Highway Truck Drivers & Hlprs.

HIGHWAY TRUCK DRIVERS & HLPRS. 531 Highway Truck Drivers and Helpers, Local 107, Inter- national Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America ; Chauf- feurs, Teamsters and Helpers, Local 331, Interna- tional Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; Truck Drivers, Chauffeurs and Helpers, Local 384, Inter- national Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America ; General Teamsters, Chauffeurs and Helpers Local 470, In- ternational Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America ; Chauf- feurs, Teamsters and Helpers, Local 312, Interna- tional Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; Truck Drivers and Helpers, Local 676, International Broth- erhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America and Peter D. Walther. Highway Truck Drivers and Helpers, Local 107, Inter- national Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; Chauf- feurs, Teamsters and Helpers, Local 312, Interna- tional Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; Chauf- feurs, Teamsters and Helpers, Local 331, Interna- tional Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; Truck Drivers, Chauffeurs, and Helpers, Local 384, Inter- national Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; General Teamsters, Chauffeurs, and Helpers, Local 470, In- ternational Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; Truck Drivers and Helpers, Local 676, International Broth- erhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; Delaware County Labor Relations Association ; Delaware Valley Labor Rela- tions Association; Schuylkill Valley Labor Relations Association; Private Carriers Association; Local Cartage Operators Association ; South Jersey Trans- port Association, Inc. and Joseph T. Wendling. Local 107, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, Independent and S & E McCormick, Inc. Local 470, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, Independent and S & E McCormick, Inc. Cases 4- CE-7, 4-CE-8, 4-CC-267, and 4-CC-268 October 6, 1972 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS KENNEDY AND PENELLO On June 10, 1966, the National Labor Relations Board issued a Decision and Order in the above-enti- tled proceeding,' finding that certain provisions of a bargaining contract between six Teamsters Locals (hereinafter the Unions) and a multiemployer bar- gaining association did not violate Section 8(e) of the National Labor Relations Act, as amended. Thereafter, on August 15, 1967, the United States Court of Appeals for the Third Circuit vacated the Board's Order and remanded the case to the Board for further action in accordance with its opinion.' The Supreme Court denied certiorari.' Pursuant to the court's remand an Order was issued by the Board on January 23, 1969,° and a hearing was held on Novem- ber 25, 1969, and on March 16, 1970, before Adminis- trative Law Judge I Thomas A. Ricci. On October 8, 1970, the Administrative Law Judge issued the attached Decision in which he con- cluded that "[I] do not believe the broad and impor- tant issue inherent in this case can be decided to the Board's satisfaction solely in reliance upon the limited facts available within the confines of this record" and "[I] recommend that the Board consider, in a manner in its judgment proper, inviting and obtaining a com- plete picture of the current practices in the trucking industry in the use of trucks owned by persons on a percentage tariff basis." Thereafter, the Charging Par- ty filed exceptions 6 and a supporting brief, and the Respondent Unions filed exceptions and a supporting brief and an answering brief to the Charging Parties' exceptions. The Board has reviewed the rulings of the Ad- ministrative Law Judge made at the hearing and finds that no prejudicial error was committed..The rulings are hereby affirmed. The Board has considered the attached Decision, the exceptions and briefs, and the entire record in the proceeding, and hereby adopts the rulings, findings, conclusions, and recommendations of the Administrative Law Judge only to the extent ' 159 NLRB 84. 2 A. Duie Pyle, Incorporated v. N L R B, 383 F.2d 772 '390 U.S 905 On May 21, 1969, the Board issued an Order Denying Motion to with- draw charges filed by the Charging Parties 5 The title of "Trial Examiner" was changed to "Adnumstrahve Law Judge" effective August 19, 1972. 6 The Charging Party's contention that the Board's remand of this case was contrary to the mandate of the United States Court of Appeals for the Third Circuit is without merit. 199 NLRB No. 63 532 DECISIONS OF NATIONAL LABOR RELATIONS BOARD consistent with our Supplemental Decision and Order issued herein. As the Administrative Law Judge pointed out in the course of his most recent decision, the hearing upon remand, the hearing which was held after the court decision herein, produced almost no additional factual material, and instead the "testimony" offered consists largely of a reargument of the question of law upon which the court disagreed with the Board. The bulk of the union argument was directed at demonstrating that certain difficulties which he in the way of enforcing the maintenance of union standards can be obviated if the owner-operators are permitted to be covered by the collective agreement and consid- ered to be "employees" thereunder. Thus, the lack of separation in payment between truck rental payments and personal service payments makes it more difficult for the Union to police its wage standards, because it is hard to determine whether the net earnings of any individual owner- operator is greater or lesser than the wage rates appli- cable to true "employees." And the unavailability of grievance machinery for owner-operators means again only that it is less convenient for the Union to police its standards than if these persons could prop- erly be required to be "employees" and thus properly covered by a grievance-arbitration procedure in the collective agreement. Other "testimony" was of just such an argumen- tative nature-all going to an issue precluded by the court opinion herein, which held that the require- ments that owner-operators become employees could not be justified "on the assertion that they are the simplest and most effective method of assuring that union standards will be followed in the subcontract in operation." In sum, only additional argument-not new facts-has been added to a record which was found inadequate by the court to show that "the valid and severable union standards provisions of the collective bargaining agreement were inadequate to safeguard the maintenance of union standards." Therefore, accepting the court's view of the clause at issue as being the law of the case, we must adopt its conclusion as to the invalidity of the contrac- tual provision requiring owner-operators and fleet owners to become employees and thus to join the Union in order to retain the work which they had been doing on subcontract? 7 We note the Administrative Law Judge's recommendation that we en- gage in a broad scale independent investigation of "a complete picture of the current practices in the trucking industry." We believe his recommendation not only exceeded the scope of our remand, but also fails to recognize the scope of this Board's authority in deciding unfair labor practice cases. We are limited in such matters to the testimony adduced by General Counsel, Charging Party, and the Respondent, and must decide the case upon the record made before us. Unlike certain regulatory agencies, who are authonz- CONCLUSIONS OF LAW 1. Each of Respondent Unions is a labor organiza- tion within the meaning of Section 2(5) of the Act. 2. Each of employer-members of Respondent As- sociations is an employer within the meaning of Sec- tion 2(2) of the Act and each is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 3. S & E McCormick, Inc., is an employer en- gaged in commerce within the meaning of Section 2(6) and (7) of the Act. 4. By inducing and encouraging employees of S & E McCormick to engage in a strike or a refusal to perform any services, and by threatening, coercing, and restraining S & E McCormick, with an object of forcing or requiring S & E McCormick to enter into an agreement prohibited by Section 8(e) of the Act, Respondents Locals 107 and 470 have engaged in unfair labor practices in violation of Section 8(b)(4)(i) and(ii)(A) of the Act. 5. By entering into agreements with Respondent Associations whereby the employer-members of said Associations agree to refrain from doing business with certain other persons in contravention of the prohibi- tions of Section 8(e) of the Act, Respondent Locals 107, 312, 331, 384, 470, and 676 and the employer- members of Respondent Associations and the Re- spondent Associations have engaged in unfair labor practices in violation of Section 8(e) of the Act. 6. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Rela- tions Board hereby orders that: A. Respondents Highway Truck Drivers and Helpers, Local 107, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, and General Teamsters, Chauffeurs and Helpers, Local 470, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, their officers, agents, and representatives, shall: 1. Cease and desist from inducing or encouraging employees of S & E McCormick, Inc., or any other employer engaged in commerce or in an industry af- fecting commerce, to engage in a strike or refusal in the course of their employment to use or handle any materials or to perform any service or threatening, coercing, or restraining S & E McCormick, Inc., or any other employer engaged in commerce or in an ed to regulate, sua sponte, wide areas of the economy , we are not authorized to initiate the kind of far-reaching inquiries and investigation which he suggests. HIGHWAY TRUCK DRIVERS & HLPRS. 533 industry affecting commerce, where an object thereof is to force or require S & E McCormick, Inc., or any other employer or person to enter into an agreement prohibited by Section 8(e) of the Act. 2. Take the following affirmative action designed to effectuate the policies of the Act: (a) Post at its business offices and meeting halls copies of the attached notice marked "Appendix A."8 Copies of said notice, on forms provided by the Re- gional Director for Region 4, after being duly signed by Locals' 107 and 470 representatives, shall be post- ed by said Unions immediately upon receipt thereof, and be maintained by them for 60 consecutive days thereafter, in conspicuous places, including all places where notices to members are customarily posted. Reasonable steps shall be taken by the Unions to insure that said notices are not altered, defaced, or covered by any other material. (b) Sign and mail to said Regional Director suffi- cient copies of the aforementioned notice for posting at the premises of S & E McCormick, Inc., if willing. (c) Notify the Regional Director for Region 4, in writing, within 20 days from the date of this Order, what steps the Respondents have taken to comply herewith. B. Respondents Highway Truck Drivers and Helpers, Local 107, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; Chauffeurs, Teamsters and Helpers, Lo- cal 312, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; Chauffeurs, Teamsters and Helpers, Local 331, Inter- national Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; Truck Driv- ers, Chauffeurs and Helpers, Local 384, International Brotherhood of Teamsters, Chauffeurs, Warehouse- men and Helpers of America; General Teamsters, Chauffeurs and Helpers, Local -470, International Brotherhood of Teamsters, Chauffeurs, Warehouse- men and Helpers of America; and Truck Drivers and Helpers, Local 676, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, their officers, agents, and representatives, shall: 1. Cease and desist from entering into, maintain- ing, giving effect to, or enforcing the clauses in their collective-bargaining agreements with Delaware County Labor Relations Association; Delaware Val- ley Labor Relations Association; Schuylkill Valley Labor Relations Association; Private Carriers Associ- ation; Local Cartage Operators Association; South 9 In the event that this Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursuant to a Judgment Jersey Transport Association, Inc., to the extent found unlawful herein. 2. Take the following affirmative action designed to effectuate the policies of the Act: (a) Post at their business offices and meeting halls copies of the attached notice marked "Appendix B."9 Copies of said notice, on forms provided by the Regional Director for Region 4, after being duly signed by Respondents' representatives, shall be post- ed by said Unions immediately upon receipt thereof, and be maintained by them for 60 consecutive days thereafter, in conspicuous places, including all places where notices to members are customarily posted. Reasonable steps shall be taken by the Unions to insure that said notices are not altered, defaced, or covered by any other material. (b) Sign and mail to said Regional Director suffi- cient copies of the aforementioned notice for posting at the premises of Delaware County Labor Relations Association ; Delaware Valley Labor Relations Asso- ciation; Schuylkill Valley Labor Relations Associa- tion ; Private Carriers Association ; Local Cartage Operators Association; South Jersey Transport Asso- ciation, Inc., and their employer-members, if willing. (c) Notify the Regional Director for Region 4, in writing, within 20 days from the date of this Order, what steps the Respondents have taken to comply herewith. C. Respondent Associations Delaware County Labor Relations Association; Delaware Valley Labor Relations Association ; Schuylkill Valley Labor Rela- tions Association; Private Carriers Association; Local Cartage Operators Association; South Jersey Trans- port Association, Inc., and their employer-members, their officers, agents, successors, and assigns, shall: 1. Cease and desist from entering into, maintain- ing, or giving effect to or enforcing the clauses in their collective-bargaining agreements with Respondent Locals 107, 312, 331, 384 , 470, and 676, to the extent found unlawful herein. 2. Take the following affirmative action designed to effectuate the policies\of the Act: (a) Post at their places of business copies of the attached notice marked "Appendix C." 10 Copies of said notice, on forms provided by the Regional Direc- tor for Region 4, after being duly signed by a repre- sentative of Respondent Associations and by employer-members , shall be poste' I by the Associa- tions and their employer-members immediately upon receipt thereof, and be maintained by them for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Associations and their employer-members to of the United States Court of Appeals Enforcing an Order of the National 9 See In. 8, supra. Labor Relations Board." 10 See In. 8, supra 534 DECISIONS OF NATIONAL LABOR RELATIONS BOARD insure that said notices are not altered, defaced, or covered by any other material. (b) Notify the Regional Director for Region 4, in writing, within 20 days from the date of this Order, what steps the Respondent has taken to comply here- with. MEMBERS FANNING and JENKINS, dissenting: We are persuaded that the evidence adduced at the reopened hearing establishes that the contract provision requiring that the owner-operators and the operators of leased equipment to employees is not in violation of Section 8(e) of the Act. Rather the record evidence shows that this provision is designed to pro- tect bargaining unit work and the work standards of the bargaining unit. Thus, the record amply demon- strates that the basis for the court 's remand has now been fully satisfied. As a result of the uncontradicted testimonial evidence of record we are persuaded that: 1. The use of owner-operators and percentage haulers exposes the drivers to abuse in that there is no separation between the payment for their personal work and their truck rental with the result that the drivers are paid less than the established wage scale for their work. 2. Unless the drivers are deemed to be employees, the Union cannot protect them through the contract grievance procedure with respect to established wage scales and fringe benefits , for the employers take the position that the Union has no standing to grieve on behalf of the owner-operators. 3. The practice of using owner-operators or per- centage haulers results in a diminution of wages throughout the industry if the Union is unable to apply the contract provisions to these drivers. 4. True seniority prevails when the owner-opera- tors are deemed to be employees . If they are not em- ployees then they are preferred over employee-drivers when the employer reduces the number of trucks he owns. 5. Owner-operators, if not employees and union members, do not receive the benefits of pensions and health and welfare coverage and only employees need be covered by workmen's compensation insurance. In its original Decision the Board pointed out that: The only limitation is that those driving the leased equipment for the certificated carriers be "employees" while performing such work so they may be required to observe all the standards and conditions prevailing in the unit. This prevents the impairment of the terms and conditions nego- tiated by the Union for its members in the unit, and removes the threat of loss of unit work by removing the economic advantage of assigning such work to independent contractors . The Un- ions' goal, and the thrust of the clause in ques- tion, is to assure the performance of unit work by unit employees in accordance with the terms and conditions set out in the Unions' contracts with the employers governing the greater part of the work performed and controlled from their re- spective locations. In such circumstances, the clauses cannot be considered to be invalid sub- contracting clauses, such as those which allow subcontracting outside the unit but limit such subcontracting only to such subcontractors as are signatories to a union agreement [159 NLRB at 100; fns. omitted.] Thus, the evidentiary gap which led the court to conclude that there was an absence of a showing that the clause was necessary to protect union standards rather than merely "the simplest and most effective method of assuring that union standards will be fol- lowed in the subcontracting operations" has now been supplied. The uncontradicted testimony of Mr. Hoffa, the general president of the Union who was in charge of the union negotiating committee in 1963 when the contracts in question were negotiated, which we have found to be of sufficient weight to support our original Decision in this case, shows that as we previously concluded the conditions and standards of employee drivers may readily be eroded by the sub- contracting of driving work." There is no doubt that Section 8(e) requires that we construe the contractual language adopted by the parties. It is also settled that the lawfulness of a clause does not depend on the parties' subjective intent in executing the clause or on their conduct in enforcing it, but on whether or not the practical effect on the contractual language comprehends a prohibited sec- ondary objective or whether it is merely incidental to the protection of the bargaining unit.12 In short, the additional evidence discloses that there exist in this situation peculiar and inordinate difficulties inherent in policing and applying unit ii For example, owner-operators and leased-equipment drivers may be paid less than the contract scale and thereby undermine the wage scale of the employees of the same firm engaging in the same work , and the employ- ees' fob tenure may readily be affected adversely by permitting their layoff while owner-operators or leased-equipment drivers are retained , but the rec- ord indicates that the erosion of those benefits cannot be made the subject matter of grievances and cannot be effectively protested (other than by striking, perhaps, if a contract does not contain a no-strike clause ) unless the requirement of employee status for "contract drivers" be utilized That these are matters of legitimate concern to the Union was recognized by the Su- preme Court in Local24, International Brotherhood of Teamsters v. Oliver, 358 U.S. 283 and 362 U S 605. In our original Decision we were at pains to note the efforts to maintain wage and labor standards in the trucking industry. See 159 NLRB 84, 100, fns. 22 and 23. Further, the Third Circuit recognized the "legitimate interest [of the Union] in the subcontracts of the work which its members have the capacity to perform," (383 F 2d at 776), and noted that the Board "was justified in concluding that the present subcontracts were a legitimate concern of the union, subject to suitable regulation in the collective bargaining agreement." (Ibid) National Woodwork Manufacturers Association v. N L.R B., 386 U.S. 612. HIGHWAY TRUCK DRIVERS & HLPRS. wage and employment conditions to owner-drivers- that is, to prevent their undercutting with respect to owner-drivers and the consequent impairment of work opportunities and standards for those in the unit. For that reason, the clause requiring application of the union contract to drivers was primarily aimed at preserving the work standards of the unit employ- ees, and accordingly, did not violate Section 8(e). We are persuaded that our original construction of the clause at issue has been reinforced by the un- Dated By contradicted evidence of record and that our previous Decision and Order in this case should be affirmed." 13 In our ongmal decision we concluded. The legitimacy of the Unions' objective in requumg all dnvers perform- ing unit work to be unit "employees" subject to the applicable collective- bargaining agreements while performing such work is not converted into an unlawful "cease doing business" one within the intent of Section 8(e) simply because, as an incident to their unit employee status, the dnvers are required to comply with all terms and conditions of the bargaining contract, including the union-security requirement. [ 159 NLRB 84, 101.] APPENDIX A NOTICE TO MEMBERS POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD AN AGENCY OF THE UNITED STATES GOVERNMENT WE WILL NOT induce or encourage individ- uals employed by S & E McCormick, Inc., or any other employer engaged in commerce or in an industry affecting commerce, to engage in a strike or refusal in the course of their employ- ment to use or handle any material or to perform any services, and WE WILL NOT threaten, coerce, or restrain S & E McCormick, Inc., or any other person engaged in commerce or in an industry affecting commerce where in either case an ob- ject thereof is to force or require S & E Mc- Cormick, Inc., or any other employer or person to enter into an agreement prohibited by Section 8(e) of the National Labor Relations Act, as amended. HIGHWAY TRUCK DRIVERS AND HELPERS, LOCAL 107, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA (Labor Organization) 535 GENERAL TEAMSTERS, CHAUFFEURS, AND HELPERS, LOCAL 470, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WARE- HOUSEMEN AND HELPERS OF AMERICA (Labor Organization) (Representative) (Title) This is an official notice and must not be defaced by anyone. This notice must remain posted for 60 corisecu- tive days from the date of posting and must not be altered, defaced, or covered by any other material. Any questions concerning this notice or compli- ance with its provisions may be directed to the Board's Office, 1700 Bankers Securities Building, Walnut and Juniper Streets, Philadelphia, Pennsylva- nia 19107, Telephone 215-597-7601. APPENDIX B NOTICE TO MEMBERS POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD AN AGENCY OF THE UNITED STATES GOVERNMENT WE WILL NOT enter into, maintain, give effect to, or enforce clauses of our collective-bargaining agreements with Delaware County Labor Rela- tions Association; Delaware Valley Labor Rela- tions Association; Schuylkill Valley Labor Relations Association; Private Carriers Associa- tion; Local Cartage Operators Association; South Jersey Transport Association, Inc., or their employer-members to the extent that they violate Section 8(e) of the National Labor Relations Act, as amended. Dated By Dated By (Representative) (Title) HIGHWAY TRUCK DRIVERS AND HELPERS, LOCAL 107, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA (Labor Organization) (Representative) (Title) 536 Dated By Dated By Dated By Dated By Dated By DECISIONS OF NATIONAL LABOR RELATIONS BOARD CHAUFFEURS, TEAMSTERS AND HELPERS, LOCAL 312, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA (Labor Organization) (Representative) (Title) CHAUFFEURS, TEAMSTERS AND HELPERS, LOCAL 331, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA (Labor Organization) (Representative) (Title) PRIVATE CARRIERS ASSOCIATION (Employer Association) (Representative) (Title) LOCAL CARTAGE OPERATORS AS- SOCIATION (Employer Association) (Representative) (Title) SOUTH JERSEY TRANSPORT ASSOCIATION, INC. (Employer Association) (Representative) (Title) This is an official notice and must not be defaced by anyone. This notice must remain posted for 60 consecu- tive days from the date of posting and must not be altered, defaced, or covered by any other material. Any questions concerning this notice or compli- ance with its provisions may be directed to the Board's Office, 1700 Bankers Securities Building, Walnut and Juniper Streets, Philadelphia, Pennsylva- nia 19107, Telephone 215-597-7601. APPENDIX C NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD AN AGENCY OF THE UNITED STATES GOVERNMENT WE WILL NOT enter into, maintain, or give effect to the clauses of our collective-bargaining agreements with Highway Truck Drivers and Helpers, Local 107, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; Chauffeurs, Teamsters and Helpers. Local 312, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; Chauffeurs, Teamsters and Helpers, Local 331, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; Truck Drivers, Chauffeurs, and Helpers Local 384, International Brother- hood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; General Teamsters, Chauffeurs, and Helpers, Local 470, Internation- al Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America; Truck Drivers and Helpers, Local 676, International Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America, to the extent that they violate Section 8(e) of the National La- bor Relations Act, as amended. DELAWARE COUNTY LABOR RELATIONS ASSOCIATION (Employer Association) Dated Dated By (Representative) (Title) DELAWARE VALLEY LABOR RELATIONS ASSOCIATION (Employer Association) By (Representative) (Title) SCHUYLKILL VALLEY LABOR RELATIONS ASSOCIATION (Employer Association) Dated By (Representative) (Title) HIGHWAY TRUCK DRIVERS & HLPRS. 537 Dated Dated By By Dated By TRUCK DRIVERS, CHAUFFEURS AND HELPERS, LOCAL 384, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA (Labor Organization) (Representative) (Title) GENERAL TEAMSTERS, CHAUF- FEURS AND HELPERS, LOCAL 470, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WARE- HOUSEMEN AND HELPERS OF AMERICA (Labor Organization) (Representative) (Title) TRUCK DRIVERS AND HELPERS, LOCAL 676, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA (Labor Organization) (Representative) (Title) This is an official notice and must not be defaced by anyone. This notice must remain posted for 60 consecu- tive days from the date of posting and must not be altered, defaced, or covered by any other material. Any questions concerning this notice or compli- ance with its provisions may be directed to the Board's Office, 1700 Bankers Securities Building, Walnut and Juniper Streets, Philadephia, Pennsylva- nia 19107, Telephone 215-597-7601. TRIAL EXAMINER'S DECISION Posture of the Case THOMAS A. Ricci, Trial Examiner: This proceeding rests upon a single complaint, which in turn grew out of four separate charges, two filed by individuals-Peter D. Walth- er, a lawyer,l and John T. Wendling-and two filed by a single Company-S. E. McCormick, Inc. The events giving rise to the complaint occurred in 1963, the Board issued its decision in 1964, and the Court of Appeals, Third Circuit, passed on the case in 1967. The Board dismissed the com- plaint in its entirety, but the Court disagreed in part and remanded the proceeding for further action by the Board. No useful object would be served by restating here in detail all the precise facts as initially presented to the Board, the refined reasoning set out in its decision, and the full ex- planatory appraisal of the questions raised appearing in the Court opinion, with the many numerical citations and cross references. All this information is an inseparable part of the record still now a matter of concern to whatever the next step in the proceeding will be. For purposes of appreciating the limited question in- volved in the particular aspect of the case here to be report- ed, a brief statement will suffice. Essentially the case turns upon the legality or illegality of certain clauses in collective- bargaining agreements between the Teamsters Internation- al Union and some of its locals in the Philadelphia area, on the one hand, and a number of associations of trucking companies, doing business on the same locality, on the other hand. The Unions are named Respondents because they struck to compel certain companies to sign these contracts, and both the Unions and the trucking companies are named Respondents for having entered into the agreements, con- duct of itself said to constitute unfair labor practices. In substance, the contract clauses in question deal with the conditions of employment applicable to truckdrivers who operate trucks that are not owned by the interstate carriers, that is, now owned by the transportation companies li- censed by ICC who undertake to move, for a price, com- modities of all kinds from place to place all over the highways of the United States. Some of these drivers are called fleet owners, or brokers, because they own more than one truck and lease them all to the various interstate car- riers; some are called owner-operators, because they own only one truck and drive it themselves when they lease it to the carriers; and some are called percentage haulers, be- cause they drive trucks owned by brokers and are paid, for personal work performed, a percentage of the cartage charged to the customer who owns the commodities, instead of on an hourly or mileage basis. The conditions of employ- ment spelled out in the various clauses cover the usual mat- ters, such as wages, holidays, hours, vacations , insurance, seniority, pensions, etc.; they also provide that persons driv- ing trucks in all three of these categories must join the Teamsters Union and pay dues. As stated above, the Board was of the opinion all of these provisions could lawfully be included in a Teamsters contract with the carriers. The court disagreed only to the extent it held the contracts could not compel membership in the Union by at least those persons who, by stipulation of the parties, were called "inde- pendent contractors." The entire proceeding, as originally considered by the Board and as reviewed by the court, rested upon a stipula- tion of fact; there had been no hearing before a Trial Exam- iner, and no broad explanation of all relevant facts. At more 1 Mr. Walther is a lawyer member of the law firm Morgan, Lewis, and Bockms. 538 DECISIONS OF NATIONAL LABOR RELATIONS BOARD than one point in its decision the court indicated a different conclusion of law might have ensued had a more compre- hensive picture been presented as to how the trucking indus- try utilizes owner-operators, or percentage haulers. In consequence of this indication by the court, the Teamsters International, as a Respondent, moved to reopen the record for purposes of introducing additional evidence. The Board granted the motion. Accordingly, a hearing by direction of the Board was held before me at Lewisburg, Pennsylvania, on November 25, 1969, and on March 16, 1970, at Philadelphia, Pennsyl- vania. In critical part, the Board's Order directed that "A further hearing be held . . . for the purpose of receiving evidence on the object of and the necessity for the inclusion of Article I, Sec. 2(c) in the collective-bargaining agree- ment; .... " These provisions of the Teamsters contract deal with the requirement that owner-operators become mem- bers of the Union and pay union dues. At Lewisburg all evidence offered by the Union was received, and when that party passed, Mr. Kleeb, the only person appearing on be- half of any trucking company, requested adjournment to decide if he wished to produce rebuttal evidence? The hear- ing was thereafter continued to March, when Mr. Mathews, an associate of Mr. Kleeb, offered testimony on behalf of the same two trucking companies. Briefs were filed after the close of the hearing by the Union and "the Charging Party." Upon the record as made, and from my observation of the witnesses, I report the following: Evidence Received on Behalf of the Unions In the light of the language in the Board's order directing the hearing-"for the purpose of receiving evidence on the object and the necessity for the inclusion [of the disputed clauses]"-it was to be expected that the "evidence" would consist more of argument than of factual assertion. And indeed this proved to be the fact. James Hoffa, who was in charge of the union negotiating committee in 1963 when the contracts in question were being negotiated, was the sole union witness. The questions put to him were candidly in- tended to bring forth his opinion as to the "object and necessity" for the contract provisions requiring the disputed drivers to become union members. He gave the following reasons: 1. The historic use of owner-operators and percentage haulers by the trucking industry exposes such drivers to abuse in that some carriers pay them by the one-check system, whereby the portion of the tariff rate properly allo- cable to personal work performance in blurred into the portion fairly applicable to truck rental, with the driver, whether owner of the truck or not, being paid less than the established wage scale for his work. The full significance of such a one-check system was distinguished from any two- check system, and the extent of such practice was not ex- plored in this proceeding. The witness then added the gener- 2 In stating his appearance , Mr. Kleeb said- "I am here as counsel for, I suppose, one of the charging parties, Peter Walther, who is my partner, and also as attorney for A. Duie Pyle and AEF Transportation, Inc, who were the petitioners seeking reversal of the Board 's decision in the Court of Ap- peals. al statement that contract clauses precisely comparable to those here in question have long been in effect and are very widely found in Teamsters contracts in many other parts of the country. 2. Unless the driver, whatever his relationship to the truck, be deemed an employee, the Union could not protect him adequately through the grievance procedure of the con- tract, could not be sure he received the established wage scale plus the indirect employment benefits. According to the witness, in his experience carriers take the position the Union has no standing to press a grievance on behalf of owner-operators who might be deemed independent con- tractors. In any event, he also voiced the argument that even assuming an owner-operator has a technical right himself to protest wage underpayment to the carrier, he is inhibited from so doing out of fear the carrier will dispense with the use of his truck by discontinuing the lease arrangement. 3. Bargaining in the trucking industry is largely, and increasingly with the passing years, on the basis of multiem- ployer bargaining units, or employer associations . There are carriers who use owner-operators exclusively, or whose total complement is more that 50 percent owner-operator or per- centage haulers. When such a camer chooses to disassociate itself from a multiemployer bargaining unit, there is no way for the Union to be sure its drivers will be paid the going wages on the highway, unless it is permitted in law to apply the disputed contract provisions to these drivers also. The result would be diminution of wages throughout the indus- try. 4. In the event of a lawful strike by regular truckdrivers, the owner-operator, if not himself also an employee, would be unprotected if he honored the picket line. The conse- quence would be a weakening of the economic strength of the work complement as a whole to protect the established wage scale. Moreover, the embattled employers would be in a position to expand the effective strikebreaking force by increasing the use of owner-operators or percentage haulers. The owner-operator who crosses a regular picket line en- dangers the Union in that its efforts to induce his coopera- tion would lead to secondary boycott prosecution if he be deemed a neutral employer, or an independent contractor. Cf. Allis-Chalmers Mfg. Co. v. N.L.R.B., 388 U.S. 175. 5. When both the direct employee and the owner-oper- ators are deemed employees, their true seniority in hauling for the carrier prevails. Not so if the driver operator stands aside from the employee union member as an independent businessman. In the event a carrier reduces the number of trucks it itself owns, and must release a man, its direct employee goes off the payroll right away, even though an owner-operator may have been at work less time at the same terminal, hauling the same freight, and doing the same work. 6. Unless the owner-operator; or even the fleet owner- if he drives a truck-be an employee of the carrier and a union member, it is not possible for him to receive two major direct employment benefits-pension and health and welfare-both substantial payments made by the carrier for all its employees under the Teamsters contract. Internal Revenue Service regulations, enforced by periodic examina- tion of records, limit participation in both these funds in the trucking industry to employees of the companies involved. HIGHWAY TRUCK DRIVERS & HLPRS. 539 If the weekly amount so earned by each driver be paid directly to the owner-operator as a separate businessman, he could not purchase as much 'medical insurance or retire- ment benefit on an individual policy basis. Moreover, the fewer the participants in the group insurance, the less the benefits enjoyed by the participants in the general fund. Lastly, cash paid to a truckowner now for insurance against unexpected disaster or old age needs, will more likely be dissipated on urgent needs, real or fancied, of the moment. 7. Only an employee is covered, or need be covered, by workmen's compensation insurance. A direct benefit of employment is such insurance against work-connected disa- bility, and cannot be enjoyed by an independent contractor. 8. There are fleet owners who do no driving personally but lease large numbers of trucks to a single carrier. If all these drivers-or percentage haulers-be not deemed em- ployees of the carrier, they might be organized by another labor organization. The result would frustrate the basic pur- port of Teamsters v. Oliver, 358 U.S. 243, and 362 U.S. 605, with two separate unions negotiating different contracts, and two different arrangements of conditions of employ- ment for the same work. 9. Nonmembers of the Union do not vote in contract ratifications. It is only if owner operators become employ- ees of the carrier, with whom the contract is negotiated, that they can voice their approval or disapproval. Evidence on Behalf of the Charging Parties The General Counsel offered no evidence. On behalf of the charging parties two witnesses were called. One was Mr. John C. Peet, Jr., an attorney associated in the practice of law in 1963 with Mr. Peter Walther, one of the charging parties, and who bargained on behalf of the tri-area labor association during the 1963 events. The other was James Latta, Jr., president of A. Duie Pyle, Inc., a trucking company in the Philadelphia area, and a member of the tri-area labor association. Peet started by denying any statement by the compa- nies during the bargaining that the wages of owner-opera- tors were of no concern to the Teamsters Union. He then testified that in other collective-bargaining agreements- not involved in this proceeding and executed in 1959 and 1960-he had negotiated and executed with the Union con- tracts providing that the Union could file grievances on behalf of owner-operators who received less money for their labor, on a percentage of tariff rate basis, than the estab- lished hourly and mileage wages. He called these the Eastern Cement Hall Agreement and the Eastern Tank Hall Agree- ment, involving other areas and other trucking companies. He then added there are other such contracts in other sec- tions of the United States and that he offered comparable provisions for grievance filing to the Union in the 1963 negotiations in Philadelphia. On cross-examination the wit- ness then generalized iQ interpretation of these other con- tacts-which were not placed in evidence-and explained they provided a right in the Union to appear at a grievance meeting "in the event the individual owner-operator com- plains that his single checks, percentage of which is set forth in the contract, amount to less than wages and fringes re- ceived by employee drivers." Latta, of the Duie Pyle Trucking Company, gave testi- mony limited to his own business, which operates in two separate divisions-one for general freight and one for what is called steel hauling. From his testimony it appears that one of the divisions consists entirely of 64 owner-operators, each of whom leases his truck to Pyle and receives a percent- age of the tariff rate for both truck rental and truckdriving labor. His other division consists of a number of trucks owned by the Company, run by its direct employees, and hauling general, or dry freight, over the highways. He testi- fied that his owner-operators are not members of the Team- sters Union, while the direct employee drivers are. The point of Latta's testimony is that some time in 1961, 2 years before the events in question, the Teamsters demanded that he sign a contract requiring the owner-operators to join the Union, that he refused, that a strike ensued, and that the Union voluntarily discontinued the picketing only after the Gener- al Counsel of the Board had petitioned the United States District Court,for an injunction under Section 10 of the Act. The theory of illegality in that 1961 proceeding paralleled that in the 1963 complaint still under consideration here. Recommendation In a very real sense the heart purpose of the Union's motion to offer additional evidence was to reargue the fun- damental question of law on which the court disagreed with the Board. And the order for hearing, inviting expressions of opinion, of necessity opened the door to argument and whatever facts the disputants could marshal to give support to their conflicting views of the law. That each of the oppos- ing sides would be selective, both in their choice of argu- ment and what related facts they would point to, of advantage to their respective views, followed like night and day. Indeed, with virtually all the participant's lawyers, even to the extent of one of the charging parties and one of the only two witnesses for the industry, there could be nothing but unending argument. There can be no meaningful "Findings of Fact" based on the testimony of these witnesses-an official of the Inter- national Union, a lawyer partner of a charging party, and a president of a single trucking company. The question is a very broad and important one: May the Teamsters Union, representing hundreds of thousands of drivers on the high- ways of America, lawfully insist that owner-operators, num- bering, it is reported, between 10,000 and 20,000, be included in the bargaining units of truckdrivers throughout the industry? Hoffa made passing reference to area con- tracts in existence in other large segments of the industry. Peet, the lawyer, selected other contracts, few but perhaps also revealing, affecting other areas and other aspects of the trucking industry. These no doubt were discriminating se- lections, none of them even proved in fact at this short hearing, and there is no reason to believe that these very pinpointed selections could reliably tell the story of what the industry as a whole is doing. But a just decision by the Board, or by the court, requires a more objective explora- tion, a more comprehensive inquiry into the realities of this owner-operator phenomenon now an integral and growing part of the entire trucking industry. The court clearly indi- cated it was of this view when it deplored the procedure- facts limited to a written stipulation negotiated by the 540 DECISIONS OF NATIONAL LABOR RELATIONS BOARD particular litigants-in this one case. And the Board agreed when it reopened the record for further evidence. I am unable to state a definitive conclusion of law, as suggested in the Board's order directing the hearing, be- cause I believe additional relevant information, not now before the Board in this particular proceeding, is an essen- tial requisite. That further facts ought to be considered is also indicated by the motion of the Respondent Union, filed after the close of the hearing in Philadelphia in March 1970, to reopen the record for receipt of more testimony and more exhibits. And in opposing the motion, repeated directly to the Board after it was denied by the Trial Examiner, the attorneys for the charging party announced in advance that if additional facts are accepted from the Union, they will request still a further reopening or continuance in order to counteract, again by some selective information, whatever the Union chooses to offer next. Were the hearing permitted to go on in this fashion it would never end, and this entire proceeding would be reduced to an exercise in futility. While it may serve the purpose of the litigants in this com- plaint proceeding to carry on in this fashion, the Board's administrative process dictates otherwise. There is presently pending for decision before the Board a consolidated proceeding in Case 5-RC-5244, et al., involving a very large number of representation petitions filed by self-organized owner-operators in a number of cit- ies throughout the northeastern states, and all naming inter- state carriers as their employers, including trucking company associations in the Philadelphia area. A hearing on 42, out of over 200 such petitions was conducted in Pitts- burgh, Pennsylvania, over a 2-month period after the March 16 hearing on this complaint, and a comprehensive record of oral testimony and exhibits was made. I am aware of these facts because I acted as Hearing Officer there. As I read the opinion of the Third Circuit court in the case at bar, and as I understand the considerations which underlay both the Board's decision and that of the court's, there appears a recognition that a factual picture of the development of this over-the-road phenomenon in the trucking industry, and the progressive factors which contri- buted to the increasing use of owner-operators, as well as their widespread coverage under Teamsters contracts, are matters of direct relevance to the basic legal question to be decided here. More important, there emerges a significant confusion in terms from the record in its entirety, starting with the original stipulation of facts 7 years ago and reach- ing into the briefs received only recently. The stipulation said "some" of the owner-operators involved are "indepen- dent contractors," and some are not. But this case, as viewed both by the Board and the court, seems to consider the same question of law as applicable to all owner-opera- tors in the Philadelphia area. And throughout the proceed- ing there is recurring indication that the Union is really interested in the people who actually drive the trucks, and not fleet owners personally who own trucks but are not highway drivers themselves. And the pending record in the related representation proceeding shows that a great majori- ty of the people involved in fact drive trucks every day, while a much smaller number are only truck owners, or fleet owners. Moreover, it also appears that a substantial number of men, while being paid on a percentage basis instead of on an hourly or mileage basis-called percentage haulers- have been swallowed into the overall disputed class without full consideration of what may be a substantially different legal problem.3 I do not believe the broad and important issue inherent in this case can be decided to the Board's satisfaction solely in reliance upon the limited facts available within the con- fines of this record. Understandably interested in winning this case and this case only, the parties and their legal repre- sentatives saw no reason to open the full picture of pertinent industry practices. Indeed they even urged contentions di- rectly opposed to others made by the same interests else- where. Some trucking companies of Trucking Employers, Inc., a nationwide bargaining group, contend here owner- operators are businessmen all. See U.S. Steel Corp. v. Steel- haulers, May 15, 1970, 74 LRRM 2297 (D.C. Pa.). Many other members of Trucking Employers, Inc. urge inclusion of owner-operators in Teamsters contracts on the ground that they are direct employees of the trucking companies, or interstate carriers. See the oral testimony in Case 5- RC-5244, et al. In that case even the Teamsters representa- tive joined in arguing that the owner-operator organization is not a labor organization but concerted activities by busi- nessmen. And the Third Circuit court seems to have empha- sized the distinction between the owner who is simply a businessman and the owner who drives his truck for work- man pay, when it recently quoted what is considered critical language in Oliver; "The Court [Supreme Court] was ex- tremely careful, however, to confine its holding to a 'nar- rowly restricted application to the times when the owner drives his leased vehicle for the carrier, and to the adverse effects upon the negotiated wage scale ....`4 It is beyond the authority of a Trial Examiner to sug- gest procedural methods for broadening the area of infor- mation necessary for adequate appraisal of questions of law necessary for a complex case of this kind. I recommend that the Board consider, in a manner in its judgment proper, inviting and obtaining a complete picture of the current practices in the trucking industry in the use of trucks owned by persons who do not drive them, trucks driven by their owners, and trucks not owned by interstate carriers but driven by persons paid on a percentage of tariff basis. 3 Note the following phrase in the original stipulation: Occasionally the owner-operator may provide a substitute driver to operate his equipment in the transportation of such commodities for the carriers. 4 U S. Steel Corp. v. Steelhaulers, September 17, 1970, 75 LRRM 2208.