Ets-Hokin Corp.

ETS-HOKIN CORPORATION, ETC. 839 NOTE.-We will notify any of the above-named employees presently serving in the Armed Forces of the United States of their right to full reinstatement upon aplication in accordance with the Selective Service Act and the Universal Military Training and Service Act of 1948, as amended, after discharge from the Armed Forces. This notice must remain posted for 60 consecutive days from the date of posting, and must not be altered, defaced, or covered by any other material. If employees have any question concerning this notice or compliance with its pro- visions, they may communicate directly with the Board's Regional Office, 720 Bulkley Building, 1501 Euclid Avenue , Cleveland, Ohio, Telephone No. Main 1-4465. Ets-Hokin Corporation and R. D. Neill, d/b/a Rose Construction Ets-Hokin Corporation and Local Union No. 428, International Union of Operating Engineers , AFL-CIO Local Union No . 769, International Brotherhood of Electrical Workers, AFL-CIO (Ets-Hokin Corporation) and R. D. Neill, d/b/a Rose Construction International Brotherhood of Electrical Workers, AFL -CIO (Ets- Hokin Corporation) and R. D. Neill, d/b/a Rose Construction Local Union No. 769, International Brotherhood of Electrical Workers, AFL-CIO (Ets-Hokin Corporation ) and Local Union No. 428, International Union of Operating Engineers, AFL- CIO Local Union No. 769, International Brotherhood of Electrical Workers, AFL-CIO and International Brotherhood of Electri- cal Workers, AFL-CIO and R. D. Neill, d/b/a Rose Construc- tion and Ets-Hokin Corporation, Party to the Contract. Cases Nos. 28-CA-939, 928-CA-915, 928-CB-262, 28-CC-137, 928-0B-9263, 28-CC-138, 928-CB-264, 928-CC-139, and 28-CE-3. August 31, 1965 DECISION AND ORDER On February 4, 1964, Trial Examiner Eugene K. Kennedy issued his Decision in the above-entitled proceeding, finding that the Re- spondents had engaged in certain unfair labor practices alleged in the complaint and recommending that they cease and desist there- from and take certain affirmative action, as set forth in the attached Trial Examiner's Decision. The Respondents filed exceptions to the Trial Examiner's Decision and briefs in support thereof. The Respondents also filed supplemental briefs in support of their posi- tions. The General 'Counsel filed an answering brief and a supple- mental memorandum in support of the Trial Examiner's Decision. The Respondents also requested oral argument. The request is denied as the record, including the exceptions and briefs, adequately present the issues and the positions of the parties. 154 NLRB No. 52. 840 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Board has revised 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 entire record in this case, including the Trial Examiner's Decision, the exceptions, and the briefs, and hereby adopts the Trial Ex- aminer's findings, conclusions, and recommendations only to the extent consistent with our Decision herein. I. Section 8(e) : Ets-Hokin's contract with IBEW Local 769 con- tains the following clause : The Local Unions are part of the International Brotherhood of Electrical Workers and any violation or annulment of work- ing rules or agreements of any other Local Union of the IBEW, or the subletting, assigning, or transfer of any work in connec- tion with electrical work to any person, firm, or corporation not recognizing the IBEW as the collective bargaining representa- tive on any electrical work in the jurisdiction of this or any other such Local Union by the Employer, will be sufficient cause for the cancellation of this agreement, after the facts have been determined by the International Office of the Union. The Trial Examiner found that the subcontracting clause violated the general proscription of Section 8(e) and was not protected by the construction industry proviso to that section. The clause has three separate aims, each of which we consider below: (1) to pre- vent subcontracting of electrical work in the jurisdiction of the con- tracting local except to a contractor having an agreement with the IBEW; (2) to allow the contracting local to terminate its contract if the employer violates the clause in its jurisdiction; and (3) to allow IBEW locals to terminate their agreements if any local's contract has been breached. A. IBEW subcontracts: It is clear that the disputed clause violates the general proscription of Section 8(e). However, not all clauses that come within the proscriptions of Section 8(e) are pro- hibited. The first proviso to Section 8(e), reading : Provided, That nothing in this subsection (e) shall apply to an agreement between a labor organization and an employer in the construction industry relating to the contracting or subcontract- ing of work to be done at the site of the construction, alteration, painting, or repair of a building, structure, or other work:.. . . grants a limited exemption to the construction industry. The Trial Examiner found that the instant clause did not come within the proviso because it did not expressly contain the statutory language. But the proviso, while exempting agreements which relate to construction work to be done on the jobsite, does not require ETS-HOKIN CORPORATION, ETC. 841 a specific verbal formula.' The Board has held that a contract not. clearly unlawful on its face would be interpreted to require no more than what is allowed by law; it',is not necessary that a questioned clause contain the precise language of the statute to be lawful.2 If a clause is ambiguous, the Board in a Section 8(e) proceeding will not presume unlawfulness, but will consider extrinsic evidence to- determine whether the clause was intended to be administered in a lawful or unlawful manner.' At all times material to this case, Ets-Hokin had been engaged in electrical contracting in the building and construction industry. The, contract itself is one which was entered into between the IBEW and the National Electrical Contractors of America. The scope of the agreement covers work normally done at the construction site, such as pole line construction, steel and metal construction, highway lighting systems, and electrical underground construction. Through- out the agreement the term "construction" appears frequently. It is clear that the contract provisions refer to construction work. It was also stipulated at the hearing that the contracting clauses are found only in contracts with the IBEW applicable to the construction industry and that Ets-Hokin was performing the type of work found in the contract. Upon the basis of the foregoing, we find that the subcontracting clause applies, and was intended to apply, only to on-site construction work. B. Termination: The subcontracting clause which we have found to be lawful under the construction industry proviso to Section 8(e) was repeated in the bargaining contracts between the IBEW, its local, and contractors throughout the United States. By its terms, if a contractor violated provisions of the clause in a collective- bargaining contract with one local of the IBEW, he was subject to having his contracts with other 1BEW locals canceled. The effect in practical terms in thus described by Respondent IBEW in a sup- plemental memorandum submitted to the Board (p. 6) : Because the so-called "annulment" clause contained in the IBEW's contract with Ets-Hokin was repeated in the union's agreements with other contractors throughout the nation, the 'Paragon Products Corporation, 134 NLRB 662 ; Stackhouse Oldsmobile, Inc., 140 NLRB 1239 ; N.L.R.B. v. News Syndicate Co, Inc., at al., 365 U.S. 695 ; Milk Drivers and Dairy Employees Union, Local No. 546, Teamsters (Minnesota Milk), 133 NLRB 1340; and Milk Drivers' Union, Local 753, Teamsters (Pure Milk Association), 141 NLRB 1237. 2 Paragon Products, supra, footnote 1 ; Stackhouse Oldsmobile, supra, footnote 1. The Board relied on N.L R.B. v. News Syndicate, supra, where the Supreme Court approved a lower court's holding that "in the absence of provisions calling explicitly for illegal conduct, the contract cannot be illegal because it falls affirmatively to disclaim all Illegal objects." 8 Ohio Valley Carpenters District Council , United Brotherhood of Carpenters and Joiners of America, AFL-CIO, et al. ( Cardinal Industries, Inc.), 136 NLRB 977, 986, and Pure Milk Association, supra. 842 DECISIONS OF NATIONAL LABOR RELATIONS BOARD cancellation of the Ets-Hokin agreement would have immedi- ately made that company an ineligible business associate in the eyes of these other contractors. Thus, whether or not the union continued to refer workmen to Ets-Hokin, the mere fact that the latter had no agreement with IBEW would have placed Ets-Hokin in a position where other contractors wishing to com- ply with their own IBEW agreements would not have made con- tracts with Ets-Hokin. Under such circumstances, there was no motivation for the union to take the strike action the General Counsel considers inevitable. In other words, by canceling its collective-bargaining contract with Ets-Hokin because of violation of the subcontracting clause, Local 769 could have practically forced Ets-Hokin out of business in the whole United States. The threat of contract cancellation was there- fore a powerful private economic sanction to insure compliance with the subcontracting clause. Both the Board and the courts have said that although a contract within the construction industry proviso to Section 8( e) is exempt from the operation of that section, it may be enforced only through lawsuits and not by threats, coercion, or restraint proscribed by Section 8(b) (4) (B).4 The term "coercion" as used means "non-judicial acts of a com- pelling or restraining nature, applied by way of concerted self-help consisting of a strike, picketing or other economic retaliation or pressure in a background of a labor dispute." [Emphasis supplied.] 5 Self-help is not judicial action, even if a court or its equivalent might grant the same remedy for breach of contract that one of the parties proposes to achieve unilaterally. Neither is the contract principle controlling, that is, one party to a contract breaches a material provision thereof, the other may elect to rescind its We are not administering the law of private contracts. ^ Congress has, as we read the legislative history, outlawed every form of private contract rendered permissible by the building construction proviso to t Muskegon Bricklayers Union #5, Bricklayers, Masons and Plasterers International Union of America (AFL-CIO) ( Greater Muskegon General Contractors Association), 152 NLRB 360; Local Union No. 48 of Sheet Metal Workers International Association v. Hardy Corporation, 332 F. 2d 682 ( C.A. 6) ; Orange Belt District Council of Painters No. 48, AFL-CIO ( Calhoun Drywall Co.) v. N.L.R.B., 328 F. 2d 534 (C.A.D.C.). a Sheet Metal Workers v. Hardy , supra, at 686. e "We realize that this conclusion may leave the union with a valid contractual pro- vision and with no means of enforcing it other than in a civil suit. We also realize the difficulty the building crafts have with the secondary boycott provision of the Labor- Management Relations Act, but this court is not the forum in which to seek relief from what the union characterizes as `the shackles ' of this statute." Local No. 5, United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada, AFL-CIO (Arthur Venneri Co.) v. N.L.R.B., 321 F. 2d 366, 370 (C.A.D.C.). ETS-HOKIN CORPORATION, ETC. 843 Section 8(e)? Finally, we are not overruling the Amalgamated Lithographers (Miami Post) case,8 as suggested by Member Fanning in his dissent. That case did not involve the construction industry proviso to Section 8(e), but a lawful, primary "struck work" clause together with a "right to terminate" clause giving the union the right to terminate the contract in the event that the employer re- quested an employee to handle "struck work." The Board said that .since the "struck work" clause was lawful, the "right to terminate" clause intended to give the union a remedy for its breach was also lawful. There is no legislative history which shows a congressional intent to limit to lawsuits the enforcement of a clause outside the reach of Section 8 (e) without reference to its proviso, as in the 'Amalgamated Lithographers case. But there is such an intention manifested as to contracts which would be unlawful under Section 8 (e) but for the construction industry proviso. By an exception, Congress has permitted in the construction industry certain contracts which would otherwise be unlawful under Section 8(e). But the exception is not unqualified. Congress has indicated clearly that, although lawful, these proviso contracts are not to be enforced by self-help. That is the point of difference between the Amalgamated Lithographers (Miami Post) case and the present one.9 Accordingly, we find that as the annulment provision of the termi- nation clause involves a form of economic pressure proscribed by Section 8(b) (4) (B), it exceeds the limited exemption of the con- struction industry proviso to Section 8 (e) and is therefore unlawful.10 C. Sympathetic action: As the local involved does not have the right to cancel its agreement to achieve an objective condemned by Section 8(b) (4) (B), a fortiori, another local not directly involved in the dispute would not have the right to terminate its contract with Ets-Hokin for a like objective. Accordingly, we find this feature of the clause unlawful under Section 8(e). 7 "Thus, although employers and unions who are under [ the construction industry] exemption to [Section 8(e) ] may lawfully enter into such agreements , and may resort to the courts for their enforcement under applicable principles of contract law, no coercion or restraint-economic or otherwise-may be used by any party to such agreement, even if entered into voluntarily by both parties, to compel the other party to live up to the contract or to refrain from breaching it." Memorandum by Senator Goldwater analyz- ing the new law. II Leg. Hist . Labor-Management Reporting and Disclosure Act of 1959 ( U.S. Govt. Print. Office 1959 ), at 1858. $Amalgamated Lithographers of America and Local 78, etc. (Miami Post Company), 130 NLRB 968 , 977, enfd. as modified 301 F. 2d 20 (C.A. 5). O Indeed, in a hot cargo or secondary boycott context , albeit not within the construc- tion industry proviso to Section 8 (e), the Ninth Circuit stated in a companion Amal- gamated Lithographers case that the effect of a "termination " clause is to agree to a strike as "an ultimate sanction ." N.L.R.B. v. Amalgamated Lithographers of America (Ind.), 309 F. 2d 31, 39-42, enfg. 130 NLRB 985 , cert. denied 372 U S. 943 . See Lesnick, Job Security and Secondary Boycotts, 113 U. Pa. L. Rev. 1000, 1013, footnote 55 (1965). 10 Muskegon Bricklayers Union # 5, supra. 844 DECISIONS OF NATIONAL LABOR RELATIONS BOARD D. Liability of Ets-Hokin: The Trial Examiner predicted the liability of Ets-Hokin on his mistaken belief that the charges and complaint in Case No. 28-CE-3 named Ets-Hokin as a respondent. In view of the fact that neither the charge nor the complaint alleged a violation of Section 8(e) by Ets-Hokin, we reject the Trial Examiner's findings against it. E. The constitutionality of this section: The contention that Sec- tion 8(e) is unconstitutional has been rejected by the Board. In the absence of a binding court order to the contrary, the Board must assume the constitutionality of the Act which it is required to, administer." F. Davis-Bacon defense : This point was originally raised by the Respondent Unions as grounds for the cancellation with Ets-Hokin. Under the Davis-Bacon Act, the general contractor is responsible for his subcontractor's meeting the Davis-Bacon rates set in the contract. The Unions argue in substance that Ets-Hokin was subject to a Government wage-standards subcontracting clause and that by sub- contracting to Rose-Phoenix, which did not pay Davis-Bacon wages," it breached its agreement. However, the facts do not support the Unions' contention that this was the sole, or even the main, reason for canceling the contract with Ets-Hokin, for the record establishes that the IBEW insisted that Rose-Phoenix be removed even after Ets-Hokin had agreed to pay the difference between the rates Rose- Phoenix was paying and the alleged Davis-Bacon rates. H. Section 8(b) (4) (A) : This section prohibits the use of pro- scribed means for an object of "forcing or requiring an employer . . to enter into any agreement which is prohibited by subsection (e) of this section." In Northeastern Indiana Building and Construction Trades Council (Centlivre Village Apartments)13 the Board reex- amined its approach to this section and decided to adopt the view of various courts that the proviso to Section 8(e) is incorporated by reference into Section 8(b) (4) (A) ; hence an attempt by means con- demned by Section 8 (b) (4) to obtain such a clause which is lawful under the construction industry proviso falls outside the scope of Section 8(b) (4) (A). We have reviewed the Trial Examiner's find- ing of a Section 8 (b) (4) (A) violation in light of our decision in Centlivre. Having found the termination and sympathetic action features of the clause unlawful under Section 8 (e), notwithstanding the proviso, we do find, as did the Trial Examiner, that Respondents IBEW and Local 769 violated Section 8(b) (4) (ii) (A) in coercing n Amalgamated Lithographers of America and Local 78, etc . ( Miami Post Company), 140 NLRB 968, footnote 3. 12 A case on this point is now pending before the Department of Labor. 13 148 NLRB 854. ETS-HOKIN CORPORATION, ETC. 845 Ets-Hokin to remove Rose-Phoenix from the Glen Canyon project, by threatening to enforce the termination clause in Local 640's 14 ,contract.l5 III. Section 8(b) (4) (B) : In Centlivre Village Apartments, supra, the Board held that coercion by a union to interrupt business relations between a neutral general contractor and an identified subcontractor came within the prohibition of Section 8(b) (4) (B). Here the Trial Examiner found that the Union, by threatening to cancel its contract with Ets-Hokin, forced Ets-Hokin to cancel its contract with Rose- Phoenix and thus violated Section 8(b) (4) (ii) (B) of the Act. We agree. The Trial Examiner rested his finding that Local 769 shared equal responsibility with the International for the coercion on the ground tthat joint activity for a joint objective creates joint responsibility. Local 769 argues that coercion must be within the power of the person making the threat, and asserts that as it alone had no power to terminate the contract, a fact known by the parties, it may not be held responsible. It also argues that the Board has recognized that labor organizations are to be treated as legal entities and the mere fact that two labor organizations are affiliated is not sufficient with- out more to establish the responsibility of the local for the action of its parent organization.16 Local 769 is chartered by the International and is a, successor to Local 640, also chartered by the International. Although the terms of employment are determined and negotiated by each local union, agreements must be submitted to the International for approval. In addition, agreements between the local and an employer in the con- struction • industry must contain a clause declaring that the local is part of the IBEW and that an alleged violation of the subcontract- ing clause would be examined by the International to see if it is factually supported. Grievances are handled by the local, but the International participates in the final stages of the grievance machin- ery. The protest that led to the International's interest in this case was made by Local 769, and officers of the local participated in the various meetings between Ets-Hokin and the International. Thus, the local and the International shared a common objective of obtain- ing work for IBEW members who belonged to the local, and the local allowed the International to act for it so that strength would 14 The original contract was between Ets-Hokin and Local 640 of the IBEW, the predecessor of Local 769. 15Los Angeles Mailers Union No. 9 I.T.U. ( Hillbro Newspaper Printing Company, etc.), 135 NLRB 1132, 1136, enfd. 311 F. 2d 121 (C A.D.C.) ; and District No. 9, Internatwnal Association of Machinists, AFL-CIO ( Greater St. Louis Automotive Trimmers and Upholsterers Association, Inc.), 134 NLRB 1354, 1359-1366, enfd. 315 F 2d 33 (C A D C ) 16 International Brotherhood of Electrical Workers, and Local 5, AFL-CIO (Franklin -Electric Construction Company ), 121 NLRB 143. 846 DECISIONS OF NATIONAL LABOR RELATIONS BOARD be added to its own position. We find that Local 769 and the Inter-- national were acting in concert and both Unions are therefore jointly responsible for the unlawful coercion prohibited by Section 8 (b) (4) (ii) (A_) and (B). IV. Discriminatory discharge : The Trial Examiner found that the Respondent Unions and Ets-Hokin were responsible for the termination o the Rose-Phoenix employees, and that the termina- tions were violations of Section 8(a) (1) and (3) by Ets-Hokin and Sections 8(b) (1) (A) and (2) by the Unions. The "no subcontracting" contract provision has the following aspects : a prohibition against subcontracting on a building construc- tion site, and an annulment clause. The first of these we have found to be lawful under the construction industry proviso to Section 8(e) ; the second we have found to be unlawful. These two aspects are, however, severable. The Unions had the right to insist, albeit not by proscribed means, that the Employer subcontract work only to IBEW subcontractors as required by the lawful part of the extant collective-bargaining contract. Accordingly, in terminating its con- tract with Rose-Phoenix because of the lawful requirement of its collective-bargaining contract with Respondent Union, Ets-Hokin did not discriminate against employees in violation of Section 8(a) (3) and (1) ; and, in insisting that Ets-Hokin adhere to the lawful contract terms, Respondent Unions did not cause Ets-Hokin to un- lawfully discriminate in violation of Section 8(b) (2) and (1) (A)."' ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondents, International Brotherhood of Electrical Workers, AFL-CIO, and its Local Union No. 769, their officers, agents, and representatives, shall take the following action : 1. Cease and desist from : (a) Entering into, maintaining, giving effect to, or enforcing the termination and sympathetic aspects of the subcontracting clause found in their collective-bargaining agreements, to the extent found unlawful herein. (b) Threatening, coercing, or restraining Ets-Hokin or any other person engaged in an industry affecting commerce to enter into an agreement prohibited by Section 8(e) of the Act, or to cease doing business with Rose-Phoenix or any other person. 17 International Brotherhood of Electrical Workers, Local 11, AFL-CIO (T. A. Thorn- burgh Co. ), 153 NLRB 1173 ETS-HOKIN CORPORATION, ETC. 847 2. Take the following affirmative action designed to effectuate the policies of the Act: (a) Post at their business offices and meeting halls in Phoenix, copies of the attached notice marked "Appendix." is Copies of said notice, to be furnished by the Regional Director for Region 28, shall, after being duly signed by the Union's representatives, be posted by the Unions immediately upon receipt thereof, and be maintained by them for 60 consecutive days thereafter, in conspicuous places, in- cluding all places where notices to members are customarily posted. Reasonable steps shall be taken by the Unions to insure that said notices are not altered, defaced, or covered by any other material. (b) Sign and mail to the Regional Director for Region 28 sufficient copies of said notice, to be furnished by him, for posting by Ets-Hokin Corporation, if willing. (c) Notify the Regional Director for Region 28, in writing, within 10 days from the date of this Order, what steps have been taken to comply herewith. IT IS FURTHER ORDERED that the complaint herein be, and it hereby is, dismissed insofar as it alleges that the Respondent, Ets-Hokin Corporation, violated the Act. MEMBER FANNING, concurring in part and dissenting in part : I join with my colleagues in dismissing the alleged violations of Section 8(a) (3) and 8(b) (2),19 and in finding that the subcontract- ing clause is protected by the construction industry proviso to Section 8(e). I cannot agree, however, that the termination clause in sup- port thereof falls outside the protection of the proviso, or that the threat to invoke the contractual right to terminate the collective- bargaining agreement constituted economic pressure prohibited by Section 8(b) (4) (B). The majority holds that the right of termination is a form of economic pressure or self-help available to force compliance with the "protected" subcontracting clause and that, therefore, the termina- tion clause exceeds the bounds of the construction industry proviso. In so holding, the majority places principal reliance on its conclu- sion that the termination of the collective-bargaining agreement 19 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 "a Decision and Order" the words "a Decree of the United States Court of Appeals, Enforcing an Order". 19 My agreement in this respect is based solely upon my conclusion that the entire "annulment" clause is lawful, for the reasons expressed infra. Therefore, I hold that the removal of Rose-Phoenix and its employees , in accordance with that clause, does not iolate Section 8(a) (3) or 8(b) (2) of the Act. Local 357, International Brotherhood of Teamsters, etc. (Los Angeles-Seattle Motor Express ) v. N.L.R.B., 365 U.S. 667. Inter- national Brotherhood of Electrical Workers, Local 11, AFL-CIO (T.A. Thornburgh Co.), 153 NLRB 1173. 848 DECISIONS OF NATIONAL LABOR RELATIONS BOARD between Respondents would work severe economic hardship on Respondent Ets-Hokin because other contractors who wish to live up to their no-subcontracting agreements with IBEW would not subcontract work to Ets-Hokin, and upon the Ninth Circuit's con- clusion in the Amalgamated Lithographers case 2p that the termina- tion clause there involved was, in the circumstances of that case, the equivalent of an agreement that the contracting union could employ a strike as "an ultimate sanction" in enforcing its contract. For the reasons stated in my -dissents in the Greater Muskegon and Carvel cases 721 I disagree with the majority's conclusion that the contractual reservation of the right to take economic action to en- force a lawful no-subcontracting clause is itself violative of Section 8(e) of the Act. It seems anomalous to find, as does the majority, that the incorporation of the so-called self-help provision in the clause at issue herein operates lawfully to prohibit the employer from subcontracting to nonunion subcontractors, even though the self-help provision itself violates Section 8(e),22 That the majority's construction of the clause and of 8(e) is unwar- ranted seems clear upon a reading of the entire decision of the Ninth Circuit in the Amalgamated Lithographers case. In that decision, the court, though construing a termination clause in conjunction with a lawful "chain shop" clause as an agreement by the primary employer "to a strike as an ultimate sanction" if it breached the "chain shop" clause, stated : , But the fact that a strike or other coercive activity of the kind described in Section 8(b) (4) is for an objective there'made un- lawful does not of itself render unlawful a contract whereby the employer agrees to voluntarily act in such a manner as would 20 N L R.B. v. Amalgamated Lithographers of America (Ind.) and Local No. 17 (Lithographers and Printers National Assn ), 309 F 2d 31. 21 Muskegon Bricklayers Union #5 ( Greater Muskegon General Contractors Associa- tion ), 152 NLRB 360, Local 217, United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the U.S. and Canada, AFL-CIO (The Carvel Co.), 152 NLRB 1672. 22 Were I to agree with the majority that the contractual right of termination con- stitutes "economic pressure " and places the clause outside the protection of the proviso to 8(e), I would, perforce, find the entire clause invalid. The clause in issue operates as a restriction on the employer's right to subcontract solely by virtue of the fact that the IBEW has the right to cancel its entire agreement if the employer subcontracts work to subcontractors who do not have agreements with appropriate IBEW locals. The entire clause constitutes an implied agreement not to subcontract to such subcon- tractors . The two parts of the clause are not severable . The majority is rewriting the parties' contract to the extent it finds that a restriction on subcontracting survives its striking down of the termination provision . Surely, if it is true as the majority states, and as I agree , that our function,is not to administer the law of private contracts, it is all the more true that our function does not include rewriting contracts of the parties. Employing Lithographers of Greater Miami -Florida ( Miami Post Co.) v. N.L.R.B., 301 F 2d, 20, 28, enfg. 130 NLRB 968 , as modified in pertinent part. ETS-HOKIN CORPORATION, ETC. 849 accomplish such an objective. This was settled in Local 1976, United Brotherhood of Carpenters and Joiners of America v. N.L.R.B., 357 U.S. 93. It follows that if the chain shop clause is unlawful it must be because some provision of the Act other than Section 8(b) (4) (A) and (B) make it so. Though the court nevertheless affirmed the Board's conclusion that the "termination" clause violated 8 (e), it did so because that clause could be invoked not only for the employer's breach of the lawful "chain shop" clause but also if the employer requested its employees to perform "'any' work received from or destined for any employer involved in a strike or lockout ... whether such work was `custom- ary' or `farmed out' work." Thus, the basis for the finding of illegality was that the termination clause itself constituted an im- plied agreement requiring the employer to cease doing business with certain other employers in violation of Section 8(e). Though the instant termination clause may be, indeed must be, construed as an implied agreement that Ets-Hokin will not subcontract to "non- union" subcontractors, such an agreement is permissible in the build- ing and construction industry. In view of the foregoing, I should think that this case is governed by the rule established by the Board in Amalgamated Lithographers of America (Miami Post Company), 130 NLRB 968, 977. In dealing with a similar termination clause there, the Board stated as follows : As we have found that the "struck work" clause is lawful, the "right to terminate" clause intended to give the Union a remedy for the breach of the former is equally lawful. However, the "refusal to handle" clause is unlawful because it is intended to implement not only the lawful "chain shop" clause but also the unlawful "trade shop" clause. Unless the majority, despite its disclaimer, is now overruling that doctrine, sub silentio, I fail to see why the same test, which would require a finding that the termination clause herein is lawful, is not applied in the instant case. The clear import of the Board's holding, quoted above, is that a termination clause is lawful whenever the clause which it supports is lawful, and it is wholly immaterial whether the latter clause is lawful because it is primary in nature or because it falls within the construction industry proviso and is thus excepted from the prohibition of Section 8(e). Moreover, the majority stretches the type of coercion prohibited under Section 8(b) (4) beyond the limits intended by the Congress and interpreted judicially. To label the right of termination a form 206-446-66-vol. 154-55 850 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of unlawful economic pressure is to beg the issue, rather than to answer it. The issue which must be resolved is whether the con- tractual right to termination or rescission is a prohibited form of coercion under Section 8(b) (4). In Sheet Metal Workers v. Hardy Corporation, 332 F. 2d 682 (C.A. 5), the court dealt with and re- jected the contention that judicial enforcement of a subcontracting clause, which was protected by the construction industry proviso to Section 8(e), amounted to coercion as that term is used in the Act. The court stated, inter alias We believe that the Congress used "coerce" in the section under consideration as a word of art, and that it means no more than non-judicial acts of a compelling or restraining nature, applied by way of concerted self help consisting of a strike, picketing or other economic retaliation or pressure in a background of a labor dispute.23 The court buttressed its conclusion with an examination of portions of the legislative history of the 1959 amendments to the Act. Those references, and particularly the quoted language from the Supreme Court's Sand Door 24 decision, are equally applicable in the instant context. Thus, the controlling distinction is that between economic ac- tion, such as strikes, picketing, and other related conduct, on the one hand, and resort to recognized legal or judicial remedies for breach of contract on'the other.25 Clearly, the IBEW lawfully could have filed suit for damages or specific performance for the breach of its agreement and, if the latter were ordered, obtained precisely the same result as it did herein. But another, long-accepted remedy is available to a party to a contract when the other party commits a material breach of that contract. That remedy is the right to re- scind the contract. As stated in Corpus Juris Secwndum, "On a material breach of the contract the injured party may elect to rescind the contract or to stand on it." 26 Certainly the articulation within the contract of this lawful right of election of remedies should not 23 332 F. 2d at 686. 24 Local 1976, United Brotherhood of Carpenters and Joiners of America, A.F L , et at. (Sand Door and Plywood Co ) v. N.L.R.B., 357 U.S. 93, 108. 25 The references to the legislative history cited by the court in Hardy, supra, prove convincingly that the "other economic retaliation or pressure" mentioned by the court is that which is akin to the "strike" or "picketing" referred to immediately before the quoted phrase in the court's opinion. As noted above, the majority apparently accepts IBEW's statement that the economic pressures involved herein are not those flowing from a refusal of IBEW members to work without a contract, but are those resulting from the refusal of other contractors who have no-subcontracting agreements with the IBEW to give work to Eta-Hokin in such circumstances . Therefore , the emphasis placed upon the quoted phrase by the majority in support of its position would appear to be mistaken. 2117A CJ.S. Contracts § 422(1) at 521 (1963). See also Williston on Contracts $$ 683, 893A (3d ed. 1937). ETS-HOKIN CORPORATION, ETC. 851 have the anomalous effect of rendering unlawful the exercise of that right, particularly where there is not the slightest evidence that the Congress, having granted specific contractual rights to employers and unions in the construction industry, then intended to deprive the parties to such agreements of the well-established remedies for breach of those very rights. I would find that the election of this remedy, like that of seeking judicial enforcement, is a lawful form of action and not a prohibited act of coercion under Section 8(b) (4). Finally, the majority's conclusion cannot be supported on the theory that termination of the contract will be followed by a strike or picketing; a "no contract-no work" theory. The record herein will not sustain a finding that the termination threat included a threat to withdraw men or to picket Ets-Hokin. Indeed, the Trial Examiner was quite careful to refrain from making any such find- ing.27 And, while these events could occur or could be thought likely to occur, such supposition will not satisfy the General Counsel's burden of proving they did occur or were actually threatened. For the foregoing reasons, I would hold the termination clause in the IBEW-Ets-Hokin contracts and the Respondents Unions' threats to invoke that clause lawful. MEMBER ZAGORIA took no part in the consideration of the above Decision and Order. 27 Trial Examiner's Decision , footnote 9. APPENDIX NOTICE TO ALL EMPLOYERS Pursuant to a Decision and Order of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby give notice that : WE, WILL NOT enter into, maintain, give effect to, or enforce the termination and sympathetic action aspects of the subcon- tracting clause found in our collective-bargaining agreement to the extent that such clause constitutes a contract or agreement, express or implied, with Ets-Hokin Corporation, or any other employer, whereby such employer ceases or refrains from or agrees to cease or refrain from handling, using, selling, transporting, or otherwise dealing in the products of any other employer, or to cease doing business with any other person. WE WILL NOT threaten, coerce, or restrain Ets-Hokin Corpora- tion or any other person engaged in an industry affecting com- merce, as defined in the Act, where an object thereof is forcing or requiring Ets-Hokin Corporation or any other employer 852 DECISIONS OF NATIONAL LABOR RELATIONS BOARD engaged in an industry affecting commerce to enter into an agreement prohibited by Section 8(e) of the Act, or to cease doing business with Rose-Phoenix or any other person. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL-CIO, Labor Organization. Dated---------------- By------------------------------------- (Representative) (Title) LOCAL UNION No. 769, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL-CIO, Labor Organization. Dated---------------- By------------------------------------- (Representative) (Title) This notice must remain posted for 60 consecutive days from the date of posting, and must not be altered, defaced, or covered by any other material. Employees may communicate directly with the Board's Resident Office, 230 North First Avenue, Phoenix, Arizona, Telephone No. 261-3717, if they have any question concerning this notice or com- pliance with its provisions. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE The General Counsel of the National Labor Relations Board consolidated nine cases for hearing in Phoenix , Arizona, in a complaint issued August 16, 1963.1 ' In Case No 28-CA-939, a charge was filed by R. D Neill for Rose Construction Com- pany, Phoenix Division, on April 17, 1963, alleging that Ets-Hokin Corporation violated Section 8(a) (3) and (1) of the Act. In Case No. 28-CB-262, Scott Neill, on behalf of Rose Construction Company, Phoenix Division, filed a charge on April 22, 1963, against Local Union No 769, International Brotherhood of Electrical Workers, AFL-CIO, alleging violations of Section 8(b) (1) (A) and (2 ) of the Act. In Case No. 28-CB-263, Scott Neill filed a charge on behalf of Rose Construction Company, Phoenix Division, on April 22, 1963, against International Brotherhood of Electrical Workers, AFL-CIO, charging violations of Section 8(b) (1) (A) and (2) of the Act. In Case No. 28-CC-137, a charge was filed on April 22, 1963, by Scott Neill on behalf of Rose Construction Company, Phoenix Division, and amended on July 30, 1963, charg- Ing Local Union No. 769, International Brotherhood of Electrical Workers, AFL-CIO, with violations of Section 8(b) (4) (ii) (A) and (B). In Case No. 28-CC-138, a charge was filed on April 22, 1963 by Scott Neill on behalf of Rose Construction Company, Phoenix Division, against International Brotherhood of Electrical Workers, AFL-CIO, and amended on July 30, 1963, alleging violations of Section 8 ( b) (4) (ii ) (A) and (B). In Case No. 28-CA-945, a charge was filed on April 25, 1963, by the business repre- sentative of Local Union No. 428, International Union of Operating Engineers, charging Ets-Hokin Corporation with violations of Section 8(a) (1) and (3) of the Act. In Case No. 28-CB-264, Local 428, International Union of Operating Engineers, AFL- CIO, filed a charge on April 25, 1963, against Local Union No 769, International Brotherhood of Electrical Workers, AFL-CIO, alleging violations of Section 8(b) (1) (A) and (2). In Case No. 28-CC-139, Local Union No. 428, International Union of Operating Engi- eers, APL-CIO, filed a charge on April 25, 1963, against Local Union No. 769, Interna- ETS-HOKIN CORPORATION, ETC. 853 Respondents IBEW International and IBEW Local 769 by their answers in general substance deny the charging allegations of the complaint , with respect to alleged vio- lations of Section 8(b)(1)(A), 8(b)(2), 8 (b)(4)(ii )(A) and (B), and 8(e) of the National Labor Relations Act, as amended, herein called the Act. Respondent Ets-Hokin in addition to a general denial of violations of Section 8(a) (1), 8 (a) (3), and 8 (e) in its answer sets forth certain affirmative defenses to justify its action in terminating Rose Construction Company, Phoenix Division, as a subcontractor from the Glen Canyon project in Arizona, which is the construction project involved in this case. The origin and nature of the disputes involved will be indicated by the statement of facts below. Briefs from the General Counsel, Respondent Ets-Hokin, Respondent International Brotherhood of Electrical Workers, AFL-CIO, and Respondent Local 769, Inter- national Brotherhood of Electrical Workers, have been received and considered. Upon the entire record and consideration of the briefs submitted, and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1. JURISDICTION Ets-Hokin Corporation,2 with its principal place of business in San Francisco, California, is engaged as a general and electrical contractor and does business in vari- ous States of the Union. As of April 1, 1963, it had in the process of construction projects exceeding $50 million in value. It annually performs services outside the State of California valued in excess of $50,000. Rose Construction Company, Phoenix Division (herein called Rose-Phoenix), was a subcontractor on the project known as the Glen Canyon project located in Arizona. Rose-Phoenix was a joint venture, composed of Russell Neill and George and Helen Sanford. Ets-Hokin, the prime contractor, had a contract from the United States Government in an amount approximating $13'/2 million for the construction of a powerline and related facilities. Rose-Phoenix, the subcontractor, was to perform work primarily concerned with the erection of steel transmission towers and a power station. The amount of this sub- contract was $1,500,000. Because Russell Neill was the sole owner of Rose Con- struction in Albuquerque and was a joint venturer in Rose Construction, Phoenix Division, the record frequently refers to Rose or Rose Construction as designating Rose Construction, Phoenix Division. II. THE LABOR ORGANIZATION INVOLVED International Brotherhood of Electrical Workers, AFL-CIO; Local Union No. 769, International Brotherhood of Electrical Workers, AFL-CIO; and Local Union No. 428, International Union of Operating Engineers , AFL-CIO, are labor organi- zations within the meaning of the Act. III. THE UNFAIR LABOR PRACTICES A. The events Prior to a recital of the events in greater detail the facts which are largely undis- puted will be summarized. For many years, Ets-Hokin, the general contractor, had contracts throughout the Nation with various locals of the IBEW containing an "annulment" clause substan- tially the same as the typical clause, set forth below. The clauses that were contained in contracts between Ets-Hokin and various IBEW locals at the time of the hearing are set forth in Appendix A. Ets-Hokin had no previous contractual relationship with IBEW Local 769, which is headquartered in Phoenix, Arizona. This IBEW local claimed geographical juris- diction of territory including that which encompassed the Glen Canyon project in Arizona. tional Brotherhood of Electrical Workers, AFL-CIO, alleging violations of Section 8(b) (4) (11) (B). In Case No. 28-CE-3, R. D. Neill on behalf of Rose Construction Company, Phoenix Division, filed a charge alleging violations by Ets-Iiokin Corporation of Section 8(e) of the Act, 2 Subsequent to the events here involved, the Company changed its name from Ets- Hokin & Galvan, Inc., to Ets-Hokin Corporation , and the name in this Decision has been changed accordingly. 854 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In October 1962, the superintendent of the Glen Canyon project, Gerald McCallister, without knowledge of the "annulment" clauses in the various IBEW local contracts with Ets-Hokin, entered into a contractual relationship with Rose- Phoenix, whereby Rose-Phoenix was to construct steel transmission towers and other steel construction. The type of work performed by the employees of Rose- Phoenix was a type of employment that the IBEW claimed on behalf of its members. McCallister was on notice that there might be a problem with respect to the juris- dictional claims of the Operating Engineers and the IBEW with respect to the work done by Rose-Phoenix. Rose-Phoenix employees came on the project in January and shortly after Rose- Phoenix executed a contract with the Operating Engineers Local 424, recognizing it as the exclusive bargaining agent and the sole source of personnel. This precipitated many representations from Local 769 IBEW officials and IBEW International officials to Ets-Hokin, advising that it was in violation of the agreements spelled out in the annulment clause relating to subcontracting. Respondent Unions insisted that Rose- Phoenix be removed from the job and that IBEW personnel be employed to perform the work that the Operating Engineers' personnel had been doing, and if not the IBEW contracts Ets-Hokin had with IBEW locals throughout the Nation would be canceled. Ets-Hokin in an effort to avoid having to breach its contractual relation- ship with Rose-Phoenix offered to pay to Rose-Phoenix the difference in wage scale occasioned by using IBEW personnel. Russell Neill, on behalf of Rose-Phoenix, agreed to this. Nonetheless, the Respondent Unions insisted that Rose-Phoenix was not acceptable to them and that it be removed from the Glen Canyon project. Because of this Ets-Hokin and Rose-Phoenix made a financial settlement and Rose- Phoenix and its approximately 56 employees left the Glen Canyon project in early April 1963. Shortly after, Ets-Hokin and IBEW Local 769 entered into a similar labor agreement in effect between Ets-Hokin and the other IBEW locals. A more detailed statement of the record follows. On October 31, 1962, Ets- Hokin entered into five separate contracts with Rose-Phoenix for construction to be performed in Arizona in connection with the construction of a transmission line and a power plant.3 Russell Neill deleted from each of the five contracts clause 17 which would have bound him to comply with any labor agreement executed by Ets-Hokin.4 Ets-Hokin Job Superintendent McCallister testified that Neill struck out this pro- vision because ". . . he wanted to use whatever people he desired on this particular work and that in his opinion that another paragraph in there precluded this paragraph anyway, something to that effect." At the time of the execution of these contracts, Sanford, the other joint venturer with Neill, suggested there might be a possible prob- lem between the IBEW and the Operating Engineers and suggested McCallister look into the matter. McCallister refused to do so, stating it was Neill's and Sanford's problem. Russell Neill at this time stated he had an agreement with the IBEW in New Mexico and that he could use IBEW personnel if necessary. McCallister further testified with reference to discussions with Neill and George Sanford prior to executing the contracts that "Generally we discussed the cost, which I was very conscious of, and, of course, his ability to do this work, his ability to do this work regardless of who he may have to use on the job." Within a few days after Rose-Phoenix started on the job in January 1963 McCallister received a telephone call from Business Representative Joe Housley of Respondent IBEW Local 769 in Phoenix, Arizona. Housley told McCallister he i Russell Neill and the Sanfords, the coventurers of Rose-Phoenix, could not obtain a single performance bond for the entire subcontract, amounting to $1,500,000. In order to meet this difficulty, an arrangement was made whereby the work was spread over five separate contracts Four of the contracts, dealing with the erection of steel transmission towers, provided that the work be completed within 90 days from a given date, and that after the first agreement the right of Rose-Phoenix to commence work under the terms of the next succeeding ones was dependent upon satisfactory completion of the prior con- tract and obtaining another performance bond Work under the fifth contract, relating to steel work on a power station, was to be commenced when directed by Ets-Hokin. * Insofar as pertinent, clause 17 provided: 17. LABOR CONDITIONS. The wages paid and working conditions established by Subcontractor shall be of the same standard as those paid and established by Con- tractor, and shall be subject to its approval. Subcontractor shall, when furnished with a copy thereof, comply with and be bound by any labor agreements executed by Contractor and applicable to the work. ETS-HOKIN CORPORATION, ETC. 855 wanted to discuss IBEW jurisdiction on the job and mentioned that a non-IBEW subcontractor was on the job and that Ets-Hokin was in violation of its contract with the IBEW. The basis for Housley's claim that Ets-Hokin was in violation of an IBEW agree- ment stemmed from the fact that Ets-Hokin had many contracts (all of which con- tained an "annulment" clause) with IBEW locals outside of Arizona, and Rose- Phoenix did not have an IBEW contract, nor did it obtain its personnel through IBEW Local 769. In a letter of February 26, 1963, to Ets-Hokin, International President Freeman of the IBEW cites the following as a typical annulment clause contained in the various IBEW local labor agreements: The Local Unions are part of the International Brotherhood of Electrical Workers and any violation or annulment of working rules or agreements of any other Local Union of the IBEW, or the subletting, assigning, or transfer of any work in connection with electrical work to any person, firm, or corporation not recognizing the IBEW as the collective bargaining representative on any elec- trical work in the jurisdiction of this or any other such Local Union by the Employer, will be sufficient cause for the cancellation of this agreement, after the facts have been determined by the International Office of the Union. Shortly after February 1, 1963, McCallister was informed by Ets-Hokin's San Francisco office that Housley had written a letter to that office, stating he had asked the IBEW International to cancel the agreements Ets-Hokin had with other IBEW locals. A few days later McCallister received a telephone call from IBEW Interna- tional Representative Scott, who advised McCallister that Ets-Hokin was in violation of the IBEW agreement and that he was coming up to the job and straighten things out. On or about February 8, 1963, Scott, in company with IBEW Local 769 Business Representative Housley and Local 769 President Nicksic, came to the con- struction site and met with McCallister and his superintendent. Scott advised McCallister that Ets-Hokin would have to comply with the agree- ment, or it would be terminated.5 McCallister stated he had been advised by his San Francisco office that because of Rose-Phoenix on the job without an IBEW agree- ment, Ets-Hokin was in violation of the IBEW annulment clauses. McCallister offered to arrange to have IBEW men on the job. However, Scott insisted the IBEW would not deal with Rose-Phoenix and this created an impasse, inasmuch as McCallister did not know how to solve the problem of Ets-Hokin's contractual relationship with Rose-Phoenix, inasmuch as Respondent Union insisted that not only IBEW personnel be employed, but that Rose-Phoenix was not eligible for an IBEW contract and must be removed from the project. At the time McCallister executed the contracts with Neill, for the Glen Canyon project, he was unaware of the annul- ment clauses contained in the various contracts with Ets-Hokin outside the State of Arizona. This lack of knowledge placed Ets-Hokin in a difficult position of becom- ing involved in a situation where the IBEW contracts were in conflict with its con- tractual responsibility to Rose-Phoenix, which, in turn, was linked to some extent with the Operating Engineers' difference with the IBEW. After Rose-Phoenix employees were on the project for about a week, Russell Neill informed McCallister that he had nonunion employees. A few clays later Neill advised McCallister that he had signed a contract with the Operating Engineers. About February 20 Neill advised McCallister that the Operating Engineers contract had been terminated. The reasons for Neill's actions in this regard will appear below. The wage rates negotiated between Rose-Phoenix and Operating Engineers Local 428 on January 22, 1963, were substantially lower than the rates IBEW Local 769 and other IBEW representatives claimed should be paid under the Davis-Bacon wage determination by the Bureau of Reclamation. After a directive from the Bureau of Reclamation, Neill paid under protest retroactive wages to conform to the directive. However, before Rose-Phoenix left the Glen Canyon job, it had reverted to the original pay scales, and Russell Neill testified that he thought the lower rate was correct and he did not intend to voluntarily make retroactive payments for the period his employees were paid at a lower rate. He paid the retroactive wages under protest in order that he might receive his progress payments due in connection with his work on the project. 'References in the record to the IBEW "agreement" or "national agreement" refer to individual agreements with IBEW locals containing the annulment clause. 856 DECISIONS OF NATIONAL LABOR RELATIONS BOARD On February 13, 1963, McCallister submitted the following written proposal to Russell Neill which in general provided that if Neill would employ IBEW personnel, Ets-Hokin would assume the extra cost: February 13, 1963 Proposal to Dave Neill re change to contract to use I.B.E.W. personnel on 345 KT Transmission Line. 1. Use 5 /2 0 ceiling as per present contract 2. E.H. & G. to pay fringe differential 3. E.H. & G. to pay work accomplished to date on construction. 4. We finance job for Rose Construction. ETS-HOKIN & GALVAN, INC. G. A. MCALLISTER By: (S) G. A. McAllister, Project Manager. On February 18, 1963, Russell Neill wrote as follows to McAllister, accepting the offer and agreeing to use IBEW personnel: G. A. MCALLISTER , Project Manager ETS-HOKIN & GALVAN, INC. P. O. Box 816 Flagstaff, Arizona Dear Sir: In answer to your proposal of February 13, 1963, that I use I.B.E.W. personnel, I list the following: Item 1-5'/2 ceiling acceptable. Item 2-E.H . & G. to pay fringe differential. My interpretation of this is all non-productive cost required by I. B . E. W. above the present line scale as defined in the job specifications which would include, but not be limited to the following: a. difference in pay rates. b. difference in foremans rates which is considerably higher if the non-working foreman is used as all foreman at present are working foreman. c. covered man hauls-I am presently using pickups for both men and material which is not allowed by I. B. E. W . agreement. d. travel time to and from shopping points-time presently starts and ends at work point. e. contributions to Electrical Union based on payroll. Item 3-E.H. & G. to pay work accomplished to date of new contract, which amount will be deducted from contract and payable upon signing of same. Item 4-E H. & G. to finance job for Rose Construction at the rate of cost plus 10 % profit to be billed and paid weekly. Equipment Dealers Manual rates less 20% as equipment cost. Adjustments of cost plus schedule to be made quarterly upward or downward as the 5'/Z¢ ceiling indicates. Acceptance of this agreement and completion of the new contract is the grounds on which I will commence negotiations with the I.B.E.W. ROSE CONSTRUCTION Russell D. Neill, Owner rdn/sr However, in the interim, on February 15, 1963, IBEW International Representative Scott, in a meeting in which he was accompanied by Business Representative Housley of IBEW Local 769, advised McCallister that the IBEW would not deal with Rose Construction even though McCallister told them he had instructed Neill of Rose- Phoenix to conform to the IBEW agreement and to request a meeting with 1BEW representatives in Phoenix for this purpose. As a further detail of the events, Russell Neill, in a letter of February 15, 1963, advised Business Representative Housley of IBEW Local 769 in Phoenix that, although he had a commitment with the Operating Engineers , he would be available for negotiation with the IBEW local after February 19, 1963. As part of the events leading to the termination of Rose-Phoenix as Ets-Hokin's subcontractor, Housely, a Local 769 IBEW representative , called McCallister again sometime in February 1963 to inquire as to what was being done. McCallister asked Housley for 5 to 10 days to work out the legal problems involved in connection with the demand that Rose-Phoenix be removed from the job. ETS-HOKIN CORPORATION, ETC. 857 Meanwhile from New Mexico, Russell Neill's attorney and labor adviser, Julian Ertz, in a letter dated February 25, 1963, advised the Operating Engineers Local 428 that the collective-bargaining agreement between Rose-Phoenix and the Operating Engineers was terminated effective February 26, 1963. The reason ascribed in the letter for this action was that Local 428 accepted the Bureau of Reclamation's direc- tive setting higher wage rates. In his letter, Ertz maintained that the Government was in error and that the proper wage rates for the Glen Canyon project involving the employees of Rose-Phoenix should be the wage rates of structural ironworkers and laborers. Prior to the events involving Ets-Hokin and the Glen Canyon project, Russell Neill on August 20, 1962, on behalf of Rose Construction, his individually owned com- pany, had entered into an agreement with Local 611 IBEW, headquartered in Albu- querque, New Mexico. This agreement by its terms expired on March 31, 1963. On February 22, 1963, Neill's attorney, Ertz, addressed a letter to the IBEW Local Union 611 in Albuquerque with reference to a claimed labor agreement violation by Rose Construction. The record does not establish the violation as occurring by reason of the involvement of Neill on the Glen Canyon project, although this would seem to be a distinct probability. A finding as to the cause of the alleged violation is not necessary to the resolution of the issues here presented. In any event, in this letter it was the position of Ertz that Neill was not a party to any effective labor agreement with Local 611 IBEW. During this general period between January and April 1963, Jeremy Ets-Hokin, the president of Ets-Hokm, and officials of Respondent Unions also had conversa- tions relating to the removal of Rose-Phoenix and its employees from the Glen Can- yon project. In January 1963, Vice President Foehn of the IBEW, Jeremy Ets-Hokin, and Wallace Barrett, vice president in charge of industrial relations, had lunch in San Francisco. Ets-Hokin testified: "And as I recall the gist of the conversation, after an exchange of amenities, was to the effect that we were not in Gordon Freeman's (International president of IBEW) best graces because of this transmission line matter and we may have our international agreement terminated." Ets-Hokin fur- ther testified that he was troubled about the loss of his agreement and that Foehn was suggesting that this termination was an imminent possibility. After this conversation with Foehn in January, Jeremy Ets-Hokin had a conver- sation with President Freeman of the IBEW. This talk was a conference telephone call which included a California congressman and was initiated at Ets-Hokin's request. Freeman first advised Ets-Hokin that he had been given enough time already and he would give Ets-Hokin 24 hours to straighten out his affairs and live up to the agreement Ets-Hokin asked for a week and the congressman also urged this and the conversation terminated on this note. During the conversation Ets-Hokin testified that Freeman was insisting that IBEW personnel work on the Glen Canyon project as provided by contract between the IBEW and Ets-Hokin. On the same day Jeremy Ets-Hokin spoke to Freeman, he attended a meeting in Flagstaff, Arizona. Also present were his vice president of operations, Louis Bruni, and his vice president of industrial relations, Wallace Barrett. Attending for Respondent Unions were Art Edwards, IBEW International vice president, Inter- national Representative Scott, and Business Representative Housely of Respondent IBEW Local 769. Edwards informed Ets-Hokin at this meeting that the only way Ets-Hokin could avoid having the IBEW contracts canceled would be to have IBEW personnel replace the employees of Rose-Phoenix and to remove Rose- Phoenix from the project. Edwards said Rose did not have an IBEW contract and was not eligible for one. Jeremy Ets-Hokin raised the question of the employees of Rose-Phoenix having a cause of action against Ets-Hokin and the IBEW for backpay. Either Edwards or Housely advised Ets-Hokin that it was the IBEW's problem, and that there would be immunity because all that Ets-Hokin had to do was refer the employees to the IBEW hiring hall. It was reiterated at this meeting by IBEW representatives that Rose-Phoenix did not have an agreement with the IBEW and was not eligible for one. Following this meeting, Ets-Hokin met with Russell Neill, managing officer of Rose-Phoenix. Ets-Hokin explained to Neill they were in jeopardy of having the national agreement canceled, and Ets-Hokin worked out an arrangement with Neill to terminate Rose-Phoenix as a subcontractor on the Glen Canyon project. Ets-Hokin gave Neill the choice of making himself acceptable to the IBEW officials (which he was unable to 'do), sue Ets-Hokin for breach of contract, or take the financial settlement offered by Ets-Hokin that would terminate his relationship with the Glen Canyon project. Neill chose making a financial settlement with Ets-Hokin rather 858 DECISIONS OF NATIONAL LABOR RELATIONS BOARD than to sue for damages. His acceptance of the latter course was undoubtedly based on his conclusion that under the circumstances it was in his best interest.6 The written settlement between Rose-Phoenix and Ets-Hokin included the following: (4) The parties hereto have become involved in disputes concerning the per- formance of the work under the first subcontract, and they are desirous of terminating all of the subcontracts and resolving their differences by mutual agreement, upon the terms and conditions herein contained. Another provision provided for the payment of $50,000 to Rose-Phoenix as con- sideration for entering into the termination agreement. There was also a provision by which Ets-Hokin agreed to pay Rose-Phoenix $135,000 for certain equipment and Neill, in his testimony, acknowledged that this was a generous appraisal of the value of the equipment. In this same written agreement dated May 20, 1963, Russell Neill agreed that he would not file any further unfair labor practice charges with the National Labor Relations Board stemming from their dispute. The record reflects that he filed a charge, Case No. 28-CE-3, on July 30, 1963, which charged Ets-Hokin with com- mitting an unfair labor practice by violating Section 8(e) of the Act. Approximately 56 employees of Rose-Phoenix were terminated between April 8 and April 11, 1963. About a week prior to this, Scott Neill, brother of Russell Neill, and project manager of Rose-Phoenix work subcontracted by Ets-Hokin, was in a bar with two of his employees. IBEW Local 769 Representatives Housley and Nicksic were also present with a third individual. Housely informed Neill he had a fine levied against him by the IBEW local. Nicksic asked Neill if he was feeling the pressure and also said that the IBEW would relieve Rose-Phoenix of the job in the near future. After harsh exchanges of words between the two groups of men, a fight ensued and two from each group were arrested for disturbing the peace.? After Rose-Phoenix left the project, Ets-Hokin did not engage another subcon- tractor but performed the previously subcontracted work with employees obtained through the hiring hall of IBEW Local 769. Ets-Hokin also executed a collective- bargaining agreement with Respondent IBEW Local 769 effective until June 20, 1964, which provided that Respondent Local 769 IBEW should be the sole and exclusive source of referrals of applicants for employment, and included a typical "annulment" clause as set forth above. All of the contracts noted in Appendix A contained provisions whereby the respec- tive IBEW locals were constituted the exclusive source of personnel for Ets-Hokin. B. Analysis and concluding findings 1. Alleged violations of Section 8(e) a. Responsibility of Local 769 IBEW As noted above, Respondent IBEW Local 769 had not executed an agreement with Ets-Hokin after Rose-Phoenix was removed from the Glen Canyon project. It contends this fact, along with the wording of the "annulment" clause vesting final authority in the IBEW International president to cancel labor agreements, absolves it from responsibility for the events leading to the termination of Rose-Phoenix and the removal of its employees from the Glen Canyon project. The typical "annulment" clause, as set forth above, which is a pivotal factor in the issues presented, is repeated for convenience of reference: The Local Unions are a part of the International Brotherhood of Electrical Workers and any violation or annulment of working rules or agreements of any other Local Union of the IBEW. or the subletting, assigning, or transfer of any work in connection with the electrical work to any person, firm, or cor- 9 Although not objecting to Jeremy Ets-Hokin's testimony with reference to the con- ference between Russell Neill and Ets-Hokin's officials, Respondent Unions objected to Neill's testimony relative to this conversation as hearsay and not binding on them. Motions to strike Neill's testimony concerning this conference were made which are here denied. The findings and conclusions made herein are not dependent upon Russell Neill's testimony, and the import of it is substantially the same as that of the testi- mony of Jeremy Ets-Hokin. Moreover, while the testimony concerning this conference may be hearsay with respect to Respondent Unions, it is not hearsay with respect to Respondent Ets-Hokin. 7 Motions to strike all or part of Scott Neill's testimony by the General Counsel and by counsel for Respondent IBEW Local 769 have been considered and are denied ETS-HOKIN CORPORATION, ETC. 859 poration not recognizing the IBEW as a collective bargaining representative on any electrical work in the jurisdiction of this or any other such Local Union by the Employer will be sufficient cause for cancellation of this agreement after the facts have been determined by the International Office of the Union. The recital that the "Local Unions are a part of the International Brotherhood of Electrical Workers" lends substance to the contention of the General Counsel that officials of Local 769 IBEW and the International officials made common cause, with joint responsibility, in obtaining the objective of removing Rose-Phoenix and replacing its employees with IBEW personnel. The record leaves no doubt that Respondent Local 769 and Respondent International had this joint objective. The joint responsibility of Respondent Local 769, along with that of Respondent IBEW International, also stems from the activities of officials of Local 769. They first attempted to have Ets-Hokin Job Superintendent McCallister award the work to IBEW personnel. In this case it would be the personnel of IBEW Local 769 as it had territorial jurisdiction in the area where the Glen Canyon project was located. Failing this, they initiated a complaint with Federal authorities, claiming Rose- Phoenix was in violation of Davis-Bacon wage rates. An official of Respondent Local 769, by letter, advised Ets-Hokin he had requested the IBEW International to terminate agreements Ets-Hokin had with other IBEW locals in territorial juris- dictions other than the territory of Local 769. Respondent Local 769 officials par- ticipated in conferences with Ets-Hokin which eventuated in the removal of Rose- Phoenix. The statements attributed to the officials of Respondent International, referring to IBEW personnel being utilized on the Glen Canyon project, leave no doubt that it was contemplated that personnel be obtained through Respondent Local 769. This objective was achieved, and Ets-Hokin, after Rose-Phoenix left the project, executed a contract with Local 769 and obtained personnel through its hiring hall to replace the employees of Rose-Phoenix. The objective of Respond- ent Local 769, as well as that of Respondent International, was identical. Even aside from the recital in the "annulment" clause that the local unions were part of the International, the joint activity in this case for a joint objective creates a joint responsibility and it is found that Local 769 shares the responsibility for the removal of Rose-Phoenix and its employees to the same degree as does the International. b. The legality of the "annulment" clause This clause reflects a prohibition against the signatory employer doing business with persons not having IBEW contracts and a provision for cancellation of all extant agreements with IBEW locals if this prohibition is not followed. The legality of all the IBEW contracts with Ets-Hokin containing this "annulment" clause is in issue inasmuch as cancellation of all contracts was threatened unless Rose-Phoenix was removed by Ets-Hokin from the Glen Canyon project. Different considerations apply to the "subcontracting" and the cancellation aspects of the "annulment" clause. It is contended by the General Counsel that Section 8(e) is violated by both facets of this clause. Insofar as here pertinent, Section 8(e) of the Act makes it an unfair labor practice for an employer and a labor organization to: . enter into any contract or agreement, express or implied, whereby such employer ceases or refrains or agrees to cease and refrain from . . . doing business with any other person . . . . Piovided, That nothing in this subsec- tion (e) shall apply to an agreement between a labor organization and an em- ployer in the construction industry relating to the contracting or subcontracting of work to be done at the site of the construction, alteration, painting, or repair of a building, structure, or other work. . . . In connection with the jobsite requisite of the construction proviso to 8(e), the Board has strictly construed this proviso to be effective where the contract in ques- tion, otherwise void under 8(e), applies only to "job site" construction work. Inter- national Brotherhood of Teamsters, Local 294 (Island Dock Lumber, Inc.), 145 NLRB 484; Southern California District Council of Hod Carriers (Golding and Jones, Inc.), 144 NLRB 978; Ohio Valley Carpenters District Council (Cardinal Industries, Inc.), 136 NLRB 978; and Teamsters Local Union No. 559 (Connecticut Sand and Stone Corporation), 138 NLRB 532. The defective aspects of the subcontracting portion of the "annulment" clause are that it does not refer to either construction work or work to be done at the site of construction. The construction proviso to Section 8(e) recites that 8(e) shall not apply "To an agreement between a labor organization and an employer in the con- struction industry relating to the contracting or subcontracting of work to be done 860 DECISIONS OF NATIONAL LABOR RELATIONS BOARD at the site of the construction . . ' The General Counsel argues the contractual relationship established by the "annulment" clause restricts subcontracting by Ets- Hokin away from the jobsite, and is not protected by the construction proviso to 8(e). A literal reading of the typical annulment clauses supports this contention. The scope of the "annulment" clause would certainly include prefabrication or elec- trical work performed by the subcontractors of Ets-Hokin and away from the con- struction jobsite. Respondents' attempt to meet this issue by pointing out that the utilization of personnel on the Glen Canyon project, insofar as it applied to Respondent Unions, was obviously confined to work at the construction site. However, this leaves unanswered the application of the "annulment" clauses Respondent Unions were seeking to enforce which were applicable to territorial jurisdictions of IBEW locals outside of the territorial jurisdiction involved in the Glen Canyon project. The record is silent as to whether such clauses had an operative effect away from the site of construction. Respondents further rely on the fact that the record contains a stipulation that the labor agreements containing the typical "annulment" clauses which were the subjects of cancellation unless Rose-Phoenix was removed from the Glen Canyon project were construction work contracts. However, because there is no showing this construc- tion work was confined to work to be done at the jobsite, this record does not estab- lish a practice that would be an arguable basis for bringing the "annulment" clauses within the 8(e) construction proviso despite the failure to comply with its literal terms. It must remain a matter of speculation whether these agreements were used affirmatively to restrict work done away from the jobsite or what inhibitory effects on doing business with non-IBEW employers away from the jobsite flowed from these "annulment" clauses. The language in the "annulment" clauses is unambiguous and since the record does not contain evidence that the practice of the parties actually complied with the terms of the construction proviso, there is not an adequate basis for finding that the typical "annulment" clauses are protected by the construction proviso of Section 8(e). This finding is supported by a basic tenet of statutory construction. In 50 Ameri- can Jurisprudence at 458: However, it is a general rule of statutory construction that a proviso which operates to limit the application of the provisions of a statute, general in terms, should be strictly construed and held to include no case not clearly within the purpose, letter, or expressed terms of the proviso. In light of these considerations, it is found that the typical "annulment" clauses contained in the labor agreements between Ets-Hokin and IBEW locals are void and unenforceable on their face because of the failure of these clauses to limit the sub- contracting restrictions to jobsite construction work. Since the same clause was included in the contract executed between Ets-Hokin and Respondent Local 769, and since the record does not establish affirmatively that all of the future relationships between this Local and Ets-Hokin would be limited to jobsite construction work, it follows from a logical extension of the con- siderations noted above that the "annulment" clause in the agreement beween Ets- Hokin and Local 769 IBEW is also void under 8(e). c. The cancellation aspect of the "annulment" clause The General Counsel contends that the cancellation provision in the typical "annulment" clauses also operates to remove these clauses from the protection of the con°truction proviso to 8(e). If it is accepted that the subcontracting strictures set forth in the "annulment" clause are not protected by the 8(e) construction proviso, it follows that the cancella- tion provisions contained in the "annulment" clause are also unlawful. In Amalgamated Lithographers of America, Local 17 (The Employing Lithog- raphers), 130 NLRB 985, enfd. 309 F. 2d 31 (C.A. 9), where there was an unlawful subcontracting clause under 8(e) and a contract cancellation in the event it was not observed, the Board stated at page 989 of its Decision: The termination clause in this case is the section intended to insure that the contracting employer will not handle certain "hot" goods. As a component part of the implied agreement to achieve an illegal objective, it partakes of that illegality. ETS-HOKIN CORPORATION, ETC. 861 On enforcement, the Court of Appeals for the Ninth Circuit stated at page 41: Since it is unlawful under Section 8(e) for an employer to agree that he will re- fuse to handle work of another employer which he customarily handles, this ter- mination clause is unlawful. The Board did not err in so finding and concluding. Consequently, here, since the "annulment" clauses are not protected by the con- struction proviso to 8(e), the cancellation feature of these clauses are also unlawful.8 2. The alleged 8(b) (4) (ii) (A) violations Having found that the "annulment" clauses violated Section 8(e) of the Act, the question as to whether the Respondent Unions violated Section 8(b)(4)(ii)(A) in connection with this "annulment" clause will next be considered. Insofar as here pertinent, Section 8(b) (4) (ii) (A) makes it an unfair labor prac- tice for a union "to threaten, coerce, or restrain a person ... where an object is forcing or requiring any employer . . . to enter into any agreement which is pro- hibited by Section 8(e)." It will be recalled that the typical "annulment" clauses were incorporated in existing labor agreements between IBEW locals and Ets- Hokin when the events leading to the removal of Rose-Phoenix from the Glen Canyon project occurred. It was these clauses in various labor agreements that were sought to be enforced. The other "annulment" clause contained in the agree- ment which Ets-Hokin and Local 769 IBEW executed after the removal of Rose- Phoenix is in a different category, and will be considered separately. Section 8(b) (4) (ii) (A) prohibits a union from using coercive acts to obtain a proscribed object. In the case at hand, in considering 8(b)(4)(ii)(A), the Act prohibits a union from coercing an employer (Ets-Hokin) in order to require Ets- Hokin to enter into an agreement unlawful under 8(e). This record establishes without question that Ets-Hokin was pressured by Respond- ent Unions to remove Rose-Phoenix because of Ets-Hokin's apprehension with respect to having many of its IBEW contracts canceled. This type of pressure is unlawful coercion within the meaning of Section 8(b) (4).9 In Amalgamated Lithographers, supra, at 988, the Board stated "an employer who is faced with the possibility of having his contract completely reopened if he handles struck or nonunion work cannot realistically be said to act `voluntarily' in refusing to handle such work." A union's action in filing a lawsuit to obtain compliance with a restrictive sub- contracting agreement which was protected by the construction proviso to Section 8(e) was held to have violated 8(b)(4) because this type of action was pressure not permitted by the case law interpretations of the Act. Local Union No. 41, Sheetmetal Workers International Association v. Hardy Corporation, 53 LRRM 2509, 2512 [218 F. Supp. 556] (D.C. N. Ala.) : The net effect of Section 8(e), supra, on the law relating to construction industry hot cargo clauses is that the case law regarding hot cargo agreements is left as it was prior to the 1959 amendments to the L.M.R.A. of 1947, if the agreement is valid within the construction industry proviso to subsection 8(e) of the Act. That is, notwithstanding the Section 8(e) validity of the agreement, unions are still prohibited from exerting the pressure specified in subsection 8(b)(4) where the object of such conduct is to either acquire or enforce a hot cargo agreement with an employer in the construction industry. Here the coercion was less subtle and also achieved its object. Ets-Hokin was pressured by Respondent Unions to terminate its business relationship with Rose- Phoenix by the enforcement of the provisions of the "annulment" clauses. The defense of Respondent Unions and Ets-Hokin, in large part, seems to rest on their view that all that was being done was an attempt to have Ets-Hokin comply with 8 A more difficult question as to the validity of a cancellation provision in a subcontract- ing clause protected by the construction proviso to 8(e) need not be reached here O The parties stipulated that the agreements containing the "annulment" clauses also contained provisions conferring on the respective IBEW locals the right to operate exclusive hiring halls. Although the existence of this type of provision likely added to the apprehension of Jeremy Ets-Hokin at the prospect of having all his IBEW labor agree- ments terminated , it is not necessary , in order to here establish coercion , to find that the threat to cancel the agreements was a threat to withhold personnel from Ets-Hokin if the agreements were canceled . Coercion is amply demonstrated by Jeremy Ets-Hokin's expressed anxiety at the prospects of cancellation of these agreements and by the efforts he made to avoid such a result. 862 DECISIONS OF NATIONAL LABOR RELATIONS BOARD its contractual obligation to Respondent Unions. Even assuming the "annulment" clauses were valid, the existence of a contractual relationship between Ets-Hokin and Respondent Unions in no way immunizes action otherwise prohibited by the Act. See, for example, Local 1976, United Brotherhood of Carpenters, etc. (Sand Door and Plywood Co.) v. N.L R.B., 357 U.S. 93, 106, when the Supreme Court stated: "The realities of coercion are not altered simply because it is said that the employer is forced to carry out a prior engagement rather than forced now to cease doing business with another." In N L.R B. v. International Union of Operating Engineers, Local No. 12, AFL- CIO (Tri-County Assn. of Civil Engineers), 293 F. 2d 319 (C.A. 9), the court held at 322: "An attempt to force one employer to sever business relations with another person is not protected by virtue of reliance upon a contract with the employer." To the same effect are the decisions in N.L R.B. v. Bangor Building Trades Coun- cil (Division Const. Co.), 278 F. 2d 287, 290 (C.A. 1); N.L.R.B. v. Local 294, Teamsters (Bonded Freightways), 273 F. 2d 696 (C A. 2). Consideration will next be given to the significance of record events in connection with the wording of 8 (b) (4) (ii) (A) which makes it an unfair labor practice for unions to force an employer "to enter into" an agreement unlawful under 8(e). In Dan McKinney Co., 137 NLRB 649, the employer, party to a contract pro- scribed by 8(e), gave effect to its provisions without any action on the part of the union. In holding that this action of the employer consituted an "entering into" an unlawful agreement, the Board stated at 654: In cases previously decided we have indicated our belief that the words "to enter into" must be interpreted broadly and encompass the concepts of reaffir- mation, maintenance, or giving effect to any agreement which is within the scope of Section 8(e). As authority for this previously expressed position, the Board cites the following cases: Los Angeles Mailers Union No. 9, I.T.U. (Hillbro Newspaper Printing Com- pany Division of Hearst Publishing Company, Inc.), 135 NLRB 1132; and District No. 9, International Association of Machinists, AFL-CIO (Greater St Louis Auto- motive Trimmers and Upholsterers Association, Inc.), 134 NLRB 1354. These cases involve contiactual provisions violative of Section 8(e) and not within the scope of the construction proviso. To the same affect is the Board's decision in Retail Clerks Union, Locals 770, 899, 1167, 1428 and 1422 (The Frito Company, Western Division), 138 NLRB 244, where the Board held that the enforcement of an invalid clause under 8(e) constituted an "entering into" within the meaning of Section 8(b) (4) (ii) (A). In a recent decision, the Board has indicated that different considerations apply to the enforcement of contracts that are protected by the construction proviso to 8(e). In International Union of Operating Engineers, Local No. 12, AFL-CIO (B. R. Schedell Contractor, Inc.), 145 NLRB 351, the Board held that it was not a viola- tion of Section 8(b)(4)(ii)(A) of the Act for a union to attempt to enforce com- pliance with the terms of a restrictive subcontracting clause protected by the 8(e) construction proviso, although holding the union violated Section 8(b) (4) (ii) (B) by such action. However, in a case issued only a few days prior to the Schedell case, the Board reiterated its position with respect to illegality of utilizing pressure to obtain a contract lawful in the construction industry by virtue of the proviso to Section 8(e). Los Angeles Building and Construction Trades Council; and Carpenters Local Union No. 1752, AFL-CIO (Murray W. McDaniel, d/b/a Treasure Homes), 145 NLRB 279.10 The Board and the Court of Appeals for the Ninth Circuit, as a result of Construc- tion, Production & Maintenance Laborers Union, Local 383, et al. (Colson and Stevens) v. N.L.R.B., 323 F. 2d 422, and Schedell, supra, are in agreement that it is not violative of Section 8(b)(4)(A) of the Act for a union to enforce a hot cargo 10 The Board's decision contains the following: The facts in this case, as the Respondents admit in their brief, do not differ mate- rially from the facts in Construction, Production 4 Maintenance Laborers Union Local 383, APL-CIO, et al. (Colson and Stevens Construction Co., Inc.), 137 NLRB 1650, enforcement denied 323 F. 2d 422 (CA 9). Though aware of the refusal of the Court of Appeals for the Ninth Circuit to enforce the Board's decision in Colson and Stevens, the Board respectfully disagrees with the court's opinion in that case, and has decided to adhere to its original decision. Accordingly, for the reasons set forth in our Colson and Stevens decision, supra, we find that the Respondents, by their acts and conduct set forth above, have violated Section 8(b)(4)(1), (ii) (A) and (B) of the Act. ETS-HOKIN CORPORATION, ETC. 863 type of agreement made lawful by the construction proviso to 8(e). The Court of Appeals for the Ninth Circuit also held in Colson and Stevens that it was not a viola- tion of Section 8(b)(4)(B) for a union to use coercion in an attempt to obtain a restrictive contract protected by the construction proviso to Section 8(e). The deci- sion in Colson and Stevens is read to indicate that a violation of 8(b) (4) (A) and (B) was not found because of the construction proviso to Section 8(e) and hence the decision of the Ninth Circuit is not a precedent for finding no violation of Section 8(b) (4) (A) and (B) in a case presented by the facts of this record. Cases not involving construction (Hillbro, McKinney, St. Louis, Automotive Trimmers, and Frito, supra) explicitly hold that enforcing or reaffirming or main- taining a contractual provision unlawful under 8(e) is a violation of 8(b)(4)(A) on the part of a union attempting to so enforce this type of contractual provision. An accommodation of the result of these cases with Schedell, supra, has not yet been articulated. One arguable distinction is that an agreement protected by the 8(e) construction proviso is lawful from its inception, and an attempt to enforce it is not viewed by the Board as within the meaning of the statutory term "to enter into." On the other hand, an agreemcnt void under 8(e) may be regarded as non- existent and every attempt to reaffirm, maintain, or enforce such a void agree- ment may fall within the meaning of the statutory language "to enter into" as used in Section 8(b) (4) (A). The execution of the agreement between Ets-Hokin and Respondent Local 769, in April 1963, containing the unlawful "annulment" clause was a violation of Sec- tion 8(e) by Respondent Ets-Hokin and Local 769, for the reasons set forth above, holding such clauses void. It has been found that both Respondent Unions violated 8(b)(4)(ii)(A) in coercing Ets-Hokin to remove Rose-Phoenix from the Glen Canyon project, by enforcing the "annulment" clauses. Whether or not Ets-Hokin was the direct employer of the personnel succeeding the employees of Rose-Proenix, as far as this record goes, was a matter of indifference to Respondent Unions as long as the replacements were obtained through the hiring hall of Local 769. Stated another way, a subcontractor with an IBEW contract would have been equally acceptable to Respondent Unions as a replacement for Rose-Phoenix. Because of this, it is found that this record lacks substantial evidence on which to base a finding that the pressure exerted to displace Rose-Phoenix was also aimed at having Ets-Hokin "enter into" an agreement unlawful under Section 8(e) with Respondent Local 769, and thus no violation of 8(b) (4) (ii) (A) is established by the events leading to the execution of the agreement in April 1963 between Ets-Hokin and Respondent Local 769, even though the agreement contained a provision void under 8(e) of the Act. 3. The alleged 8(b) (4) (it) (B) violations As far as applicable here, 8(b)(4)(ii)(B) of the Act makes it an unfair labor practice for a union to force an employer to cease doing business with another person Here Respondent Unions pressure Ets-Hokin to cease doing business with Rose-Phoenix. Finding a violation of 8(b)(4)(ii)(B) is not complicated by Sec- tion 8(e) with its construction proviso, nor by the necessity of construing the statu- tory meaning of the phrase "to enter into," insofar as 8(b) (4) (A) relates to a prohibition against obtaining a contract unlawful under 8(e). The Board's majority decision, along with the dissent, in Hillbro, and the Board's decisions in Treasure Homes and Colson and Stevens, supra, reflect that the Board has a firm belief in the proposition that causing an employer to cease doing business with another person is a violation of Section 8(b) (4) (B), irrespective of what type of contractual provisions are involved. Here Respondent Unions coerced or caused Ets-Hokin to cease doing business with Rose-Phoenix and hence a violation of Section 8(b)(4)(ii)(B) is established. 4. Alleged violations of 8 (a) (1) and (3) by Ets-Hokin and 8(b)(1)(A) and (2) by Respondent Unions This record clearly establishes that the employees of Rose-Phoenix lost their employment as a proximate cause of Respondent Unions' pressure on Ets-Hokin to remove Rose-Phoenix and its employees from the job and to have them replaced with personnel secured through Respondent Local 769's hiring hall. Insofar as is pertinent, Section 8(b)(2) of the Act provides that it is an unfair labor practice for a union "to cause an employer to discriminate against an employee in violation of subsection (a)(3)-" Subsection (a)(3) of Section 8 provides in pertinent part that it shall be an unfair labor practice for an employe- 864 DECISIONS OF NATIONAL LABOR RELATIONS BOARD "by discrimination in regard to hire or tenure of employment or any term or con- dition of employment to encourage or discourage membership in any labor organi- zation-" This record reflects discrimination by an employer against employees caused by a labor organization which would naturally tend to encourage or discourage mem- bership in two labor organizations, i e., the IBEW and the Operating Engineers. Here Ets-Hokin does not stand in the relationship of an employer to employees of Rose-Phoenix under the ordinary common law concept of employer-employee rela- tionship. However, the Board, relying in part upon decisions of the United States Supreme Court, has determined that a violation of Section 8(a)(3) may be caused by an employer whose relationship with the employees suffering discrimination is not the customary common law relationship. In Northern California Chapter, AGC (St. Maurice, Helmkemp & Musser), 119 NLRB 1026, enfd. 266 F. 2d 905 (C.A.D.C.), cert. denied 361 U.S 834, the Board in its majority opinion in consider- ing this question noted at page 1030: We consider it immaterial that no formal employer-employee relationship existed between AGC and Musser's employees. A defense, grounded on that fact, has no statutory support . As the Board stated in the Austin case [Austin Company, 101 NLRB 1257, 1259] : ... the statute, read literally precludes any employer from discriminating with respect to any employee, for Section 8(a)(3) does not limit its prohibitions to acts of an employer vis-a-vis his own employees. In reaching its decision the Board relied on Phelps Dodge Corp. v. N.L.R.B., 313 U.S. 177, where a discrimination was found to exist with reference to a prospective employee where an employer-employee relationship had never been established. Also in N.L.R.B. V. Hearst Publications, Inc., 322 U.S. 111, an employee who was technically an independent contractor was found to be within the scope of the defi- nition of employee as used by the National Labor Relations Act. In enforcing the Board's decision in the AGC case, supra, which found a viola- tion of 8(b)(2) and 8(a)(3), flowing from a factual situation parallel to the case at hand, the Court of Appeals for the District of Columbia stated at 909: It is also contended that no unfair labor practice can be found where the discriminatory action is against employees other than those of the direct employer; specifically, that AGC could not be found to have violated section 8(a)(3) by terminating the employment of Musser's employees, nor could Local 3 have been found to have violated section 8(b)(2) by causing that action, since there was no direct employer-employee relationship between AGC and Musser's employees. This position had the support of two members of the Board, relying upon previous Board decisions, The Great Atlantic & Pacific Tea Co., 116 NLRB 943 (1956); United Association of Journeymen of the Plumbing and Pipefitting Industry, 116 NLRB 119 (1956), and language in N.L.R.B. v. Denver Bldg. & Const. Trades Council, 341 U.S. 675, 71 S.Ct. 953, 95 L.Ed. 1284. The provisions of the Act here involved.... do not read as this contention would construe them, in contrast with language in other provisions. The terms used in the applicable provision bear an interpretation which reaches discrimination as to employees of another employer. We must guard against this broad language a scope which includes employees whose relationship to the controversy is so attenuated as to cause their inclusion to defeat a sound administration of the Act; yet the closeness of Musser to the dispute leads us to refer to the Board's interpretation which brings its four employees within the questioned protection. This is an area of interpretation into which we should follow the Board. N.L.R.B. v. Hearst Publications, Inc., 322 U.S. 111, 128-129, 64 S.Ct. 851, 88 L.Ed. 1170; N.L.R.B. v. Gluck Brewing Co., 8 Cir., 1944, 144 F. 2d 847, 855. Here, as in the Northern California Chapter AGC case, supra, Rose-Phoenix employees stood in the same relationship to Ets-Hokin as did the employees of the subcontractor Musser in the AGC case who were found to have been discrimi- nated against in violation of 8(a)(3) by the general contractor, and of 8(b)(2) by the Respondent Unions. Here Respondent Unions caused employees to be terminated because of union considerations, violating 8(b) (2) and 8(b) (1) (A). Ets-Hokin was the employer caused to effect this discrimination, thereby violating Section 8(a)(3) and (1) of the Act. The violations of Section 8 (b) (1) (A) and 8(a)(1) are derivative viola- tions of 8(b)(2) and 8(a)(3), respectively. ETS-HOKIN CORPORATION, ETC. 865 5. Special defenses asserted by Respondent Ets-Hokin a. Misrepresentation defense Ets-Hokin contends that the record indicates that Russell Neill misrepresented his IBEW contractual situation to Ets-Hokin, and this was the basis for a recission of the agreement by Ets-Hokin. Nothing appears in this record that would support the contention of a misrepresentation by Neill or that Ets-Hokin canceled the sub- contract because of such misrepresentation. Neill, at the time of the execution of the contract between Ets-Hokin and Rose-Phoenix, stated that he had a contract with the IBEW in New Mexico and would use IBEW personnel if necessary. Ets- Hokin Representative McCallister was indifferent to the question of union jurisdic- tional claims as between the Operating Engineers and the IBEW at the time of the execution of the contract. It seems a fair assumption that McCallister's expressed interest in costs was a substantial motivating factor leading to Ets-Hokin's execution of the contract with Rose-Phoenix, irrespective of the union affiliation of the per- sonnel to be used by Rose-Phoenix. b. The illegal assistance defense Ets-Hokin contends that the action of Rose-Phoenix in dealing with the Operating Engineers demonstrates illegal assistance to that union and is an unfair labor prac- tice which should be considered as a special defense to any charge of unfair labor practice against Ets-Hokin. Aside from the fact that Rose-Phoenix is not the only charging party in this consolidated proceeding, the contention of Ets-Hokin that Rose-Phoenix was discharged because it gave illegal assistance to the Operating Engineers Union is totally unsupported by the record. The record reflects that Rose-Phoenix was terminated because of the pressure instituted by the Respondent IBEW Unions. c. The breach of contract defense The essence of this defense is that the contract signed between Rose-Phoenix and Ets-Hokin recited that Rose-Phoenix must comply at all times with all applicable laws and regulations and that if Rose-Phoenix failed to perform, Ets-Hokin has the right to take over the work on 24 hours' written notice. It is contended that because of the illegal assistance given to Rose-Phoenix, the National Labor Relations Act was violated and that Ets-Hokin had a contractual right to take back the work. The difficulties with this position are that the record does not demonstrate affirmatively Rose-Phoenix committed unfair labor practices and, further, it demonstrates that the reason Rose-Phoenix was removed from the Glen Canyon project was because of pressure from the IBEW and not because of any breach or alleged breach of con- tractual obligation by Rose-Phoenix. d. The negotiated withdrawal defense Here the argument is made that the agreement by Rose-Phoenix , terminating the subcontracting relationship with Ets-Hokin , constituted an accord and satisfaction including a bar to this proceeding brought by the General Counsel of the Board Among other objections to this contention is one that the Charging Parties included the Operating Engineers, as well as Russell Neill of Rose-Phoenix , and further the compromise settlement recognizes that there were unfair labor practice charges pending against Ets-Hokin , at the time of its execution . In the section of this Decision entitled "The Remedy," the conduct of Neill in filing a charge after the settlement agreement, wherein he agreed not to file any further charges, will be adverted to as a factor in considering an appropriate remedy. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondents set forth in section III, above, occurring in con- nection with the operations of Ets-Hokin Corporation described in section I, above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States, and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY Having found Respondents have engaged in unfair labor practices, it will be recommended that they cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. 206-446-66-vol. 151 56 866 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The question is raised by this record as to whether the Rose-Phoenix joint ven- turers are entitled to remedial relief as well as their employees. As a general prop- osition, the restoration of parties adversely affected by unfair labor practices to the status quo ante is an appropriate form of remedy to be exercised by the Board insofar as possible. Assuming this proposition to be correct, and that a violation of 8(e) would be appropriately remedied by the restoration of an unlawfully displaced subcontractor, a possible remedy to be considered in this case would include an order reinstating Rose-Phoenix as the subcontractor on the Glen Canyon project. It is not difficult to conceive of the many problems that such an order would entail. Such problems do not necessarily rule out this order but, for the reasons indicated below, this type of remedy will not be recommended in this case. In some circumstances, if the project were of sufficient duration, the reinstatement of the displaced subcontractor might be the most feasible method of effecting reinstatement of employees discharged because of discrimination. The latter consideration is not vital here as Ets-Hokin is within the jurisdiction of the Board and subject to a remedial order directing an offer of reinstatement to the employees, whereas if a subcontractor replaced Rose-Phoenix it would not necessarily be a party to the proceeding and hence not subject to a Board order. Since reinstatement of Rose-Phoenix as a subcontractor is not a necessary incident of restoring employees to their prediscrimination status, an order requiring a rein- statement of Rose-Phoenix must rest on the entitlement of Rose-Phoenix and not of its employees. Although Russell Neill of Rose-Phoenix filed an unfair labor practice charge alleging a violation of 8(e) by Ets-Hokin, it cannot be assumed that he sought reinstatement as a subcontractor. The settlement agreement between Ets-Hokin and Rose-Phoenix provided for a $50,000 payment to Rose-Phoenix as consideration for entering the agreement. In addition, Ets-Hokin paid an additional financial consideration by reason of the "generous" appraisal of the value of the equipment purchased from Rose-Phoenix by Ets-Hokin. Although the choice of remaining as subcontractor was taken from Rose-Phoenix, it seems likely the financial consideration received approximated damages provable in a civil suit for breach of contract. Russell Neill, in his letter to McCallister, agreeing to use IBEW personnel, reflected a keen sense of financial acumen. The record also reflects he had the services of legal counsel available in connection with his problems on the Glen Canyon project which also supports the inference Rose-Phoenix obtained from Ets-Hokin a fair financial consideration for agreeing to terminate the five subcontracts. A recommended order providing for the reinstatement of Rose-Phoenix as sub- contractor should, on the facts of this record, be only considered on the basis of the 8(e) unfair labor practice charge filed by Russell Neill. However, that charge was filed after the agreement with Ets-Hokin wherein Russell Neill expressly agreed not to file further unfair labor practice charges against Ets-Hokin in connection with the Glen Canyon project. This record also reflects Russell Neill had no com- punction against switching employees because of union affiliation provided he was compensated for so doing, which reflects a disregard for the rights of employees guaranteed by the Act. A combination of the above factors, on balance, negates the appropriateness of recommending an order reinstating Rose-Phoenix as a subcontractor even assuming such a remedy would be legally correct. It is recognized that the project likely would be completed in any event before such a recommendation could be implemented. However, this contingency is not regarded as a valid basis for failing to recommend such a remedy. With respect to the displaced employees, it will be recommended that Ets-Hokin offer them employment at the work from which they were displaced on the Glen Canyon project at the wage rates they were receiving at the time of their termination in April 1963, plus any periodic increases in the wage scale they were receiving. This record does not provide an adequate basis for ascertaining the correct Davis- Bacon wage scale even if this were the proper forum to make such a determination. It will also be recommended that all Respondents' liability for any wage loss suffered by the displaced employees shall be joint and several and shall be computed according to Board policy set forth in F. W. Woolworth Company, 90 NLRB 289, with interest computed in the manner set forth in Isis Plumbing & Heating Co., 138 NLRB 716. The liability for backpay shall continue with respect to Respondent Ets-Hokin until such time as it makes an unconditional offer of reinstatement to the employees who would have continued working on the Glen Canyon project absent the discrim- ination exercised against them. ETS-HOKIN CORPORATION, ETC. 867 The liability of Respondent Unions for backpay, if any, shall terminate 5 days subsequent to the written notice from such Respondent Unions to Ets-Hokin with- drawing the Respondent Unions' objections to the employment of the employees suffering discrimination, or on the termination of the job if occurring prior thereto. With respect to the recommended remedial action in connection with the "annul- ment" clauses of various IBEW local unions included in the attached Appendix A, consideration has been given to the recital in such agreements to the effect that the locals are a part of the International, and that a violation of the restrictive subcon- tracting clause by any employer, in connection with any local contract, would be a basis for canceling agreements with any other IBEW local. This language, in addi- tion to the threatened cancellation of the agreements included in Appendix A, indicates specific remedial action with respect to all the unlawful agreements extant between Ets-Hokin and the IBEW locals. Also because employees were discrimina- torily discharged and the record reflects a wide use of unlawful restrictive subcon- tracting clauses by Respondent Unions, a broad cease-and-desist order will be recommended." Upon the basis of the foregoing findings of fact, and upon entire record in the case, I make the following. CONCLUSIONS OF LAW 1. Ets-Hokin Corporation and Rose Construction, Phoenix Division, are em- ployers within the meaning of the Act. 2. International Brotherhood of Electrical Workers, AFL-CIO; Local Union No. 769, International Brotherhood of Electrical Workers, AFL-CIO; and Local Union No. 428, International Union of Operating Engineers, AFL-CIO, are labor organizations within the meaning of the Act. 3. By enforcing the restrictive subcontracting provision in the "annulment" clauses, resulting in a termination of employment of the employees of Rose-Phoenix, Ets-Hokin has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(1) and (3) of the Act. 4. By causing Ets-Hokin to remove Rose-Phoenix and its employees from the Glen Canyon project by the enforcement of the unlawful "annulment" labor prac- tices within the meaning of Section 8(b) (1) (A), 8(b) (2), and 8(b) (4) (ii) (A) and (B) of the Act. 5. By entering into agreements containing the unlawful "annulment" clause, Respondent Ets-Hokin and Respondent Unions have egaged in unfair labor prac- tices within the meaning of Section 8(e) of the Act. 6. The aforesaid unfair labor practices are unfair labor practices affecting com- merce within the meaning of Section 2(6) and (7) of the Act. [Recommended Order omitted from, publication.] 11 N.L.R.B. v. Entwistle Mfg. Co., 120 F. 2d 532 (C.A. 4). APPENDIX A I.B.E.W. NULLIFICATION CLAUSES SOUTHWESTERN LINE CONSTRUCTORS, N.E.C.A. LOCAL 769 ARTICLE II, SECTION 8 Section 8. Local Union 769 is a part of the International Brotherhood of Elec- trical Workers and any violation or annulment of working rules or agreements of any other Local Union of the IBEW, or the sub-letting, assigning, or transfer of any work in connection with electrical work to any person, firm or corporation not recognizing the IBEW as the collective bargaining representative on any electrical work in the jurisdiction of this or any other such Local Union by the Employer, will be sufficient cause for cancellation of this agreement, after the facts have been determined by the International Office of the Union. DAKOTAS CHAPTER, NECA, INC. LOCAL #426 ARTICLE IV, SECTION 7 Sec. 7. Local Union #426 is a part of the International Brotherhood of Elec- trical Workers and any violation or annulment of working rules or Agreement of any other Local Union of the IBEW or the sub-letting, assigning or transfer of any work to any person, firm or corporation not recognizing the IBEW as the exclusive 868 DECISIONS OF NATIONAL LABOR RELATIONS BOARD representative of his employees, will be sufficient cause for cancellation of this Agreement, after the facts have been determined by the International Office of the Union. MONTEREY, CALIFORNIA LOCAL # 1072 ARTICLE II, SECTION 9 Sec. 9. Local Union No. 1072 is a part of the International Brotherhood of Elec- trical Workers and any violation or annulment of working rules or agreement of any other Local Union of the I.B.E.W., or the sub-letting, assigning, or the transfer of any work in connection with Electrical work to any person, firm , or corporation not complying with the terms of this Agreement by the Employer, will be sufficient cause for cancellation of this Agreement, after the facts have been determined by the International Office of the Union. ROCKY MOUNTAIN CHAPTER, NECA LOCAL #68 ARTICLE 4.24 4.24 Second Party: Local Union 68 is a part of the International Brotherhood of Electrical Workers and any violation or annulment of working rules or Agreements of any other Local Union of the I.B.E.W.; or subletting , assigning, or transfer of any work in connection with electrical work to any person, firm , or corporation not recognizing the I .B.E.W. as the collective bargaining representative on any electrical work in the jurisdiction of this or any other such Local Union by the Employer, will be sufficient cause for cancellation of this Agreement , after the facts have been determined by the International Office of the Union. MISSOURI VALLEY LINE CONSTRUCTION CHAPTER, NECA LOCAL # 426 (ALSO LOCALS ## 714, # 1250 and # 1426) ARTICLE II, SECTION 13 Sec. 13. The Local Unions parties to this Agreement are a part of the Inter- national Brotherhood of Electrical Workers and any violation or annulment of this Agreement or any other agreement with any local union of the IBEW or the subletting, assigning or the transfer of any work in connection with electrical work to any person, firm or corporation not complying with the terms of this Agreement by the Employer will be sufficient cause for cancellation of this Agreement after the facts have been determined by the International Office of the Union. THE SAN FRANCISCO ELECTRICAL CONTRACTORS ASSOCIATION, INC. LOCAL # 6 ARTICLE II, SECTION 10 Sec. 10. Local Union No. 6 is a part of the International Brotherhood of Elec- trical Workers and any violation or annulment of working rules or Agreement of any other Local Union of the International Brotherhood of Electrical Workers, or the sub-letting, assigning or the transfer of any work in connection with electrical work to any person, firm, or corporation not complying with the terms of this Agreement by the Employer, will be sufficient cause for cancellation of this Agree- ment, after the facts have been determined by the Labor-Management Committee and the International Office of the Union. SAN DIEGO COUNTY CHAPTER, NECA LOCAL # 569 ARTICLE II, SECTION 5 Section 5. CANCELLATION . Local Union 569 is a part of the International Brotherhood of Electrical Workers and any violation of Agreement of any other Local Union of the I.B.E.W. or the subletting of any work in connection with the electrical work to any persons, firm or corporation not recognizing the I .B.E.W. as the exclusive representative of his employees , or the employment of workmen not in accordance with Article IV on any electrical work in the jurisdiction of this or any other such Local Union, by the employer, will be sufficient cause for the cancel- lation of this Agreement, after the facts have been determined by the International Office of the Union. SOUTHERN NEVADA CHAPTER, NECA LOCAL #357 ARTICLE II, SECTION 16 Sec. 16. Local Union #357 is a part of the International Brotherhood of Elec- trical Workers and any violation or annulment of working agreement of any other Local Union of the I.B.E.W., or the subletting to any person, firm or corporation ETS-HOKIN CORPORATION, ETC. 869 not recognizing the LB E.W. as the exclusive bargaining representative of his em- ployees, will be sufficient cause for cancellation of this agreement after the facts have been determined by the International Office of the Union. LOS ANGELES CHAPTER, NECA (INSIDE WIREMEN'S AGREEMENT) LOCAL #11 ARTICLE III, SECTION 13 (a) Cause for Cancellation Sec. 13 (a). Local Union No. 11 is a part of the International Brotherhood of Electrical Workers and any violation or annulment of working rules or agreement of any other local union of the LB E.W.; or the sub-letting, assigning, or the transfer of any work in connection with electrical work to any person, firm or corporation not complying with the terms of this agreement; or the employment of workmen in any manner other than provided in Article II Section 3 will be sufficient cause for cancellation of this agreement, after the facts have been determined by an Inter- national Office of the Union. Note: Article II, Section 3 is Union Security Clause. SANTA BARBARA DIVISION, SANTA CLARA-SAN BENITO CHAPTER, NECA LOCAL #413 ARTICLE II, SECTION 19 Section 19. Local Union No. 413 is a part of the International Brotherhood of Electrical Workers and any violation or annulment of working rules or agree- ments of any other Local Union of the I.B.E.W, or the subletting, assigning or transfer of any work in connection with electrical work to any person, firm or cor- poration not recognizing the I B.E.W. as the exclusive bargaining agency, will be sufficient cause for the cancellation of this Agreement after the facts have been determined by the International Office of the Union. RIVERSIDE CALIFORNIA DIVISION, LOS ANGELES CHAPTER, NECA LOCAL # 440 ARTICLE II, SECTION 5 Sec. 5. ---------- Local Union No. 440 is a part of the International Brother- hood of Electrical Workers and any violation or annulment of working rules or agreement of any other Local Union of the IBEW, or the sub-letting, assigning, or the transfer of any work in connection with electrical work to any person, firm or cor- poration not complying with the terms of this agreement on any electrical work in the jurisdiction of this or any other such Local Union by the Employer, will be sufficient cause for cancellation of this agreement , after the facts have been deter- mined by the International Office of the Union. SAN BERNARDINO DIVISION, LOS ANGELES CHAPTER, NECA LOCAL #477 ARTICLE II, SECTION 15 Section 15. Local Union No. 477 is a part of the International Brotherhood of Electrical Workers and any violation or annulment of working rules or agreement of any other local union of the I.B.E.W.; or the subletting, assigning or the transfer of any work in connection with electrical work to any person, firm or corporation not recognizing the I.B.E.W. as the exclusive bargaining representative of his em- ployees, on any electrical work in the jurisdiction of this or any other such local union by the employer, will be sufficient cause for cancellation of this agreement, after the facts have been determined by the International Office of the Union. ARIZONA CHAPTER, TUCSON DIVISION, NECA LOCAL #570 ARTICLE II, SECTION 8 Section 8 . Local Union No. 570 is a part of the International Brotherhood of Electrical Workers. Any violation or annulment of working rules or agreement of any other local of the IBEW or the subletting , assigning or the transfer by the employer of any electrical work, to any person, firm or corporation not complying with the terms of this agreement will be sufficient cause for cancellation of this agreement with that employer, after the facts have been determined by the Interna- tional Office of the Union. CENTRAL NEW MEXICO CHAPTER, NECA LOCAL # 611 ARTICLE II, SECTION 9 Sec. 9. Local Union 611 is a part of the International Brotherhood of Electrical Workers and any violation or annulment of working rules or agreement of any 870 DECISIONS OF NATIONAL LABOR RELATIONS BOARD other Local Union of the IBEW or the subletting , assigning, or the transfer of any work in connection with the electrical work the terms of this Agreement by the Employer will be sufficient cause for cancellation of this Agreement after the facts have been determined by the International Office of the Union. Los Angeles Building and Construction Trades Council ; Laborers and Hod Carriers, Local No. 1082, AFL-CIO ; Carpenters Local Union No. 1507, AFL-CIO ; District Council of Painters No. 36, AFL-CIO ; and Cement Masons Union Local No. 627, AFL- CIO [Elmer E. Willhoite] and Jones and Jones, Inc. Case No. 31-CC-9 (formerly f1-CC-732). August 31, 1965 DECISION AND ORDER On October 30, 1961, Trial Examiner Herman Marx issued his Decision in the above-entitled proceeding, finding that the above- named Respondents had engaged in certain unfair labor practices and recommending that they cease and desist therefrom and take certain affirmative action, as set forth in the attached Trial Examiner's Decision. Thereafter, the Respondents filed exceptions to the Trial Examiner's Decision and a supporting brief. Pursuant to the provisions of Section 3 (b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with this case to a three-member panel [Members Fanning, Brown, and Jenkins]. The Board has reviewed the rulings made by the Trial Examiner at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions and brief, and the entire record in this case, and hereby adopts the findings, conclusions, and recom- mendations of the Trial Examiner with the additions and modifi- cations noted below. We agree with the Trial Examiner, for the reasons stated in Los Angeles Building & Construction Trades Council, et al. [Portofino Marina] (Jones and Jones, Inc.),' that the picket line clause in article IX of the proposed contract which provides that no employee need cross any authorized or approved picket line is violative of Section 8 (e) because the clause "can be read as applying to unlawful secondary picketing." In further agreement with the Trial Exam- iner, but for the reasons set forth in Muskegon Bricklayers Union #5, Bricklayers (Greater Muskegon General Contractors Associa- tion),2 we find the provision of article IX which insulates employees 1150 NLRB 1590. 2152 NLRB 360, Member Fanning dissenting. 154 NLRB No. 55.