General Teamsters Local 386

1038 DECISIONS OF NATIONAL LABOR RELATIONS BOARD General Teamsters Local 386, International Brother- hood of Teamsters, Chauffeurs, Warehousemen and Helpers of America and Construction Materi- als Trucking, Inc. Case 20-CE-78 August 24, 1972 DECISION AND ORDER - On November 3, 1971, Trial Examiner Herman Corenman issued the attached Decision in this proceeding. Thereafter, the General Counsel filed exceptions and a supporting brief. The Board has considered the record and the Trial Examiner's Decision in light of the exceptions and brief and has decided to affirm the Trial Examiner's rulings, findings, and conclusions and to adopt his recommended Order dismissing the complaint. In agreement with the Trial Examiner's conclusion, we find that the Respondent, Teamsters Local 386, did not violate Section 8(e) of the Act by entering into its contract with Flintkote, the general contrac- tor herein,' who had subcontracted certain work to Construction Materials Trucking, Inc., called CMT herein. However, we reach this conclusion because we believe that the contract provisions involved are unambigous and lawful on their face.2 A union has a legitimate interest in preventing the undermining of the work opportunities and stand- ards of employees in a contractual bargaining unit by subcontractors who do not meet the prevailing wage scales and employee benefits covered by the con- tract. Thus, its contract with an employer may require the employer, if it subcontracts, to subcon- tract to another employer who agrees to observe "the equivalent of union wages, hours, and the like" provided for in the bargaining agreement.3 Such a provision, generally referred to as a union standards clause, does not violate Section 8(e) because it has a primary object: to aid the employees in the work unit. Where, however, the object is not to protect or preserve the working standards of employees in the unit, but to control the employment practices of firms which seek to do business with the employer and to aid and assist union members generally, such object is secondary and unlawful.4 In the words of the U.S. Court of Appeals for the District of Columbia, "To conclude that a contract falling within the letter of Section 8(e) properly falls within its prohibition, there must be either a finding that both parties understood and acquiesced in a second- ary object for the term, or a finding that secondary, consequences within Section 8(e)'s intendment would probably flow from the clause, in view of the economic history and circumstances of the industry, the locality, and the parties."5 Section 30(C) provides that an employer party to the AGC contract may subcontract offsite work, involved herein, only to another employer who agrees that his employees will work "in accordance with the schedule of hours and will receive not less than the wages and economic benefits" provided for in the contract, "including holidays, vacations, premiums, overtime, health and welfare and pension contributions or benefits or their equivalent and any other programs or contributions required by this Agreement" ant who further agrees to submit any grievance or disputes concerning his performance or compliance with such undertaking to the grievance procedures set forth in . . . this Agreement." (Emphasis supplied.) Section 30(D) provides further means for assuring compliance with the provisions of section 30(C), which is the critical provision before us. The issue which has been raised with respect to section 30(C) is whether it requires the subcontractor only to agree that its employees will receive the economic benefits of the contract, which would serve the lawful purpose of protecting the interests of the employees in the contract unit, or whether it also requires him to adhere to the noneconomic terms of the contract, which would be unrelated to this lawful purpose. In our view, the subcontractor's obligation under the contract is concerned solely with the economic features thereof. Thus, the initial obliga- tion required of him by section 30(C) is that he agree that his employees will receive not less than the wages and economic benefits of the contract, which are then specified to include holidays, vacations, etc., "and any other programs" provided for by the agreement. This is what the contract says and we do not read it as imposing any other obligation upon the subcontractor than that he simply agree that his employees will receive all wages and economic benefits of the contract. Our dissenting colleagues would agree with us had the phrase "and any other programs" read "or any other programs." As written, however, they believe that the list of specified economic benefits is an i Teamsters Local 386 and Flmtkote are parties to this contract by virtue of their respective membership in the Heavy, Highway, Building and Construction Teamster Committee for Northern California, and the Northern and Central California Chapter, the Associated General Contrac- tors of America, Inc This so -called AGC master agreement was for the period May 1, 1968, to June 15, 1971, and its term was extended until a new agreement was reached 2 The pertinent contract provisions , sec. 30(C) and (D), are set forth in section 111 , A, of the Trial Examiner's Decision. 3 Truck Drivers Union Local 413 (Brown Transport Corp, Patton Warehouse, Inc), 334 F 2d 539 548 (C.A.D.C ) 4 Meat and Highway Drivers, Dockmen, Helpers and Miscellaneous Truck Terminal Employees, Local Union No 710 ( Wilson & Co) v N L.R B, 335 F2d709,716(CAD.C) 5 Id I 198 NLRB No. 129 GENERAL TEAMSTERS LOCAL 386 1039 exhaustive one and that "and any other programs" must refer to something altogether different, namely, all the noneconomic provisions of the contract, such as union security, the hiring hall, and the grievance procedure; and thus exceeds the bounds of a lawful union standards clause.,But we are unable to attach such significance to the omission of "or." Perhaps even more plainly without it, the portion of section 30(C) under discussion speaks to us of "wages and economic benefits" to be "received" by a subcontrac- tor's employees, "including" the benefits to be derived from certain specified programs "and any other programs." The latter phrase is obviously intended to embrace all the economic benefits of the contract not specified. Obviously, it is a reference to something to be' "received" by employees and it is difficult for u\to perceive how, accepting the view of the dissent, this could incorporate such matters as union security and hiring halls. Had the contracting parties intended that the subcontractor be bound to all the provisions of the contract they would have said just that, as they knew how to state it in the immediately preceding paragraph of section 30(B) where, with respect to jobsite work, the subcontrac- tor is required to agree "to comply with all the terms and conditions of this Agreement." 6 Furthermore, if "any other programs" is read to refer to all noneconomic provisions, the language which follows on its heels expressly requiring submission to the grievance procedure would hardly have been neces- sary. But this is not to imply that the requirement for submitting grievances concerning compliance with the economic obligations imposed by section 30(C) is without a lawful primary purpose. As found by the Trial Examiner, "the grievance procedure language is ancillary to the legitimate primary job protection purpose of section 30(C) and is designed to effectuate this same lawful primary purpose. The grievance procedure substitutes peaceful procedures in lieu of strike or other economic action as a means of resolving disputes as to whether the wages and economic benefits of the AGC contract are being observed by the subcontractor." Accordingly, as recommended by the Trial Exam- iner, we shall dismiss the complaint.7 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor 6 This is the provision which is "strikingly similar" to the section of the contract in Local 437, International Brotherhood of Electrical Workers (Dimeo Construction Co), 180 NLRB 420, relied on in the dissent, which required 'compliance "with the terms of this Agreement" But all this language is patently distmgutshable from that of section 30(C) which is before us Relations Board adopts as its Order the recommend- ed Order of the Trial Examiner and hereby orders that the complaint herein be, and it hereby is, dismissed in its entirety. CHAIRMAN MILLER and MEMBER KENNEDY, dissent- ing: Because we would find that subsections (C) and (D) of section 30 of the Construction Master Agreement are, on their face, unlawful union-signato- ry clauses proscribed by Section 8(e) of the Act, we must dissent to our colleagues' affirmance of the Trial Examiner's contrary conclusion. Section 30(C) provides that a signatory employer may subcontract "off site work" only to a subcon- tractor who agrees that his employees will work in accordance with the hours, wage and economic benefits of the agreement, "including holidays, vaca- tions, premiums, overtime, health and welfare and pension contributions or benefits or their equivalent and any other programs or contributions required by this Agreement" (emphasis supplied), and agrees further that he will "submit any grievances or disputes concerning his performance" (emphasis supplied) to the terms of the grievance procedure provided for in section 15 of the agreement. Thus, section 30(C) plainly requires not only that the subcontractor pay "wages and economic benefits provided" for in the agreement but also that he conform with "any other programs" of the contract; further, it imposes the obligation on the subcontractor to submit disputes arising from the subcontractor's performance under the contract to the grievance procedure "set forth in Section 15 of this Agreement." In our view, the requirement that the subcontractor pay to or provide for the benefit of the persons performing the subcontracted work "any other programs or contributions required by this Agree- ment," and that he submit to the contract's grievance procedure, requires the subcontractor, in effect, to recognize the union and to adopt the agreement in its totality, which goes far beyond the legitimate right of a union to preserve unit work by making subcon- tracting of such work economically unattractive to the primary, contracting employer. In our opinion, such noneconomic benefits as union security, hiring halls, prejob conferences, etc., are programs highly beneficial to Respondent's members and are intend- ed to be included within the coverage of section 30(C). The thrust of the agreement plainly appears to be to force the subcontractor to abide by all of the provisions of the Construction Master Agreement, 7 In Building Material & Construction Teamsters Union Local No 216 (Bigge Drayage Company), 198 NLRB No 130, issued this date , a majority of the Board finds a violation on the ground that the subcontracting provisions were made applicable to certain nonunit work, which is not an issue that was raised or litigated in the instant case 1040 DECISIONS OF NATIONAL LABOR RELATIONS BOARD particularly when we consider that the phrase "and any other programs" follows a rather exhaustive list of specified economic benefits. Had the parties sought to limit the phrase in a lawful manner they could have used the words "or any other economic benefits." That such limitation was not their intent is made abundantly clear when it is considered that all disputes must be submitted to the grievance proce- dure set forth in the agreement. In the instant case, only Respondent and Flintkote, the general contractor, are contractually bound, and would normally be the only parties to any grievance procedure which may be instituted under the contract. However, by its terms, any violation of the agreement by any subcontractor of Flintkote gives rise to a dispute between Respondent and such subcontractor which must be processed under the agreement's grievance procedure. We submit that, in practical effect, this constitutes the subcontractor a signatory to the agreement. We fail to understand how the subcontractor's obligation to submit to the grievance procedure of the agreement preserves the legitimate interests of the general contractor's em- ployees represented by Respondent. It appears to us that by virture of this provision, Respondent is attempting to influence the labor relations of the subcontractor, rather than to protect the work standards of its members. Here, to require CMT, the subcontractor of Flintkote, to submit to a grievance procedure with Respondent, a labor organization which does not represent any of CMT's employees, can in no sense be deemed to protect the work standards of Respondent's members. On the contra- ry, it would clearly be an intrusion into the labor relations policies of CMT, vis-a-vis its own employ- ees. If the clause were lawful, and merely called for the payment of certain sums or the providing of certain benefits to the employees of the subcontrac- tor, there would be no need to bring the subcontrac- tor himself into the grievance procedure because he would have no obligations under the agreement. Only the primary employer would be required to observe the terms of the agreement and could be held responsible for the subcontractor's breach thereof. But, as shown above, the clause requires the subcontractor to agree to all the programs contained in the agreement, such as The prejob conference, the union-security clause, the hiring hall, etc., therefore necessitating the envelopment of the subcontractor himself into the grievance machinery of the agreement.8 As we see it, this case is strikingly similar to Local 437, International Brotherhood of Electrical Workers 8 For an interpretation of the identical agreement here involved by another Teamsters local signatory thereto in the northern California area, as obligating a subcontractor to abide by more than just the economic benefits (Dimeo Construction Co.) 180 NLRB 420. There, the respondent union entered into a collective-bargain- ing agreement with respondent association of em- ployers containing the following clause: Article II, Section 11 Local Union 437 is a part of the International Brotherhood of Electrical Workers, and any violation or annulment of working rules or agreement of any other Local Union of the IBEW or the subletting assigning or transfer of any work in connection with electrical work to any person, firm or corporation not complying with the terms of this Agreement by the employer, will be sufficient cause for cancellation of this Agree- ment after the facts have been determined by the International Office of the Union. The parties stipulated that the above provision was found only in contracts "applicable to work ordinari- ly performed by employees covered by the IBEW contract on job sites in the construction industry" and that the provision "as interpreted by the parties, allows subcontracting to any subcontractor who abides by the union standards of wages, hours and working conditions." The complaint alleged, and the Trial Examiner found, that the above-quoted provision violated Section 8(e) of the Act. The Board agreed, stating that: The clause when considered alone is unlawful because in effect it permits subcontracting only to employers who recognize the Union. The phrase "complying with the terms of this Agreement" covers union recognition as well as other terms of the agreement between the Unions and Respon- dent Association. It is thus an unlawful secondary union-signatory subcontracting clause. With respect to Respondent's argument in Dimeo that the contract clause, as interpreted by the parties, allowed subcontracting to any subcontractor who abides by the union standards of wages, hours, and working conditions, and thus made the clause a lawful, primary union standards clause, the Board stated: [A] union standards subcontracting clause is primary only if it is limited to requiring that subcontractors observe "the equivalent of union wages, hours, and the like." The legitimacy of a union standards clause is determined by the union's interest in preventing the undermining of the work opportunities for the standards of, employees in the appropriate unit by contractors who do not meet prevailing wage scales and of the agreement, see Building Material & Construction Teamsters Union 'Local No 216 (Bigge Drayage Company), 198 NLRB No. 130 (opinion of Chairman Miller and Member Kennedy ), issued this date. GENERAL TEAMSTERS LOCAL 386 1041 employee benefits. When the subcontracting clause, contains limitations not required to protect the interests of the employees in the unit, it exceeds the bounds of a lawful primary clause and becomes secondary and unlawful. Thus if a subcontracting clause should require the subcontractor to adhere not only to the contract wage and hour terms, but also to such contract working conditions as seniority and grievance procedure, it would be an unlawful secondary clause. [Footnotes omitted; emphasis supplied.] Here, as in Dimeo, section 30(C) contains limitations not required to protect the interests of the unit employees, and exceeds the bounds of a lawful primary clause. See also Sheet Metal Workers, Local Union No. 223, AFL-CIO (Continental Air Filters Co.), 196 NLRB No. 12. As we view it, section 30(D) is inextricably tied to section 30(C) and is designed to implement the unlawful provisions of section 30(C). It requires the contracting employer to undertake certain actions to enforce compliance by his subcontractor with the provisions of section 30(C). On receipt of written notice from the union that his subcontractor has become delinquent in the payment or meeting of obligations set forth in section 30(C), the contracting employer is required to withhold the amount claimed to be delinquent out of any sums owing by the said employer to the subcontractor. In addition, section 30(D), like section 30(C), provides that any dispute will be settled by resort to the grievance procedure of the Construction Master Agreement. Thus, inasmuch as section 30(D) is tied to section 30(C), and is designed to implement the unlawful provisions thereof, section 30(D) is also violative of Section 8(e) of the Act. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE HERMAN CORENMAN, Trial Examiner: Upon a charge filed by Construction Materials Trucking, Inc., herein called CMT, on December 14, 1970, against General Teamsters Local 386, International Brotherhood of Team- sters, Chauffeurs, Warehousemen and Helpers of America, herein called Respondent, a complaint issued on February 24, 1971, on behalf of the General Counsel of the National Labor Relations Board, alleging that the Respondent violated Section 8(e) of the National Labor Relations Act, as amended, herein called the Act. Pursuant to notice, a hearing was held at San Francisco, California, on September 14 and 15, 1971, before the Trial Examiner. All parties appeared and participated in the hearing by counsel and were afforded full opportunity to be heard, to produce evidence, examine and cross-examine witnesses, and to argue orally on the record. Briefs submitted by counsel for the General Counsel and for Respondent have been carefully considered. Upon the entire record in the case and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE EMPLOYERS The pleadings establish, and I find, that The Flintkote Company, Concrete Materials Division, herein called Flintkote, a Massachusetts corporation with a place of, business at Modesto, California, is a general contractor's engaged in the building and construction industry, and' during the past year, preceding issuance of complaint, inl the course and conduct of its business operations,) purchased and received goods and materials valued in, excess of $50,000 directly from suppliers located outside the State of California. CMT, a California corporation with its principal office) and place of business at Fremont , California, is engaged as,' a common carrier in intrastate hauling by motor truck, and during the past year, preceding issuance of complaint, in the course of conduct of its business operations, provided services to Flintkote valued in excess of $50,000, consisting of the hauling of sand and gravel to various Flintkote construction sites. The complaint alleges, the answer admits, and I find that at all times material to this matter, Flintkote and CMT, and each of them, have been and are employers engaged in commerce and in operations affecting commerce within the meaning of Section 2(6) and (7) of the Act. It. THE LABOR ORGANIZATIONS INVOLVED The pleadings establish, and I find, that the Respondent Local 386 and Construction and Building Materials Teamsters, Local 291, International Brotherhood of Team- sters, Chauffeurs, Warehousemen and Helpers of America, herein called Teamsters Local 291, have been and are labor organizations within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. The Contract Provision Alleged To Be in Violation of Section 8(e) of the Act Flintkote and the Respondent were parties to a collec- tive-bargaining agreement designated Master Agreement, Building Heavy Highway and Engineering Construction, herein called AGC master agreement, negotiated on behalf of Flintkote and other employers by the Associated General Contractors of America, herein called AGC, and on behalf of the Respondent and other Teamsters locals by Construction Teamsters Committee. The AGC master agreement in question was for the contract term May 1, 1968, through June 15, 1971. The General Counsel contends that subsections (C) and (D) of section 30 of the AGC master agreement violate Section 8(e) of the Act. The pertinent sections are herein set forth. C. The Employer further agrees that when subcon- tracting work covered by this Agreement which is to be performed within the geographical area covered by this Agreement but which is not to be performed at the site of the construction, alteration, painting or repair of the building, road or other work, he will subcontract such work only to an Employer or person who agrees that 1042 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the persons performing such work will work in accordance with the schedule of hours and will receive not less than the wages and economic benefits provided in this Agreement including holidays, vacations, premi- ums, overtime, health and welfare and pension contrib- utions or benefits or their equivalent and any other programs or contributions required by this Agreement and who further agrees to submit any grievance or disputes concerning his performance or compliance with such undertaking to the procedures set forth in Section 15 of this Agreement. As to any Employer who has always subcontracted work involving certain equipment, this paragraph shall not become applicable with respect to work involving such equipment if its validity is challenged by charges filed by the National Labor Relations Board until determination by the National Labor Relations Board or if not by the National Labor Relations Board, by a Court of competent jurisdiction that the provisions are not in violation of the National Labor Relations Act. D. The Employer will give written notice to the Union of any subcontract involving the performance of work covered by this Agreement within five (5) days of entering into such subcontract and shall specify the name and address of the subcontractor. Any Employer who gives such notice anjl requires the subcontractor to agree to comply with and observe the provisions of Subsection B hereof with respect to job site work and Subsection C hereof with respect to work performed other than at the job site shall not be liable for any delinquency by such subcontractor in the payment of any wages, fringes, benefits or contributions provided herein except as provided hereinafter. If thereafter any subcontractor shall become delin- quent in the payment or meeting of the obligations set forth above, the Union shall promptly give written notice thereof to the Employer and Subcontractor specifying the nature and amount of such delinquency. More than one such notice may be given with respect to delinquencies. If such notice is given, the Employer shall withhold the amount claimed to be delinquent out of any sums due and owing by the Employer to such Subcontractor and shall pay and satisfy therefrom the amount of such delinquency by such Subcontractor as follows: If such Subcontractor does not dispute the existence or amount of such delinquency, the Employer shall forthwith pay the amount of such delinquencies to the person or fund entitled thereto. Any dispute as to the existence or amount of such delinquency shall be settled by the Union and Subcontractor as provided in Section 15 hereof and the Employer shall pay to the person of Funds entitled thereto the amount of such delinquency as so determined and costs incurred. The Employer shall not be liable for any such delinquency occumng more t7ian sixty (60) days prior to the receipt of such written notice from the Union. B. The Subcontract From Flintkote to CMT CMT, the Charging Party in this matter, is a motor carrier engaged in the transportation of rock, sand, and gravel. It is a member of the California Trucking Association, herein called CTA, and through its member- ship in CTA was signatory to and bound by the Teamsters Union Materials Hauling Agreement which expired June 26, 1970. Since the expiration of this agreement, there have been negotiations for a renewal agreement and during this period CMT has continued to pay the wage rates provided for in the Materials Hauling Agreement which expired June 26, 1970. CMT's regular truckdriver employees are represented by Teamsters Local 291. Flintkote has contracted to pave the roads in three residential subdivisions being built by the Boise-Cascade Corporation. To supplement its own manpower and equipment necessary to fulfill its contract on the Boise- Cascade projects, Flintkote in about July 1970 subcon- tracted to CMT some of the hauling of crushed rock and blacktop from its portable crushing plant at Merced Falls, California, to the Boise-Cascade projects which were located approximately 13 to 15 miles from the portable crushing plant. Thus, CMT's employees, four of whom were truckdrivers, and about 25 of whom were owner- operators, would load up with the crushed rock or blacktop at the portable crushing plant at Merced Falls and transport the paving material to the Boise-Cascade building projects, where the paving material would be dumped on the road bed. Having dumped the truckload, the truckdnver would then return to the portable crushing plant for another load. Flintkote paid its own truckdnvers who hauled paving materials from the portable crusher to the Boise-Cascade project sites the wage rates provided by the AGC master agreement, whereas CMT, to whom Flintkote had subcon- tracted some of its truck hauling, paid its truckdnvers the rates provided for in the Teamster Union Materials Hauling Agreement negotiated on behalf of the motor carriers by CTA. The AGC construction rates and fringe benefits paid by Flintkote to its truckdrivers were more generous than the Materials Hauling rates and fringe benefits paid by CMT to its truckdrivers. For example, the AGC construction rate paid by Flintkote was $6.25 per hour, whereas the rate paid by CMT to its truckdriver employees was $4.30 per hour. C. The Respondent's Reaffirmance and Enforcement of Section 30(C) and (D) of the AGC Contract In July and August 1970, Wendel Kiser, Respondent's secretary-treasurer, phoned Flintkote's general manager, John Kenealy, several times to complain that CMT was paying its truckdrivers the lesser wages provided for in the Teamster Materials Hauling Agreement rather than the more generous wage rates provided for in the AGC master agreement. Kiser told Kenealy that since Flintkote was the prime contractor on the job, he was looking to Flintkote for payment. Kiser demanded that Fhntkote require CMT to pay the AGC construction rate, or he would pull the men off the job. Kenealy on each occasion that Kiser called, told him that he would contact Mr. Fabry, president of CMT. Kenealy told Kiser that since Flintkote was paying the proscribed AGC construction rate, "This was really a problem between Kiser and CMT." Kenealy, on each occasion that Kiser called, in turn phoned Mr. GENERAL TEAMSTERS LOCAL 386 Fabry of CMT and told him to get in touch with Mr. Kiser and resolve the problem. In late August or early September 1970, Mr. Norbert F. Miller, Respondent's president, phoned Mr. Fabry, presi- dent of CMT, to prevail upon CMT to pay the rates provided by the AGC master agreement, which Flintkote was paying to its truckdrivers who were performing the same work as the CMT drivers. Fabry refused to pay the AGC master agreement rate to his truckdrivers, pointing out to Miller that,CMT was not performing onsite work and was merely a supplementary carrier whereas Flintkote was the prime contractor on the job. Miller held fast to his position that CMT should be paying the AGC rate because CMT's equipment was working alongside Flintkote's equipment. Approximately I month later, Mr. Fabry phoned Respondent's secretary-treasurer, Kiser, and dis- cussed with him the problem, but nothing was resolved. On September 15, 1970, Fabry received a telegram dated September 4 from Mr. Kiser demanding that all drivers working for CMT and hauling for Flintkote in the Respondent's jurisdiction should be paid the AGC con- tract rates and benefits retroactive to their start of employment. The telegram further requested that the retroactive adjustments should be in the Respondent's office at Modesto, California, not later than the close of business on Wednesday, September 9, 1970; otherwise the Respondent "will take such action as we feel necessary to resolve the matter." Under dates of October 7 and 13, 1970, the Respondent filed grievances under the AGC contract based on CMT's "not paying the proper scale" provided for in the AGC contract. Backpay was claimed for drivers Victor Burn- ham, Eugene Stephens, and Luther Bagwell. On November 3, 1970, the October 7 grievance was amended "to include any owner-operator that was on the job." The aforesaid grievances were heard about the first part of January 1970 by the board of adjustment, composed of an equal number of AGC members and joint council of Teamster members. The board of adjustment was unable to resolve the grievances and became deadlocked. The dispute was finally resolved by agreement of Flintkote and the Respondent. Pursuant to this agreement, Flintkote on February 1, 1971, prepared backpay checks to drivers as follows : $37.84 to Luther Bagwell ; $737.40 to Eugene Stephens; $860.27 to Victor Burnham; and $54.18 to Norie Gibson. The aforesaid checks were mailed by AGC's counsel to the Respondent's counsel for delivery to the drivers with an accompanying letter, dated February 8, 1971, which set forth the agreement between Flintkote and the Respondent as follows: As discussed in our prior conversations, in order to settle this matter we request from your office a letter on behalf of Teamster Local #386 stating that the settlement of this case shall in no way prejudice the position of The Flintkote Company and the Associated General Contractors of California regarding the issues evolving from the above-mentioned grievances. The checks enclosed are in settlement in full and no further 1 Los Angeles Mailers Union No. 9, 1.T. U. (Hilbro Newspaper Printing Company), 135 NLRB 1132, enfd. 311 F.2d 121 (C.A.D.C.); N.L.R.B. v. Milk Wagon Drivers Union, Local 753, 335 F.2d 326, 329 (C.A. 7); Dan 1043 liability accrues to The Flintkote Company regarding the above-mentioned grievances. On March 1, 1971, Flintkote withheld from its progress payments to CMT the payments it had made on the aforesaid settlement agreement. The money withheld from CMT was itemized as $2,096.69 for payroll plus 30 percent thereof or the amount of $629.01 for fringe benefits paid on behalf of the drivers. D. Analysis and Conclusionary Findings I agree with the General Counsel that within the 6-month period preceding the filing of the charge, there was a reaffirmance or reentering of the subcontractors clause, Sections 30(C) and (D) of the AGC contract so as to preclude the operation of a 10(b) bar in the event those sections of the contract are found in violation of 8(e). This reaffirmance or reentry is clearly manifested in the demands made by Respondent's officers, Kiser and Miller, on officials of Flintkote and Fabry in July, August, and September 1970 and in the written grievances filed by the Respondent against Flintkote in October 1970 seeking to enforce the wage, vacation, and holiday pay requirements of the AGC contract, and in Flintkote's withholding of sums of money from CMT in March 1971.1 I also agree with the General Counsel that the subcon- tract from Flintkote to CMT was not covered by the construction proviso to Section 8(e) which provides "that nothing in this subsection (e) shall apply to an agreement between a labor organization and an employer in the construction industry relating to the contracting or subcontracting of work to be done at the site of the construction, alteration, painting, or repair of a building, structure, or other work." I reach this conclusion notwith- standing the fact that Flintkote was producing the road building materials at the portable crushing plant for its own use in the construction of roads by its own employees at the Boise-Cascade projects. It is noted that the portable rock crushing plant was situated approximately 15 miles from the Boise-Cascade construction sites, requiring CMT's truckdrivers to travel approximately 15 miles of public road to carry the crushed rock and blacktop from Flintkote's portable crushing plant at Merced Falls to the construction sites where the drivers dumped their loads. In comparable situations, the Board has held that the construction site proviso to Section 8(e) is not applicable to the work of the truckdrivers. See, for example, Local Union No. 551, Teamsters (Dravo Corporation), 176 NLRB No. 109; Teamsters Local 294 (Island Dock Lumber, Inc.), 145 NLRB 484, enfd. 342 F.2d 18 (C.A. 2); Drivers Local 695 (Madison Employers Council), 152 NLRB 577, enfd. 361 F.2d 547, 552 (C.A.D.C.). In short, I find that the work of the CMT drivers was not performed at the construction site. The parties are in agreement that Section 8(e) does not proscribe a subcontractors clause which limits subcontract- ing to employees who observe the wage standards provided by the prime contract. The Board in Highway Truck Drivers and Helpers Local 10 (S. E. McCormick, Inc.), 159 McKinney Co., 137 NLRB 64); Sheet Metal Workers Union, Local 216 (Sheet Metal, Heating and Air Contractors, et at.), 172 NLRB No. 6; Brotherhood of Painters, Local No. 823, 161 NLRB No. 44. 1044 DECISIONS OF NATIONAL LABOR RELATIONS BOARD NLRB 84, clearly announced its policy henceforth to! recognize the validity of subcontractor clauses limiting subcontracting to employers who observe the proscribed wage and hour standards of the prime contract, in keeping with the rationale of the Court of Appeals for the District. of Columbia which had reversed the Board's findings of 8(e) violations in previous cases. At 159 NLRB 101, the Board stated its agreement with the Court of Appeals for the District of Columbia as follows: We turn now to the issue of whether subparagraph (a) of article 33, "Subcontracting," is unlawful under Section 8(e), as contended by the General Counsel. That clause is identical to one of the provisions which we found violative of Section 8(e) in The Patton Warehouse, Inc. 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 per- formed by employees in the bargaining unit." 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 the equivalent of union standards in order to protect the work standards of the employees of the contracting employer." Interpreting the clause "as merely requiring, that subcontractors observe the equivalent of union wages, hours, and the like," the 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). See also Truck Drivers Local 13 [Brown Transport Corp. and Patton Warehouse] v. N.L.R.B., 334 F.2d, 539 (C.A.D.C.), where the court said at page 548: Union signatory subcontracting clauses are secondary, and therefore within the scope of 8(e), while union standards subcontracting clauses are primary as to the contracting employer. We so held in Building & Construction Trades Council v. N.L.R.B., 117 U.S. App. D.C. 239, 328 F.2d 540 (1964). We drew this same distinction in Orange Belt District Council of Painters No. 48 v. N. L. R. B., 117 U.S. App. D.C. 233, 328 F.2d 534 (1964); in District No. 9, International Association of Machinists v. N.L.R.B., 114 U.S. App. D.C. 287, 315 F.2d 33 (1962); and in Retail Clerks Union Local 770, etc. v. N. L. R. B., Ill U.S. App. D.C. 246, 296 F.2d 368 (1961).2 We now come to grips with the question whether the subcontractors clause at sections 30(C) and (D) heretofore set forth in this Decision is a union signatory clause proscribed by 8(e) of the Act or a wage standards clause not proscribed by 8(e). I have already found hereinabove that these clauses were reentered into and reaffirmed within the 6-month period preceding the filing of the charge in this case. Under section 30, subcontracting (C), 2 See also United Mine Workers (Dixie Mining Co.) (W.A. Boyle), 179 NLRB No. 80; United Mine Workers, 165 NLRB 467; Orange Belt District Council v. N.L.R.B. (C.A.D.C.), 315 F.2d 33; J. K. Barker Truck Co., 181 the employer agrees that when subcontracting work is not to be performed at a construction site, he will subcontract such work only to an employer or person who agrees that ,the persons performing such work will work in accordance with the schedule of hours and will receive not less than thei wages and economic benefits provided in this agreement,, including holidays, vacations, premiums, overtime, health] and welfare and pension contributions or benefits or their, equivalent, and any other programs or contributions] required by this agreement and who further agrees to submit any grievance or disputes concerning his perform-' ance or compliance with such undertaking to the proce dures set forth in section 15 of this agreement. Although the General Counsel concedes that so-called "primary" or "area standards" clauses are legitimate, he contends that the subcontractors clause, section 30(C) not ,only requires the subcontractor to pay "wages and economic benefits" provided for in the AGC master agreement ; but also requires conformance with "any other ,programs . . . of the contract and imposes the obligation to submit disputes arising under a subcontractor's perform- ance to the grievance procedure set forth in Section 15 of this agreement" The General Counsel argues that the phrase "any other programs" read in conjunction with the requirement that the subcontractor submit to the contract's ,grievance procedure invalidates the subcontractor's clause, the General Counsel contending further that the phrase "any other programs" embraces noneconomic provisions in the contract, for example, section 9, union security, section 14, records and itemized statements, section 18, conflicting. contracts, section 22, employer's membership, and section 36, authorized agents. The General Counsel concludes "that the thrust of the Respondent's contract is, in effect, to force the subcontractor to abide by all the provisions of the AGC Construction Master Agreement." I do not agree. The phrase "any other programs" contained in Section 30(C) is ambiguous. It is not, unreasonable to construe that phrase as referring only to, economic programs related to wage and hour standards, working conditions, and fringe benefits. In the absence of evidence to the contrary, the legal presumption of validity should be accorded to the phrase "any other programs." A problem of contract construction was resolved in favor of legality in Highway Truck Drivers, etc. (S.E. McCormick Inc.), 159 NLRB 84, with these words by the Board at footnote 30 on page 102: In these circumstances, we do not deem it appropriate for us to indulge in a presumption of illegality. As the Supreme Court stated in N.L.R.B. v. News Syndicate Company Inc., 365 U.S. 695, " .. as we said in Teamsters Local 357 v. Labor Board decided this day federal law . against a clear command of this Act of Congress. As stated by the Court of Appeals, `In the absence of provisions calling explicitly for illegal conduct, the contract cannot be held illegal because it failed affirmatively to disclaim all illegal objectives (365 U.S. 695, 699-700)."' The circumstances attending the dispute between the Respondent on the one hand and Flintkote and CMT on the other, disclose that Respondent's officers, Kiser and NLRB No. 67; TV and Radio Artists (Westinghouse Broadcasting Co., Inc.), 160 NLRB 241; Sheet Metal Workers Union (Reno Employees' Council), 168 NLRB 893. GENERAL TEAMSTERS LOCAL 386 1045 Miller, construed the subcontractors clause as purely one limited only to economic benefits, namely wages, vacation, and holiday pay. Thus, the complaint made by Kiser to Kenealy was concerning the lesser wage rate being paid by CMT to its drivers, and Respondent's demand was that CMT pay the wage rate provided for in the AGC contract. The Respondent's September 4, 1970, telegram to CMT and Flintkote demanded that the CMT drivers hauling for Flintkote be "put on the AGC rates of pay and benefits." The Respondent's October 7 written grievance alleged the contract violation as "not paying proper rate" and it sought backpay for the drivers. Respondent's October 13 written grievance specified the contract violation as "not paying proper scale," complaining that CMT "paid $4.30 per hour instead of $6.25 plus vacation and holiday pay." It is clear, and I find, on the basis of the demands made by the Respondent on CMT and Flintkote, that it was the intention of the parties, and so construed by the Respon- dent, that the phrase "any other programs" in the subcontractors clause had reference only to economic programs provided for in the AGC contract. Moreover, it is appropriate in construing the meaning of section 30(C) to examine it in context with section 30(B) of the AGC contract. Section 30(B) whose validity is not challenged by the General Counsel reads as follows: (B) The Employer agrees that when subcontracting work covered by this Agreement, which is to be performed within the geographical area covered by this Agreement, and at the site of construction, alteration, painting or repair of a building, structure, road or other work, he will subcontract such work only to an employer or person who will agree to comply with all the terms and conditions of this Agreement. It is section 30(B) which has the scope and reach which the General Counsel contends is found in section 30(C). Since 30(B) is limited on its face to the performance of jobsite work, it is permitted by the construction industry proviso of Section 8(e) of the Act. Comparing the language of 30(C) with 30(B), it is clear that the contracting parties did not intend 30(C) to have the reach or scope urged by the General Counsel. Section 30(B) requires the subcon- tractor to "agree to comply with all the terms and conditions of this agreement," whereas section 30(C) requires only that the subcontractor pay not less than the wage and other economic benefits of the AGC contract. I am satisfied, and I find, that section 30(C) is a legitimate, primary "wage standards" provision outside the scope of Section 8(e)'s prohibition. I further am of the opinion, contrary to the position of ,the General Counsel, that section 30(C)'s requirement that the subcontractor "further agree to submit any grievance or disputes concerning his performance or compliance with such undertaking to the procedures set forth in Section 15 of this agreement," is confined only to grievances relating to the wage and economic standards provided for in the AGC contract. I am in agreement with the Respondent that the grievance procedure language is ancillary to the legitimate primary job protection purpose of section 30(C) and is designed to effectuate this same lawful primary purpose. The grievance procedure substitutes peaceful procedures in lieu of strike or other economic action as a means of resolving disputes as to whether the wages and economic benefits of the AGC contract are being observed by the subcontractor. There is no need to repeat again the language of section 30(D). It merely outlines the steps the Employer is required to take to assure compliance by the subcontractor with his undertaking to meet the wages and other economic standards of the AGC contract. Although the United States Court for the Eastern 'District of California issued a temporary injuction in the instant case pursuant to Section 10(1) of the Act upon the conclusion that there was reasonable cause to believe the Respondent violated Section 8(e) of the Act, the United 'States District Court for the Northern District of Califor- nia in 10(1) proceedings in Letter v. Building Material & Construction Teamsters Local Union 216, 76 LRRM 2369 (Oct. 1, 1970), involving Section 30(C) and (D) of the AGC contract and under a factual situation similar to the instant case, declined to issue a temporary injunction, stating: There is not reasonable cause to believe . . . that the parties to the agreement have interpreted or applied these provisions [Sections 30(C) and (D)] in the manner alleged in the petition; rather, there is reasonable cause to believe that the provisions have in practice consist- ently been interpreted to require compliance by a subcontractor only with the wages, hours and other economic obligations or their equivalent, imposed by the agreement. As so interpreted and applied, Section 30(C) and (D) of the Construction Teamsters Master Agreement is not a violation of Section 8(e) of the Act as alleged in the petition. CONCLUSIONS OF LAW 1. Flintkote and CMT are employers engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Respondent is a labor organization within the meaning of Section 2(5) of the Act. 3. Section 30(C) and (D) of the subcontractors clause, of the AGC master agreement, and the Respondent's ,reentry and reaffirmation of said subcontractors clause is not violative of Section 8(e) of the Act. 4. The Respondent has not violated Section 8(e) of the Act. Upon the basis of the foregoing findings of fact, conclusions of law, and the entire record in this proceed- ing, and pursuant to Section 10(c) of the Act, I hereby make the following recommended: 3 ORDER The complaint is dismissed in its entirety. 3 In the event no exceptions are filed as provided by Section 102 46 of the Rules and Regulations of the National Labor Relations Board, the findings, conclusions, and recommended Order herein shall, as provided in Section 102 48 of the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and order, and all objections thereto shall be deemed waived for all purposes