the Act, as modified by the Labor- Management Reporting and Disclosure Act of 1959. WE WILL NOT cause or attempt to cause American Advertising Distributors, or any other employer over whom the Board will assert jurisdiction, to discriminate against employees or appli- cants for employment in violation of Section 8(a) (3) of the Act. WE WILL NOT in any other manner restrain or coerce employees or applicants for employment in the exercise of the rights guar- anteed in Section 7 of the Act, 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 author- ized in Section 8(a) (3) of the Act, as modified by the Labor- Management Reporting and Disclosure Act of 1959. WE WILL reimburse all distributors and distributor apprentices of American Advertising Distributors at its Detroit, Michigan, office for all dues, initiation fees, and assessments they were un- lawfully required to pay to us as a result of the illegal provisions in our contracts with American Advertising Distributors, and our practices under these contracts. AMERICAN ADVERTISING DISTRIBUTORS 647 WE WILL make whole the employees of American Advertising Distributors for any loss of pay suffered by them as a result of the discrimination practiced against them. CIRCULAR DISTRIBUTORS UNION, LOCAL B.B. 5, INTERNATIONAL ALLIANCE OF BILL POSTERS, BILLERS AND DISTRIBUTORS OF THE UNITED STATES AND CANADA, AFL-CIO, Labor Organization. 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 separate charges, duly filed, the General Counsel of the National Labor Relations Board, for the Regional Director of the Seventh Region, issued a con- solidated complaint, dated September 30, 1959, against American Advertising Distributors and Circular Distributors Union, Local B. B. 5, International Alliance of Bill Posters, Billers and Distributors of the United States and Canada, AFL-CIO (American Advertising Distributors), alleging that Respondents (Company and Union) had engaged in certain unfair labor practices within the meaning of Section 8(a)(1), (2), and (3), Section 8(b)(1)(A) and (2), and Section 2(6) and (7) of the Act, in that Respondents have operated under the terms and conditions of an unsigned written contract and other oral agreements which inherently restrain, interfere, coerce, and discriminate unlawfully in regard to the hire and tenure of employment of the Charging Parties and all other employees, in violation of the Act. This matter was tried before the duly designated Trial Examiner in Detroit, Michigan, on January 18, 1960, and the facts were stipulated by all counsel at the trial, which facts are set forth verbatim hereinafter. Upon the entire record in the case, including the comprehensive briefs, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE EMPLOYER American Advertising Distributors is now and at all times material hereto has been a Michigan partnership with its principal business office located at 3333 W. Fort Street, Detroit, Michigan, where it is engaged in the house-to-house distribution of advertising materials. During the year 1958 the Respondent Employer performed services valued in excess of $50,000 for Michigan firms engaged in interstate com- merce within the meaning of the Act by virtue of the fact that they either were (a) retail enterprises which annually purchase and cause to be shipped directly from points outside the State of Michigan to their stores located in the State of Michigan goods valued in excess of $10,000 and sold at such stores goods valued in excess of $500,000 annually, or (b) manufacturers who purchased and caused to be shipped directly to their Michigan plants from points outside the State of Michigan supplies valued in excess of $50,000 annually, or (c) manufacturers who produced and caused to be shipped from their Michigan plants directly to points outside the State of Michigan products valued in excess of $50,000 annually. The Respondent Employer has been at all times material hereto and is now engaged in commerce within the meaning of Section 2(6) and (7) of the Act. Respondent Company furnishes services to ACF-Wrigley's Stores, Inc., Sams, Inc., and Detroit Shopping News for which in the year of 1958 it received payment in the approximate amounts of $45,000, $42,000, and $12,000, respectively. From the stipulated commerce facts these companies themselves are within the jurisdictional standards established and applied by the Board to retail chains and enterprises and newspapers. Jurisdiction is not sought over Respondent Company on the basis of its direct interstate opera- tions although Respondent does engage in a small amount of purchasing and shipping 648 DECISIONS OF NATIONAL LABOR RELATIONS BOARD across State lines in the amount of $5,000 for rubber bands, clips, paper, etc. The basis of jurisdiction in this case is the indirect standard as set forth and explained by the Board in the leading case of Siemons Mailing Service: 1 The Board has concluded that it will best effectuate the policies of the Act if jurisdiction is asserted over all nonretail enterprises which have an outflow or inflow across State lines of at least $50,000 whether such outflow or inflow be regarded as direct or indirect. The Board therein further noted: Indirect outflow refers to the sales of goods or services to users meeting any of the Board's jurisdictional standards except the indirect outflow or indirect inflow standard. [T]he Act accords the same importance and applies equally to operations which affect commerce and those which are directly engaged in commerce across State lines. Contentions of Respondents that jurisdiction should be declined because services furnished by Respondent Company do not actually enter the stream of commerce have previously been considered by the Board and held to be without merit. It is sufficient that Respondent Distributors' operations considered in their totality satisfy the Board's jurisdictional standards.2 I find, contrary to the contentions of the Respondent Company fully set forth hereinafter, that the business operations of American Advertising Distributors affect commerce within the meaning of Section 2(6) and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED Circular Distributors Union, Local B.B. 5, International Alliance of Bill Posters, Billers and Distributors of the United States and Canada, AFL-CIO (American Advertising Distributors), is a labor organization within the meaning of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES Circular Distributors Union, Local B.B. 5, International Alliance of Bill Posters, Billers and Distributors of the United States and Canada, AFL-CIO (American Advertising Distributors), has been and is party to a contract and arrangement with American Advertising Distributors constituting the Union as the exclusive source of carriers and distributors of advertising handbills and circulars employed by the Company, which arrangement prior to and since January 24, 1959, requires: a. All employees who are non-members of the Respondent Union are required as a condition of employment, beginning on the first day of employment, to permit the Respondent Employer to deduct fifty cents per day from said em- ployees' wages for payment to the Respondent Union towards a $30.00 initiation fee. b. The wage deductions described in sub-paragraph a are made without the consent of employees and notwithstanding employee protests and are made without written authorization from said employees. c. All employees who are non-members of the Respondent Union are paid by Respondent Employer at the rate of two and one-half cents less per hour than members of the Respondent Union. d. Members of the Respondent Union are granted preferential hiring rights over non-members of the Respondent Union. e. All initiation fees, dues, permit, referral and clearance fees, assessments and other monies checked off or otherwise paid to said Respondent Union or otherwise paid by applicants for employment or employees of the Respondent Employer since January 24, 1959, have been paid pursuant to the agreement, arrangement understading and/or practice above described. Material parts of the original written contract entitled "Working Agreement" dated November 7, 1956, read: 3. It is further agreed that the Party of the First Part agrees to employ none other than Union men in good standing (as termed by the Party of the Second Part) of the Circular Distributors Union 5BB. In the event that there be an 1122 NLRB 81. 2 Voicell Construction Company , 117 NLRB 490; Whippany Motor Co, Ire, 115 NLRB 52; Jonesboro Grain Drying Cooperative, 110 NLRB 481. AMERICAN ADVERTISING DISTRIBUTORS 649 insufficient number of Union men available at the time of starting work, the party of the First Part shall have the privilege of employing non-union men, who will be issued an apprenticeship card, countersigned by the Business Agent, for each day employed. The Union men shall have without exception preference. 19. It is further agreed by both parties hereto that the Party of the Second Part shall charge a service fee for the issuance of apprentice cards to any non- union man employed by the First Party, as authorized and set forth in paragraph 3 of this agreement. Such service charge shall be set by the Second Party and such funds collected shall be turned over to the Party of the Second Part upon request of said Second Party. It is further agreed that such service charges shall only be changed whenever the said Second Party shall notify the First Party of such change, at least one week prior to such change. The First Party shall at all times comply with whatever apprentice system that may be devised by the Second Party. First Stipulation The following stipulation was agreed upon and entered into by all counsel of the parties and constitutes an agreed statement of facts: Respondent, American Advertising Distributors, is a co-partnership located in Detroit, Michigan. Its offices are at 3333 W. Fort Street, and it has a dis- tribution center at 939 Michigan Avenue in Detroit. It is engaged exclusively in the door-to-door distribution of advertising circulars, bills and similar ma- terials in the Detroit Metropolitan area. It handles no mailing work. For the calendar year 1958, which is the calendar year immediately preceding the period here in dispute, respondent company purchased from sources outside the State of Michigan bags and rubber bands used in its operations. The total purchases were less than five -thousand dollars for this period. The company employs distributors driven to distribution points in a company truck. Its employees pick up or receive printed pieces of various sorts, printed, manufactured within the State of Michigan for distribution to householders within the Detroit Metropolitan Area. For the calendar year 1958 the total tales revenues of the respondent company were three hundred forty-seven thousand four hundred fifty-nine dollars. All of this represented compensation for hand distribution to householders within the Detroit Metropolitan Area. No distribution occurred outside the State of Michigan. The bulk of the company's customers are individual retail stores, service sta- tions, and service establishments. However, in 1958 respondent company re- ceived approximately forty-five thousand dollars from ACF Wrigley Stores, Inc., which operates a chain of grocery supermarkets. This concern, Wrigley's, had a hundred and fifty million dollars in sales in the Detroit area during the calendar year 1958, representing sixty per cent groceries and twenty-five per cent meats and fifteen per cent produce. All of the meats and groceries are purchased within the State of Michigan, while approximately five million dollars of prod- uce is purchased outside the State and shipped directly to Wrigleys. Respondent in 1958 also received forty-two thousand dollars for bills dis- tributed for Sam's, Incorporated. This concern has three retail variety stores in the City of Detroit, at which it does several million dollars' worth of business per year, including 1958. Purchases from outside the State of Michigan, shipped directly to Sam's exceeded fifty thousand dollars for the year and constituted ninety per cent of the total purchases of that concern. The respondent also received from the Detroit Shopping News, in the year 1958, twelve thousand two hundred eighteen dollars for distributing services which it rendered. The Detroit Shopping News publishes a weekly newspaper and also circulates advertising materials in the Detroit Metropolitan Area. Its purchases for 1958 were in excess of fifty thousand dollars from outside the State of Michigan, and it did a gross volume of business for that year in excess of two hundred thousand dollars. All of the distributions made by the respondent company for Wrigley's and for Sam's, Incorporated, were for stores located in the Metropolitan Detroit Area, and all of the distribution for those two concerns and the Detroit Shopping News was to individual householders residing in the Metropolitan Detroit area within the State of Michigan. Circular Distributors Union, Local B.B. 5, Inter- national Alliance of Bill Posters, Billers and Distributors of the United States and Canada, AFL-CIO, is a labor organization within the meaning of the Na- 650 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tional Labor Relations Act, and has acted as the collective bargaining agent of the bill-distributing employees of the respondent company. There has been no written contract executed between the respondent company and the respondent union since 1955 and prior to the period here involved . Arrangements for years subsequent to 1955 were entered into increasing the applicable wage rates. Second Stipulation-Employment Conditions It is agreed that a certain writing entitled "Working Agreement" purporting to be executed by the Circular Distributors Union, and this Respondent Company some- time during the year 1955 may be accepted as the written contract which the parties operated at that time. It is further agreed that there were no written contracts , with the exception of a supplement dated November 7, 1956, that were entered into by and between the parties, no written contracts since that date , during the entire period-up to and in- cluding August 1, 1959-but that the parties have continued to operate in the same manner as provided in the original writing until approximately August 1, 1959, except that increased wage rates were from time to time paid by the Respondent to its employees. By the last week of July, or no later than the first week in August 1959, any deduc- tion by the Company of initiation fees of 50 cents per day had been discontinued, and any payment of any differential in wages to any class or group of employees had likewise been discontinued. Now, the normal workday and hiring process employed by the Company with re- spect to its employees was as follows : The manager of distribution gave to each of the Respondent's truckdrivers a worksheet for each individual truck , which specified the customer, the quantity of materials to be distributed , the area or territory to be covered, the hours to be spent on the job by the circular distributors , and the number of men to be used. The truckdriver was designated as a supervisory employee, and he had authority to hire and fire personnel, as well as to authorize payment for hours worked at the end of the day by each individual bill distributor. The workers would assemble each day at the starting site or distribution terminal on Michigan Avenue, and the men stood around, and the truckdriver would select the various workers for each individual truck. Book-carrying members of the Union were hired first , and then men who had worked previously in the industry as evidenced by initiation fee deduction tickets which they might have. A preferential distinction being drawn between those em- ployees having a large number of tickets and those having very few tickets. Next, the Company would hire any other applicants who were there for any jobs which might be available on the particular day. After a driver had selected his crew for the day he handed out a time record sheet upon which each man wrote his name and social security number. At the end of the day the truckdriver would write down the number of hours which each man would have worked, and would indicate his ap- proval on the time slip, evidencing the right of the man to be paid by the paymaster. The men were all paid off in this manner at the end of the day. A member in good standing in the Union would designate on the yellow worksheet his union book number, whereas all other employees were separately designated by the letter "P," which would indicate that they were not present members in good standing of the Union. Now, a typical daily worksheet will be furnished and will be attached or will be admitted into evidence without further stipulation . Now, the employees holding membership books in the Union received $1.05 per hour for ordinary bill distribu- tion during the period here involved . Other employees received $ 1.021/2 per hour for such work. When samples were being distributed by the employees the rate for all employees distributing such samples was $ 1.10 per hour, with a bonus of 15 cents for employees who worked at least 4 days during a single workweek. There were approximately 90 men who worked 5 days a week for an 8 -week period between May 18 and July 15, 1959, in the distribution of such samples. The Company regularly employed about 150 men 3 days a week in the handling of ordinary bill distribution , including the period above indicated , during which samples were also distributed. Members of the Union were employed by the Respondent Company on the fore- going terms during the period involved-or rather-members of the Union who were employed by the Company on the foregoing terms during the period involved paid the sum of $2 in monthly dues to the Union This amount was paid directly to the Union by each member. At the time of hire an employee who was not a member of the Union was informed that a 50-cent deduction would be made from his daily AMERICAN ADVERTISING DISTRIBUTORS ' 651 wages, to be applied toward his initiation fee into the Union. When the Respondent Company had occasion to notify the Michigan Employment Security Commission, a State agency, of prospective job vacanies, it likewise notified the commission of these terms of employment. The employees were similarly notified of the same terms by the Respondent and by the Union, in the event they had occasion to chal- lenge the deduction of the 50 cents or to challenge the payment of the 2 1/2 -cent wage differential. When the employees were paid, the 50-cent amount was deducted from the wages by the Company and the man was given a white ticket identified as a daily deduction record of initiation fee, a copy of which will also be supplied for the record. This form was furnished by the Union for use by the Respondent Company. The ticket was torn in two by the paymaster, and one-half was given to the employee as a receipt for the 50 cents deducted. The paymaster at the end of each week would forward the appropriate aggregate amounts deducted to the Union, together with the other halves of the tickets. The only writing signed by the employee with respect to such deductions was that used in the case of the men who distributed the samples, of which a copy will also be attached. Initiation fee deductions were made from the first day a man was employed and each workday thereafter until he became a union member in good standing. The union initiation fee was $30. When a man collected 60 tickets he became eligible for union membership upon presentation of the tickets to the Union. Under the 1955 contract any employee who did not hold a union membership book was considered tobe an apprentice. Jurisdictional Contention Because of the interest and importance of this case, the Trial Examiner is reciting Respondent's argument in full. Company Counsel Ellmann and Union Counsel O'Hare contended that: The Board does not have jurisdiction in this case over the activities of this employer, American Advertising Distributors, for the reason that its operations are purely local in character and are not within the thrust of the Act, within the operation of the jurisdictional rules which the Board has laid down, and, indeed, within the constitutional authority of the Congress, if we need go that far, in determining the remote extensions of the commerce power itself. I think it need not be rehearsed that although we haven't been talking much about inter- state commerce in these proceedings for maybe twenty years or so, where we get into a situation such as this, as I think the stipulation itself makes clear, we are in an extremely remote borderline area, and it is incumbent upon us to go back to fairly rudimentary first principles. Now, your Honor, I am sure, is well aware that notwithstanding the breadth to which the commerce power has been applied, the Supreme Court, in the Fainblatt case and again in the Denver Building Construction case and the Amalgamated Meat Cutters, going back to '39 right up to '47, where in each of these cases it has been recognized that there is a limit in a Federal system be- yond which the National Government does not go in regulating employer-em- ployee relationships, that while it is possible as an abstract matter to find in a complicated industrial society that everything has an impact upon everything else and there is, in fact, nothing localized, and everything is nationalized, that it is the genius of a Federal system that there is still a residuum of authority reserved to the States by the Tenth Amendment and by Congressional legislation so that you do not apply even national legislation, even remedial legislation, such as the type here involved, into every nook and cranny and corner of local- ized business activities In other words, where the impact or effect upon interstate commerce is so in- substantial and so remote at that point the Courts say de minimum non curat lex, the law does not bow down or yield to concern itself with trifles, and the commerce power itself does not extend that far. Now, what does this mean9 In this case, as in all cases, the jurisdiction of the Board is said to depend upon the practical impact of interstate activity, the work of the individual con- cerned, upon interstate movement or interstate activity, transportation, produc- tion or the like. Now, in this instance there is no interstate movement at all, direct or indirect. It is not enough, we submit, mechanically and unthinkingly to apply these formulary rules which the Board has set forth as a general guide to litigants, lawyers, examiners, its own personnel and itself, when it is perfectly apparent that an analysis of the practical operation of the rule makes it perfectly clear 652 DECISIONS OF NATIONAL LABOR RELATIONS BOARD that there is no significant direct effect upon interstate activities in the operations of the subject concerned. In other words, Mr. Justice Holmes said away back in the Swift case that interstate commerce is a practical exception drawn from the course of trade. I think that was his phrase, and this has been reiterated over and over again. It is not enough merely to say we submit that this company does business with Sam's and Sam's is the kind of enterprise over which the Board may have jurisdiction because of certain aspects of its operations, unless there is some sig- nificant connection in the work performed by this company and the interstate activity of Sam's on the basis of which the Board does not hesitate to take jurisdiction. Now, if you will pause for a moment to view this operation in its practical effect, it seems to me our position is abundantly demonstrated. We are not here dealing with articles of commerce. There is no merchandise, no tangible goods, or even intangible goods, that is moving across State lines or out of which or in which this concern has some share in the interstate journey. This is not a case where produce goes from Ohio into Michigan, it is warehoused, it is picked up by retailers, the retailers continue in a practical sense perhaps the flow of the interstate movement of the produce until it reaches the hands of the ultimate consumer, because in this case none of the merchandise which this company is handling has come from outside the State of Michigan What it handles, insofar as it handles anything, is pieces of paper, and the pieces of paper have been picked up by an employee of this company from a local printing establishment where the paper has been processed by the printer and put into a form available and appropriate for the advertisement itself Now, if the interstate movement of merchandise has any practical limitations whatever, certainly if we go back to the newsprint on which the advertising may have been printed-and there is nothing, of course, in our stipulation that even justifies such an assumption-but if assuming some newsprint was made in Canada and moves into the print shop it may stay in the print shop for six months or two years, however long the printer may have it, and then it is proc- essed by the printer with ink printing equipment and the like. If there is any- thing in the notion that at some point the interstate movement must be said effectively to terminate, to come to rest when the newsprint becomes mingled, if you will, with the generality of property localized within the State, it is certainly in such a place. In other words, we do not understand the Government here to be contending the jurisdiction is to be predicated in any way upon the flow of the pieces of paper which may, for all that appears, have been produced in upper Michigan pulp- wood factories or, on the other hand, may have conceivably come from outside the State, but then jurisdiction is not claimed to depend in any way upon the actual movement of the paper itself, so then we are faced with the other alterna- tive, or the other ground upon which jurisdiction is here asserted, and that is that one must examine into the nature of the operation of these three customers of this concern, and if one finds that Wrigley's is engaged in activities of moving merchandise, groceries, from out of the State and into the State and into the hands of the consumer, and then it should follow, my brother here claims, that the Board has jurisdiction of this case, but it seems to us there is a very sub- stantial distinction. This is not the kind of a service which is rendered to Wrigley's We are not, for example, giving Wrigley's strength. We are not giving Wrigley's custodial services within its own warehouse or within its own retail establishment where it can be presumed that the services are beneficial both to the transaction of interstate business for such sales as they make into Ohio and the like and where it is possible to assume there is no way to distinguish between the interstate benefit and the intrastate benefit of the service that we are furnishing, in other words. You are familiar, I am certain, with the Window Cleaning cases. The Supreme Court under the Wage and Hour Law in the Martino case said there is enough impact or, rather, effect upon interstate activity where a service estab- lishment localized within the City of Detroit, by the wav. hires men to go out and clean factory windows where within the factory building goods are being produced, some of which find their way across state lines. At least you cannot distinguish too clearly the destination of the goods; there is enough contribution made to the interstate productive activity, whether it is made by the factory owner himself who hires his own men to clean the windows AMERICAN ADVERTISING DISTRIBUTORS 653 or whether it is furnished by an independent contractor hired to clean the windows. Now, in that case, as you remember, after the Court had affirmed it the Congress indicated it did not wish to go that far , and changed the law so that activities which the majority felt were essentially localized in character should remain outside the protection of the Wage and Hour Law. Now, the Board, however, with broader jurisdictional basis, has assumed in a comparable case-I think it was the Detroit Window Cleaning case-that there is jurisdiction in this kind of a situation , but again it was because the factory building whose windows were being cleaned was, itself, a part of the process of movement destined for points beyond the State itself. Now, here the nature of the service-the services here rendered don't even move to Wrigley's. They don't move to Sam's. These men have no occasion to go to any of these retail outlets in the course of rendering any sort of service whatever. Their service is rendered exclusively to the individual householder who sees the bill . The bill is picked up from the local print shop within the State. It is transported in a truck and deposited in the householder 's-on his porch or his door handle. There is nothing, in terms of the practical operation and in terms of the practical movement , that has anything to do with interstate activity whatsoever. The only remote connection, we submit, in terms of the activities of this employer and interstate activities , is who pays the bill . The distribution to a local hardware dealer who wants, say , Zone TwentyOne covered completely is exactly the same as the distribution to Sam's that wants Zone TwentyOne covered completely, because in each case the retail merchant has a sale coming up. There is nothing different about the operation of the employee . There is nothing different about the operation of the employer . In each case this is a purely parochial, isolated, localized operation or activity. Now, with respect to the bill, certainly in the one instance we send our bill for the service rendered to the local hardware store. In the other case we send our bill to Sam's, Incorporated, all of them in the City of Detroit. The invoices are sent to Detroit. They are paid from Detroit. Now, the mere fact that the bank account out of which the payment is made in one case may include receipts derived from retail outlets, as in the case of Wrigley 's, outside of the State of Michigan, does not seem to us to be anything like a concrete , sensible, palpable link to interstate activity. This is seizing upon a purely adventitious factor without any significance, we would submit, in constitutional doctrine or in the application or operation of the law itself. Now, there is one final point , and that is it can be suggested, I suppose, that when we advertise a sale for Sam's or for a hardware store, and if there were to be a strike among our bill distributors , the merchandise that's all there on the shelves priced , itemized and ready for sale certainly mingled within the generality of local property, if there could be such a thing, that that merchandise will pile up, and that the proprietor of the enterprise will not go back to hire more goods from outside the state of Michigan until he has made other arrange- ments on his advertising or until the supposed strike were to terminate, but this, we submit, is the kind of carrying to the extreme of abstract logic to a point beyond which the Courts have told us we should not go. It is possible, Mr. Justice Frankfurter said, in the Polish National Alliance case, that every local business has some-no matter how slight-effect on interstate commerce, but scholastic reasoning may prove that no activity is isolated within the boundaries of a single state, but they cannot justify absorp- tion of legislative power by the United States over every activity . In there the Court also mentioned that the inner penetrations of modern society have not wiped out State lines. When the conduct of an enterprise affects commerce among the States it is a matter of practical judgment not to be determined by abstract notions. Now, as we read the Siemons case and this mailing case, as we read the other recent decisions of the Board, in none of these cases has there been involved the kind of a service such as is rendered here, where no phase of the service itself is directed towards the establishment of the premises of the hiring employer , even though he may, in turn , be in interstate activity, subject to the Board's jurisdiction. Going back to the practicalities of economic existence, these people, when they pick up the printed materials produced at Michigan Rotary or Highland Park Printers or these other rotary shops within the city of Detroit, they haul them down to the central point at which they proceed to distribute, and then 6 54 DECISIONS OF NATIONAL LABOR RELATIONS BOARD they go out and hand them to each individual householder, and at no point, as a practical matter, is there any involvement-directly or in directly-with the movement of merchandise across State lines, it seems to us. The fact that in some cases the customer may be a large outfit which pays the bill does not, it seems to us, constitute a fair and reasonable and practical basis for the assertion of the Board's jurisdiction here, and, indeed, it was just such an appreciation or feeling that for twenty-five years-notwithstanding the vicisitudes and changes in constitutional developments-that these people were engaged in a purely localized activity that contributed, no doubt, to the fact they made no attempt to alter their operations with changes in the National Labor Law because they felt at all times they were purely local in character. So long as a distinction between local activity and interstate activity has any meaning in our constitutional sphere we thing it should be given meaning in a case such as this, and, indeed, there was a recent decision involving window washers in the Supreme Court of Pennsylvania, where the Court felt that, not- withstanding changes in doctrine, notwithstanding assumption of added jurisdic- tion on the part of the Board, this was the kind of service activity which con- stitutionally must be regarded still as localized, and is, we would submit, within the rule of de minimis itself, and for this reason we would suggest the proceed- ings here should be dismissed for lack of jurisdiction over the respondent company. Finding The Trial Examiner finds on the basis of the stipulated facts and from the entire record that the Board is properly vested with and has exercised jurisdiction in this matter; and the existing agreements between the Respondents, Company and Union, in effect and as carried out constitute violations of the Act as alleged in the complaint with the exception that the allegation of domination is not sustained. Conclusions On the entire record I hold that by requiring employees to pay dues, initiation fees, make wage deductions, and permit a wage differential of 21/2 cents per hour between union members and nonunion members in order to obtain and retain employment, Respondent Company violated Section 8(a)(3) and (1), and Respondent Circular Distributors Union violated Section 8(b) (1) (A) and (2) of the Act. I hold that Re- spondents by their officers, agents, and representatives, since on or about January 24, 1959, have maintained in effect an illegal agreement, arrangement, understanding and/or practice, based upon union membership, which agreement is illegal, null, and void for the reason that (a) it affords a greater degree of union seniority than that permitted by the proviso in Section 8(a)(3) of the Act, and for the further reason that it grants preference in employment and greater wage rates to members of the Respondent Union, contrary to Section 8(a)(3) and 8(b)(2) of the Act; (b) constitutes financial assistance to the Respondent Union in violation of Section 8(a)(2) of the Act and interferes with, restrains, and coerces employees in the exercise of rights guaranteed in Section 7 of the Act. By reason of maintaining in effect such illegal agreement and enforcing it, the Respondent Employer is dis- criminating and has discriminated against its employees in respect to hire, tenure, and terms and conditions of employment, thereby encouraging membership in Re- spondent Union in violation of Section 8(a)(3) of the Act. By reason of Respond- ent Employer's conduct above, said Respondent Employer has interferred with, and is interfering with, the formation and administration of Respondent Union, and has contributed and is contributing financial and other support to it, and thereby has committed unfair labor practices within the meaning of Section 8(a) (2) of the Act. By reason of the Respondent Employer's conduct as above stated, the Respondent Employer has interfered with, restrained, and coerced, and is interfering with, re- straining, and coercing employees in the exercise of the rights guaranteed them in Section 7 of the Act, and thereby has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(1) of the Act. By reason of the Respondent Union's conduct, described above, the said Respond- ent Union has coerced and restrained and is coercing and restraining employees of Respondent Employer in the exercise of rights guaranteed in Section 7 of the Act, and thereby is engaging in and has engaged in unfair labor practices within the meaning of Section 8(b) (1) (A) of the Act. The activities of the Respondents, as set forth above, occurring in'connection with the operations of the Respondent Em- ployer, have a close, intimate, and substantial relationship to trade, traffic, and com- AMERICAN ADVERTISING DISTRIBUTORS 655 merce among the several States, and tend to lead to labor disputes burdening and ob- structing commerce and the free flow of commerce. The acts of the Respondent Employer described above constitute unfair labor practices affecting commerce within the meaning of Section 8(a)(1), (2), and (3) and Section 2(6) and (7) of the Act. The acts of the Respondent Union described above constitute unfair labor practices affecting commerce within the meaning of Section 8(b) (1) (A) and (2) and Section 2(6) and (7) of the Act. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondents set forth in section III, above, occurring in con- nection with the operations of Respondent Company described in section 1, 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 com- merce and the free flow of commerce. V. THE REMEDY Having found that certain of the Respondents have engaged in the unfair labor practices set forth above, I recommend that they cease and desist therefrom, and that they take certain affirmative action designed to effectuate the policies of the Act. As I find that dues, initiation fees, and assessments were collected under the illegal 1956 contract and subsequent oral agreements and the practice of the parties under them, as the price employees paid in order to obtain or retain their jobs, it would not effectuate the policies of the Act to permit the retention of the payments which have been unlawfully exacted from the employees. In addition, therefore, I recom- mend that Respondent Company, American Advertising Distributors, and Circular Distributors Union, Local B.B. 5, jointly or severally refund to all distributors and apprentices employed by the Company, the dues, initiation fees, and assessments paid by the employees as a price for their employment. Respondents' liability for reim- bursement shall include the period beginning 6 months prior to the filing and service of the initial charge against each respondent and shall extend to all such moneys thereafter collected since that date, including the differential of 2ih cents per hour less which was paid to nonunion employees. These remedial provisions are appro- priate and necessary to expunge the coercive effect of Respondents' unfair labor practices. United Association of Journeymen & Apprentices of Plumbing & Pipe- fitting Industry etc., Local 231, AFL-CIO (J. S. Brown-E. F. Olds Plumbing & Heat- ing Corporation), 115 NLRB 594, 597-602; Broderick Wood Products Company, 118 NLRB 38, enfd. 261 F. 2d 548 (C.A. 10); Los Angeles-Seattle Motor Express, Incorporated, 121 NLRB 1629; Lakeland Bus Lines, Incorporated, 122 NLRB 281; Indianapolis and Central Indiana District Council, et al. (Mechanical Handling Sys- tems, Incorporated), 122 NLRB 396; Argo Steel Construction Company, 122 NLRB 1077; Carpenters' District Council of Rochester, et al. [Rochester Davis-Fetch Cor- poration], 122 NLRB 269. 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. American Advertising Distributors is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Circular Distributors Union, Local B. B. 5, International Alliance of Bill Posters, Billers and Distributors of the United States and Canada, AFL-CIO (American Ad- vertising Distributors), is a labor organization within the meaning of Section 2(5) of the Act. 3. By maintaining and enforcing illegal hiring hall agreements and practices giving exclusive control over the employment of distributors in Detroit, Michigan, to the Local Union, Respondent Company has violated Section 8(a)(1) and (3), and Respondent Union has violated Section 8(b) (1) (A) and (2) of the Act. 4. By requiring all distributors and distributor apprentices of the Respondent Company to pay dues, initiation fees, and assessments in order to obtain employment and to retain employment, Respondent Company has violated Section 8(a)( 1), (2), and (3) and Respondent Circular Distributors Union, Local B.B. 5, has violated Section 8(b)(1) (A) and (2) of the Act. 5. 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.]