Okeh Caterers

OKEH CATERERS Okeh Caterers ; Jameson, Inc.; and Frumento, Inc.' and Produce, Refrigerated & Processed Foods and Industrial Workers, Local Union No. 630, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, Petitioner. Case 21-RC-1 1130 November 7, 1969 DECISION AND DIRECTION OF ELECTION BY MEMBERS FANNING, BROWN, AND ZAGORIA Upon a petition duly filed under Section 9(c) of the National Labor Relations Act, as amended, a hearing was held before Leonard N. Cohen, Hearing Officer of the National Relations Board. The Employers and the Petitioner filed briefs which have been considered by the Board in making its decision in this case. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with this case to a three- member panel. The Board has reviewed the Hearing Officer's rulings made at the hearing and finds that they are free from prejudicial error. They are hereby affirmed. 3 Upon the entire record in this case,' the Board finds: 1. Okeh Caterers' is a corporation which is engaged in the manufacture and sale of packaged food products and the providing of industrial catering services to its customers. Okeh's business offices and its principal facility are located in Bell, California,' Jameson, Inc.,' and Frumento, Inc.' also provide industrial catering services for customers and operate their trucks out of Okeh's Bell location' Petitioner contends that Okeh, Jameson, and Frumento operate as a single-integrated enterprise out of Okeh's Bell facility and that accordingly, the Board should find them to be point employers for 'During the hearing, Petitioner amended its petition to include Jameson, Inc and Frumento, Inc as joint employers with Okeh Caterers While the hearing was still in progress, appearances were entered on behalf of Jameson, Inc and Frumento, Inc 'We find no merit in the Employers ' contention that the Hearing Officer committed prejudicial error by denying the Employers' motion to strike from the record certain remarks of Petitioner's counsel which allegedly are abusive, intemperate and scandalous in nature The Hearing Officer acted within his discretion in denying this Motion and, we can perceive no basis upon which it could be said that the ruling was prejudicial to the Employers' case 'The Employers have moved to correct the transcript in certain respects In the absence of any opposition thereto, the Motion is hereby granted 'Hereinafter referred to as Okeh 'Okeh also maintains smaller facilities in Anaheim and Burbank, California 'Hereinafter referred to as Jameson 'Hereinafter referred to as Frumento 'Jameson owns 34 trucks, 31 of which operate out of Okeh's Bell facility Frumento owns 5 trucks , 3 of which use the Bell property 535 purposes of jurisdiction and unit. The Employer argues that the operations of the three corporations are separate and distinct and therefore no joint employer finding would be justified. With respect to this issue, the record evidence establishes that although Okeh, Jameson, and Frumento are separately owned,' they represent themselves to the public as a single enterprise. All three corporations list Okeh's Bell facility as their business address and Okeh provides rent free offices for Jameson and Frumento and allows them the complete use of its facilities. The trucks owned by Jameson and Frumento display the sign, "Okeh Caterers" on the door and are otherwise indistinguishable from the trucks operated by Okeh. Jameson and Frumento trucks are repaired and serviced at Okeh's garage for which service a fee is charged. A common insurance policy covering liability and damage to both Okeh and Jameson's trucks' ° is maintained by Okeh which monthly bills Jameson for its share of the premiums. Okeh also has an arrangement with Jameson and Frumento whereby Jameson and Frumento are given a rebate on the amount of food products purchased from Okeh by Jameson and Frumento drivers. Finally, the integrated nature of the operation is demonstrated by the working relationship between the corporations and their respective lessee drivers. Although each corporation contracts separately for its own route drivers, all three corporations use identical lease forms, and it appears that all three corporations enter into the same type of contractual arrangement with their drivers. Also, the individual driver may be in some cases responsible to the management personnel of a corporation other than the one with which he has contractual relations, for, as Curtis Hoffman, the Employer's principal witness testified, the district managers and supervisors fill in for one another among the three corporations." On the basis of the foregoing, and the entire record, we find that Okeh, Jameson, and Frumento are joint employers engaged in a single integrated enterprise and that the combined total of their operations should be considered for jurisdictional purposes.' At the hearing, it was stipulated that Okeh is a California corporation which is engaged in the manufacture and sale of food products at wholesale and that such sales exceed $500,000 annually. It was further stipulated that Okeh annually _purchases products valued in excess of $50,000 from firms 'Mr Edward Jameson and Mrs Josephine Frumento are the sole owners and shareholders in their respective corporation and both Mr Jameson and Mrs Frumento are minority shareholders in Okeh In addition, Mr Jameson is the secretary-treasurer of Okeh and a member of its board of directors "Frumento 's trucks are covered by a separate insurance policy "At a later point in this testimony, Hoffman explained that because Frumento has only one operating manager, it does not assume responsibility for the operation or control of Okeh or Jameson drivers "City Cab Company , 167 NLRB No 97, compare International Union of Operating Engineers . 169 NLRB No 30 179 NLRB No. 84 536 DECISIONS OF NATIONAL LABOR RELATIONS BOARD directly outside the State of California. No jurisdictional information was presented with respect to Jameson and Frumento. However based upon the foregoing stipulation and our finding that the three corporations are joint employers, we find that Okeh, Jameson, and Frumento are employers engaged in commerce within the meaning of the Act, and that it will effectuate the purposes of the Act to assert jurisdiction herein. 2. The labor organization involved claims to represent certain employees of the Employers. 3. A question affecting commerce exists concerning the representation of certain employees of the Employers within the meaning of Section 9(c)(1) and Section 2(6) and (7) of the Act 4. Petitioner has requested a unit of all the catering truckdrivers employed by Okeh, Jameson, and Frumento at their Bell, California, facility. The Employers" contend that the catering truckdrivers are independent contractors and not employees. Concerning this issue, the record shows that the catering truckdrivers operate under lease arrangements with their respective Employer.' 4 The lease agreement which as previously noted is the same for all three Employers provides, inter alia, that the lessor will furnish to the lessee a catering truck and customer route in consideration for which the lessee agrees to pay a daily rental fee to the lessor. The lease, which is in force on a month to month basis but may be terminated by either party at any time for cause, also provides that the customer stops supplied by the lessor remain its property and by an addendum to the agreement, the lessee agrees that any customers solicited by him also become the property of the lessor. Although the lease agreement provides a fixed method of determining the lessee's rental fee, no effect is given to this provision. Instead, the lessor determines the daily rental based upon a variety of factors and the lessor may raise or lower the lessee's rental fee when in its judgment circumstances so warrant. By way of initial investment, the catering truckdriver is required to furnish very little. He must post a $200 cash bond to protect the Employer against future liability and he must also have sufficient funds to purchase his first day's inventory and to make change for customers, a total investment of approximately $175. Thereafter, the catering truckdriver is billed on a daily basis for his previous day's purchase of food products from Okeh, his daily rental fee, and miscellaneous expenses such as ice and truck lubrication charges. Although there is a conflict in the testimony as to the extent to which the catering truckdrivers are required to purchase their inventory from Okeh, all "For the reasons previously expressed, we find Okeh, Jameson, and Frumento to be joint employers for purposes of unit as well as jurisdiction "Okeh does not have signed lease agreements with all of its catering truckdrivers because several of these individuals were operating under leases with companies which were later absorbed by Okeh and they were not required by Okeh to enter into a new lease agreement drivers purchase at least a portion of their supplies from Okeh and as Okeh's vice president and general manager Curtis Hoffman admitted, when a driver buys more than 30 percent of his inventory from outside sources, the route is no longer profitable to Okeh. In situations where the particular driver's "buying out" practices become excessive,15 he will be requested to increase his order with Okeh, and in the event such persuasion fails, the driver may find that his rental fee has been increased. Certain of the characteristics usually found in an independent contractor relationship are present here. For example, the driver in most instances determines the retail price of the items he sells to customers,16 and hence, his margin of profit is determined by price he receives for his products less expenses. The driver also bears the loss for items he is unable to sell as well as the losses which might be occasioned by theft, damage to his products," or debts owed to him by customers to whom he has determined to extend credit. In addition as a cost of doing business, the driver may be required to purchase a health permit and business licenses by State and local authorities. Drivers can and do solicit new business and on occasion, they swap or trade customer stops with other drivers. Also the catering truck leased by the driver is completely at his disposal at all times. 18 He may keep the vehicle at the Bell location or elsewhere, and when the driver is not servicing regular route customers, he can, if he so desires, perform catering services on his own behalf without payment of any additional charge to his Employer. The drivers also do not share in the benefits Okeh provides for its employees, such as vacation time, pension benefits, and health and welfare coverage. Further, no deductions are made from the drivers' earnings for purposes of tax withholding, disability insurance, unemployment compensation, and social security coverage. From the foregoing, it cannot be disputed that the drivers exercise a considerable degree of independence in their operations, and the business acumen of the particular driver will have a direct bearing upon the earnings he will derive from such activity. However, it is also clear that the ultimate and effective control over the relationship resides with the Employers. As indicated earlier, the driver has no substantial investment in the equipment" or "Almost all drivers purchase at least a portion of their supplies from sources other than Okeh "In some cases, Okeh negotiates an arrangement with the customer whereby in return for the right to service the customer stop, Okeh agrees to provide a menu list of items at fixed prices for a period of usually I year "Because the catering trucks remain the property of the Employers, collision and liability insurance coverage is carried by the Employers However, the driver is responsible for the first $100 of a liability claim "in the event the driver experiences a breakdown while servicing the route, the Employers will provide free towing service and will make a substitute truck available "The value of a catering truck will range from $5,200 to $6,500 OKEH CATERERS 537 route he services, both of which remain the property of the Employer. His arrangement with his Employer can be terminated for cause at any time by the Employer and in such an event, the only obligation incurred by the Employer is its agreement to purchase the driver's inventory and compensate him for any equipment he had added to the catering truck. Also as the rental fee charged to the driver is subject to change at any time, the Employers at least have it within their power to limit the driver's profit by demanding a higher rental fee Likewise, although the driver is not theoretically required to purchase his supplies from Okeh, the driver can be discouraged from engaging in excessive "buy out" practices by increasing the rental fee.20 In these circumstances, we do not believe it can properly be said that the driver exercises the type of control characteristic of an independent contractor. Accordingly on the basis of the foregoing and the entire record, we conclude that the Employers have reserved the right to control the manner and means as well as indirectly the result of the work performed by the catering truckdrivers, and that these drivers are therefore employees of the Employers and not independent contractors.21 As an alternative position, the Employers contend that if the catering truckdrivers are not found to be independent contractors, the Board should conclude that the catering truckdrivers are supervisors within the meaning of the Act and dismiss the petition on this basis. With respect to this issue, the record shows that most of the catering truckdrivers use the services of "load boys" who clean the truck and assist the driver in the early morning by performing such functions as loading ice on the truck, starting the coffee, firing the truck with butane and starting the ovens. The driver determines himself whether or not to use the services of a load boy and the compensation to be paid. However, load boys usually receive between $1.50 and $2 per day for their services. Some of the drivers also use helpers "in order for the route to be profitable to the Employer , the driver must purchase a certain percentage of his inventory from Okeh "Cf Mister Softee of Indiana, Inc. 162 NLRB 354 to watch for theft at certain customer stops or to assist the driver in servicing the customers at a stop where the volume of business is heavy. As with the load boys, the driver determines whether or not a helper is required and for what purpose. The record shows that often the helper is one of the driver's customers and that the payment for such services is in the form of free food items, although the helper may in some instances receive a cash payment for his services. The driver alone makes the decision whether or not to use the services of load boys and/or helpers and it is conceded that under no circumstances are such individuals considered to be employees of the Employers. We find that the catering truckdrivers exercise no supervisory authority over employees of the Employers, or "in the interest of the Employer" and, we conclude that they are not supervisors within the meaning of the Act.22 On the basis of the foregoing, and the entire record, we find that a unit of the following employees is appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. All catering truckdrivers employed by Okeh Caterers, Jameson, Inc., and Frumento, Inc. at their Bell California location, excluding all other employees, guards and all supervisors as defined in the Act. [Direction of Election23 omitted from publication.] "See El Monte Hay Market, Inc, 173 NLRB No 170, Newsday Inc, 171 NLRB No 184 "In order to assure that all eligible voters may have the opportunity to be informed of the issues in the exercise of their statutory right to vote, all parties to the election should have access to a list of voters and their addresses which may be used to communicate with them Excelsior Underwear Inc, 156 NLRB 1236, N L R B v Wyman-Gordon Company, 394 U S 759 Accordingly, it is hereby directed that an election eligibility list, containing the names and addresses of all the eligible voters , must be filed by the Employer with the Regional Director for Region 21 within 7 days of the date of this Decision and Direction of Election The Regional Director shall make the list available to all parties to the election No extension of time to file this list shall be granted by the Regional Director except in extraordinary circumstances Failure to comply with this requirement shall be grounds for setting aside the election whenever proper objections are filed