Dan McKinney Co.

DAN McKINNEY CO. 649 or on or about July 12, 1960, insofar as said contracts provide that: If the Company contracts any hauling of produce between the field and the packinghouse or the field and the vacuum cooler, employees of such contractors shall be covered under the terms of this contract. If the contractor does not comply with the terms of this agreement, the Union will notify the Company in writing of any provisions of the ageement violated. If contractor shall not come into compliance within 48 hours, the Company shall terminate the contract with contractor. All independent truckdrivers hauling melons between the field and the packinghouse shall be in good standing with the Union. Shippers will, upon written request by the Union, terminate within 48 hours thereafter the contract of any in- dependent trucker who ceases to be in good standing with the Union. GENERAL TEAMSTERS', WAREHOUSEMEN AND HELPERS' UNION, LOCAL No. 890, 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. Employees may communicate directly with the Board's Regional Office, 703 Market Building, 830 Market Street, San Francisco 2, California, Telephone Number, Yukon 6-3500, Extension 3191, if they have any question concerning this notice or compliance with its provision. Dan McKinney Co. and Leo S. Angel and California Beer Whole- salers' Association, Inc.; California Brewers Association; Teamster Brewery and Soft Drink Workers Joint Board of California ; and Beer Drivers Local Union 683, Parties to the Contract. Case No. 21-CE-18. June 15, 1962 DECISION AND ORDER On September 27, 1961, Trial Examiner Herman Marx issued his Intermediate Report in the above-entitled proceeding, finding that Dan McKinney Co., the Respondent herein, had not engaged in unfair labor practices in violation of Section 8 (e) of the Act and recom- mending that the complaint be dismissed, as set forth in the attached Intermediate Report. Thereafter, the General Counsel, California 137 NLRB No. 74. 650 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Brewers Association, and the Union filed exceptions to the Inter- mediate Report and supporting briefs. The Union also filed a reply brief.' The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the ex- ceptions and briefs, and the entire record in the case, and hereby adopts the findings and conclusions of the Trial Examiner, only insofar as they are consistent with this decision. We find, in disagreement with the Trial Examiner, that the Re- spondent violated Section 8 (e) of the Act. The basic facts are not in dispute. As more fully set forth in the Intermediate Report, the Respondent and the Union became parties to a collective-bargaining contract entered into on June 15, 19602 Sec- tion 17 thereof contains the following terms : (b) it shall not be cause for discharge and no employee shall be discriminated against : 1. for refusing to pass a duly sanctioned picket line. (This section shall not apply to jurisdictional disputes.) 2. for refusing to load or unload trucks where drivers are not working under a collective bargaining agreement negotiated by a legitimate labor organization. Provided, however, that where a Brewery Establishment is concerned, in the absence of a labor controversy with a distributor, emergency deliveries may be made to such distributor's vehicle, at the Individual Employer's dock and where a Distributor's Establishment is concerned, in the absence of a labor controversy with a retailer, emergency de- liveries may be made to such Retailer's vehicle, at the Individual Employer's dock. The existence of an emergency shall be mu- tually agreed upon by the Local Union and Individual Employer involved ... . 3. With respect to the provisions of this Section, no Individual Employer will cease or refrain from doing business with any person or organization as a result of an employee or employees exercising their rights under this Section but each Individual Employer shall, notwithstanding any other provision of this Agreement, if the Individual Employer so desires, continue doing such business by use of other personnel (including management 1 The Board hereby denies the Union's request for oral argument because the record, the exceptions , and the briefs adequately present the issues and positions of the parties. 2 The contract was effective at least until April 1, 1962. The formal parties to the contract were California Beer Wholesalers ' Association , Inc, and California Brewers Association, representing employers including the Respondent herein who was a member of the former ; and Teamster Brewery and Soft Drink Workers Joint Board of California, Beer Drivers Local Union 683, and several other local unions, representing employees of the respective employers . As Local Union 683 is one of the signatories which approved the contract, we find that it is a Party to the Contract. DAN McKINNEY CO. 651 personnel) or by other methods such Individual Employer deems appropriate or proper. This clause has remained in the contract at all relevant times. Angel, the Charging Party, began operating a cocktail lounge in Imperial City, California, in July 1960, and regularly purchased beer and received deliveries from the Respondent, a wholesale beer distributor. On May 15, 1961, labor organizations which are not parties to this proceeding began picketing Angel's place of business. Thereafter, the Respondent refused to make deliveries to Angel's establishment, although on two occasions shortly after the picketing began Respondent sold beer to Angel at the Respondent's shipping dock. On a third occasion near the end of May, the Respondent re- fused to sell to Angel,' explaining that the Respondent's employees were covered by a union contract and the Respondent feared it would become involved in a union problem of its own if it sold to an estab- lishment being picketed by another union. On June 15, 1961, Angel filed the charge in this case alleging that the Respondent had violated Section 8 (e) of the Act .4 The General Counsel contends that section 17(b) (2) contained in the above contract is a hot-cargo clause which is unlawful under Section 8(e) of the Act and that the Respondent, by refusing to sell or deliver to Angel, gave effect to the said clause and thereby "entered into" a contract prohibited by Section 8(e). The Trial Examiner found that section 17(b) (2) 5 is not within the prohibition of Section 8 (e). He further concluded that, even if it be invalid, the Board is precluded by Section 10(b) of the Act,6 from finding a violation based thereon because Section 8(e) prohibits only the beginning of a con- tractual obligation, such as the initial execution of a proscribed agree- ment, and here the contract was signed more than 6 months before 3It appears from a motion filed with the Trial Examiner after the close of the hearing, that sometime in September 1961, the dispute at Angel's place of business was settled and the picketing ceased . The Respondent thereupon resumed its normal business deal- ings with Angel , making sales and deliveries to him. To the extent material here, Section 8(e) provides as follows: It shall be an unfair labor practice for any labor organization and any employer to enter into any contract or agreement , express or implied, whereby such employer ceases or refrains or agrees to cease or refrain from handling , using, selling , trans- porting or otherwise dealing in any of the products of any other employer, or to cease doing business with any other person , and any contract or agreement entered into heretofore or hereafter containing such an agreement shall be to such extent unenforcible and void . . . . 5As the complaint herein did not allege that section 17 (b) (1) was unlawful, the ques- tion of its validity was not in issue before the Trial Examiner in this proceeding. In his brief, the General Counsel notes this fact, but states that be does not take the posi- tion that such a provision is lawful in all situations. However, as no specific exception was taken to the Trial Examiner's consideration of that provision or his conclusion that it is not violative of the Act, we adopt this finding pro forma. 6 Section 10 ( b) of the Act provides in pertinent part: "That no complaint shall issue based upon any unfair labor practice occurring more than six months prior to the filing of the charge . . . ." As we do not base our conclusions in this case on any event pre- ceding the 6-month period , Section 10 (b) is inapplicable. 652 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the charge was filed. For the reasons stated below, we find, contrary to the Trial Examiner, that section 17(b) (2) is invalid, that the pro- hibition of Section 8(e) extends beyond the mere initiation of such an obligation, and that the Respondent, by maintaining or implement- ing that clause within the period covered by the charge, engaged in conduct which is violative of Section 8 (e). As we read the terms of section 17(b) (2), it is an agreement that the Respondent (a wholesale distributor) will cease doing business with any other persons (retailers) if their employees are not covered by a union contract, except that the Respondent may make emergency deliveries at the Respondent's dock to such a retailer, but only if the Union agrees and no active labor controversy exists between a union and such retailer. The disputed clause thus falls squarely within the prohibition of Section 8(e). For Congress specifically proscribed "hot cargo" agreements whether express or implied. And here, by specifying in the proviso to section 17(b) (2) the conditions under which the Respondent may make deliveries to nonunion retailers, the parties have agreed, at least by implication, that in no other circum- stances will sales or deliveries be made to such retailers. The fact that the disputed section is worded in terms of protection of employees against discharge, rather than a direct prohibition against the Re- spondent's doing business with others, does not alter the effect, and hence the illegality, of that section. We have had occasion to consider contract terms providing that employees will not be required to work on "hot" goods or provide services for employers involved in a labor controversy. We have con- cluded in each instance that such clauses are invalid within the mean- ing of Section 8(e).° We see no real distinction between a contract which prohibits an employer from requiring that his employees do certain work and one prohibiting an employer from discharging his employees for refusing to perform such work. This interpretation of clauses protecting employees against discharge is supported by the legislative history, which reveals that Congress clearly intended to prohibit agreements such as the one involved herein.' Accordingly, 7See, e.g., Amalgamated Lithogiaphers of America (Ind) and Local No 17 of the Amalgamated Lithographers of America (Ind) (The Employing Lithographers, et al ), 130 NLRB 985 , 989; Amalgamated Lithographers of America and Local 78 , et at. (Miami Post Company ), 130 NLRB 968 , 977, enfd. as mod in other respects 301 F 2d 20 (C A. 5) ; Los Angeles Mailers Union No 9, I T U. (Hillbro Newspaper Printing Company, Division of Hearst Publishing Company, Inc ), 135 NLRB 1132; Mary Feifer, d/b/a American Feed Company, 133 NLRB 214 8 105 Daily Cong Record 5974, April 24, 1959 , Legislative History of the Labor- Management Reporting and Disclosure Act of 1959 , U S. Government Printing Office, 1959 , vol. II, p. 1197 ("what ( the hot cargo clause] does is require an employer to agree that his employees do not have to handle goods which the union labels as 'hot' ") ; 105 Daily Cong. Record 3524, March 12, 1959 , II Legislative History 1007 ("Closely re- lated to the secondary boycott bill is one that would make unlawful a contract whereby an employer agrees in advance that he will not require his employees to handle goods or provide other services for the benefit of an employer who is involved in a labor dis- DAN McKINNEY CO. 653 we do not agree with the Trial Examiner's conclusion that section 17(b) (2) is lawful merely because clause 17(b) (2) does not specifi- cally require that the Respondent cease doing business with other persons. Nor does the "savings clause" of section 17(b) (3) of the contract, which states that the Respondent shall not cease doing business with any other person, persuade us that the parties did not intend section 17(b) (2) to have the effect which we have found. The alternative method of operating required by this so-called "savings clause" is so impractical and burdensome as to be meaningless. The Respondent could not reasonably have been expected to comply with section 17(b) (3), and it could only have been an attempted subterfuge to avoid the application of Section 8(e). Congress, in banning all hot cargo clauses, was intent on reaching every device, no matter how dis- guised, which, fairly considered, is tantamount to an agreement to cease doing business for an unlawful reason.9 Therefore, a device which does not completely eliminate an invalid clause is ineffective. Having found that section 17(b) (2) is an unlawful hot cargo clause, we reach the issue of whether the facts establish that the Respondent "entered into," the proscribed agreement within the 6-month period preceding the filing of the charge. We disagree with the Trial Examiner's conclusion that Section 8(e), by the words "to enter into," was intended to define as an unfair labor practice only the initial execution of a proscribed agreement. We have already considered similar contentions and have rejected this restrictive interpretation of Section 8(e).10 Such a construction would so narrow the meaning of the words "to enter into" as to recreate one of the loopholes which Congress obviously intended to close. For, Congress sought to free neutral employers from the inhibitions of a prior contractual commitment at all times, not just at the time of sign- ing the contract and the 6-month period following." Congress could therefore not have intended to leave a gap, whereby contracts which are rendered void and unenforcable as between the parties, would, in effect, continue as if they were lawful agreements upon which findings of unfair labor practices could not be based simply because they were pute. . . . To . insure that no hot-cargo clause shall be used as justification for or in aid of, a secondary boycott, this bill outlaws hot-cargo clauses. . . ... ) ; 105 Daily Cong Record 5764, April 21, 1959, II Legislative History 1079 (" . an employer may be coerced into entering or living up to hot -cargo agreements , which are standard in Teamster contracts, under which his employees do not have to handle or work on goods produced or handled by another employer who happens to be in disfavor with the union." 6 See District No. 9, International Association of Machinists, AFL-CIO ( Greater St. Louis Automotive Trimmers and Upholsterers Association, Inc ), 134 NLRB 1354. 10 Los Angeles Mailers Union No 9 , I T.U. (Hillbro Newspaper Printing Company, Divi- sion of Hearst Publishing Company, Inc ), supra; District No 9, International Associa- tion of Machinists, AFL-CIO ( Greater St . Louis Automotive Trimmers and Upholsterers Association, Inc ), supra. n Los Angeles Mailers Union No. 9, I.T.U. ( Hilibro Newspaper Printing Company, et at ), supra. 654 DECISIONS OF NATIONAL LABOR RELATIONS BOARD executed more than 6 months prior to the filing of the charge.12 The effect of the Trial Examiner's rationale would be to thwart the intent of Congress in enacting Section 8 (e). In cases previously decided we have indicated our belief that the words "to enter into" must be interpreted broadly and encompass the concepts of reaffirmation, maintenance, or giving effect to any agree- ment which is within the scope of Section 8(e).13 For the reasons set forth in the cited cases and those discussed below, we are con- vinced that such an interpretation is correct. However, in those cases our ultimate finding that a violation of Section 8 (e) had occurred was based on the fact that both the contracting union and the employer had taken some action by which both had acknowledged and reaffirmed the current effectiveness and application of the hot cargo clause in their contract and we held they had thereby "entered into" a hot cargo agreement. The instant situation presents a question we have not previously considered-whether a violation of Section 8 (e) has oc- curred where the evidence establishes only that the employer took ac- tion implementing the contract during the period covered by the charge. We believe and find that this question must be answered in the affirmative and that the Respondent's action herein is within the prohibition and constitutes a violation of that section of the Act. That Congress intended to make it unlawful, inter alia, for a party to a hot-cargo clause "to live up to" or enforce such agreement is evidenced by the legislative history. Thus, it is well recognized that Congress' chief objective in enacting Section 8(e) was to close the so- called Sand Door 14 loopholes.l5 In the Sand Door case, the Supreme Court held that while a hot cargo agreement was not a defense, in a situation where the union actually induced employees to refuse to handle goods with an object proscribed by Section 8(b) (4) of the Act, it was not unlawful for an employer merely to agree with a union that his employees would not be required in the future to handle such goods. In reaching this conclusion, the Court noted that under the statute as it then existed, an employer was entitled to freedom of choice at the time it was faced with the question of whether to boycott, and that where an employer acted voluntarily to boycott another no violation of the Act occurred simply because of the existence of the hot cargo clause. The Court also stated that "the Board has no general commis- sion to police collective-bargaining agreements and strike down con- tractual provisions in which there is no element of an unfair labor prac- 12 See District No. 9, International Association of Machinists, AFL-CIO ( Greater St. Louis Automotive Trimmers and Upholsterers Association, Inc ), supra 11 See cases cited in footnote 10 above '4 Local 1976, United Brotherhood of Carpenters and Joiners of America, AFL, et al. ( Sand Door if Plywood Co ) v N.L R B., 357 U S 93. 1s See, e g, 105 Daily Cong. Rec 14195 , August 11 , 1959, II Legis. Hist 1508 , state- ment of Congressman Griffin. DAN McKINNEY CO. 655 tice. Certainly the voluntary observance of a hot cargo provision by an employer does not constitute a violation of [the Act], and its mere execution is not . . . prima facie evidence of prohibited inducement of employees." Further, in discussing the validity of hot cargo clauses in light of the Interstate Commerce Act, the Court said that ". . . the fact that the carrier's consent is not effective to relieve him from cer- tain obligations under the Interstate Commerce Act does not neces- sarily mean that it is ineffective for all purposes . . . . The Board is not concerned with whether the carrier has performed its obligations to the shipper, but whether the union has performed its obligation not to induce employees . . . . " These comments by the Supreme Court reveal what some of those loopholes were and that many of them arose by virtue of voluntary action by employers. It is clear from the legislative history that, to close these loopholes, Congress, in banning the signing of all such agreements, intended also to render unlawful a secondary boycott resulting from the employer's voluntary compliance with an existing hot-cargo clause and to render the employer's consent ineffective for all purposes.16 The congressional intent to interdict an actual cessa- tion of business pursuant to an illegal clause is further obvious from a literal reading of Section 8(e) itself, which prohibits such agree- ment "whereby such employer ceases or refrains ... from . . . doing business with any other person . . . ." Also, it is clear that Congress was of the opinion that the mere existence of such provisions has coercive effect upon an employer 14 and, in providing that hot cargo clauses shall be "void and unenforcible," was legislating to eradicate any form, existence, or enforcement of such contracts as against public policy."' Accordingly, to accomplish its purpose, Congress broadened the Board's power to include the authority which it did not previously have according to the Supreme Court's decision in Sand Door, and commissioned the Board, where proper charges are filed, to police collective-bargaining agreements insofar as hot cargo clauses are con- cerned and to make findings of unfair labor practices where the facts 10 105 Daily Cong Rec 3524 , March 12, 1959, II Legis . Hist. 1007 : Senator McClellan, in asserting the necessity for outlawing hot-cargo clauses, stated ". . . the [Supreme] Court explicitly left open the question of whether such a clause might have other ramifi- cations in labor-management relations . . . Also to be considered is the possible non- legal effect of such a clause as a gentlemen 's agreement providing moral suasion against an employer To remove any such doubts, and to insure that no hot-cargo clause shall be used as justification for, or in aid of, a secondary boycott, this bill outlaws hot-cargo 11 clauses . . . . n Ibid. See also 105 Daily Cong . Rec 14207 , August 11, 1959, II Legis Hist. 1581: Congressman Rhodes, in urging adoption of the hot cargo clause as finally passed, stated that such restrictive contracts themselves encourage secondary boycotts 18 District No 9, International Association of Machinists , AFL-CIO ( Greater St. Louis Automotive Trimmers and Upholsterers Association, Inc ), supra. 656 DECISIONS OF NATIONAL LABOR RELATIONS BOARD reveal that any such agreement has been initiated or there has been any enforcement of such a clause. A statement by the then Senator Kennedy and Representative Thompson in their joint analysis of the Landrum-Griffin bill strongly supports the conclusion that an employer's independent enforcement of a hot-cargo clause was intended to be a violation of Section 8(e). 105 Daily Cong. Record 15222, August 20, 1959, II Legis. History 1708. After referring to the Supreme Court's holding in Sand Door, they said : Unfortunately there are a good many cases in which the Team- sters without any inducement of employees, is often able to persuade the secondary employer not to carry the goods and not to require his employees to handle them. It is very hard for the trucking firm either to resist the Teamsters' demand for a hot cargo clause in collective bargaining, when the price of resistance would undoubtedly be a strike for still higher wages, or to refuse to live up to the contract when he has signed it, when the cost of noncompliance would undoubtedly be the Teamsters' insistence that the contract had been terminated by the violation, thus free- ing the union to present new demands in collective bargain- ing . . . . [From] the standpoint of the primary employer it makes no difference whether the goods will not be trucked by a common carrier because the Teamsters' Union induces the com- mon carrier's employees to refuse to handle them or because the carrier voluntarily lives up to the hot cargo contract because he dares not challenge the Teamsters Union. The injury to the public is also the same . . . . [Emphasis supplied.] 19 In the instant case, the Respondent concedes that it refused to de- liver or sell beer to Angel in May 1961 because of its contract with the Union.20 It is plain that the Respondent was thereby enforcing ie Other statements to this same effect appear at 105 Daily Cong Rec 14176 , August 11, 1959, II Legis Hist. 1549 ("There are no ifs , and, buts, or provisos about it. It says you have to stop the boycott, hot cargo practices period " ) ; 105 Daily Cong Rec 5888, April 23, 1959, II Legis . Hist 1162 ( statement by then Senator Kennedy that " It [the original proposal limited to interstate carriers ] supplements the action of the Interstate Commerce Commission in attempting to control the effect of hot cargo agreements ") . 105 Daily Cong Rec 12429 , July 16 , 1959 , II Legis Hist. 1514 ("[The bill] . . pre- vents the enforcement of existing contracts containing such clauses .") ; 105 Daily Cong Rec., Appendix , A6654, August 3, 1959 , II Legis . Hist . 1777 ("Proponents of this [hot cargo] provision aver that it will eliminate a major weakness in the present law on sec- condary boycotts As long as the retaining of hot-cargo agreements remains legal, common carriers continue to abide by it , even if the unions cannot force the carrier to do so " ) ; 105 Daily Cong . Rec. 6033, April 25, 1959, II Legis Hist 1242 (" . . The objective . . Is to effectively curb hot-cargo practices from being indulged in in inter- state commerce ") 2O We find no merit in the Union 's contention that the Respondent and other parties to the contract are estopped , under the doctrine of "unclean hands," from asserting that clause 17 ( b) (2) is unlawful . Milk Drivers and Dairy Employees Union , Local No 546, et at. (Minnesota Milk Company ), 133 NLRB 1314, footnote 3. DAN McKINNEY CO. 657 or "living up to" clause 17 (b) (2) of the contract, which we have found to be unlawful 21 As we are persuaded that such enforcement, whether or not it was sought, assented to, or acquiesced in by the other party to the contract," is within the scope of the prohibition of Section 8 (e) against entering into such contracts, we accordingly find that the Respondent by complying with the terms of the unlawful clause, violated that section of the Act. THE EFFECT OF THE UNFAIR LABOR PRACTICES ON COMMERCE The activities of the Respondent set forth above, have a close, inti- mate, 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. THE REMEDY Having found that the Respondent has engaged in an unfair labor practice, we shall order it to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act. Upon the basis of the foregoing and the entire record, the Board makes the following : SUPPLEMENTAL CONCLUSIONS OF LAW 1. By refusing to make deliveries or sell to Leo S. Angel in May 1961 and thereby enforcing clause 17(b) (2) contained in its June 1960 collective-bargaining contract with the Union, the Respondent vio- lated Section 8 (e) of the Act. 2. The aforesaid unfair labor practice is an unfair labor practice affecting commerce within the meaning of Section 2(6) and (7) of the Act. ORDER Upon the entire record in this case, and pursuant to Section 10(c) of the Act, as amended, the National Labor Relations Board hereby orders that the Respondent, Dan McKinney Co., San Diego, Cali- fornia, its officers, agents, successors, and assigns, shall : 1. Cease and desist from : (a) Enforcing or giving effect to Section 17 (b) (2) of the collective- bargaining contract entered into on June 15, 1960, between the Union and the Respondent. u As already noted, Respondent predicated this refusal on the ground that its em. ployees were covered by a union contract and that it was "liable to become involved in a union problem of [its] own." = We need not, and do not here decide, whether such enforcement by Respondent was sought, assented to, or acquiesced in by the Union. 649856-63-vol. 137-43 658 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (b) Entering into, enforcing, or giving effect to any like or related clause in any collective-bargaining contract with the Union, express or implied, whereby the Respondent ceases or refrains, or agrees to cease or refrain, from handling, using, selling, transporting, or other- wise dealing in any of the products of any other employer, or from do- ing business with any other person. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act. (a) Post at its place of business in San Diego, California, copies of the notice attached hereto marked "Appendix." 23 Copies of said notice, to be furnished by the Regional Director for the Twenty-first Region, shall, after having been duly signed by an authorized repre- sentative of the Respondent, be posted by the Respondent immediately upon receipt thereof, and be maintained by it for a period of 60 consec- utive days thereafter, in conspicuous places including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respondent to insure that said notices are not altered, defaced, or covered by other material. (b) Notify the Regional Director for the Twenty-first Region, in writing, within 10 days from the date of this Order, what steps the Respondent has taken to comply herewith. MEMBERS FANNING and BROWN took no part in the consideration of the above Decision and Order. av 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 " APPENDIX 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, as modified by the Labor-Management Reporting and Disclosure Act of 1959, we hereby notify you that : WE WILL NOT enforce or give effect to section 17(b) (2) of the collective-bargaining contract entered into on June 15, 1960, be- tween this Company and Teamster Brewery and Soft Drink Workers Joint Board of California; and Beer Drivers Local Union 683. WE WILL NOT enter into, enforce, or give effect to any like or related clause in any collective-bargaining contract with the afore- said labor organization, express or implied, whereby we cease or refrain, or agree to cease or refrain, from handling, using, selling, DAN McKINNEY CO. 659 transporting, or otherwise dealing in any of the products of any other employer, or from doing business with any other employer. DAN MCKINNEY Co., 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. Employees may communicate directly with the Board's Regional Office, Eastern Columbia Building, 849 Broadway, Los Angeles, California, Telephone Number, Richmond 9-4711, Extension 1031, if they have any question concerning this notice or compliance with its provisions. INTERMEDIATE REPORT AND RECOMMENDED ORDER STATEMENT OF THE CASE The complaint in this proceeding, issued by the General Counsel of the National Labor Relations Board (also called the Board herein), alleges that an employer, Dan McKinney Co. (also referred to herein as the Company or Respondent), has entered into a contract prohibited by the terms of Section 8(e) of the National Labor Rela- tions Act, as amended (73 Stat. 5.19, et seq.; also called the Act herein ), and has by such conduct engaged in unfair labor practices forbidden by the said section., Joined in the complaint as "parties to the contract ," although not as respondents, are two labor organizations , Teamster Brewery and Soft Drink Workers Joint Board of California and Beer Drivers Local Union 683 (respectively referred to herein as the Teamster Joint Board and Local 683 ); and two organizations of employers, California Beer Wholesalers' Association, Inc., and California Brewers Association (respectively called herein the Wholesalers Association and the Brewers Associa- tion) 2 The Respondent has filed an answer which, in material substance , denies that it has committed the unfair labor practices imputed to it in the complaint.3 Pursuant to notice duly served by the General Counsel upon each of the other parties, a hearing upon the issues in this proceeding was held before Herman Marx, the duly designated Trial Examiner, on August 30, 1961, at Los Angeles, California. The General Counsel, the Respondent, and each of the "parties to the contract" named above appeared at, and participated in, the hearing through respective counsel; the Charging Party, Leo Angel , did not enter an appearance ; and each of the parties was afforded a full opportunity to be heard , examine and cross-examine witnesses, adduce evidence, file briefs, and submit oral argument.4 I have read and considered ' To the extent material here, Section 8(e) provides: It shall be an unfair labor practice for any labor organization and any employer to enter into any contract or agreement , express or implied, whereby such employer ceases or refrains or agrees to cease or refrain from handling , using, selling, trans- porting or otherwise dealing in any of the products of any other employer, or to cease doing business with any other person, and any contract or agreement entered into heretofore or hereafter containing such an agreement shall be to such extent unenforcible and void . . . . a The complaint is based upon a charge filed with the Board on June 15, 1961. A copy of the charge has been duly served upon the Respondent , and due service of a copy of the complaint has been made by the General Counsel upon the Respondent and each of the "parties to the contract" named above. 3 Some of the "parties to the contract" have filed answers It may be noted that the Board's procedural rules make no provision for the filing of an answer by a party other than a respondent. See Sections 102 20 to 102.23 of the Board's Rules and Regulations, Series 8 4 The transcript of the hearing contains garbled transcriptions at a substantial number of points, even on occasion giving the appearance of incoherence to statements made by one or another of the participants in the hearing. At times, I am quoted to the reverse 660 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the respective briefs of the General Counsel, the Respondent, Local 683, the Teamster Joint Board, and the Wholesalers Association filed with me since the close of the hearing. No other party has filed a brief. Upon the entire record, and from my observation of the witnesses, I make the following: FINDINGS OF FACT I. NATURE OF THE COMPANY'S BUSINESS; JURISDICTION OF THE BOARD The Company is a California corporation; maintains its principal office and place of business in San Diego, California; and is there engaged in the business of selling beer at wholesale. In the course and conduct of its business, the Company annually purchases prod- ucts valued in excess of $50,000 from supply sources located outside California, and the commodities so purchased are shipped to the Company in California from points outside that State. By reason of such transactions, the Company is, and has been at all material times, engaged in interstate commerce within the meaning of the Act. Accordingly, the Board has jurisdiction over the subject matter of this proceeding.5 II. THE LABOR ORGANIZATIONS INVOLVED The Teamster Joint Board is "an association of local unions," including Local 683; and is the collective-bargaining representative of employees, including personnel in the employ of the Company. It is undisputed, and I find, that the Teamster Joint Board and Local 683 are labor organizations within the meaning of the Act. M. THE ALLEGED UNFAIR LABOR PRACTICES A. Prefatory findings The Wholesalers Association and the Brewers Association are organizations of California employers, the former consisting of beer wholesalers, and the latter of brewers. The Company is a member of the Wholesalers Association. Each organiza- tion represents its members in collective bargaining with various labor organizations, including the Teamster Joint Board. On June 15, 1960, the Wholesalers Association and the Brewers Association, on behalf of their members, entered into a collective-bargaining contract with the Teamster Joint Board, prescribing terms and conditions of employment of individuals in the members' employ. By its terms, the agreement was to be in effect until at least April 1, 1962. The contract, as appears from a notation at its foot, immediately following the executing signatures, has been "approved" by various "local unions," including Local 683. (Whether this warrants a conclusion that Local 683 is a party effect of what I said, as on page 39 of the transcript, at lines 2 and 3, where it appears that I made the observation that a given individual "could bind your union by this tele- phone conversation," whereas what I actually said (in Interrogative form) was that the Individual "could not bind your union by this telephone conversation " However, not- withstanding the inaccuracies, the record adequately reflects the material facts and Issues, and I thus deem it unnecessary, in the absence of a motion by any of the parties, to amend the transcript 5 The Teamster Joint Board and Local 683 challenge the jurisdiction of the National Labor Relations Board here on constitutional grounds Pointing out that the subject matter of this proceeding is an alleged agreement by a beer wholesaler not to do business with a retailer, the labor organizations contend that the 21st amendment to the United States Constitution, repealing the 18th (prohibition) amendment, has the effect of vest- ing control over sales of "intoxicating liquor" within the sole competence of the States; that California, by Section 25007 of Its Business and Professions Code, has expressly provided that "[n]o manufacturer, importer or wholesaler [ of beer] Is prohibited the right of choice of customers," thus in effect sanctioning an agreement by a wholesaler with a union whereby the former undertakes not to sell beer to a retailer, and that by force of the 21st amendment and the cited code provision, the agreement alleged in the complaint is beyond the reach of Section 8(e) of the Act, and the jurisdiction of the Board The contention Is devoid of merit Obviously, the 21st amendment does not restrict the congressional power to regulate interstate commerce, and it should be equally obvious that Section 8(e) is an expression of that power. Plainly, too, even if one assumes the incompatibility between the code provision and Section 8 (e) that the Teamster Joint Board and Local 683 claim they see, the California legislation must, under well- established constitutional doctrine, give way to the Federal statute. Garner v, Teamsters, Local 776, 346 U S. 485; Garmon v. San Diego Bldg. Trades Council, 359 U.S. 236. DAN McKINNEY CO. 661 to the contract need not be decided, for, as will appear, the end result in this pro- ceeding is the same whatever interpretation one places on the approval.) There is no dispute that the contract applies to individuals in the Company's employ. The only contractual terms that may have a material bearing on the issues are contained in section 17 of the contract. These provide: * • e s • • t (b) it shall not be cause for discharge and no employee shall be discriminated against: 1. for refusing to pass a duly sanctioned picket line. (This section shall not apply to jurisdictional disputes. ) 2. for refusing to load or unload trucks where drivers are not working under a collective bargaining agreement negotiated by a legitimate labor organization. Provided, however, that where a Brewery Establishment is concerned, in the absence of a labor controversy with a distributor, emergency deliveries may be made to such distributor's vehicle, at the Individual Employer's dock and where a Distributor's Establishment is concerned, in the absence of a labor controversy with a retailer, emergency deliveries may be made to such Retailer's vehicle, at the Individual Employer's dock. The existence of an emergency shall be mutually agreed upon by the Local Union and Individual Employer involved.. . . 3. With respect to the provisions of this Section, no Individual Employer will cease or refrain from doing business with any person or organization as a re- sult of an employee or employees exercising their rights under this Section but each Individual Employer shall, notwithstanding any other provision of this Agreement, if the Individual Employer so desires, continue doing such business by use of other personnel (including management personnel) or by other methods such Individual Employer deems appropriate or proper. The Charging Party in this proceeding, Leo Angel, operates a cocktail lounge called the Redhawk in Imperial City, California, and employs three individuals in the enterprise-a waitress, a pianist, and a bartender. From the opening of the Redhawk in July 1960 until some point in May 1961, Angel purchased beer for his establishment from the Company. A driver in the latter's employ made regular weekly deliveries of the beverage to Angel's place of business. About a month after Angel began operation of the Redhawk, a representative of a labor organization, which may be designated, for convenience of reference, as the Bartenders Union, called on Angel and asked him to sign a contract affecting his employees. Angel took the request under advisement. Thereafter, he asked each of his three employees whether they "were interested in joining the union." The bartender was already a member of the organization; the other two employees re- plied in the negative. The Bartenders Union made subsequent efforts to induce Angel to sign the con- tract, but these proved unavailing, and the upshot of Angel's failure to sign was that the bartender ceased working at the Redhawk on May 15, 1961, at the instance of the Bartenders Union; and that on the same date, that union and two other labor or- ganizations (identified in the record as the "Waitresses Union" and the "Culinary Workers Union," and who, like the Bartenders Union, are not parties to any con- tractual terms in issue in this case) began picketing the Redhawk, continuing to do so thereafter at all times material to the issues raised here. The Company has not made any deliveries at the Redhawk since May 15, 1961, and the evidence leaves one in no doubt, and I find, that it has not done so because of the picketing. Two or three days after the picketing began, since the Redhawk's beer supply "was getting low," Angel and a friend of his, one Bill Luepow, whom Angel had hired as a replacement for the bartender who had left the Redhawk, went to the Company's place of business with a view to purchasing beer there. Transacting their business with the Company's vice president, one Doug Oldfield, who is also the firm's sales manager, they told Oldfield that Angel was "having trouble with the union," that his establishment was being picketed, and that Angel was in urgent need of beer for his business. Oldfield replied that the Company "could not deliver beer," but would sell a specified quantity to Angel, although making it appear on its bill that the product had been sold to Luepow. A sale was made on that basis, Angel paying for the beer; and the product was delivered to Angel and Luepow at the Company's premises. About a week later, Oldfield, on the Company's behalf, sold Angel some kegs of draft beer, similarly billing Luepow, and delivering the beer to Angel and Luepow at the Company's place of business. On that occasion, too, Oldfield gave Angel and Luepow some equipment needed for the operation of the kegs, stating that he did not wish to install the equipment at the Redhawk himself "because of the picket line." Several days later, toward the end of May, Angel and Luepow re- 662 DECISIONS OF NATIONAL LABOR RELATIONS BOARD turned to purchase more draft beer, but Oldfield declined to make the sale, asserting that all of the Company's employees, including office personnel, "were under [union] contract"; that the firm's "dock workers and . . . truck drivers" would not go through "a picket line", and that the reason for the refusal to sell was fear by the Company that it was "liable to become involved in a union problem of [its] own . . . by selling to an establishment that was being picketed by another union." Luepow asked if there "was any possible way that we could get beer" from the Com- pany, and Oldfield replied, "No, not until you correct your union problem down there." About a week after this discussion, Angel and Luepow spoke to Dan McKinney (apparently the head of the Company) on the phone, Luepow using an extension line at the Redhawk. The material substance of the conversation was that Angel or Luepow asked McKinney if there was "any possible way" to purchase beer from the Company for the Redhawk; and that McKinney replied in the negative, stating that the reason was that all of the Company's employees were unionized; and that he was afraid that if the Company did business with Angel and Luepow while the Redhawk was being picketed, it would be "in violation of [its] contract with [its] employees and getting in trouble with [its] employees." 6 The Company has not sold any beer to Angel since the sale of the beer kegs by Oldfield in May. B. Discussion of the issues; concluding findings The fact that the Company has ceased doing business with Angel is by no means dispositive of the General Counsel's claim that the firm has violated Section 8(e), for the reach of the relevant statutory language (with certain exceptions not relevant here) is to forbid "any labor organization and any employee to enter into any contract or agreement, express or implied, whereby such employer ceases or refrains or agrees to cease or refrain from handling, using, selling, transporting, or otherwise dealing in any products of any other employer, or to cease doing business with any other person." [Emphasis supplied.] In short, to prevail here, the General Counsel must establish that the Company entered into an express or implied agreement with either the Teamster Joint Board or Local 683, or both, to cease or refrain from doing business with Angel, or from performing one of the other acts specified in Sec- tion 8(e). The General Counsel reaches for that goal with section 17(b)2 of the contract of June 15, 1960, notwithstanding the fact that the parties thereto entered into the agreement more than 6 months prior to the filing of the charge, and that, thus, under Section -10(b) of the Act, no complaint may issue alleging the execution of the agree- ment as an unfair labor practice. Be that as it may, in his brief, the General Counsel appears to read the protection from discharge or discrimination "for refusing to load or unload trucks," given employees by section 17(b)2, and the provision for "emergency deliveries" prescribed by .the relevant proviso of section 17(b)2, as con- taining an implication that wholesale distributors subject to the contract will not do business with a retailer involved in "a labor controversy." The contractual terms in question, so the argument appears to run, imply "work cessations" by the distribu- tor and his employees, thus amounting to an undertaking by the former not to do business with a struck retailer. One may note, in passing, that although the protec- 6 Angel and Luepow were the only witnesses, both describing what passed between them and Oldfield and McKinney. There is only one difference between the two witnesses worthy of special mention, and that is that Angel quotes McKinney as saying during the telephone conversation that the Company "had an agreement with the union . not [to] sell or deliver in any way to any business which has a picket on It" I am unable to base findings on this testimony for a number of reasons. First, apart from the relevant remark Angel imputes to McKinney, there is no evidence of such an "agreement" unless one construes section 17 of the contract of June 15 , 1960, to that effect. For reasons to be described later, such a construction is not valid, but putting that aside, in the perspective of the whole record, particularly taking into account the language of sec- tion 17, I think it less likely that 11IcKinney expressed himself flatly on the subject of an "agreement" in the terms imputed to him by Angel than that McKinney voiced a fear, as Luepow quotes him, that if the Company did business with Angel, it would be "in violation of [its] contract with [its] employees and getting in trouble" with them Second, in a subsequent version of the telephone conversation, Angel makes no reference to the "agreement" mentioned in his first account and, in fact, attributes substantially no more to McKinney than a statement that he could be of no help to Angel Finally, Luepow appeared to me to have better powers of recall than Angel, and, for that and the other reasons mentioned above, I have based findings as to what both Oldfield and McKinney said on Luepow 's testimony. DAN McKINNEY CO. 663 tion against discharge and discrimination contained in section 17(b)2 appears to be the keystone, or at least a major facet, of the General Counsel's position that the section offends the Act, he makes no comparable claim regarding section 17(b).1 which provides employees with protection from discharge or discrimination (except in cases of "jurisdictional disputes") "for refusing to pass a duly sanctioned picket line." In any case, the conclusion reached below with respect to section 17(b)2 ap- plies as well to section 17(b)1. It may be noted, too, that notwithstanding the fact that the Wholesalers Association negotiated and executed the contract for the Company, and that the latter is thus a party to it, both attack the provisions of section 17(b)1 and 17(b)2 protecting em- ployees against discharge and discrimination, maintaining that the terms in question amount to an "implied" agreement within the reach of Section 8(e) of the Act, and are thus "unenforcible and void." It is unnecessary to decide, and I do not deter- mine, whether effectuation of the policies of the Act requires a holding that the Company and the Wholesalers Association are foreclosed from attacking the legality of provisions of their own contract in this proceeding, for the conclusion reached below regarding the General Counsel's interpretation of section -17(b)2 applies with equal force to the one the Company and the Wholesalers Association would give the relevant provisions of section,17(b)1 and 17(b)2. These interpretations, it seems to me, are more imaginative than factual.? As I read the relevant terms of section 17(b)2, their thrust is to protect employees from discharge or discrimination for refusing to load or unload trucks operated by "drivers [who] are not working under a collective bargaining agreement negotiated by a legitimate labor organization," but, by means of the proviso that immediately follows the sentence containing the protection, to place beyond the reach of that provision the right of a distributor to make "emergency deliveries" at his "dock" to a retailer's vehicle in prescribed circumstances. That construction is fortified by the express provisions of section 17(b)3 that "no individual Employer will cease or refrain from doing business with any person or organization as a result of an employee or employees exercising their rights under this section (17) but . . shall, notwithstanding any other provision of this Agreement, if the Individual Employer so desires, continue do- ing such business by use of other personnel (including management personnel) or by other methods such Individual Employer deems appropriate or proper." On the record as made, there is no warrant for a finding that those who negotiated or signed the contract did so with tongue in cheek, as regards section 17(b)3, or harbored a purpose to treat the section as a nullity. Moreover, I think it obvious, at least in the framework of the evidence in the record, that an employer and a union representing his employees have the right to agree that the employees may not be discharged or subjected to discrimination for causes such as those specified in section 17(b)1 and 17(b)2; and that being the case one would have to have more than the evidence provides to conclude that the contracting parties intended the protection against discharge and discrimination to serve as an undertaking by an employer subject to the contract to cease or refrain from doing business with another employer. In other words, to read into the con- tract the implications the General Counsel, the Company, and the Wholesalers As- sociation would bestow upon it would be to rewrite the agreement through the instrument of a guess . Surely, Section 8( e) does not contemplate such an intrusion into the right of collective bargaining that the National Labor Relations Act guarantees, and is designed, in part, to foster. These conclusions, it may be pointed out, are not negated by the evidence of McKinney's statement to Angel and Luepow that he was "afraid" that the Company would be "in violation of [its] contract" if it did business with Angel, for, plainly, McKinney's remark cannot convert the con- tract into something it is not, nor establish the law of this case. In short, there is no warrant in the record for treating the relevant contractual terms as in contravention of Section 8 (e) of the Act. The General Counsel's reading of section 17(b)2 is stated thus in his brief: "The first sentence of Section 17(b)2 [meaning, apparently, the protection given against dis- charge and discrimination] . . . provides, in effect, that Respondent's employees shall not perform work for other employers whose employees are not covered by a `collective bargaining agreement negotiated by a legitimate labor organization.' The second sentence of Section 17(b)2 [the relevant proviso] prevents `emergency deliveries' by Respondent to retail employers involved in `a labor controversy.' " This misreads the contractual terms in question, for the bald fact is that the "first sentence" of section 17(b)2 does not provide "that Respondent's employees shall not perform work for other employers" , nor does the "second sentence" prevent "emergency deliveries " 664 DECISIONS OF NATIONAL LABOR RELATIONS BOARD What is more, even if one assumes the validity of the General Counsel's interpreta- tion of section 17(b)2, his claim that the Company engaged in the unfair labor prac- tices imputed to it is without warrant in the evidence, for the basic fact is that the record is barren of any proof that the Respondent and any labor organization, whether the Teamster Joint Board, Local 683, or any other, entered into an agree- ment within the reach of Section 8(e) during the 6-month period preceding the filing of the charge.8 The General Counsel, however, seeks escape from this posture of the record with a claim to the effect that by ,the "Respondent's actions" (meaning the Company's refusals to sell to Angel) and the failure of the contracting unions to dis- avow section 17(b)2, the Company and the unions "enter[ed] into" an agreement prohibited by Section 8(e) within the 6-month period preceding the filing of the charge. Indeed, the General Counsel goes so far as to say in his brief that in the absence of disavowal of section 17(b)2, "every single day that it [the contract] con- tinues to be in effect, it is an `entering into' a new illegal act." I deem it unnecessary to forage among the multiple dictionary meanings, and uses of the word "enter" (as, for example, in Webster's Unabridged New Inter- national Dictionary) to determine the meaning as used in Section 8(e) of the Act, for it is but reasonable to assume that what the Congress meant by the phrase "to enter into any contract or agreement" is what is meant in normal usage, namely, to begin a contractual obligation (as, for example, the inception of a signed contract upon its execution). As regards the contract embracing section 17(b)2, the point when the parties thereto entered into it occurred, plainly, on June 15, 1960, as indeed, the contract itself in effect specifies in its opening sentence ("This Agreement made and entered into this 15th day of June 1960. ."). In my view, it is thus a distortion of language and meaning to assert, as does the General Counsel in effect, that a uni- lateral application of the contract by the Respondent (assuming, arguendo, that its refusal to do business with Angel was such an application) constituted "entering into" the agreement. And it is no less a twisting of meaning to assert, as the General Counsel does, that each day the contract exists constitutes " `entering into' a new illegal act." Moreover, this "doctrine of continuing tort," 0 applied to the contractual terms in question, runs counter to Section 10(b) of the Act, and its underlying aim of putting "stale charges" to rest.10 The sum of the matter is that the evidence does not establish that the Respond- ent has violated Section 8(e) of the Act. Accordingly, the complaint should be dismissed. Upon the basis of the foregoing findings of fact, and upon the entire record in this proceeding, I make the following: CONCLUSIONS OF LAW 1. The Teamster Joint Board and Local 683 are, and have been at all times material to the issues in this proceeding, labor organizations within the meaning of Section 2(5) of the Act. 2. The Company, the Wholesalers Association, and the Brewers Association are, and have been at all times material to the issues, employers within the meaning of Section 2(2) of the Act. 3. The evidence does not establish that the Company has engaged in the unfair labor practices imputed to it in the complaint. RECOMMENDATIONS Upon the basis of the foregoing findings of fact and conclusions of law, and upon the entire record in the case, I recommend that the complaint in this proceeding be dismissed. s Angel gave testimony to the effect that on the occasion when Oldfield refused to sell him beer, the sales manager told Angel that he had received a phone call "from one of the fellows" (unidentified) who asked Oldfield if he realized that the Redhawk had a certain brand of beer (sold by the Company) "on tap"; and that he (Oldfield) was "afraid" the call had come "from the union " Oldfield did not identify the "union" in the conversation and, for all that appears, he could have been alluding to one of the unions picketing the Redhawk. In any case, the evidence will not support a finding that the Respondent refused to sell beer to Angel at the instance or, or by arrangement or agreement with, either the Teamster Joint Board or Local 683 e Concurring opinion of Judge Biggs in N L R.B v. Pennwoven, Inc, 194 F 2d 521 (C A. 3). 10 Cf. N L R B. v Pennwoven, Inc., supra; and Local Lodge No 1424, International Association of Machinists, AFL-CIO (Bryan Manufacturing Co) v. N L R B., 362 U.S. 411.