Highway Truck Drivers and Helpers, Local 107

84 DECISIONS OF NATIONAL LABOR RELATIONS BOARD by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to its employees are customarily posted . Reasonable steps shall be taken by Respondent to assure that said notices are not altered, defaced , or covered by any other material. (b) Notify said Regional Director, in writing, within 20 days from the date of receipt of this Decision, what steps Respondent has taken to comply herewith? ^In the event that this Recommended Order be adopted by the Board , paragraph 3(b) hereof shall be modified to read : "Notify said regional Director, in writing, within 10 days from the date of this Order , what steps Respondent has taken to comply herewith." APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to the Recommended Order of a Trial Examiner of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Rela- tions 'Act, as amended, we hereby notify our employees that: WE WILL NOT interrogate any employee with respect to any employee's activity, membership, or interest in any labor organization in a manner constituting interference, restraint, or coercion in violation of Section 8 (a)( I) of the said Act. WE WILL NOT threaten any employee with reprisals because of such activ- ity, membership, or interest on the part of such or any other employee. WE WILL NOT promulgate, maintain, enforce, or apply any rule or regula- tion prohibiting our employees , when they are on nonworking time, from distributing materials in behalf of any labor organization in nonworking areas of our property. WE WILL NOT prohibit our employees, during nonworking time, from otherwise soliciting their fellow employees to join or support United Pack- inghouse, Food and Allied Workers , AFL-CIO, or any other labor organization. WE HEREBY rescind our rules governing distribution of materials and solicitations to the extent that they prohibit conduct described in the two paragraphs preceding this paragraph. WE WILL NOT in any like or related manner interfere with , restrain, or coerce employees in the exercise of their right to self-organization, to form, join, or assist any labor organization, to bargain collectively through repre- sentatives of their own choosing, to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, or to refrain from any or all such activities. CAMPBELL SOUP COMPANY, Employer. 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. If employees have any question concerning this notice or compliance with its provisions, they may communicate directly with the Board's Regional Office, Sixth Floor, Meacham Building, 110 West Fifth Street , Fort Worth, Texas 76102, Telephone 335-2145. Highway Truck Drivers and Helpers, Local 107, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America ; Chauffeurs, Teamsters and Helpers, Local 331, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America ; Truck Drivers, Chauf- feurs and Helpers, Local 384, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers, of Amer- ica; General Teamsters, Chauffeurs and Helpers Local 470, International Brotherhood of Teamsters, Chauffeurs, Ware- HIGHWAY TRUCK DRIVERS AND HELPERS, LOCAL 107 85 housemen and Helpers of America; Chauffeurs , Teamsters and Helpers, Local 312, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; Truck Drivers and Helpers, Local 676, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America and Peter D. Walther, an individual Highway Truck Drivers and Helpers, Local 107, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America ; Chauffeurs, Teamsters and Helpers, Local 312, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America ; Chauffeurs, Team- sters and Helpers, Local 331, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of Amer- ica; Truck Drivers, Chauffeurs, and Helpers, Local 384, Interna- tional Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America ; General Teamsters, Chauffeurs, and Helpers, Local 470, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; Truck Drivers and Helpers, Local 676, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of Amer- ica; Delaware County Labor Relations Association ; Delaware Valley Labor Relations Association ; Schuylkill Valley Labor Relations Association ; Private Carriers Association; Local Cartage Operators Association ; South Jersey Transport Asso- ciation, Inc. and Joseph T. Wendling, an individual Local 107, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, Independent and S & E McCormick, Inc. Local 470 International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, Independent and S & E McCormick, Inc. Cases 4-CE-7, 8, 4-CC-267, 2G8. June 10, 1966 DECISION AND ORDER Upon charges duly filed on June 3, 1963, by Peter D. Walther in Case 4-CE-7, and upon charges duly filed on June 4, 1963, by Joseph T. Wendling in Case 4-CE-8, the General Counsel of the National Labor Relations Board for Region 4 issued an order consolidating cases, consolidated complaint, and notice of hearing dated October 16, 1963, in Case 4-CE-7 and in Case 4-CE-8, against Highway Truck Drivers and Helpers, Local 107, International Brotherhood of Team- sters, Chauffeurs, Warehousemen and Helpers of America; Chauf- feurs, Teamsters and Helpers, Local 312, International Brotherhood 159 NLRB No. 1. 86 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of Teamsters, Chauffeurs, Warehousemen and Helpers of America; Chauffeurs, Teamsters and Helpers, Local 331, International Brother- hood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; Truck Drivers, Chauffeurs and Helpers, Local 384, Inter- national Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; General Teamsters, Chauffeurs, and Helpers, Local 470, International Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America; and Truck Drivers and Helpers, Local 6 '16, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (herein called Locals 107, 312, 331, 384, 470, and 676, respectively, and herein also called, collectively, Respondent Unions), alleging that Respondent Unions had engaged in and were engaging in unfair labor practices within the meaning of Section 8(e) of the National Labor Relations Act, as amended (herein called the Act), and in Case 4-CE-8 against the aforesaid Respondent Unions, together with Delaware County Labor Relations Association, Delaware Valley Labor Relations Association, Schuylkill Valley Labor Relations Association, Private Carriers As- sociation, Local Cartage Operators Association, and South Jersey Transport Association, Inc. (herein called Delaware County, Dela- ware Valley, Schuylkill Valley, Private Carriers, Local Cartage, and South Jersey, respectively,, and herein also called, collectively, Re- spondent Associations), alleging that Respondent Unions and Re- spondent Associations had engaged in and were engaging in unfair labor practices within the meaning of Section 8(e) of the Act. Cop- ies of the charges, order consolidating cases, consolidated com- plaint, and notice of hearing before a Trial Examiner were duly served on the Respondent Unions, the Respondent Associations, and the Charging Parties. On October 28, 1963, Respondent Associations Delaware County, Delaware Valley, and Schuylkill Valley duly filed their answer admit- ting certain allegations of the complaint, but denying the commis- sion of any unfair laibor practices . On October 29, 1963 , Respond- ent Associations Private Carriers, Local Cartage, and South Jersey duly filed their answer admitting certain allegations of the complaint, but denying the commission of any unfair labor practices . On Octo- ber 29, 1963, Respondent Unions filed their answer admitting certain allegations of the complaint, but denying the commission of any unfair labor practices. Upon charges filed on July 15, 1963, by S & E McCormick, Inc. (herein called McCormick) in Cases 4-CC-267 and 4-CC-268, the General Counsel of the National Labor Relations Board, by the Regional Director for Region 4, issued an order' consolidating cases, consolidated complaint, and notice of hearing dated October 31, 1963, against Local 107 in Case 4-CC-267 and against Local 470 in`Case HIGHWAY TRUCK DRIVERS AND HELPERS, LOCAL 107 87 4-CC-268, alleging that Locals 107 and 470 had engaged in and were engaging in unfair labor practices within the meaning of Section 8(b) (4) (i) and (ii) (A) of the Act. Copies of the charges, order, consolidated complaint, and notice of hearing before a Trial Exam- iner were duly served on the Respondents and the Charging Party. On November 6, 1963, Locals 107 and 470 duly filed their answer ad- mitting certain allegations of the complaint, but denying the com- mission of any unfair labor practices. On November 12, 1963, the General Counsel by the Regional Director for Region 4 issued an order consolidating cases in Cases 4-CE-7, 4-CE 8, 4-CC-267, and 4-CC-268.1 On November 26 and 27, 1963, a hearing was held before Trial Examiner Reeves R. Hilton. Counsel for the General Counsel, on November 26, was permitted to amend the complaint in Cases 4-CC- 267 and 4-CC-268 to allege an additional violation of Section 8(b) (4) (i) and (ii) (A) of the Act. On November 27, 1963, the hearing was adjourned until December 17, 1963, and on December 17 was continued indefinitely. On June 1, 1964, all parties to this proceed- ing entered into a stipulation of facts. The parties agreed that the charges, consolidated complaints, answers, and stipulation of facts constitute the entire record in the case and that no oral testimony was necessary or desired by any of the parties. The parties further stipulated that they waived a hearing before a Trial Examiner and the issuance of a Trial Examiner's Decision and desired to submit these cases for findings of fact, conclusions of law, and order directly to the National Labor Relations Board. On June 5, 1964, the Board granted the parties' request to transfer the case to the Board and to file briefs. Thereafter, the General Counsel, the Respondent Unions, and the Charging Parties filed briefs.' Upon the basis of the parties' Stipulation of Facts and upon the entire record in these cases, the Board makes the following: FINDINGS OF FACTS I. THE BUSINESS OF TIIE RESPONDENT ASSOCIATIONS AND MCCORMICK. INC. Respondent Associations are, and have been at all times material herein, employer associations admitting to membership firms engaged in interstate and intrastate hauling and the transportation of goods and commodities in the Philadelphia, Pennsylvania, and South New 1 On November 12, 1963, Respondent Union filed a motion for bill of particulars which was denied on November 20, 1963, by Trial Examiner Leo F. Lightner . No appeal from that ruling having been taken, we hereby affirm that ruling. 2 The request of the Respondent Unions for oral argument before the Board is hereby denied as the record as stipulated and the briefs adequately present the issues and posi- tions of the parties. 88 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Jersey area,-and among other things perform the function of negoti- ating, executing, and administering collective-bargaining agreements on behalf of their employer members with various labor organiza- tions, including the Respondent Unions. In the performance of such functions, Delaware County, Delaware Valley, and Schuylkill Valley have combined together to form the Tri-Area Association. In the operation of their business, employer members of each of Respond- ent Associations annually receive in excess of $50,000 from the trans- portation of goods and materials across State lines. McCormick is, and has been at all times material herein, a Dela- ware corporation engaged in the interstate and intrastate hauling and transportation of goods and maintains offices and terminals in Philadelphia, Pennsylvania, and Wilmington, Delaware. In the operation of its business, McCormick annually receives in excess of $50,000 from services in the transportation of goods and materials across State lines. On the basis of the foregoing facts, the parties admit, and we find, that Respondent Associations and McCormick are, and have been at all times material herein, engaged in commerce within the meaning of Section 2(6) and (7) of the Act and that it will effectuate the policies of the Act to assert jurisdiction herein. U. THE LABOR ORGANIZATIONS INVOLVED Respondent Unions, Locals 107, 312, 331, 384, 470, and 676, are, and have been at all times material to this case, labor organizations within the meaning of Section 2(5) of the Act. III. BACKGROUND The following facts are summarized from the stipulation of the parties. A. Cases 4-CE-7; 4-CE-8 The Respondent Associations are comprised of 84 member carriers who are either private, common, or contract carriers as those terms are defined by the Interstate Commerce Act.3 The member carriers are engaged in the interstate and intrastate transportation of steel, heavy machinery, dry, freight, and household goods. In addition to their own employees driving- carrier-owned equipment, some of the member carriers utilize the services of owner-operators under con- tract or lease arrangements in the transportation of the aforemen- tioned goods. The owner-operators or owner-drivers are persons who own either a truck-tractor or a truck-tractor and trailer, lease the 3 According to the stipulation, a single multiemployer unit has been established cover- ing the employees of all local cartage and over-the-road operations of all employers represented by the Employer Associations involved in this proceeding. HIGHWAY TRUCK DRIVERS AND HELPERS, LOCAL 107 89 truck-tractor (with or without a truck-trailer) to a carrier for the transportation of various commodities by the carriers, and then drive or operate such equipment. On occasion they may provide a substi- tute driver to operate their equipment in the transportation of the aforementioned commodities for the carrier. Fleet owners own one or more truck-tractors and lease such equipment to one or more car- riers with or without drivers. Some of the drivers of fleet equip- ment, which is leased to carriers with drivers in the absence of the contractual provisions involved herein, are employees of the fleet owner and some are employees of the carrier. The carrier-driver relationship involved in these cases is stated in paragraph 18 of the stipulation as follows: These proceedings involve only those owner-operators or fleet equipment drivers as to whom the Employer-employee relation- ship with the carriers does not apply, but as to whom the con- tract would establish such Employer-employee relationship. Neither the owner-operators or owner-drivers nor the fleet owners have permits, licenses, or certificates which authorize them to engage in interstate commerce; therefore, (except for commodities exempted by the Interstate Commerce Commission) they may engage in trans- portation in interstate commerce only for carriers. Some of the carriers have had contractual or lease arrangements with owner-operators, for varying periods of time, from a minimum of 2 years to a maximum of 27 years .4, The relationship of some of the owner-operators or owner-drivers to some of the carriers under the contracts or leases is, in fact and in law, that of independent, con- tractors, while others are employees as defined in the National Labor Relations Act, as amended. Employees of the Respondent Associations' members are repre- sented by Respondent Unions for the purposes of collective bargain- ing under collective-bargaining agreements negotiated with Respond- ent Associations and their members. An undetermined number of 4 They are listed in an Appendix A to the stipulation with the number of years of their respective lease arrangements as A.E.F . Interstate Transportation Service (10), Carrier Cartage Co. (5), Kulp & Gordon, Inc. (3 ), Martella Motor Freight ( 27), Moon Carrier (15), A. Duie Pyle, Inc. (17 ), Ragens Transportation Company ( 3), Service Motor Freight, Inc. (4), Wilson Freight Forwarding Co. (2), Robbins Motor Transportation (23), Shanahan Transportation Company (5), Cline's Express ( 3), Cross Transportation, Inc. (18), Kowalsky Express Service (6), Loblondo Brothers Motor Express, Inc. (10 ), Salem Express, Inc. (3). Counsel for the General Counsel, Delaware County, Delaware Valley, Schuylkill Valley, and Charging Parties aver that the aforementioned carriers (with the exception of Carrier Cartage Co., Kulp & Gordon, Inc., Ragens Transportation Company, Robbins Motor Transportation , and Salem Express ) and the owner-operators and leased operators with whom they have lease agreements are in the relationship of independent contractors in fact and in law. Respondent Unions, while agreeing that the relationship of owner- operators and fleet owners to some of the aforementioned Carriers is that of independent contractor, takes the position that as to the independent contractor relationships with specific carriers, it is a matter of proof under applicable law. 90 .DECISIONS OF NATIONAL LABOR RELATIONS 'BOARD owner-operators orf'owner-drivers who have leases or contracts with the Carriers involved herein are not'members of any of the Respond- 'Unions: . Respondent Unions acknowledged that the clauses in issue would result in compelling some owner-operators to join their unions. The collective-bargaining agreements between the Respond- ent Unions and Carriers in existence -immediately prior to the agree- ment :in issue herein covered the, transportation of steel, heavy machinery, dry freight, and household goods in interstate and intra- state commerce. The contracts involved in the instant case also include the same transportation. Prior to the execution of the con- tracts, involved here, none- of the Respondent Associations' members were parties to contracts with any of Respondent Unions containing similar provisions.5 . - .Drivers who are qualified to drive the equipment used in the trans- portation of dry freight and general commodities are also qualified to drive the equipment used in the transportation of steel and heavy machinery sand, if physically qualified, are ordinarily qualified to per- form driver duties with respect to the latter after instruction as to the handling of the specific commodity. Some drivers of carriers may be assigned to the transportation of steel, heavy machinery, or dry freight interchangeably. A few of the carriers involved have used and do use owner-operators to perform certain over-the-road driving operations from specified origins to specified areas or destina- tions. Employees of these carriers have been used to perform such work only when owner- operators were not available or when there was an overflow of such work. During the early stages of negotiation of the collective-bargaining contracts involved herein, the Respondent Associations opposed the inclusion of the owner-operators clauses and offered to include in the agreements contractual guarantees that no employee driver pres- ently employed would be deprived of employment or work because of the utilization by ' any' carrier of owner-operators .6 It is stipulated that the clauses involved in the instant case are similar to clauses negotiated by affiliates-of the, International Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America in'various areas of.tbe United States , and that a sub- stantial number of carriers and drivers , including owner-operators covered by those agree- ments operate into and out of the area covered by the agreements involved herein, and that a substantial number of carriers and drivers , including owner-operators , covered by the agreements involved herein operate into some of the areas covered by other similar agreements . i • r+ , - Wilson Freight Forwarding Co., Kowalsky Express Service , and Lobiondo Brothers Motor Express , Inc , are parties to contracts containing similar clauses with other unions in other sections of-the United States,where they are engaged in the trucking business eIn addition to,the stipulated facts summarized above, Respondent Unions stated that they would present testimony through witnesses as to the circumstances and object of the negotiations of the rchallenged clauses. " The General Counsel, Respondent Associations, and the Charging ,Parties object to this portion of the stipulation as irrelevant, immate- rial, or conclusionary : In view of our ultimate disposition ,of the issues herein, we find it, unnecessary to rule on , these objections or to consider the arguments based thereon. We have, however, included in Appendix. A this , portion of the stipulation. I HIGHWAY -TRUCK DRIVERS AND HELPERS, LOCAL 10 7 91 B. Cases 4-CC-267; 4-C(J 268 McCormick is engaged in the transportation of heavy construction machinery and iron and steel articles, utilizing the services of both its employees and owner-operators in the performance of such work. Most of the iron and steel articles are transported by owner- operators who are in a contractual or lease relationship with Mc- Cormick. for purposes of the stipulation in this case only, Respondent Unions (Locals 107 and 470) agree that some of the owner-operators in lease or contractual agreements with McCormick are in fact and in law independent contractors. For approximately 7 years, Mc- Cormick was a member of Motor Transport Labor Relations, Inc. (herein called MTLR), and was a party to the collective-bargaining agreement negotiated on its behalf by MTLR with Respondent Unions which was scheduled to terminate on December 31, 1962, but was ex- tended on December 27, 1962, pending the resolution of the representa- tion proceeding in Case 4-RC-5059. Certification issued in that case on May 6, 1963; negotiations were immediately resumed between MTLR and Respondent Unions; and, on June 5, 1963, a new contract was agreed to by the parties. On June 6, McCormick notified MTLR that it was resigning froln MTLR, as of that date. On June 13, MTLR acknowledged receipt of McCormick's notice and notified Re- spondent Union that McCormick had resigned from MTLR and was no longer a party to the master agreement. On July 1 at a meeting between representatives of Respondent Unions (Locals 107 and 470) and McCormick, the Unions requested McCormick to sign letters of intent to be bound by the area freight agreement covering independent employers which contained the owner-operator clauses alleged to be violative of Section 8(e.) of the Act in Cases 4-CE-7 and 4-CE-8. McCormick did not sign the letters but requested time to study them and agreed to notify Respondent Unions within 48 hours of its decision. On July 8 McCormick advised the Unions that it would not sign the letters. On July 15 Respondent Local 107 commenced picketing the premises of McCormick in Wilmington, Delaware, and Respondent Local 470 commenced picketing McCormick's premises in Philadelphia, Pennsyl- vania. At a meeting,on July 31 McCormick agreed to enter into contracts with Respondent Unions subject to an agreement holding in abeyance the owner-operator provisions of the contract. Through- out,the events related, herein, McCormick objected to. the inclusion of the owner-operator clauses in the contracts. The stipulation recites that Respondent Unions would present wit- nesses to testify that the reason for the picketing of McCormick was McCormick's refusal to, be bound by the terms of the collective- bargaining agreement, including the payment- of wages, which had 92 DECISIONS OF NATIONAL LABOR RELATIONS BOARD been negotiated on its behalf by MTLR, and would aver that Mc- Cormick's resignation from MTLR was untimely. IV. THE ALLEGED UNFAIR LABOR PRACTICES A. Case 4-CE-7; 4-CE-8 The complaint alleged* a violation of Section 8(e) of the Act in that on or about May 21, 1963, Respondent Unions and Respondent Associations, on behalf of their employer members, entered into con- tracts, including a City Cartage Agreement and an Over-The-Road Agreement, containing among others the following clause: ARTICLE 1 Scope of Agreement Section 2. Employees Covered (c) In all cases hired or leased equipment shall be operated by an employee of the certificated or permitted carrier and such employee shall be paid pursuant to the terms of this Agreement. The Employer expressly reserves the right to control the manner, means and details of, and by which the owner-operator performs his services, as well as the ends to be accomplished. The complaint further alleged that, at all times material, Respond- ent Unions and Respondent Associations maintained and gave effect to the clauses, and that pursuant to these clauses Respondent Associ- ations, on behalf of their members, ceased and refrained and agreed to cease and refrain from handling, using, selling, transporting, or otherwise dealing in the product of other employers, or from doing business with other persons, namely, owner- operators. Respondent Associations and Respondent Unions admitted in their respective answers that they had entered into contracts containing the clauses, and that they had maintained and given effect to said clauses. Respondent Associations further admitted that pursuant to the clauses they had agreed to cease doing business with other persons. Respondent Unions denied that pursuant to the clauses the Associa- tions had agreed to cease doing business with other persons. B. Case 4-CC-267; 4-CC-268 The complaint alleged that Respondent Locals 107 and Respondent Local 470 demanded that McCormick enter into a collective-bargaining 7 The complaint also alleged that article 23 in the City Cartage Agreement and an identical article number 24 in the Over-The-Road Agreement were violative of Section 8(e) of the Act. The text of those articles appear in an attached Appendix B. For convenience, we shall refer to these articles as article 23 and to article 1, section 2(c), and article 23, collectively, as the "owner-operator clauses." HIGHWAY TRUCK DRIVERS AND HELPERS, LOCAL 107 93 agreement containing the clauses and that they picketed and en- gaged in a strike against McCormick in support thereof, all in vio- lation of Section 8(b) (4) (i) and (ii) (A) of the Act. Respondent Unions admitted that they demanded that McCormick enter into a contract containing the disputed clauses. They further admit the picketing of McCormick's premises, but assert that said picketing was the result of the refusal of McCormick to accept a collective- bargaing agreement which had been negotiated on its behalf by its agent MTLR. During the hearing, Counsel for the General Counsel amended the consolidated complaint to allege that Respondent Locals 107 and 470 had further violated Section 8,(b) (4) (i) and (ii)-(A) of the Act by picketing McCormick to obtain the following clause : ARTICLE 33 a Subcontracting (a) The Employer agrees to refrain from using the serv- ices of any person who does not observe the wages, hours and conditions of employment established by labor unions having jurisdiction over the type of services performed. Pending a determination by the courts that the above Article 33 (a) is valid, the Unions and the Employer shall comply with and enforce only the following modification thereof : V. CONTENTIONS, OF THE PARTIES On the foregoing stipulated facts, it is the General Counsel's con- tention in Cases 4-CE-7 and 4-CE-8 that the owner-operator clauses are unlawful under Section 8 (e) of, the Act; and that by entering into agreements containing such clauses and continuing to maintain and give effect to them, Respondent Associations and Respondent Unions have violated Section 8 (e) of the Act. In Cases 4-CC-267 and 4-CC- 268, the General Counsel contends that Respondent Unions, by strik- ing and picketing McCormick with an object of forcing or requiring McCormick to enter into contracts containing the owner-operator clauses, and, in addition, article 33(a) of the Subcontracting clause, violated Section 8 (b) (4) (i) and (ii) (A) of the Act. More specifically, with respect to the owner-operator clauses, Cases 4-CE-7 and 4-CE-8, the General Counsel contends that the first sec- tion of article 1, section 2(c), requiring the carriers to use their own 8 Only subparagraph (a) of article 33 was alleged by the General Counsel to be violative of Section 8(e). The Unions denied the allegation, but requested that the whole clause be included and the Trial Examiner in granting the General Counsel 's motion to amend also granted their request. The full text of article 33(b) appears in Appendix B Article 33 appears in the Over-The-Road Agreement and an identical article numbered 30 appears in the City Cartage Agreement . For convenience we shall refer to this clause as article 33(a). 94 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employees to operate all leased equipment, constitutes an 'agreement by which the carriers agree to cease or refrain from doing business with owner-operators, and that the second sentence effectively pre- vents the carriers from utilizing the services of owner-operators who will not submit to the common law "right of control" test speci- fied therein, converting them from independent contractors to employ- ees. It is further contended that since article 23 is an extension of the latter part of article 1, section 2(c), it necessarily restricts the man- ner in which owner-operators and carriers may deal with each other and effectively prevents them from continuing their present business relationships. Thus, the effect and inevitable consequence of the limi- tations on the carriers' right to do business with owner-operators will be either to require the carriers to cease doing business with such owner-operators and fleet owners as they have in the past, or change their present business relationship to that of employer-employee, or have their employees become employees of the carriers and members of Respondent Unions. To rebut the Union's argument that the clauses are valid work- preservation clauses, the General Counsel contends that the purpose of the clauses is the regulation and control of the employment conditions of owner-operators with whom the carriers do business, and that they dictate with whom the carriers may do business, and the manner in which they may do so. It is argued that since the Union is entitled to represent only employees in an appropriate unit and not independ- ent contractors or their employees, it is only the work of the unit which the Union may protect, and there is no evidence to show that bargaining unit work has been taken from the unit and given to inde- pendent contractors. Pointing out that the subject matter of article '23 as evidenced by section 16 is wages of owner-operators and not work preservation for the members of the bargaining unit, it is contended that article 23 cannot be construed to give it a work-preservation objective. In fact, the argument runs, carriers are expressly per- mitted under section 19 of article 23 to use owner-operators provided they become employees and their grievances are handled pursuant to the contract. Finally, it is contended that subparagraph (b) of arti- cle 33 ° effectively provides safeguards against subcontracting in order to preserve bargaining unit work and that this express provision argues against any attempt to give a similar construction to the owner-operator clauses at issue here. Respondent Unions' contentions are as follows: The owner-operator clauses are a prohibition against the subcontracting of work of the type performed 'by unit employees. There is only a slight degree of 9 See Appendix "B," infra. HIGHWAY TRUCK DRIVERS AND HELPERS, LOCAL 107 95 difference in the supervision exercised by the carriers over the owner- operators and employees of fleet owners as opposed to unit employees. Both types of drivers perform the same work, have the same skills, use the same equipment, transport the same commodities, work for unit carriers, operate out of the same terminals, engage in local cart- age and over-the-road trucking and may own the equipment they drive or may drive leased equipment. The only reason unit employ- ees are not performing the work, say the Unions, is that 'the carriers have subcontracted it out. Such subcontracting (the argument runs) deprives unit employees of unit work; creates inconsistent standards for drivers performing the same work; creates friction and antago- nism between drivers; and, where carriers can compel acceptance of lower standards than those attained by unit employees, causes pres- sures to reduce further the amount of work available for unit employ- ees. In sum, Respondent Unions contend that the clauses are designed to return unit work to the unit by prohibiting the subcontracting of unit work. Respondent Unions further contend that article 1, section 2(c), together with article 1, section 2(a),10 constitute a total prohibition on subcontracting which prevent subcontracting and require the return of previously subcontracted work, and that the substance of these clauses is neither augmented nor diminished by article 23 which is designed to protect the owner-operators from the necessity of using their wages to pay the cost of operating equipment. The necessity for such safeguards, argue the Unions, was clearly recognized by the carriers in their proposal to include in the contract a guaranty that no employee driver presently employed by the carriers would be deprived of work because of the utilization of owner-operators. But Respondent Unions contend such a guaranty would permit attrition of the unit through discharges, resignations, and retirements. They fur- ther contend that since the carriers are permitted to continue to lease equipment, the clauses do not deprive the owner-operators of any 10Article 1, section 2(a), in both the City Cartage Agreement and the Over-The-Road Agreement reads as follows: Scope of Agreement Section 2. Employees Covered (a) Employees covered by this Agreement shall be construed to mean, but not lim- ited to, any driver, chauffeur, or driver-helper operating a truck tractor , motorcycle, passenger or horse-drawn vehicle, or any other vehicle operated on the highway , street or private road for transportation purposes when used to defeat the purposes of this Agreement. The term employee also includes, but is not limited to , all employees used in dock work , checking, stacking, loading, unloading , handling, shipping, receiv- ing, switching and assembling or drag line and allied work. It is understood, how- ever, that the term employee shall be construed to mean those employees of the Employer employed directly and indirectly by and /or under the control of the Em- ployer, and who are represented by the Local Union or during the life of this Agree- ment may come to be represented by the Local Union. 96 DECISIONS OF NATIONAL LABOR RELATIONS BOARD work. On the contrary, they are permitted to continue performing such work, but as unit employees, not as independent contractors. The General Counsel contends, in the McCormick cases, Cases 4- 'CC-267 and 4-CC-268, that Respondent Locals 107 and 407 in their answers admitted that during the time of their picketing they had 'demanded that McCormick enter into contracts containing the owner- operator clauses alleged in Cases 4JCE-7 and 4-CE-8 to be violative of Section 8(e) of the Act and that their picketing was a result of McCormick's refusal to accept the MTLR agreements. Moreover, during the negotiations that followed, the Unions asked McCormick to sign letters of intent to-be bound by the Area Freight Agreement which contained similar clauses. With respect W -subparagraph (a) of article 33, the General Counsel contends that since it is identical to the clause found to be unlawful- by the Board in Patton Warehouse, Inc.," Respondent Unions' strike to obtain a contract containing the clause was also vio- lative of Section 8(b) (4) (i) and (ii) (A) of the Act, and the pres- ence of the deferral clause does not make the strike lawful. VI. DISCUSSION A. Cases. 4-CE-7; 4-CE-8 Article 1, section 2(c), in effect prohibits the leasing of equipment by carriers, from owner-operators, owner-drivers, or fleet owners unless the drivers of such equipment become and remain employees of the carriers while performing work for the carriers. It is now well settled that provisions of collective-bargaining agree- ments prohibiting the contracting out of unit work are lawful if they are aimed at the primary and permitted object of protecting and pre- serving unit work and standards and do not have as their real target the imposition of a boycott on third parties who do not recognize or have a contract with the contracting unit.12 Thus, in Calhoun Drywall Company,13 the Court of Appeals for the District of Columbia stated : We have phrased the test as whether the clauses are germane to the economic integrity of the principal work unit,,and seek to protect and preserve the work and standards [the union] has bargained for, or instead extend beyond the [contract-, ing] employer and are aimed really at the union's difference with another employer.14 "Truck Drivers Union Local No. 413, Teamsters ( The Patton Warehouse, Inc.), 140 NLRB 1474, enfd. In part 334 F.2d 539 (C.A.D.C.), cert. denied 379 U.S. 916. 32 Retail Clerks Union Local No. 1428 (Jones and Jones, Inc.), 155 NLRB 656. ' Orange Belt District Council of Painters, No. 48' ( Calhoun Drywall Co.) v. N.L.R.B., 328 F.2d 534, 538 (C.A.D.C.). 141bid, page 538, footnotes omitted. HIGHWAY TRUCK DRIVERS AND HELPERS, LOCAL 107 97 More recently, that court in considering Section 8 (e) has stated : Resolution of the difficult issue of primary versus second- ary activity, ... involves consideration of two factors: (1) jobs fairly claimable by the bargaining unit, and (2) preser- vation of those jobs for the bargaining unit. If the jobs are fairly claimable by the unit, they may, without violating either §8(e) or §8(b) (4) (A) or (B), be protected by pro- vision for, an implementation of, no-subcontracting or union standards clauses in the bargaining agreements. Activity and agreement which directly protect fairly claimable jobs are primary under the Act.15 The parties have agreed in their collective-bargaining agreements that the work included within the scope of the agreement "shall cover all local and road operations of the Employer, ... " and that "[A]11 operations and work covered herein shall be performed exclusively by employees covered by this Agreement (except as otherwise provided in this Agreement)." 16 Thus, all the work performed by the carriers has been bargained for by the Unions, and it is the entirety of that work which constitutes the unit work the Unions have a legitimate primary interest in protecting for the carriers' employees. Here the nature of the 'work performed by the unit employees of the carriers under the present agreements is identical to the work performed for the carriers by the owner-operators or owner-drivers or employees of fleet owners ; i.e., the transportation of steel, heavy machinery, dry freight, and household goods in interstate and intrastate commerce. The parties have stipulated that the collective-bargaining agreements now in effect,as well as those immediately prior thereto relate to the performance by unit employees of the same type work. In implementation of their legitimate primary interest in "all local and road operations of the Employer," the Respondent Unions have agreed with the Associations in article 1, section 2(c), that the car- riers will use only "employees" to operate hired or leased equipment. To accomplish this objective, and at the same time permit the carriers to continue to utilize hired and leased equipment from owner- operators and fleet owners, they have further agreed that the Employ- ers will assert and exercise the "right of control" over the drivers of 'Meat and Highway Drivers, Dockmen, Helpers and Miscellaneous Truck Terminal Em- ployees, Local Union No. 710 , Teamsters ( Wilson and Co ) v. N.L.R.B., 335 F 2d 709, 713 (C.A.D.C.), footnotes omitted. Cited infra as Wllaon. 1 Article 1, section 1, Scope of Agreement, Over-The-Road Agreement and City Cartage Agreement. 243-084-67-vol. 159-8 98 DECISIONS OF NATIONAL LABOR RELATIONS BOARD leased or hired equipment.17 To do so has-the legal effect of convert- ing them to unit employees when performing unit work for the car- riers."' To further implement and protect the work standards of the bargaining unit work,they have agreed in article 23 to the wages and terms and conditions of employment for drivers who drive their own equipment under lease with a certificated carrier. In the factual con- text of this case, we are unable to agree with the General Counsel that these provisions,` assessed in the light of the applicable principles set out above, have an unlawful secondary objective interdicted by Sec- tion 8(e). The work which the Unions have sought to limit to owner-operators who would agree to become "employees" of the carriers while they were performing it.is similar, and even identical, to the work done by the unit employees. The work done by the carriers' employees, and the work for which the carriers retained "independent contractor" truck operators, is done for the same employer in both instances, it is work of the same type`or character in both oases, it requires the same skill's, it is performed at or its performance is directed or controlled from the same location or base,19 and any increase in the amount of work done by ow'ner'operators or other drivers` of leased equipment would cause a corresponding decrease in the amount of work available to'the unit employees.20 Any work of this kind done by those outside the unit, i.e., by the "independent contractors," is-sufficiently compa- rable in character; land' the terms under which it,is done sufficiently affect the terms and conditions of the work done•in the unit; to cause the Union to have a direct and necessary interest in the work and to .make it unit work within the meaning of Wilson, supra. We particularly note, moreover, that the contractual provisions requiring that owner-operators and other drivers of leased equipment be unit employees subject to the collective-bargaining agreement are applicable and operative only while they are employed to perform owner-operator clauses alleged to be violative of Section -8 (e) of the work for the signatory carriers of the same kind as is done by other unit employees of such carriers. No attempt is made to regulate their 17 In generally comparable circumstances , the Board, with court approval, has found owner-operators and drivers of leased equipment to be employees of the leasee-employer even in the absence of an express "right of control" contractual provision. Deaton Truck Lines, Inc., 143 NLRB 1372 enfd : 337 F.2d 697 (C.A. 5). 18 See Reisch Trucking and Transportation Co., Inc., 143 NLRB 953, 956 and cases cited therein at footnote 7. 19 We note that it is stipulated that the "independent contractors" may engage in the interstate transportation of commodities which are nonexempt by the Interstate Com- merce Commission only for a private, common, or contract carrier as those terms are defined in the Interstate Commerce Act and that the carriers herein are such carriers. "Article 33(b) of the Subcontracting clause (Appendix B, infra) prohibiting an increase in the use of leased equipment with drivers ( except as attrition through retire- ments, quits, or discharges reduces the number of employees'in the unit ) only slows down, and does not eliminate , inroads on the unit work through increases in subcontracting. HIGHWAY TRUCK DRIVERS AND HELPERS, LOCAL 107 99 status, or their terms and conditions of employment, when perform- ing work for others, either as independent contractors or drivers of leased equipment. In these circumstances, we are satisfied that the provisions in ques- tion, requiring in effect that all hired or leased equipment be operated by persons occupying toward the certificated carriers the status of employees, were genuinely designed to protect unit work and stand- ards against erosion from subcontracting that might allow the same work to be performed under terms and conditions of employment less favorable than those prescribed in the Union's collective-bargaining agreement. We therefore find that the provisions in issue have a legitimate primary object and are not aimed at achieving secondary objectives tied to union interests outside the unit that Section 8(e) is designed to prevent. In reaching that conclusion, we have not overlooked the point stressed by the General Counsel that the provisions in question nec- essitate changes in previously long-established business relationships between the carriers and those owner-operators and fleet owners of leased equipment whom the provisions affect. We are unable to agree, however, that this circumstance is sufficient in itself to estab- lish an unlawful secondary objective. Obviously, any agreement pro- hibiting or restricting the subcontracting of unit work has an impact on business relationships, actual or potential, and often requires a total cessation of existing business relationships. Yet, we have long held that agreements banning or curbing the subcontracting of unit work are not unlawful for that reason alone. If the clauses are otherwise lawful, the mere fact that, as an incident thereto, a ces- sation in business relationships may flow from their operation is not alone enough to establish an unlawful secondary object within the intent of Section 8(e). To conclude otherwise would mean that unions would be limited to negotiating clauses prohibiting or restrict- ing subcontracting to those situations where the employer is not engaging in any subcontracting at the time of the making of the contract. Under that view, once work had been subcontracted it could never be considered to be unit work because it would disrupt business relationships to require the employer to cease doing business with its subcontractors. We have been cautioned against such a result by the judicial admonition that the "'cease doing business' language in Section 8 (e) cannot be read literally." 21 The requirement that the owner-operators or other drivers of leased equipment performing work for the carriers be employees per- a Wilson, supra, 713. Also see the language of the Fifth Circuit Court of Appeals in Houston Insulation Contractors Association Y. N L R.B., 357 F.2d 182, 188-189- (C.A. 5). 100 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 'mits the carriers to enter into equipment leasing agreements with any- one. The only limitation is that those driving the leased equipment for the certificated carriers be "employees" while performing such work so they may be required to observe all the standards and condi- tions prevailing in the unit.22 This prevents the impairment of the terms and conditions negotiated by the Union for its members in the unit, and removes the threat of loss of unit work by removing the economic advantage of ass bgning such work to independent contrac- tors. The Unions' goal, and the thrust' of the clause in question, is to assure the performance of unit work by unit employees in accordance with the terms and conditions set out in the Unions' contracts with the employers governing the greater part of the work performed and controlled from their, respective '' locations 28 In such circumstances, the clauses cannot be considered to be invalid subcontracting clauses, such as those which allow sulbcoiltractin'g•"outside the unit but limit -silch subcontracting only to such subcontractors as are signatories to a union agreement. We find no merit' in, the- General Counsel's argument that these clauses are inherently unlawful under Section 8 (e) because they'have the effect of requiring owner-operators and other drivers of leased ra The maintenance of wage,and labor .standards ' in the trucking ' field has been notori- ously difficult. One effort by a union to police its wage standards was before us recently in Local Union No. 282, IBT (F. Mascali c8.Sons, Inc.), 155 NLRB 973, wherein the union sought (unlawfully, as we found ) to prevent mix-plant operators who employed union members from also using ' independent "gypsy" owner -drivers who had no fixed base of operations. See also Arthur J. Goldberg v. Maine Asphalt Road Corporation , 206 F. Supp. 913 (D. Me. 1962 ), where the employers of owner-drivers attempted (unsuccessfully) to avoid the overtime provisions of the Fair Labor Standards Act by increasing the driver's stated hourly rate after 40 hours of work while simultaneously decreasing the stated hourly rental of the truck by the same amount , so that the total hourly pay for driver and truck remained constant regardless of overtime worked. av In this connection we note that the Unions' efforts to protect the standards which they have obtained through collective bargaining has been considered by the Supreme Court, albeit in a different context, to fall within the area of mandatory bargaining, and hence to be a right,protected by Section, 7 of this Act. In Local 24 , Teamsters Union v. Oliver, 358 U.S. 283, the Supreme Court in discussing article XXXII (which except for section 20 and other minor variations is identical to article 23 here ) reviewed the origin of that article and the leasing practices of carriers . The Court recognized the legitimate interest of unions in seeking "to protect lawful employee interests against what is believed, rightly or wrongly, to be `a scheme or device utilized for the purpose of escaping the payment of union wages and the assumption of working conditions commensurate with those imposed under union standards"' and described article XXXII as "a direct frontal attack upon a problem thought to threaten the maintenance of the basic wage structure established by the collective -bargaining contract." (358 U.S. at pages 294-295. ) Continu- ing, the Court observed that the rental arrangements at which article XXXII was directed "not only clearly bears a close relation to labor 's efforts to improve working conditions but is in fact of vital concern Ito the carrier 's employed drivers ; an inadequate rental might mean the progressive curtailment *of jobs through withdrawal of more and more carrier- owned vehicles from service ." Subsequently, in Local 24, Teamsters Union v. Oliver, 362 U.S. 605, 606 , the Court observed that the provisions in article XXXII ( section 4, article 23 here ) which "provide that hired or leased equipment , if not owner driven, shall be operated only by employees of the certificated or permitted carriers . . . are at least as intimately bound up with the subject of wages as the minimum rental provisions" con- sidered earlier in Local 24, Teamsters Union v. Oliver, supra. HIGHWAY TRUCK DRIVERS AND HELPERS, LOCAL 107 101 equipment while performing services for the certificated carriers to become and remain members of the Respondent Unions in conformity with the union-security clause in the governing collective-bargaining agreements. The legitimacy of the Unions' objective in requiring all drivers performing unit work to be unit "employees" subject to the applicable collective-bargaining agreements while performing such work is not converted into an unlawful "cease doing business" one within the intent of Section 8(e) simply because, as an incident to their unit employee status, the drivers are required to comply with all terms and conditions of the bargaining contract, including the union- security requirement. Any clause prohibiting' sulbcontracting would have a comparable effect where it results in increasing the amount of unit work available to the bargaining unit, leading to an increase in the number of unit employees becoming, subject to a valid union- security clause. Finally, it is argued that since the contracts contain a separate pro- vision dealing exclusively with 1 subcontracting, the Respondent Unions' position that the clauses are designed to prohibit subcon- tracting must be rejected. We do' not 'agree. Article 33(b) 24 on which the General Counsel relies to support this argument relates to future subcontracting of work by the Employer and does not deal with the primary dispute which gave rise to the additional pro- hibitions against subcontracting contained in the clauses alleged to be violative herein. We are satisfied that article 1, section 2(c), and article 23, either separately or taken together, do not have a secondary object within the meaning of Section 8(e): , We turn now to the issue of whether subparagraph (a) of article 33, "Subcontracting," 25 is unlawful under Section 8 (e), as contended by the General Counsel. That clause is' identical to one of the pro- visions which we found violative of, Section 8(e) in The Patton Warehouse, Inc 2e In that case we held the clause to be secondary because in our view it "dictate[d] to the Employer those persons with whom he shall be permitted to do business, rather than obliging him to refrain from contracting out work previously performed by employees in the bargaining unit.", 27 The Court of Appeals for the District of Columbia disagreed, however. It drew a distinction between secondary union-signatory subcontracting clauses which impose boycotts on nonsignatories of union agreements and primary union standards clauses "which merely require subcontractors to meet ,* Appendix B, infra. 25 See footnote 8, supra. 28 Truck Drivers Union Local 413, et al. (The Patton ' Warehouse, Inc.), 140 NLRB 1474, enfd. In part 834 F.2d 539 (C.A.D.C.). See also Chauffeurs, Teamsters and Helpers "General" Local Union No . 200 (Milwaukee Cheese Company), 144 NLRB 826. 27 Patton, supra, 1486. 102 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the equivalent of union standards in order to protect the work stand- ards of the employees of the contracting employer." 28 Interpreting the clause "as merely requiring that subcontractors observe the equivalent of union wages, hours, and the like," 29 ilie court found the clause to require only union standards and not union recognition; therefore, not interdicted by Section 8(e). We have since reconsidered our decision in the light of the court's reasoning and we now conclude in agreement with the court that the clause is primary, and thus not violative of Section 8(e),30 B. Cases 4-CC-. 67; 4-CC-268 Since we have concluded that the clauses are not in violation of Section 8(e), Respondent Unions Local 107 and 470 did not violate Section 8 (b) (4) (i) and (ii) (A) of the Act in striking and picket in- McCormick with an object of obtaining contracts containing these clauses which are alleged to be violative of Section 8(e). Accordingly, we shall dismiss the consolidated complaints herein. CONCLUSIONS OF LAw 1. Each of Respondent Unions is a labor organization within the meaning of Section 2(5) of the Act. 2. Each of employer-members of Respondent Associations is an employer within the meaning of Section 2(2) of the Act and each is 11 Truck Drivers Union Local 413 v. N.L.R B ., supra, 548. as Ibid. so Like the court, however , our conclusion Is based on the assumption that "in the absence of any indication to the contrary . . . [ the] scope [of the clause ] is limited to the contracting out of work which otherwise would be performed by members of the bargaining unit" ( 334 F.2dat 548). ' In this connection we note as did the court ,, that article 33 ( a) Is included in an article of the contract entitled "Subcontracting" and that it is expressly qualified by the sub- contracting provision in article 33(b) which immediately follows and is described as a "modification" of article 33(a). In these circumstances , we do not deem it appropirate for us to indulge in a presumption of illegality. As the Supreme Court stated in N L.R B. v. News Syndicate Oompany, Inc., 365 U.S. 695 , ". . . as we said in Teamsters Local 357 v. Labor Board, decided this day . , we wall not ,assume that unions and employers will violate a federal law . . . against a clear command of this Act of Congress As stated by the Court of Appeals 'In the absence of provisions calling eaplzcitly for illegal conduct,, the contract cannot be held illegal because it failed affirmatively to disclaim all illegal objectives."' ( 865,11A.695,' 699-700.) [Emphasis supplied.] With due respect for,the Circuit Court's views on the matter In Patton, supra, Members Fanning and Brown nevertheless believe that article 33 ( a) is unlawful as found by the Board in that proceeding . They do not reach that conclusion by presuming unlawfulness but by according the clause what they consider to be its natural meaning In its contractual context The Employer agrees under article 33(a) "tq refrain from using the services of any person who does not observe the wages, hours and conditions of employment estab- lished by labor unions having jurisdiction over the type of services performed " Members Fanning and Brown read this clause as applying to nonunit as well as unit work, even where the nonunit work Is of a different character, and as requiring the employees who perform such nonunit work to enjoy the work standards established by any union with trade jurisdiction over the work. Construed thusly, the effective scope of article 33(a) prescribes union working conditions for another employer 's employees In situations un- related to preserving the work and standards of the bargaining unit here Involved. HIGHWAY TRUCK DRIVERS AND HELPERS, LOCAL 107 103 engaged in commerce within the meaning of Section 2 (6) and (7) of the Act. 3. S & E McCormick, Inc., is an employer engaged in commerce within the meaning of Sections 2(6) and (7) and 8 (b) (4) of the Act. 4. Respondent Unions and Respondent Associations have not engaged in unfair labor practices within the meaning of Section 8 (e) of the Act. 5. Respondent Unions Locals 107 and 470 have not engaged in unfair labor practices within the meaning of Sections 8 (b) (4) (i) and (ii) (A) and 2 ( 6) and (7) of the Act. [The Board dismissed the complaints.] MEMBER ZAGORIA took no part in the above Decision and Order. APPENDIX A Excerpt From Stipulation 16. Respondent Unions subject to the objections reserved in para- graph 16 (A) below, would present the following testimony through witnesses as to the circumstances and object of the negotiations of the challenged clauses : (a) The first such Agreement containing provisions relating to owner-operators appeared in the CENTRAL STATES AREA OVER-THE-ROAD MOTOR FREIGHT AGREEMENT for the period starting October 1,, 1938 to October 31, 1939, ,and such provi- sions have appeared continuously in such Agreement , with amend- ments from time to time , down to the present time (Local 24 v. Revel Oliver, 358 U.S. 283, hereinafter cited as Oliver.) (b) The minimum lease contract rates which appear in Section 12 of Article 24 of Exhibit 1(b) resulted from surveys made by Unions and Carriers with regard to the cost of operation of leased equipment under other contracts in other areas and referred to in Oliver. Such rates have been increased from time to time to keep up with what the unions claim was the increased cost of operations and those rates were not intended to give to the owner-driver a profit for the use of his equipment. However, owner-drivers are free to negotiate lease rental rates which are in excess of the minimums established by the Agree- ment, and it is common for them to do so. (Oliver) (c) Such minimum lease rental rates apply only to the equipment which an owner-driver leases to a Carrier and which the owner-driver drives himself in the transportation of commodities for such Carrier. (Oliver) - 104 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (d) Article 1, Section 2 and Article 23 of the collective bargaining agreement (Exhibit 1 a) before the Board in this case are essen- tially the same contract clauses which were before the United States Supreme Court in the case of Local 24 v. Revel Oliver, 358 U.S. 283, and the statements contained in the record and in the opinion of the Court in that case accurately set forth the reasons, intent, pur- poses and motive for the negotiation of such contract clauses by the Respondent Unions. (Oliver) (e) The Union, negotiated the Article to prevent undermining of the negotiated drivers' wage scale resulting from the practice of Car- riers of leasing a vehicle from an owner-driver at a rental which returned to the owner-driver less than his actual costs of operation, so that the driver's wage received by him, although nominally the nego- tiated wage, was actually a wage reduced by the excess of his operat- ing expenses over the rental he received. (Oliver) (f) The Carriers and the Union have disputed since 1938 the terms of a Carrier's hire of a lessor's driving services with his leased vehicle. (Oliver) (g) The usual lease is by the owner of a single vehicle who hires out his services as driver with his vehicle. (Oliver) (h) The nub of the Union's position since 1938 has been that the Carriers abuse the leasing practice, particularly by paying inadequate rentals for the use of leased vehicles, with the result that part of the men's wages for driving was being used for the upkeep of their vehicles .... The Union's demands for contract provisions relating to owner-operators were designed also to secure a living wage for the lessor plus an adequate rental for this equipment. (Oliver) (i) A minimum rental clause first appeared in the 1938 agreement which also contained provisions comparable to Section 8, 10 and 14 of present Article 23, (Exhibit 1 -a). In 1939, after the Union claimed that "there were a lot of people that were transferring their title into other people's name to avoid the conditions of the contract," Section 3 was added to provide that "certificate and title to the equipment must be in the name of the actual owner." When the dispute brought the parties to the verge of a strike in 1941, the note to Section 1 and Sec- tions 13, 15, 16, 17 and 18 came into the agreement. (Oliver) (j) In 1946 the Union demanded agreement from the Carriers to abolish the leasing practice claiming the Carriers were taking advan- tage of certain provisions of the contract. This demand was compro- mised by the addition of Section 19 restricting leasing to Carriers who will agree to submit all grievances pertaining to owner-operators to joint Employer-Union grievance committees in each respective state; the section represented the compromise between the union posi- HIGHWAY TRUCK DRIVERS AND HELPERS, LOCAL 107 105 tion that it should abolish all owner-operators and the Carriers' con- tention that there should be no limitation. (Oliver) Section numbers referred to in subparagraphs (i) and (j) are the same section num- bers which appear in Articles 23 and 24 in Exhibits 1 (a) and 1(b) respectively. (k) The Union also urged in support of its contract demands relat- ing to owner-operators that the inadequacy of a rental `which means that the owner-operator makes up his excess costs from his driver's wages would result in the progressive curtailment of jobs through withdrawal of more and more Carrier-owned vehicles from service. (Oliver) 1. The purpose and intent of the contract clauses in question is to preserve work covered by the contracts in evidence as Exhibits 1 (a) and 1(b), to employees within the collective bargaining unit. (Arti- cle 1, Section 2; Article 23, Sections 1 and 4 of the Exhibit 1(a); Local 24 v. Revel Oliver, 358 U.S. 283 at 298). (m) Drivers of fleet-owned equipment are also required to become employees of the Carrier under the provision of the Agreements. However, the lease rental rate which the Carriers pay to the fleet- owner for the use of his equipment is subject to negotiation between the fleet-owner and the Carrier, and is not in any `way regulated by the contract. (Oliver) (n) The reason and object for -requiring that all drivers of leased equipment including drivers of fleet-leased equipment become employ- ees of the Carrier is the same as the relating to owner-operators, that is, to assure the payment of negotiated drivers' wages and to assure that work covered by the collective bargaining agreement be per- formed only by employees-covered by the collective bargaining agree- ment. (Oliver) APPENDIX B ADDITIONAL CLAUSES ALLEGED TO BE VIOLATIVE OF SECTION 8(e) I Cases Nos. 1-CE-7-8 and 4-CC-267-268 ARTICLE 23 (City Cartage Agreement) ARTICLE 24 (Over-The-Road Agreement) Owner Operators Effective July 1, 1963 * * Section 1. -' Owner-Operators (see note), other than certificated or permitted carriers, shall not be covered by this Agreement unless affiliated by 1 Consolidated Complaints , General Counsel's Exhibits 1 (i) and 1(n). 106 DECISIONS OF NATIONAL LABOR RELATIONS BOARD lease with a certificated or permitted carrier which is required to operate in full compliance with all the provisions of this Agreement and holding proper ICC and state certificates and permits. Such Owner-Operators shall operate exclusively in such service and for no other interests. (Note: Whenever "Owner-Operator" is used in this article, it means Owner-driver only, and nothing in this article shall apply to any equipment leased except where Owner is also employed as a driver.) Section 0. This type of operator's compensation for wages and working con- ditions shall be in full accordance with all the provisions of this Agreement. The Owner-Operator shall have seniority as a driver only, provided, however, that owner-drivers shall not bump onto company equipment except where a vacancy occurs or the company adds additional equipment in which event he may bump onto such equipment, provided further that if he does so bump he shall go to the bottom of the seniority roster for work preference but shall have se- niority from original date of hire for purposes of layoff and all other contract benefits. In the event of layoff he shall exercise his seniority from his original date of hire. After bumping as provided above, he shall accumulate seniority for all work preferences from the date of bumping onto company equipment. Section 3. Certificate and title to the equipment must be in the name of the actual owner. Section 4. In all cases, hired or ]eased equipment shall be operated by an employee of the certificated or permitted carrier. The Employee expressly reserves the right to control the manner, means and details of, and by which, the Owner-Operator performs his services, as well as the ends to be accomplished. Section 5. Certificated or permitted carriers shall use their own available equipment, together with all leased equipment under minimum thirty- day (30 bona fide lease arrangements, on a rotating board, before hir- ing any extra equipment. Section 6. Separate checks shall be issued by the certificated or permitted car- riers for driver's wages and equipment rental. At no time shall the equipment check be for less than actual miles operated. Separated checks for drivers shall not be deducted from the minimum truck ren- tal revenue. The driver shall turn in time direct to the certificated HIGHWAY TRUCK DRIVERS AND HELPERS, LOCAL 107 107 or permitted carrier. All monies due the Owner-Operator may be held no longer than two (2) weeks, except where the Lease of Equip- ment Agreement is terminated and in such case all monies due the operator may be held no longer than thirty (30 days from the date of the termination of the operation of the equipment. Section 7. Payment for equipment service shall be handled by the issuance of a check for the full mileage operated, tonnage or percentage, less any agreed advances. A statement of any charges by the certificated or permitted carrier shall be issued at the same time, but shall not be deducted in advance. Section 8. The Owner-Operator shall have complete freedom to purchasing gasoline, oil, grease, tires, tubes, etc., including repair work, at any place where efficient service and satisfactory products can be obtained at the most favorable prices. Section 9. There shall be no deduction pertaining to equipment operation for any reason whatsoever. Section 10. The Employer or certificated or permitted carrier hereby agrees to pay road or mile tax, social security tax, compensation insurance, public liability and property damage insurance, bridge tolls, fees for certificates, permits and travel orders, fines and penalties for inade- quate certificates, license fees, weight tax and wheel tax, and for loss of driving time due to waiting at state lines, and also cargo insurance. It is expressly understood that the owner-driver shall pay the license fees in the state in which title is registered. All tolls no matter how computed must be paid by the Employer regardless of any agreement to the contrary. All taxes or additional charges imposed by law relating to actual truck operation and use of highways, no matter how computed or named, shall be paid 'by the carrier, excepting only vehicle licensing as such, in the state where title is registered. Section 11. There shall be no interest or handling charge on earned money advanced prior to the regular pay day. Section 100. (A) All certificated or permitted carriers hiring or leasing equip- ment owned and driven by the dwner-driver shall file a true copy of the Lease Agreement covering the owner-driver equipment with the Joint Area Committee. The terms of the lease shall cover only the equipment owned and driven by the owner-driver and shall be in com- 108 DECISIONS OF NATIONAL LABOR - RELATIONS BOARD plete accord with the minimum rates and conditions provided herein, plus the full wage rate and supplementary allowances for drivers as embodied elsewhere in this Agreement. (B) The minimum rate for leased equipment owned and driven by the owner-driver shall be : Single Axle, Tractor only-------------------- 101/2¢ per mile Tandem Axle, Tractor only------------------- 11¢ per mile Single Axle, Trailer and 35 to 40 foot tandem trailer only------------------------------- 4¢ per mile (with $8.00 minimum daily guarantee.) Tandem Axle, 40 foot over, Trailer only ------------------------------------- 5¢ per mile (with $10.00 minimum daily guarantee.) Minimum daily guarantee for trailers does not apply to Saturday, Sunday or holidays, it applied to either the first day or last day of use, but not both. The above rates also apply to deadheading. The above rates are based on twenty-three thousand pounds (23,000) load limit for single axle tractors and twenty-seven thousand pounds (27,000) load limit for tandem axle tractors. On load limits over twenty-three thousand pounds (23,000) there shall be 1/2¢ additional per mile for each one thousand pounds (1,000) or fraction thereof in excess of twenty-three thousand pounds '(23,000). There shall be as minimum guarantee of twenty-five thousand pounds (25,000) for leased single axle tractors and twenty-seven thousand pounds (27,000) for leased tandem axle tractors owned and driven by the owner-driver. During the first year of a lease, there shall be a minimum guarantee of $100 a month for rental of single axle tractors unless the lease is terminated by mutual agreement, or for just cause (which does not include 'lay-off). There shall-' be an- offset against such minimum 'monthly guarantee to the extent, that rental income exceeds the mini- mum mileage' rental revenue provided herein, and to the extent of other for hire rental revenue during periods of lay-off. The carrier may, at its option, provide a minimum guarantee of 26,000 pounds for single axle tractors in lieu of the minimum monthly guarantee provided herein. - ' Nothing herein shall apply to leased equipment not owned by the driver: The minimum rates set forth above result from the joint determi- n tioii of 'the parties that such rates represent only the actual cost of operating such equipment. 'The parties have not attempted to nego- tiate a profit for the owner-driver. HIGHWAY TRUCK DRIVERS AND HELPERS , LOCAL 107 109 Section 13. Driver-owner mileage scale does not include use of equipment for pickup or delivery at point of origin terminal or at point of desti- nation terminal, but shall be subject to negotiations between the local union and company. Such negotiations shall be only for the purpose of protecting the wage rate of the driver only as an employee. Failure to agree shall be submitted to the grievance procedure. Section 14. There shall be no reductions where the present basis of payment is higher than the minimums established herein for this type of oper- ation. Where Owner-Operator is paid on a percentage or tonnage basis and the operating company reduces its tariff, the percentage or tonnage basis of payment shall be automatically adjusted so that the Owner-Operator suffers no reduction in equipment rental or wages, or both. Section 15. It is further understood and agreed that any arrangements which have heretofore been entered into between members of this Union, either among themselves or with the Employer or with the aid of the Employer, applicable to owner-driver equipment contrary to the terms hereof, shall be dissolved or modified within thirty (30) days after the signing of this Agreement so that such arrangements shall apply only to equipment of the owner-driver while being driven by such owner-driver. In the event that the parties cannot agree on a method of dissolution or modification of such arrangement to make the same conform to this Agreement, the question of dissolution or modification shall be submitted to arbitration, each party to select one member of the Arbitration Board, and the two so selected to choose a third member of said Board. If the two cannot agree upon the third within five (5) days, he shall be appointed by the Joint Area Com- mittee. The decision of said Board is to be final and binding. Section 16 It is further agreed that the intent of this clause and this entire Agreement is to assure the payment of the Union scale of wages as provided in this Agreement and to prohibit the making and carry- ing out of any plan, scheme or device to circumvent or defeat the payment of wage scales provided in this Agreement. This clause is intended to prevent the continuation of or formation of combina- tions or corporations or so-called lease of fleet arrangements whereby the driver is required to and does periodically pay losses sustained by the corporation or fleet arrangement, or is required to accept less than the actual cost of the running of his equipment, thus, in fact, reducing his scale of pay. 110 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Section 17. It is further agreed that if the Employer or certificated or per- mitted carrier requires that the "driver-owner-operator" sell his equipment to the Employer or certificated or permitted carrier, directly or indirectly, the "driver-owner-operator" shall be paid the fair true value of such equipment. Copies of the instruments of sale shall be filed: with the,Union and unless objected .to within, ten (10) days shall be deemed satisfactory. If any question is raised by the Union as to such value, the same shall be submitted to arbitration, as above-set forth,;for determination. The decision of the Arbitra- tion Board shallh,be_ final 'and binding. Section 18. •,It •is further agreed thatithe Employer or certificated or permitted carrier will not, devise or put into operation any scheme, whether herein enumerated- or not, • to defeat t the terms of the Agreement, wherein the provisions as to compensation for services on and for use of equipment owned by owner-driver shall be lessened; nor shall, any' owner,driver lease be,:•cancelled for the purpose of depriving Uniori,employees f' employment, 'and' any such, complaint that should arise; pertaining to such cnllation of lease of-violation under this section-shallbe subject to,Article-7. Section! 19. _ '• The use of individual Owner-Operators shall be permitted by all certificated or, permitted, carriers who will agree to submit all grievances pertaining to Owner-Operators to the.-Joint Area Com- mittee. It is understood and agreed that all such grievances will, be promptly heard and decided with the specific purpose in mind of : (1) Protecting provisions of the Union contract; (2) Prohibiting any and all violations directly or indirectly of contract provisions relating to the proper use of individual owners; (3) Prohibiting any attempts by any certificated or permitted carrier in changing his operation which will affect the rights of drivers under the terms of the contract, and generally the certificated or permitted carriers agree to assume responsibil- ity in policing and doing everything within their power to eliminate all alleged abuses in the use of owner-drivers which resulted' in the insertion.of Section 19 (Article 33) in the original 1945-47 central states over-the-road contract; •(4) Owner-driver operations to be terminal to terminal, except where no local employees to make such deliveries or otherwise agreed to in this contract; (5) The certificated or permitted carriers agree that they will, with a joint meeting of the Unions, set up uniform rules and practices under which all such cases will be heard; HIGHWAY TRUCK DRIVERS AND HELPERS, LOCAL 107 111 (6) It shall be considered a violation of the contract should any operator deduct from rental of equipment the increases pro- vided for by the 1963 amendments or put into effect any means of evasion to circumvent actual payment of increases agreed upon effective for the period starting January 1, 1963 and ending August 31, 1964. (B) No Owner-Operator shall be permitted to drive or hold senior- ity where he owns three or more pieces of leased equipment. This provision shall not apply to present Owner-Operators having three or more pieces of equipment under lease agreement, but such Owner-Operator shall not be permitted to put additional equipment in service so long as he engages in work covered by this Agreement or holds seniority. Where such Owner-Operator drives, he can hold seniority where he works sixty (60) percent or more of time. Section 20. All leases,- agreements, or arrangements between carriers and Owner. Operators shall contain the following statements : The equipment which is the subject of this lease shall be driven by an employee of the lessee at all times that, it is in the service of the lessee. If the lessor is hired as an employee to drive such equipment he shall receive as rental compensation for the use of such equip- ment no less than the minimum rental rates, allowances, and conditions (or the equivalent thereof as approved by the Joint Area Committee), established by this Agreement for this type of equipment, and in addition thereto, the full wage rate and supplementary allowances for drivers (or the equivalent thereof by the Joint Area Committee). To the extent that any provision of this lease may conflict with the provisions of this Agreement as it applies to equipment driven by the owner such provision of this lease shall be null and void and the provisions of such agreement shall prevail. ARTICLE 33 (Over-The-Road Agreement) ARTICLE 30 ( City Cartage Agreement) Sub contracting * * * * * * A (b) For the purpose of preserving work and job opportunities for the employees covered by this Agreement, the Employer agrees that no work or services presently performed or hereafter assigned to the collective bargaining unit will be subcontracted, transferred, leased, assigned or conveyed in whole or in part to any other plant, person or non-unit employees, unless otherwise provided in this Agreement. 112 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Employer may subcontract work when all of his regular employ- ees are working, except that in no event shall road work presently performed or runs established during the life of this Agreement be farmed out. No dock work shall be farmed out except for existing situations established by agreed-to-past practices. Occasional overflow loads may be delivered by drivers other than the Employer's employees provided that this shall not be used as a subterfuge to violate the provisions of this Agreement. Loads may also be delivered by other agreed-to-methods or as presently agreed to. The normal, orderly interlining of freight for peddle on an occa- sional basis, where there are parallel rights, and when not for the purpose of evading this Agreement shall be permitted. Alleged violations of this provision shall be submitted to the grievance procedure. J. Duncan Company and United Steelworkers of America, AFL- CIO. Cases 1-CA.-503, 5111, and 1-RC-8468. June 10, 1966 DECISION AND ORDER On February 18, 1966, Trial Examiner Thomas A. Ricci issued his Decision in the above-entitled proceeding, finding that the Respondent had engaged in was engaging in certain unfair labor practices and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the attached Trial Examiner's Decision. He also found that the Respondent had not engaged in certain other unfair labor practices and recommended that the complaint be dismissed with respect thereto. Thereafter, the Respondent, the General Counsel, and the Charging Party filed exceptions to the Trial Examiner's Decision and supporting briefs. 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 proceeding to a three- member panel [Chairman McCulloch and Members Fanning and Brown]. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions, briefs, and the entire record in this proceeding, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner, to the extent consistent herewith. 1. We agree with the Trial Examiner that the Respondent engaged in independent violations of Section 8(a) (1) of the Act and that it 159 NLRB No. 3.