Chicago Tri-Cities Motor Freight, Inc.

668 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Chicago Tri-Cities Motor Freight, Inc. and Alvin A. Seifert and George Jacobs and Windle Tetrick. Cases 38-CA-234 and 38-CA-263 (formerly 13-CA-7608) December 1, 1967 DECISION AND ORDER BY MEMBERS FANNING, JENKINS, AND ZAGORIA On June 22, 1967, Trial Examiner George L. Powell issued his Decision in the above-entitled proceedings, finding that Respondent had not en- gaged in the unfair labor practices alleged in the complaint, and recommending that the complaint be dismissed in its entirety, as set forth in the attached Trial Examiner's Decision. Thereafter, the General Counsel filed exceptions to the Trial Examiner's Decision and a supporting brief, and the Respond- ent filed a reply brief to the General Counsel's exceptions. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its powers in connection with this case to a three- member panel. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions, the briefs, and the entire record in the case, and hereby adopts the findings, conclusions, and recommenda- tions of the Trial Examiner. I ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the Recom- mended Order of the Trial Examiner and hereby or- ders that the complaint be, and it hereby is, dismissed. I Unlike the Trial Examiner, we find that the General Counsel's allega- tion that Respondent violated Section 8(a)(1) and (3) by its discriminatory cancellation of the leases of five of its tractor owner over-the-road drivers in October 1966, was adequately litigated at the hearing. However, we sustain the Trial Examiner's finding that the record does not support this allegation. The complaint consolidated two cases and alleged that Respondent violated Section 8(a)(1), (3), and (4) of the National Labor Relations Act, as amended, herein called the Act, by: (a) reducing the rate of pay of employee Alvin A. Seifert on April 21, 1966, because he had filed grievances or attempted to implement his rights under the collective-bargaining agreement between Respondent and Local No. 371 of Chauffeurs, Teamsters and Helpers Union, herein called Local 371; (b) terminating the em- ployment of Seifert as an over-the-road driver on December 2, 1966; and (c) terminating the employment of George Jacobs and Windle Tetrick as over-the-road drivers on November 28, 1966, because, in the cases of (b) and (c), said employees had filed grievances or were attempting to implement their rights under a collective- bargaining agreement between Respondent and Local No. 710 of the Teamsters, herein referred to as Local 710. Seifert's pay was reduced on April 21, 1966. He filed his charge in Case 38-CA-234 on September 6, 1966, which he amended on December 19, 1966. The charge in Case 38-CA-263 was filed on October 3, 1966. The parties were capably represented throughout the trial of the case. Comprehensive and thoughtful briefs were received from Respondent and from the General Counsel on April 17, 1967. Upon the entire record of the case, the briefs filed, and from my observation of the witnesses, including their demeanor while on the witness stand, I make the findings of fact and conclusions of law hereinafter set forth and recommend that the complaint be dismissed in its entirety. FINDINGS OF FACT I. RESPONDENT'S BUSINESS OPERATIONS Respondent is an Illinois corporation engaging in busi- ness as a motor freight carrier with terminals in Chicago and Rock Island, Illinois. During the past calendar or fiscal year, Respondent purchased and caused to be transported and delivered to its places of business trucks, truck parts, oil and other goods and materials valued in excess of $50,000, which goods and materials were trans- ported and delivered to its terminals and places of busi- ness in interstate commerce directly from States of the United States other than the State of Illinois. During the same period of time Respondent performed services valued in excess of $50,000 for various enterprises located in States other than the State of Illinois. Upon the basis of the foregoing facts, I find that Respondent is engaged in, and during all times material was engaged in, a business affecting commerce within the meaning of Section 2(6) and (7) of the Act and that its business operations meet the standards fixed by the Board for assertion of jurisdiction. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE GEORGE L. POWELL, Trial Examiner: With Respond- ent represented, this unfair labor practice case was tried before me in Rock Island, Illinois, on March 16, and 17, 1967, on the complaint of the General Counsel of the Na- tional Labor Relations Board, herein called the Board, and the answer of Chicago Tri-Cities Motor Freight, Inc., of Rock Island, Illinois, herein called the Respondent. II. THE LABOR ORGANIZATION INVOLVED It is admitted and I find that the Chauffeurs, Teamsters and Helpers Union, Local No. 371 and Local Union No. 710 are labor organizations as defined in Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES Respondent, maintaining terminals in both Rock Island and Chicago, Illinois, is engaged in the trucking industry 168 NLRB No. 86 CHICAGO TRI-CITIES MOTOR FREIGHT with a franchise to transport freight between those two cities. Its principal offices are located at Rock Island, Illinois. Dr. Millo Brady is president of Respondent Company, and is responsible for establishing corporate policy. He became. associated with it 12 years ago and became the sole owner in April 1965 . Donald Lees is terminal manager of the Chicago operation , and George Totto is in charge of the terminal at Rock Island, Illinois. Lees and Totto are responsible for the day-to -day operations of the Company. Respondent's operation is not small. Brady testified that Respondent had approximately 33 city drivers in Rock Island and 21 city drivers in Chicago . At the time of the hearing there were 2 over-the-road drivers based in Chicago and 13 over-the-road drivers based in Rock Island. The two over-the-road drivers in Chicago drove their own tractors which are leased to Respondent. Also 2 of the 13 over-the-road drivers in Rock Island drove their own tractors which were leased to Respondent. All others drove company-owned or leased equipment. These tractors, depending upon the precise equipment, would cost between $ 15,000 and $23,000 each. In October 1966, Respondent had four owner-operated tractors in Chicago and four owner-operated tractors in Rock Island. Under the terms of an owner-operator lease the tractor owner either drove or provided the driver and was paid approximately $ .16 per mile for its use plus an additional $ . 11 per mile for the driver (whose pay was covered by the union contract).' The owners drove their tractors in the instant case. The four owner operators based in Chicago would haul a trailer with their tractor from Chicago to Rock Island , drop that trailer and pick up another for the return trip back. One round trip (run) per day is all that was made under these owner-operator leases. The four owner operators in Rock Island also made one run per day to Chicago and back exchanging trailers at the terminal in Chicago. Respondent's employees are represented by two dif- ferent locals of the Teamsters . Local 710 represents em- ployees dispatched out of Chicago, whereas Local 371 represents those dispatched from Rock Island. In Chicago, Local 710 had two separate seniority lists; one for over-the-road drivers and one for city drivers. And seniority could not be transferred from one list to the other. It was different in Rock Island . Only one seniority list existed there and city drivers and over-the-road drivers were lumped together and would bid once a year for over-the-road or city driving jobs on equipment owned or leased by Respondent . Employees could transfer from one terminal to the other but could not transfer their seniority with them. In October 1966, the eight over-the-road owner- operated tractor drivers of Respondent ranked in order of their seniority as follows: Rank Chicago Rock Island 1 Arlon Mum Alfred Cooper 2 Tetrick Lyman Withrow 3 Jacobs Seifert 4 Hans Gudd Warren F. Herzberg, Sr. ' The lease payments varied slightly Seifert's and Jacobs' called for $ 2675 per mile for tractor plus driver , whereas Gudd's was $.27. Tet- ricks' was stipulated to be same as Seifert's. Steifert testified the $.2675 was arrived at by adding $ 15625 for the tractor to $. 1 1 125 for the driver. 669 Cancellation of Owner-Operator Leases In October 1966, and pursuant to the terms of the owner-operator leases under which either party could cancel on 30 days' written notice , Respondent canceled five of the eight owner-operator leases. The letter of can- cellation to Jacobs, dated October 14, 1966 (which is substantially similar to the other letters), stated: This is to inform you that thirty days from receipt of this letter, as per your signed lease -contract with Chicago Tri Cities Motor Freight Inc., the service of your tractor will no longer be needed and your lease- contract will be terminated. Chicago Tri Cities Motor Freight Inc. is starting a program of replacing owner-operated equipment with company equipment. Respondent replaced the equipment covered by the can- celed leases with three company-owned tractors plus three tractors obtained under a new lease arrangement with Gudd and Herzberg whereby Respondent could use the tractors in either over-the-road work or city work and also could use the tractor with different drivers thereby making it possible that the tractor could work 24 hours per day. As noted earlier, only the owner drove his trac- tor under the owner-operator type lease and but one round trip (344 miles) per day was driven. The five canceled owner-operator leases involved the three owners having the least seniority in Chicago, i.e., Gudd, Jacobs, and Tetrick, and the two having the least seniority in Rock Island, i.e., Herzberg and Seifert. After the 30-day notices of cancellation were given, the leases were due to expire on November 14, 1966, for Jacobs, Tetrick, Gudd, and Herzberg and on November 18, 1966 , for Seifert. It should be noted that although the owner-operator leases were canceled the owners continued in employ- ment as drivers under the contract between the Team- sters and Respondent. Gudd and Herzberg Respondent's first lease with Gudd was dated June 17, 1966, for a term of 1 year beginning June 20 , 1966. As noted above, this lease was due to expire on November 14, 1966 , having been canceled on October 14. On November 28, 1966 , Gudd leased his tractor for 1 year to Respondent for 16-1/2 cents per mile for freight han- dling by Respondent. This new lease pays one-half cent per mile more for the tractor than the old lease but gives Respondent the exclusive control over the tractor with authority to assign other drivers to operate it. (Sec- tion 7 of the new lease together with the money con- sideration distinguish it from the former owner -operator type lease.) After Herzberg's owner-operator lease was canceled he entered into a 1-year lease with Respondent for two of his tractors with an option by Respondent for another under terms similar to those offered Gudd ; that is, at $.165 per mile with the tractors being under the sole con- trol of Respondent thereby allowing Respondent to as- sign the tractors to either over-the-road or city work, or As there is no controversy over the amount of the lease , I will use the sum $.27 divided into $.16 for the tractor and $A t for the driver for ease in writing the Decision 670 DECISIONS OF NATIONAL a combination of both and with sole authority in Re- spondent to assign drivers to the leased tractors. Jacobs Jacobs, an experienced driver of some 25 years, began driving for Respondent in September 1965 as an over- the-road owner-operator. His last lease from December 15, 1965, to December 15, 1966 , was canceled effective November 14, 1966, but he continued driving thereunder until November 28, 1966, when he was offered a new lease for his tractor on same terms as the Gudd and Herz- berg leases. But Jacobs refused to accept the new lease because, as he admitted, he did not want another driver on his tractor. Also he refused on November 28, 1966, to drive company equipment . He was discharged by letter dated November 29, 1966 , for refusing the assignment to drive made on November 28, 1966. Tetrick Tetrick had been employed as an owner -operator from August 1962 . Tetrick was not offered a new lease after his 1965-66 owner-operator lease was canceled by 30 days' notice given on October 14, 1966 . His employment had been previously terminated by Respondent by letter dated November 9, 1966 , effective November 14, 1966. He had been involved in an accident on November 2 while driving his tractor, leased to Respondent, for another trucking firm . This was in violation not only of his lease with Respondent ,2 but in violation of the Local Union's contract and in violation of Interstate Commerce Commission regulations. Seifert Seifert was first employed by Respondent in 1961. He had always been an owner-operator. He continued as an over-the-road driver on his own equipment after cancella- tion of his lease until November 21, 1966, when he was assigned to Respondent 's equipment as a city driver on the basis of his union seniority . His seniority was not enough to permit him to drive company-owned equip- ment over the road. He was not offered a new lease such as was offered Jacobs, Gudd, and Herzberg because of his well-known strong opinion of not letting anyone else drive his tractor. Seifert refused the assignment to city work on Re- spondent's equipment and after two warning letters dated November 28 and November 30 he was terminated on December 2, 1966, for failure to work as a city driver. Arbitration Award for Jacobs and Tetrick Jacobs and Tetrick grieved their discharges, above, with their Union. The Joint Board of Arbitration heard the grievances on December 21, 1966, in accordance 2 By its terms , the contract terminated automatically when Tetrick leased his tractor to the other firm The General Counsel attempted to discount the gravity of this action with testimony that Tetrick was only doing a favor for a friend and neighbor . The General Counsel further LABOR RELATIONS BOARD with the contract between the Teamsters and Respond- ent. The Joint Board ruled in favor of Jacobs and Tetrick because their discharges had not been preceded by at least one warning notice. Accordingly , Respondent was directed to employ them as over-the -road drivers on Respondent's equipment. Both Jacobs and Tetrick ad- mitted they agreed to return to work on December 21. However, when telephoned by Respondent to report for work December 21, Jacobs reported that he had changed his mind and decided against driving Respondent's "junky equipment." The only way he would return to work was as an owner-operator. Likewise , Tetrick ad- mitted he refused to report when called on December 21 saying, "I don't want the job, driving company equip- ment, and you can stick it up your ...." Finally, after let- ters of warnings were sent Jacobs and Tetrick by Respondent for their refusal to accept assignment as over-the-road drivers on company equipment, their employment was terminated by letters dated December 27 and December 30, 1966, respectively. Reduction of Pay of Seifert The term of Seifert's last 1 -year lease was from December 15, 1965, to December 15, 1966 . As noted earlier, it provided for a flat cents -per-mile rate for the lease of his tractor plus his driver's wages. However, by letter from Respondent dated April 21, 1966 , his pay was changed to ton-mile rather than flat rate. The letter is as follows: Mr. Hughes of the Teamsters & Chauffeurs Union was here this morning and informed me that the $180.00 must be paid to you and I shall see that it is with your next week check. I was also informed that your pay beginning Monday will be 12 cents per mile for your tractor and a minimum of 11 cents a mile for drivers pay. This 23 cents per mile will cover all loads up to 27,000 pounds, each additional 1000 pounds will be paid 1 /2 cents a mile. Starting Mon- day, your pay will be figured on this basis. [These rates are the union contract rates.] I am attaching copy of this to your lease contract so it will become a part of your contract and would ap- preciate your signing the same. The $180 referred to in the letter was the payment to Seifert of the Federal Highway Use Tax which he had first paid, had grieved for reimbursement, and for which his Union insisted he be reimbursed. All other owner- operators paid this tax out of their own pockets and had not asked for reimbursement. There was some question of whether Seifert had asked to be put on ton-mile rather than flat rate or whether Respondent had done it uni- laterally. On this point, Seifert testified that he filed a grievance in May 1966 (G.C. Exh. 10-A) in which he asked for ton-mile pay from April 25, 1966 , back to June 1, 1965, but did not contest being on ton-mile. I find from all the evidence that Seifert was put on ton-mile at his and equates an ICC violation of running without a speedometer or odometer with Tetricks' action of unauthorized use of the tractor I am unable to agree with the General Counsel on either point and find his position lacking in ment. CHICAGO TRI-CITIES MOTOR FREIGHT 671 Hughes', his union business agent, request and agreement and that Respondent did not act unilaterally.3 Seifert, in the same grievance, claimed he was being discriminated against because the heavy gross loads were being pulled by drivers having less seniority. In this manner his take home pay per week under ton-mile was less than it was under flat rate. However, before April 21, 1966, Seifert had stated to fellow employee Withrow that he could make more money on the ton-mileage basis than on the flat cents-per-mile basis. Loads are assigned in Rock Island on the basis of seniority - the first available load being assigned to the most senior driver. This procedure is followed until all the loads are assigned or until all the drivers are assigned. Seifert has more seniority then Herzberg, yet Herzberg, says Seifert, was getting heavier loads and hence more pay because of payment on ton-mileage basis. The facts are that about 50 percent of the weight hauled by Re- spondent comes from a firm in Davenport, Iowa, named Alcoa. And normally the last loads each night are deliveries from Alcoa. Herzberg being less senior was normally assigned these last loads. Respondent was just getting into an air-truck lift opera- tion with American Airlines on a 24-hour basis. Company-owned equipment could be used in either city or over-the-road use whereas owner-operated tractors were only used over-the-road. The company-owned equipment acquired after October 1966 has been operated on two runs per day between Chicago and Rock Island as against one run per day under the old owner- operated equipment. The General Counsel failed to controvert the above testimony. With respect to the theory that Respondent was retaliating against Jacobs for filing grievances, the Respondent did not receive the letter from the Teamsters notifying it of Jacobs' October 10, 1966 , three grievances until 5 days after Jacobs' lease was canceled and there was no evidence that it had acquired knowledge of the grievances in any other manner. With respect to the theory that Respondent was retaliating because Jacobs notified the ICC of Respond- ent's violations of ICC regulations, there is no evidence that Respondent ever knew any one was informing against it much less that the informer was Jacobs. Respondent's Reasons for Cancellations of Leases Although not alleged in the complaint as a violation of the Act, the General Counsel seemed to be interested in attempting to prove that the termination of three of the five leases in October 1966 was a violation of the Act on the theory that Respondent was retaliating because these three employees had filed grievances with their Union or charges with the Board or had instigated investigations of Respondent by the ICC. Notwithstanding the fact that Respondent was not called upon by the formal pleadings to adduce evidence justifying its position on this point, or alerted to the fact that it might have to adduce evidence on the point, Doc- tor Brady credibly testified that the following were the reasons why Respondent terminated the leases: 1. It finally had the capital necessary to purchase addi- tional equipment; 2. Delivery was promised for November 1966 on some new tractor orders and after November 15 in each year a tractor in Illinois can operate on the following year's license thereby buying 13-1/2 months' use for the price of 12 months' use; and there was 3. Greater flexibility in operation in company-owned rather than owner-operator leased tractors. As to (1), above, Brady was convinced, whether cor- rectly so or not, that company-owned equipment would cost Respondent but $ .11 per mile as against the cost of owner-operated equipment of $ .16 per mile, and his study of other freight lines showed they graduated to company-owned equipment as they grew larger and ob- tained the necessary capital. He gave specific examples such as Carstensen Freight Lines and Roadway Express. As to (3), above, company-owned equipment was more flexible than owner-operated equipment. It could be driven 24 hours per day using different drivers. Further, 3 Hughes' testimony, which I credit, is as follows- Q. Now, was it Dr. Brady who suggested that Seifert be paid ton- mile or was it you? A. It was me and Seifert, that he be put under the ton-mile. (Hughes) He [Seifert] asked to go on ton-mule .... Brady's The General Counsel's Complaint, Theory, Discussion, and Conclusions The three alleged discriminatees had been owner- operators with Respondent since 1962 for Tetrick, 1963 for Seifert, and 1964 for Jacobs. As for Seifert the complaint in pertinent part alleged (a) that on or about April 21, 1966, and continuing Respond- ent reduced the rate of pay of Seifert; and (b) that on or about December 2, 1966, Respondent terminated Seifert as an over-the-road driver because of certain activities protected under the Act. The facts establish that on April 21, 1966, Seifert's rate of pay was changed from a cents-per-mile rate under a contract with Respondent to a ton-mileage basis provided under the union contract. But as the facts also show that this was done at Seifert's request and agreement between Seifert, the Union, and Respondent, I find no violation of the Act in this regard. The fact that Seifert was receiving less pay under the new rate because of the way the payloads were assigned was not pleaded in the complaint and was not completely litigated. Furthermore, the simple explanation given by Respondent was not refuted by the General Counsel. The heavier loads come later in the day after the more senior men had picked up their loads. Finally Seifert was terminated not as an over-the-road driver on December 2, but as an employee who refused assignment as a city driver on company equipment and after two warning letters had been sent him. His termina- tion as an over-the-road driver took place when his lease expired on November 18, 1966, yet even then he con- tinued to drive over-the-road until November 21, 1966. There is no allegation that the cancellation of the owner- operator lease was a violation of the Act. This aspect was not completely litigated. Finally, Respondent's reasons for cancellation were not refuted by the General Counsel. testimony, also credited, was that at a meeting of Hughes, Seifert, and Brady. It was decided that I should notify Mr. Seifert by letter that he would be placed on ton-mileage as the union - according to the terms of the contract. 672 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Accordingly, I find no substantial evidence in the case of Seifert and find that the General Counsel has not sustained the burden of proof he is required to carry to prove a violation of the Act. Accordingly, I will recom- mend dismissal of this complaint. As to the cases of Jacobs and Tetrick, the complaint al- leged that on or after November 28, 1966, they were ter- minated as over-the-road drivers for Respondent because of certain protected activities. Again no mention was made in the complaint that Respondent would have to answer to its cancellation of the owner-operator leases yet the reasons for this cancellation of five out of eight outstanding leases were given by Respondent. Cross-ex- amination of testimony given not in preparation of a defense to an allegation can not be considered raised to the dignity of "litigation." The termination of Jacobs' lease took place on November 14, 1966, following the 30 days' notice of cancellation. His discharge took place by letter on November 29, 1966, for his failure to accept as- signment to drive company equipment on November 28, 1966. The General Counsel is concerned in his brief that Jacobs had just purchased an expensive new tractor pur- suant to a rule established in September 1965, under which Respondent required leased tractors to be less than 5 years old and that somehow this helps to show that his discharge on November 29, 1966, violated the Act. The General Counsel fails to acknowledge that Respondent offered to lease Jacobs' new tractor at $ .165 per mile which was one-half cent more than the old lease yet somehow tries to cast doubt on Respondent's good faith in leasing tractors from Gudd and Herzberg at these new rates. Finally, the General Counsel fails to acknowledge that Jacobs also was offered driver employment but refused to drive Respondent's equipment. Jacobs only wanted to drive his own equipment. Under the circum- stances of this case this desire is not frustrated by a viola- tion of the Act. I find the General Counsel has failed to sustain his burden of proof in the case involving Jacobs and will recommend dismissal. As to Tetrick, his lease automatically terminated by its terms when he leased his tractor to another while it was ' The General Counsel had sought to cast suspicion on the motives of Respondent in cancelling the leases (again, this is not involved in the com- plaint) with testimony from Jacobs that back in May 1965 he was laid off because he had filed a grievance concerning his pay and that Brady so told him Brady denied this Based upon the demeanor of the witnesses, I credit Brady over Jacobs. General Counsel, through his own witness Withrow, attempted to show that Brady was fed up with Jacobs, Tetrick, and Seifert but this evidence under lease to Respondent . At that time of course it was in the 30 days' notice of cancellation period. Respond- ent's subsequent notice on November 9, 1966, to Tetrick called attention to the lease violation as well as the other violations . This is the reason , which I find to be used in good faith, Tetrick was not offered a new lease on November 28, 1966, if that is what the General Counsel was referring to in his complaint . The Respondent had subsequently offered Tetrick employment on its equip- ment which was refused with the comment by Tetrick that Respondent could stick its equipment "up your ...... Again, I find the General Counsel has failed to sustain his burden of proof and will recommend the complaint as to Tetrick be dismissed. The Board has stated the proposition many times that the burden is on the General Counsel to affirmatively establish discriminatory motivation in discharges and not on Respondent to disprove it. The most recent statement appears in Culinary Workers, Bartenders and Hotel Ser- vice Employees, Local 535, AFL-CIO, Case 21-CA-6776, 164 NLRB 555. CONCLUSIONS OF LAW 1. The Respondent is, and during all times material has been, an employer engaged in commerce and in a business affecting commerce within the meaning of Sec- tion 2(6) and (7) of the Act. 2. The Chauffeurs, Teamsters and Helpers Union, Local No. 371 and Local Union No. 710 are labor or- ganizations within the meaning of Section 2(5) of the Act. 3. The General Counsel has failed to establish by a preponderance of the evidence that Respondent is guilty of the violations of the Act alleged in the complaint.4 RECOMMENDED ORDER Accordingly, I recommend that the complaint be dismissed in its entirety. was not substantial. Withrow testified that on a date he could not re- member if Brady came out of his office saying "he'd had it with those guys " Then Withrow added, "Now, what guys he didn't specify " Not- withstanding this lack of identification, Withrow took it on himself to tell Jacobs, Tetnck, and Seifert of Brady's remarks, telling them that Brady was referring to them Withrow's remarks are irresponsible. As there was evidence of dissension among the drivers, such irresponsible remarks as made by Withrow would provide fuel for even greater dissension