Carpet Layers, Local Union 419

CARPET LAYERS, LOCAL UNION 419 Carpet, Linoleum, Soft Tile and Resilient Floor Cover- ing Layers, Local Union No. 419, AFL-CIO and Sears, Roebuck & Co. Case 27-CC-278 April 27, 1971 SUPPLEMENTAL DECISION BY CHAIRMAN MILLER AND MEMBERS FANNING, BROWN, AND JENKINS On June 20, 1969, the National Labor Relations Board issued a Decision and Order in the above-enti- tled proceeding,' in which it adopted, with certain modifications, the findings, conclusions, and recom- mendations of Trial Examiner Maurice Miller in his Decision of February 6, 1969, as attached thereto. The Board thereby affirmed the Trial Examiner's conclu- sion that the Respondent2 violated Section 8(b)(4)(i)- (ii)(B) of the National Labor Relations Act, as amended, by picketing Sears, Roebuck & Co. (here- inafter referred to as Sears), with an unlawful object of forcing Sears to cease doing business with certain in- stallers of floor covering with whom Sears was in a contractual relationship. The Board accordingly or- dered the Respondent to cease and desist from such activity and to take certain affirmative action to remedy the unfair labor practices found. Thereafter, the-Re- spondent filed a petition for review in the United States Court of Appeals for the District of Columbia Circuit and the Board filed a cross-petition for enforcement of its order. On June 12, 1970, the Court of Appeals for the Dis- trict of Columbia Circuit issued its Decision enforcing the Board's Order pending reconsideration by the Board of the question of Sear's neutrality (i.e., in its relationship with the installer), and the court remanded the case to the Board for such reconsideration.' Subse- quently, the Board, on July 24, 1970, issued a notice to all parties requesting that they submit statements of position concerning the issues raised by the court's remand. Statements were duly filed by the Respondent, Sears, and the General Counsel. In addition, the American Retail Federation was permitted to file a brief amicus curiae. Due to the novelty of the issues raised by the court's decision, the Board, by notice of November 17, 1970, granted oral argument in this case, which was held on December 7, 1970. The Board has reviewed the record in this proceed- ing and its Decision and Order reported at 176 NLRB No. 120, the Decision of the United States Court of Appeals for the District of Columbia Circuit, the vari- 176 NLRB No 120 Carpet, Linoleum, Soft Tile and Resilient Floor Covering Layers, Local Union No 419, AFL-CIO ' Carpet, Linoleum, Soft Tile and Resilient Floor Covering Layers, Local Union No. 419, AFL-CIO v NLRB, 429 F 2d 747 (C.A D C, 1970). 190 NLRB No. 28 143 ous statements of positions, and the oral argument, and hereby reaffirms its original Decision and Order. Briefly, this case arose as follows. Sears sells carpet and various other forms of floor coverings from several Denver area locations. It offers these products either installed or uninstalled. When, as is usually the case, a customer purchases installed floor covering or carpet- ing, the customer pays Sears for both the material and a charge for the installation. Sears in turn assigns the task of installation to one of a number of installer enter- prises with which it is in contractual relationship and pays that installer an agreed-upon rate for his service. In July 1968 the Respondent attempted to organize one of the installer enterprises, Joe and Eddie's Carpet Service, and in connection therewith, picketed briefly at the home of a customer where carpeting was being installed by that enterprise. In August 1968 Respond- ent renewed picketing, but at Sears' locations, and effectively stopped or delayed various deliveries. In the previous Decision in this case we found, in agreement with the Trial Examiner, that the Respond- ent violated Section 8(b)(4)(i) and (ii)(B) of the Act by picketing Sears, with an unlawful object of forcing Sears to cease doing business with certain floor cover- ing installers with whom the Respondent had a dispute. That finding was predicated upon our conclusions, also in agreement with the Trial Examiner, that the floor covering installers were independent contractors and not employees of Sears, and that there was no basis for finding Sears to be an "ally" of the installers in their dispute with the Respondent. While accepting the Board's conclusion that the in- stallers were independent contractors, the court was of the opinion that the Board nevertheless had not suffi- ciently considered the question whether Sears was in fact a neutral in the dispute. The court thus deemed it necessary to determine (1) whether Sears was truly a neutral in an economic sense and (2) whether Sears' possible interest in whether the installers were union- ized was sufficient to preclude finding any such neutral- ity. The details of the relationship between Sears and the installers have been set forth at considerable length in the Trial Examiner's Decision, in the Board's previous Decision, and in the court's Decision as well. In sum- mary, the installers perform no work at Sears' locations beyond picking up carpet and installation orders; oper- ate out of their own homes; utilize their own trucks, tools, and equipment; hire their own employees, where necessary, at rates of pay which are not determined by Sears; are responsible for repair or damage which may be caused during installation; establish their own hours and schedules; schedule and reschedule jobs directly with the customers without notice to Sears; subcontract jobs without prior approval or knowledge of Sears; in practice do extra work for customers without Sears' 144 DECISIONS OF NATIONAL LABOR RELATIONS BOARD approval; generally perform work without instructions or guidelines; and, if a job is more difficult or time consuming than estimated by Sears, change the prices quoted by Sears to the customer. In addition we note the following circumstances established by the evidence before us. The installers here work for firms other than Sears who sell installed carpet and at least to that extent are in competition with Sears; the installers can. and do turn down work for Sears; and there are no employees of Sears performing functions which are the same as or similar to those of the installers. While we accept the view of the court, we are con- vinced that this case falls within the ambit of Denver Building and Construction Trades Council." It is unquestionably true, as the court suggests, that Sears has a competitive interest in the amounts charged by the installers for their services, and that Sears is thus concerned with whether those installers join a labor organization, insofar as such circumstance might affect the fees charged by the installers. However, the same interest or lack of neutrality would be presumable on the part of Sears concerning the labor costs of a steel manufacturer which supplied a hardware producer which in turn produces and supplies Sears with items for sale on a competitive market. In sum, we do not believe that such an economic interest requires a con- clusion that a firm is not neutral for the purposes of Section 8(b)(4)(i) and (ii)(B) where, as here, the record so clearly shows the independent contractor status of the installers, and the manner in which they secure and perform their work for Sears; the absence of Sears' employees doing the same work; the fact that the in- stallers can and do turn down work offered by Sears; and the fact that they work for other companies.' Accordingly, upon reconsideration, we affirm our Decision and Order as published in 176 NLRB No. 120. MEMBER FANNING, dissenting: The court has remanded this case to give the Board an opportunity to consider whether the conditions un- der which carpet installers (found by the Board and the court to be independent contractors) perform installa- tion of carpets sold by Sears gives the Respondent Un- ion a legitimate interest in bringing direct pressure against Sears in its efforts to combat the substandard wages under which the carpets are installed. The court suggests that the economic relationship between Sears and its installers is such that Sears is not a neutral in an economic sense in the dispute between N.LR.B. v. Denver Building and Construction Trades Council, 341 U.S. 675 (1951). 6 Our dissenting colleague's contrary conclusion is based on an analysis not of the actual practices but of the terms of the contracts between Sears and the installers concerning which there is a vast difference. We believe that the actual situation is controlling. the Union and the installers over their performance of installation work at substandard wages. This seems clearly to be so . Sears sells both carpeting and the installation service, the latter under a contract with the customer that obligates Sears, as a continuing relation- ship with more than 60 installers in the Denver area who are obligated to accept all work that Sears fur- nishes with certain exceptions not relevant here. Sears determines the time within which the installation is to be made, sets the price of the installation, bills and collects from the customer , and retains the right to inspect and approve the installation and to require in- stallers to correct defective work at the installer's ex- pense. Sears and the installer together set the cost to Sears of the installer's services . Quite obviously, the sale of installation services grants Sears to increase its volume of carpet and floor covering sales . As that volume increases, the amount of work available to in- stallers increases. In essence, Sears and its installers are engaged in a common venture involving the sale and installation of carpets. The success of that venture for each depends to a considerable extent on the perform- ance of the other and can only be carried out through an integration of the operations of both. My colleagues conclude that the relationship in- volved herein falls within the ambit of N.L. R.B. v. Denver Building and Construction Trades Council' be- cause Sears' interest in whether or not its installers are organized is no greater than its interest in whether employees of the manufacturers of the carpets are or- ganized. I cannot agree . Sears' relationship with its installers is significantly different from its relationship with manufacturers of the carpets. In the case of the manufacturer, it may well be true that Sears' willing- ness to purchase its products will depend to a signifi- cant extent on the labor costs incorporated in the price charged Sears and that union wages may increase those costs. Nevertheless, Sears has no say in the setting of those wages. With respect to the carpet installers, how- ever, Sears has not only a direct interest in the carpet installers' labor charges , it has a substantial, if not the dominant, role in the setting of those charges. More than that, it also has the primary role in setting the price to be charged to the retail customer who pur- chases-from Sears itself-the installation services. Significantly, as the court pointed out , it appears that Sears makes a profit on the installation charges. More- over, the carpet installers agree to accept all jobs within a defined geographical area tendered them by Sears, and agree that they will not do work for Sears' custom- ers which is not specifically authorized by Sears. The continuing nature of the relationship , the sub- stantial role played by Sears in the establishment of the installers' wages, and its power through assignment to 6 341 U.S. 675 (1951). CARPET LAYERS, LOCAL UNION 419 compel installers to work only for Sears, leads me to agree with the court that the Denver Building and Con- struction Trades Council decision is not controlling on the question of whether the Union's pressures on Sears in its efforts to raise the substandard wages of the in- stallers is unlawful secondary or lawful primary ac- tivity. There seems to me to be a crucial distinction between the relationship involved here and the normal relationship between contractors and their subcontrac- tors in the building and construction industry. In such a relationship, the general contractor undertakes to perform a construction contract and generally subcon- tracts various parts of that work to subcontractors, usually on a bid basis. At the conclusion of the project they go their separate ways for the subcontractor does not bind himself to a general contractor on a continuing basis. Here, in contrast, the installers do bind them- selves to Sears under 3-year contracts to take all the work that Sears assigns to them. There is no guarantee of the amount of work for that depends on Sears' volume of carpet sales, which in turn depends in sub- stantial part on Sears ' willingness and ability to provide 145 installation service to the buyer. Whether or not Sears and the installer may properly be called allies as that concept has found expression in previous decisions is of less importance than is the fact that Sears is directly involved in the setting of the labor costs of the installa- tion services. In the final analysis, Respondent Union seeks to avoid the wage cutting or depressing effect on Sears' use of nonunion installers in two ways. First, through di- rect organization of the installers, and second, through direct pressure on Sears by picket line advertisement of the fact that Sears' carpets are installed by workmen receiving substandard wages. Whether Sears grants an increase in the installers' charges to the level of union wages in unilateral response to the Union's picket line pressures or as a result of negotiations with unionized installers, it is apparent that it necessarily must be in- volved as a direct participant in the settlement of this labor dispute. In these circumstances, it is unrealistic to classify Sears as a neutral third person to the dispute, and I would find that the Union's pressures against Sears do not constitute unlawful secondary activity.