Raymond O. Lewis, Et Al., Agents (U.M.W.)

RAYMOND 0. LEWIS, ET AL., AGENTS (U.M.W.) 249 Raymond O. Lewis,' W. A. Boyle and John Owens, as Agents for the International Union, United Mine Workers of America and as Members of the Joint Industry Contract Committee established by the National Bituminous Coal Wage Agreement of 1950, and Edward G. Fox, C. W. Davis and Hamilton K. Beebe, as Agents for the Coal Operators , signatory to the National Bituminous Coal Wage Agreement of 1950 and as Members of the Joint Industry Contract Committee estab- lished by that Agreement and Arthur J. Galligan. Case No. 5-CE-6. August 7,1964 SUPPLEMENTAL DECISION AND ORDER DENYING MOTION On August 27, 1963, the Board issued its Decision and Order 2 herein finding that the protective wage clause of the National Bitumi- nous Coal Wage Agreement of 1950, as amended,3 is an agreement prohibited by Section 8(e) of the Act, and ordering Respondents to cease and desist from (a) maintaining, enforcing, or giving effect to the protective wage clause, and (b) entering into, actively maintain- ing, and giving effect to or enforcing any other contract or agreement, express or implied, whereby operators signatory thereto agree to cease or refrain from handling, using, selling, transporting, or otherwise dealing in any of the products of any other employer, or from doing business with any other person, in violation of Section 8 (e) of the Act. On May 14, 1964, the Board received a motion filed by R. O. Lewis, W. A. Boyle, and John Owens, as agents for the International Union, United Mine Workers of America,4 stating that on April 2, 1964, the Respondents. negotiated and executed with representatives of the Operator Respondents named in the Board's Order a new national agreement, known as the Bitmuminous Coal Wage Agreement of 1950, as amended April 2, 1964,6 which agreement fully and com- pletely supplants and supersedes the 1958 Agreement. Respondents assert that the 1964 Agreement fails to renew the protective wage clause of the 1958 Agreement, and that by the terms of the 1964 Agreement, the 1958 Agreement containing said clause is no longer in effect. Respondents contend that the 1964 Agreement does not vio- late Section 8(e) of.the Act. Accordingly, the Respondents move 1 By appropriate order dated January 25 , 1964, Raymond 0. Lewis was substituted for Thomas Kennedy as a Respondent 2 144 NLRB 228 On December 12, '1963 , the Board denied a motion To Reconsider its Decision and Order a Hereinafter referred to as the 1958 Agreement 4 Hereinafter referred to as Respondents or as UMW. Hereinafter referred to as the 1964 Agreement. 148 NLRB No. 31. 250 DECISIONS OF NATIONAL LABOR RELATIONS BOARD that the Board determine that the 1964 Agreement is not 'violative of Section 8 (e) of the Act, that Respondents are in compliance with the Board's Order in this case, and that the case be closed.' On May 18, 1964, by direction of the Board, the Executive Secre- tary issued an order, to show cause, ordering the Charging Party and the Respondents in this proceeding to show cause by written response why the Board should not grant the motion; and ordering further that the charging and charged parties in Cases Nos. 5-CE-8, 9-CE- 12-1, 9-CE-12-2, 9-CC-342-1, and 9-CC-342-2, currently pending before the General Counsel, be permitted to address themselves to the question of the legality or illegality, under Section 8(e) of the Act, of the provision in` the 1964 Agreement headed "UNITED MINE WORKERS OF AMERICA WELFARE and RETIREMENT FUND OF 1950," and to file motions to intervene, for the considera- tion of.the Board. Thereafter, the Board received written responses from those Re- spondents who filed the motion, from Dixie Mining Company, charg- ing party in Case No. 5-CE-8, from Riverton Coal Company and its president, Dan S. Davison, charging party in Cases Nos. 9-CE-12-1, 9-CE-12-2, 9-CC-342-1, and 9-CC-342-2, and from Bituminous Coal Operators Association, one of the employer associations signatory to the 1958 and 1964 Agreements.' No responses were received from those individuals named as Respondents as agents for Signatory Operators, or from the Charging Party in this case. It is the contention of Intervenors Dixie Mining Company and Riverton Coal Company that Respondent's motion should be denied because certain provisions' of the clause in the 1964 Agreement en- titled "United Mine Workers of America Welfare and Retirement Fund" to violate Section 8 (e) of the Act I and, hence, are not in com- pliance with paragraph 1(b) of the Board's Order. These provisions are: During the life of this Agreement there shall be paid into such Fund by each Operator signatory hereto the sum of forty cents 6 In making this motion , UMW expressly reserves the right to challenge certain holdings and findings of our prior Decision. 7 Appropriate motions to intervene were filed on behalf of Dixie Coal Company, Riverton Coal Company and its president , Dan S Davison , and Bituminous Coal Operators Associa- tion. Having considered the motions for intervention , the Board has decided that, in view of the evident interest of these parties in the question of legality of the 1964 Agreement, the motions should be , and they hereby are, granted for the purpose of receiving and con- sidering the written responses of these parties as they bear on issues raised by Respond- ents' motion. 8 Intervenor Bituminous Coal Operators Association generally supports the UMW's claim that the provisions do not violate Section 8(e). In pertinent part that section provides* (e) It shall be an unfair labor practice for any labor organization and any em- ployer 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 of the products of any other employer, or to cease doing business with any other person . . . . RAYMOND 0. LEWIS, ET AL., AGENTS (U.M.W.) 251 (400) per ton of two thousand (2,000) pounds on each ton of bitu- minous coal produced by such Operator for use or for sale. On all bituminous coal procured or acquired by any signatory Opera- tor for use or for sale, (i.e., all bituminous coal other than that produced by such signatory Operator) there shall, during the life of the Agreement, be paid into such Fund by each such Operator signatory hereto or by any subsidiary or affiliate of such Operator signatory hereto the sum of eighty cents (80¢) per ton of two thousand (2,000) pounds on each ton of such bituminous coal so procured or acquired on which the aforesaid sum of forty cents (400) per ton had not been paid into said Fund prior to such pro- curement or acquisition. It is apparent that the clause does not expressly require operators signatory to the 1964 Agreement to cease or refrain from doing busi- ness with any other person. However, it is also apparent that the clause does attach conditions to a Signatory's purchases of coal from nonsignatory operators which do not attach to such purchases if made from a Signatory Operator.10 According to the UMW, its decision to insist upon inclusion of the clause in the 1964 Agreement was prompted by the same economic and industrial considerations which confronted it in demanding and se- curing the protective wage clause of the 1958 Agreement. These considerations, as contained in the stipulated record in this case, are fully discussed in our prior Decision. In essence they are : labor costs constitute the principal cost item in the production of coal; the pur- chasing of coal by one producer from another producer is an essential marketing practice within the industry; the UMW has long recog- nized the necessity of permitting operators under contract with it to purchase coal from other producers, and this practice enables the purchasing operator successfully to compete for orders from large utility and steel users even though the operator is not able to produce all the coal required to fulfill such orders; these practices have, how- ever, given rise to abuses in the past in that Signatory' Operators regularly have purchased coal from mines having substandard labor conditions and paying substandard wages despite the purchasing pro- ducer's ample production capacity to satisfy his customer's require- ments from his own facilities ; and the UMW has long sought to pre- vent these abuses and to preserve work opportunities for employees it represents. io While the same conditions also attach to coal purchases from noncomplying signs- tories , and may thus indicate an added objective of "policing" the contract to induce com- pliance by such noncomplying signatories who would market their coal to complying sig- natories, this does not negate the unlawful impact which we find the clause has on nonsignatories. 252 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The UMW freely concedes that the welfare fund clause at issue herein represents a compromise between the maximum restriction on purchases of additional coal which theoretically it could achieve under the Act, i.e., a complete ban on' subcontracting under which each Signatory Operator would maintain full production of all its pro- ductive capacity so that it would produce from its own mines all coal needed to fill all of its contracts and market requirements, and a con- tract which permitted each Signatory to purchase additional coal from whatever source it might choose. According to UMW, the clause as finally agreed to was written to "allow a Signatory Operator to procure or acquire, without restriction [emphasis in the original], from any other Signatory Operator [emphasis supplied] whatever coal was needed to fulfill market demands and contract requirements of the purchasing signatory." We conclude from the above admission that the UMW intended that restrictions be placed on the right to purchase coal from nonsignatory sources. This conclusion receives additional support from the reasons stated by the UMW as to why the 80-cent royalty payment was placed on coal purchased from nonsignatory sources. According to the UMW, this figure was chosen because a lesser figure, for example 40 cents, as being equivalent to the normal royalty payment required of Signatory Operators, would place a Sig- natory at an economic disadvantage in purchasing coal mined under the contract with the result that such purchases would be made from nonsignatory sources and work opportunities and security for em- ployees under the contract would be diminished." Further support for this conclusion is furnished by the written response of the Bitu- minous Coal Operators Association which, in agreeing to the clause, helped to set the pattern for the entire industry.12 BCOA states that it resisted the UMW's proposal because "it would impose a financial burden upon any signatory who might procure or acquire coal from sources other than its own production or from other Signatory Opera- tors" but that the UMW represented to the BCOA that the purpose, which BCOA does not question, of the clause was "to protect and preserve job opportunities and job standards of its members and to enhance and increase the welfare fund established to provide retire- ment and other benefits to coal miners." In view of the foregoing statements of the negotiating parties as to the purpose and impact of the clause, and in view of the economic and industrial realities obtaining in the coal-mining industry as set forth in the stipulated record, we find that the clause imposes a sub- ".The UMW points out that the same result would occur if the 80-cent royalty payment attached to purchases from signatory and nonsignatory operators alike. 12 The stipulated record herein reveals that since 1950 , the UMW has first negotiated with the BCOA, and that the resulting agreement has then been presented to other associa- tions and operators , with the result that a uniform national agreement has thus been achieved in every instance. -RAYMOND 0. LEWIS, ET AL., AGENTS (U.M.W.) 253 stantial financial penalty upon Signatory Operators who procure or acquire coal from nonsignatory sources,,a penalty which is not imposed if they procure or acquire coal from other Signatory Operators. We further find that this financial penalty was imposed to restrain Signa- tory Operators from procuring or acquiring coal from nonsignatory sources.13 The Board has held that clauses which grant a contracting em- ployer the right to do business with noncontracting employers, but which impose a substantial penalty or sanction upon the exercise of such right, are in reality implied agreements that the contracting em- ployer will refrain from doing business with the noncontracting em- ployer.14 In our judgment the instant clause is indistinguishable in purpose and-effect from the clauses involved in the cited cases, and constitutes an implied agreement that Signatory Operators will re- frain from purchasing coal from nonsignatory operators. The UMW nevertheless contends that the clause is lawful because its purpose is to preserve and protect the work of employees in the industrywide contract unit. It further contends that even if the clause does operate, as we have found, as an economic restraint on the purchase of nonsignatory coal, it creates no unlawful secondary pressures, because it is not, and cannot be construed to be, an attempt to extend the contract provisions to unorganized employees. We reject these contentions as founded on the unacceptable premise that the so-called industrywide contract unit is the established bar- gaining unit for purposes of determining whether the contract seeks to preserve bargaining-unit work for unit employees. We reserved decision on this issue in our prior Decision in this case because it ap- 13 In making this finding, we do not find , as urged by Intervenors Dixie Mining Company and Riverton Coal Company , that the effect of the clauses necessarily will be to cause a complete cessation in the purchase of coal from nonsignatory sources. It is sufficient, in our opinion ,' that the clause will exercise a clearly restraining effect on such purchases, even though a complete cessation does not occur . The Intervenors have submitted cer- tain evidence in the form of copies of business letters and affidavits relevant to the amount of nonsignatory coal normally purchased by Signatory Operators , the effect of the 80-cent royalty charge on such transactions, and the effect on nonsignatory operators of the loss of that portion of their traditional market made up of sales to Signatory Operators, and they asked for a hearing to permit them to prove their contention , if the truth of the contention be material to the issues herein. We do not rely on the proffered evidence as a basis for our conclusion that the clause was intended to create a restraint on the pur- chase of nonsignatory coal . We note, however, that the proffered evidence is generally corroborated by at least one factor not only admitted by the UMW, but which it urges as the reason it needed the protection furnished by the clause in issue, f e., that Signatory Operators , in the past, have been purchasing substantial amounts of coal from nonsignatory sources in violation of their contractual obligations . Further it is consistent with the implicit admission of the UMW that the 80-cent royalty charge will place a Signatory Operator at an economic disadvantage if it persists in dealing in nonsignatory coal. 14Amalgamated Lithographers of,Amerwca and Local 78 (Employing Lithographers of Greater Miami, at al. ), 130 NLRB 968 , enfd 301 F. 2d 20 (C.A. 5) ; Amalgamated Lithog- saphers of America and Local No. 17, et at . ( The Employing Lithographers , etc ), 130 NLRB 985, enfd. 309 F. 2d 31 (C A. 9) ; Truck Drivers & Helpers Local Union No. 728 & IBT (Brown Transport Corp ), 140 NLRB 1436, 1438-1439 ( hazardous work clause), en- forcement denied , 334 P. 2d 539 (-C A.D.C ), for reasons not pertinent herein. 254 DECISIONS OF NATIONAL LABOR RELATIONS BOARD peared that whatever unit might be appropriate for this purpose, the protective wage clause of the 1958 Agreement was an agreement that work could be performed outside the unit, provided contract work- ing conditions and standards were accorded to the employees doing the work. As we have found that the clause involved herein is an implied agreement that coal will be purchased only from Signatory Operators, we now reach the issue and we find on the basis of the facts stipulated to'the Board, that the UMW national contract covers a multiplicity of bargaining units rather than a single industrywide unit. This is disclosed by the stipulated record which reveals that, although the UMW has been successful in obtaining uniform national agreements since at least 1950, it has achieved this through the me- dium of separate negotiations with the various Signatories. Typi- cally, the UMW first negotiates with the BCOA, and presents the agreement resulting from such negotiations to the other Association Signatories and to individual Signatory Operators who are not mem- bers of any association, for their acceptance. The record thus in- dicates that in practice the UMW recognizes the lack of authority of the BCOA or any other Association Signatory to commit operators who are not members. - An essential element for establishing a multiemployer unit is the participation by a group of employees, whether members or non- members of a single association, either personally or through an authorized representative, in joint bargaining negotiations unequivo- cally manifesting the intent to be bound by group, rather than by individual, action.15 The facts stipulated herein fall far short of fur- nishing the necessary basis for finding the multisignatory unit urged upon us by UMW. The fact that the various Signatory Associations and individual Signatory Operators, since 1950, have signed identi- cal, though separately negotiated, contracts is an insufficient basis for concluding that an industrywide contract unit has been created by the parties here,16 as there is an absence of evidence to indicate that the various Signatory Associations negotiated on other than an in- dividual Association basis. Accordingly, we find, under the normal tests applied by the Board in making bargaining-unit determina- tions, that an industrywide unit has not been established by the parties. The considerations which in other circumstances have led us to conclude that a work protection clause having as its sole purpose and effect the preservation of work for employees in an established ap- 15 Chester County Beer Distributors Asaoeiation, 133 NLRB 771. 11 Ibid. RAYMOND 0. LEWIS, ET AL., AGENTS (U.M.W.) 255 propriate unit is outside the intended interdiction of Section 8 (e) " have no valid application to a situation where, as here, the work pro- tection sought extends beyond the established unit. The fact that the UMW has succeeded in covering all the employees in the different bargaining units which it represents under a single uniform agree- ment provides no justification for excepting such a situation from the normal operative effect of Section 8(e). Indeed, such success may well have been facilitated by the fact that any association or in- dividual Operator unwilling to accept the contract negotiated initially by the BCOA and under no legal obligation to accept such contract, would face the prospect, not only of a strike, but of being ineligible to sell' coal to Signatory Operators if it refused to accede to the UMW's demand. Given the operative economic and industrial fac- tors in the industry, the inclusion of the instant clause in the 1964 Agreement constitutes secondary pressure on unsigned Operators. Section 8 (e) was enacted. principally for the purpose of eliminating a union's use of such secondary pressures in its disputes with employers. It is now well established that clauses which expressly or impliedly permit the subcontracting of unit work only to employers under con- tract with the union violate Section 8(e) of the Act."' The instant clause, realistically appraised, is nothing more than an implied union signatory agreement restricting ,the subcontracting of work to opera- tors under contract with the UMW, without regard to unit considera- tions." Thus the clause places restrictions on subcontracting which are not "strictly germane to the economic integrity of the principal work unit . . . . It is, rather, a provision to make certain the pri- mary employer [i.e., the employer whose employees are to perform the work] is under contract with the Union...." 20 On the basis of the foregoing considerations, we find that the United Mine Workers of America Welfare and Retirement Fund Clause of the 1964 Agreement, is not valid under Section. 8 (e) of the 17 See, e.g., Ohio Valley Carpenters District Council, etc. (Cardinal Industries , Inc.), 136 NLRB 977, 986; Milk Drivers' Union, Local 753, etc. (Pure Milk Association), 141 NLRB 1237. 18 Highway Truck Drivers and Helpers, Local 107, et al. (E. A. Gallagher & Sons), 131 NLRB 925, enfd. 302 F. 2d 897 (C.A.D.C.) ; District No. 9, International Association of Machinists ( Greater St. Louis Automotive Trimmers , etc.), 134 NLRB 1354, enfd. '315 F. 2d 33 (C.A.D C.) ; Bakery Wagon Drivers & Salesmen, Local Union No. 484 ( Sunrise Transportation), 137 NLRB 987, enfd. 321 F. 2d 353 (C.A.D.;C.) ; Building and Con- struction Trades Council of San Bernardino and Riverside Counties, et al. v. N.L.R.B. (Golding & Jones ), 328 F. 2d 540, 541 (C.A.D.C.). 19 The fact that a noncomplying operator may be outside the bargaining unit reinforces our conclusion that the clause has an objective reaching beyond the protection of bargaining-unit work. 20 District No. 9, International Association of Machinists v. N.L.R.B., supra. I 256 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Act. Accordingly, we shall deny UMWW's motion that Respondents herein be adjudged to be in compliance with the provisions of the Board's Order issued in this case on August 27, 1963.21 [The Board denied the motion.] M1MBER JENKINS, dissenting : For reasons to be set forth in a separate opinion issuing shortly, I dissent from my colleagues' denial of Respondents' motion. DISSENTING OPINION On August 7, 1964, the Board issued a Supplemental Decision and Order denying Respondent's motion for a determination that the 1964 Agreement between the Union and the Mine Operators is not violative of Section 8(e) of the Act. Member Howard Jenkins, Jr., dissented from' that Decision and Order which expressly provided that the dissenting opinion would issue at a later date. That opinion follows. My colleagues have determined that the welfare clause in the collective-bargaining agreements between the Union and the Signa- tory Operators violates Section 8(e) of the Act insofar as it provides for the imposition of an 80-cent-per-ton payment to the welfare fund for coal purchased by such Signatories from producers who have not paid the usual 40-cent welfare fund royalty. Their conclusion is based principally upon the Union's admission that the payment under this clause is imposed for the purpose of restricting and curtailing purchases from nonunion operators. Such a purpose, without more, does not necessarily bring the payment within the 8(e) prohibition; for such purchases can be restricted for legitimate reasons which do not violate that section of the Act. First, it is plain that the 80-cent payment has a substantial effect on Signatory Operators who are delinquent in their welfare fund contributions in that it provides a strong incentive for them to make timely payments on the coal they sell to other Signatories. In this respect the clause does no more than "protect and preserve the work and standards [the' union] has bargained for;' 22 by enforcement of contracts which the affected Operators have with the Union. 21 Members Fanning and Brown did not participate in the original Decision in this case. Since the contract clause involved in that case is not now in effect, they do not express any opinion on the validity of such, clause. For the reasons stated in this opinion they agree that the clause here presented contravenes Section 8 (e) of the statute and there- fore is not in compliance with paragraph 1(b) of the Order of the Board in the original Decision. 22 Orange Belt District Council of Painters No. 48 v. N.L R B. (Calhoun Drywall Co ), 328 F. 2d 534, 538 (C.A.D.C ). RAYMOND 0. LEWIS, ET AL., AGENTS (U.M.W.) 257 Second, as to substitute coal (which could be produced by the Sig- natory but is purchased from another operator because it is cheaper to do so), the sole effect of this clause is to protect the work stand- ards of employees concededly in the bargaining unit against impair- ment by that form of subcontracting which is most destructive, i.e., subcontracting to operators who can produce more cheaply because of lower wages and lower standards of benefits. Third, as to supplemental coal (which could not be produced by the Signatory and is purchased elsewhere in order to enable the Sig- natory to supply the several types of coal required by its customers), the restriction of purchases to Signatory Operators is, under the terms of this clause, not mandatory; purchase from a nonsignatory is per- mitted with no qualification other than the required payment of the 80-cent' royalty. My colleagues consider that this charge, when viewed from an economic standpoint, is so high as to constitute a penalty amounting to a prohibition of subcontracting to any non- signatory.23 However, they fail to note that, prohibition or not, this clause does assure that a welfare fund royalty will be paid on all coal the production of which is subcontracted by any Signatory Em- ployer as well as upon coal produced by that Employer itself. In doing so, the clause protects this particular work standard, the wel- fare fund, for all employees of all Signatories. The welfare fund is administered under a single agreement, nation- wide in scope, and separate from any agreement covering wages, hours, and other working conditions. It is executed by all employers having agreements with the Union and provides for a single system of administration, of employer contributions, and of eligibility and level of benefits for all employees. In these circumstances it would appear, contrary to the view of my colleagues, that there exists a single industrywide bargaining unit for welfare fund matters. The Board has recently held that, while so broad a unit may not exist With respect to some matters (e.g., those covered in the Bituminous Coal Operators' Association agreement and other association agree- as The fact that the 80-cent payment may be denominated a "penalty" seems to me to shed little light on the issue A' figure somewhat higher than the usual 40-cent royalty paid by nondelinquent Signatories would be justified because of the additional effort and expense in administering the clause and to offset the Welfare Fund's administrative ex- penses which are escaped by nonsignatorie4. The additional 40 cents also was assertedly intended to compensate to some extent for cost advantages enjoyed by nonsignatoiles on account of lower wages, less rigid safety standards, and the like Consequently, it would appear that, in the absence of additional evidence, the clause should be regarded as no more than an effort to protect work standards by equalizing the labor costs between em- ployees of Signatoiles and nonsignatories. Any degree of such equalization would, of course, tend to restrict purchases of coal from nonsignatories, which the Union admits Nevertheless, this alone will not suffice to bring the clause within the proscription of Section 8(e). 760-577-65-vol. 148-18 258 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ments), this does not affect the existence of the broader unit in which the parties have agreed to deal with respect to certain other matters (here, the welfare fund contributions)." Whether the clause be considered a prohibition on subcontracting work to those outside this broad unit who make no welfare fund contributions, or simply a requirement that the welfare fund con- tributions be maintained for coal which is subcontracted , the effect is to preserve this work standard against impairment through sub- contracting to those who are able to produce more cheaply because they do not meet this standard . Section 8 (e) was enacted for the purpose of prohibiting agreements which require an employer not to do business with another employer because the latter is involved in a labor dispute . This is not the case in the instant matter. The pro- tection of the work standards of employees in the unit constitutes primary activity with respect to the contracting employer and is not, therefore, within the intended reach of Section 8(e).25 My colleagues reject the Union's contention that this clause is law- ful because its purpose is "to preserve and protect the work of em- ployees in the industrywide contract unit." They consider such pur- pose to be unlawful where, as here, "the UMW national contract covers a multiplicity of bargaining units rather than a single indus- trywide unit." This conclusion seems to read into Section 8 (e) sub- stantially more than its acknowledged purpose of prohibiting a union from agreeing with an employer that he must refrain from doing business with another employer should the latter become involved in a labor dispute. The fact that there may be no "industrywide" bargaining unit which would bind all individual operators to sign the agreement first reached with BCOA, or permit all employees to vote in a single elec- tion to choose bargaining representation , and the like, does not dic- tate that the interest of the Union is so alien or disparate under each of its separate contracts that an unlawful secondary character at- taches to its action to protect job opportunities for all of the em- ployees affected by those contracts. Nothing in the language or purpose of Section 8(e) would seem to prevent groups of employees in separate bargaining units from acting jointly through a local or regional council , their parent union, or otherwise, to protect work opportunities for all such employees . This is a far different matter from the imposition of an absolute union requirement that an em- ployer cease doing business with nonunion employers or with em- ployers who are engaged in a labor dispute in which the union has no primary interest. - 24 The Kroger Co., 148 NLRB 669. 25 Truck Drivers Union Local No. 413 v. N.L.R.B., 334 F. 2d 539 (C.A.D.C.). RAYMOND O . LEWIS, ET AL., AGENTS (U.M.W.) 259 Here the facts indicate that the Union had a direct and substantial primary interest in protecting the work of the employees involved. Upon reaching an agreement with a major association of operators, the Union successfully negotiated agreements with other groups of operators, and with individual operators, which conformed to the initial agreement. The Union's goal in so doing was to achieve uni- formity of conditions in its contracts; and by this practice it has achieved and maintained such uniformity since 1950. So plain has been the economic reality of this practice and the uniformity flow- ing from it that the Secretary of Labor has repeatedly determined the prevailing minimum wage under the Walsh-Healy Act, for the several regions within the country, to be the same as the wage speci- fied in the union agreements .26 - Also, as noted above, the welfare fund itself is established by a single industrywide agreement executed • by all operators, having agreements with the Union. Therefore, all of the employees of these operators, as a single unit, have a common interest in preserving the work of those benefiting from the welfare fund. Further, it has.been held that, to find a clause, the purpose of which is the protection of work, to be lawful, it is not necessary that the work be presently performed by persons within the unit, but only that it be "fairly claimable" by those in the unit because "closely allied" in func- tion, content, or otherwise?' Should this clause prevent the purchase of supplemental coal-the effect most plainly illegal in the majority's view-it nevertheless concerns work "fairly claimable" by those within the unit; for the elimination of such subcontracting might reasonably result iri the production of this coal by a signatory within the same association, which the majority would concede to be within the bar- 20 See 41 C.F.R . par. 50-202 .16, and earlier determinations. 27 As the court said , in Meat and Highway Drivers etc., Local Union No . 710, etc. V. N.L.R.B ( Wilson & Co.), '335 F. 2d 709 (C.A.D C.) Resolution of the difficult issue of primary versus secondary activity , as it relates to this case, involves consideration of two factors : ( 1) jobs fairly claimable by the bargaining unit, and ( 2) preservation of those jobs for the bargaining unit. If the jobs are fairly claimable by the unit , they may, without violating either § 8(e) or § 8(b) (4) (A) or (B), be protected by provision for, and implementation of, no- subcontracting or union standards clauses in the bargaining agreements Activity and agreement which directly protect fairly claimable jobs are primary under the Act. Incidental secondary effects of such activity and agreement do not render them il- legal. Thus the "cease doing business" language in § 8(e ) cannot be read literally because inherent in all subcontracting clauses, even those admittedly primary, is re- fusal at least with some contractors. ' . i i • M M R • Even if [the work ] had never been customarily performed by unit members when it was part of an interstate haul, it is nevertheless so closely allied-and is in part identical-to the local deliveries previously recognized for almost 20 years to be unit work as to make bargaining about it mandatory. To hold otherwise is to say that a union may not seek to bargain with an employer either about the quantum of work, or the qualifications of its members to perform closely related work, whenever technological changes or mere changes in methods of dis- tribution are to be effected. 260 DECISIONS OF NATIONAL LABOR RELATIONS BOARD gaining unit. Moreover, the purchase of supplemental coal enables the Employer to enter into contracts with customers which it might not otherwise obtain ; and, in this respect, the fact that the Union chose not to impose a complete prohibition on subcontracting (which ad- mittedly would have been lawful) has the effect of securing work for those in the unit. As to substitute coal, the elimination of subcon- tracting to producers who charge lower rates would almost certainly lead to the performance of the work by the Signatory's own em- ployees, since this is coal which the Signatory itself would ordinarily produce; and the work preservation effect is, therefore, plain. In short, my colleagues appear to be inferring facts or contract interpreta- tions which would render this clause unlawful (amounting to a per se rule), rather than presuming lawful effects and purposes where that is possible, as Board precedent requires 28 In the Board's prior decision on this matter (in which I did not par- ticipate), the wage clause was held invalid on the ground that it was not a work-protection provision because the Operators were left free to purchase the substitute and supplemental coal. In the present de- cision, the welfare clause is held invalid because they are not left free to do so. It appears unlikely that both decisions can be correct. Had the present clause been placed in the industrywide welfare fund agreement, it clearly would have been valid under the majority's view because it would have protected the work and standards of an indus- trywide unit. To reach a different result because the clause was placed in the several wage agreements emphasizes form at the expense of substance. For these reasons, I would hold that the welfare clause is lawful under Section 8 (e) and would grant the motion. 28 N.L.R.B. v. News Syndicate Company, Inc., et al., 365 U.S. 695 ; Local 359, Inter- national Brotherhood of Teamsters etc. v. N.L.R.B. (Los Angeles-Seattle Motor Express), 365 U.S. 667; Paragon Products Corporation, 134 NLRB 662. Indeed, if inferences are to be drawn, the practice of the Union and the Employers in executing uniform agreements after the initial agreement is reached warrants the inference of an industrywide bargain- ing unit as readily as the facts here support the majority's inference that, even though the language provides otherwise, the welfare clause is an inducement for nonunion opera- tors to sign union agreements. Stinson Manufacturing Company and United Steelworkers of America, AFL-CIO, District No. 38, Sub-District No. 7. Case No. 19-CA-2745. August 10, 1964 DECISION AND ORDER On May 4, 1964, Trial Examiner William E. Spencer issued his Decision in the above-entitled proceeding, finding that Respondent had engaged in and was engaging in certain unfair labor practices 148 NLRB No. 27.