Local 814, Teamsters

184 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Local 814, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of Ameri- ca (Santini Brothers, Inc.) and Karl Leib, Jr., Esq. Local 814, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of Ameri- ca and Santini Brothers, Inc. and Karl Leib, Jr., Esq. Cases 2-CC-1247 and 2-CE-52 January 8, 1974 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS KENNEDY AND PENELLO On June 29, 1973, Administrative Law Judge Herzel H. E. Plaine issued the attached Decision in this proceeding. Thereafter, Respondent Union filed exceptions and a supporting brief, the Charging Party filed a brief, and the General Counsel filed a brief and a reply brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three-member panel.' The Board has considered the record and the attached Decision in light of the exceptions and briefs and has decided to affirm the rulings, findings, and conclusions of the Administrative Law Judge and to adopt his recommended Order.2 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the recommend- ed Order of the Administrative Law Judge and hereby orders that Respondent Union, Local 814, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, its officers, agents, and representatives; and Respondent Com- pany, Santini Brothers, Inc., New York, New York, its officers, agents, successors, and assigns, shall take the action set forth in said recommended Order. 1 As the Board deems it unnecessary that all five of its Members decide the issues involved herein , the Charging Party's motion to that effect is hereby denied. 2 The request of the Charging Party and Respondent Union for oral argument is hereby denied as the record , exceptions, and briefs adequately present the issues and positions of the parties. DECISION HERZEL H. E. PLAINE, Administrative Law Judge: The case involves the so-called "secondary boycott" and "hot cargo" provisions of the National Labor Relations Act (the Act). Santini Brothers , Inc. (Santini), with its principal base in New York City, is engaged in the local and long distance moving of household goods, and in the local moving of office furniture and equipment, called commercial moving. For its local household and commercial moving, Santini uses its own moving vans-tractor-trailers and trucks-and its own employees including drivers who are members of the Union, under a union contract with an association of New York City moving companies of which Santini is one. For its long distance household moving, Santini has contracted individually with a number of owner operators of tractors who, using mostly Santini-owned trailers, perform the service of loading, hauling, and unloading the household goods of each of the shippers from the household of origin to the household of destination for a percentage of the moving charges, established under Interstate Commerce Commission (ICC) tariffs, paid by the shipper to the ICC authorized carrier, Santini. Under article 24 of its current collective-bargaining contract (1971-74) with the association of moving compa- nies, the Union has taken the position that the long distance owner-operators are employees, called contract employees in the article, required under the union-security clause to become and remain union members. When, in the fall of 1972, none of the owner-operators had joined the Union and Santini had taken no measures to compel them to join, the Union caused a work stoppage at Santini's New York facilities on October 30, 1972. The work stoppage was lifted on agreement of Santini to undertake to obtain signed union membership applications from the owner- operators and to refuse to "load" those who did not sign, on Union threat of further work stoppages if Santini did not comply. Some owner-operators signed up; but others refused to join the Union, and Santini in turn refused to allow them to load in New York. Unfair labor practice charges were filed with the Board on November 8, 1972, on behalf of several of the owner- operators based in Florida, and a complaint issued January 31, 1973.1 The complaint charges (1) that, in violation of Section 8(e) of the Act (text infra ), the Union coerced Santini to enter into, and that both the Union and Santini main- tained, an unlawful (hot cargo) agreement to force independent contractors, namely the owner-operators, to become and remain members of the Union, and to require Santini to cease doing business with the owner-operators who would not join; and (2) that in violation of Section 8(b)(4)(i) and (ii)(A) and (B) (the secondary boycott provisions, text infra ), the Union induced and encouraged employees of Santini to engage in a work stoppage on October 30, 1972, and threatened to cause additional work i On January 22, 1973, the Regional Director petitioned the United States District Court for the Southern District of New York for an injunction under Sec 10(1) of the Act to restrain the Union and Santini from, among other things, compelling owner-operators to become union members as a condition for hauling goods from and to New York City, and to otherwise maintain the status quo ante Following the taking of testimony on February 7, 9, and 14, 1973, and oral argument. the court issued a temporary injunction on March 22. 1973, pending disposition of the instant case, Danielson v Local 814 IBT and Santini, 73 Civ 325 (Ward J, March 22, 1973). 208 NLRB No. 22 LOCAL 814, TEAMSTERS 185 stoppages, in order to force Santini to enter and give effect to the unlawful agreement prohibited by Section 8(e) of the Act, to force the independent contractors to become and remain members of the Union, and to force Santini to cease doing business with the independent contractors who would notjoin the Union. The Union's defense is that, contrary to the position of General Counsel, Santini, and the Charging Party,2 the owner operators are not independent contractors but are employees of Santini, required by the union-security clause of the union contract to become and remain members of the Union as a condition of employment with Santini, and subject to discharge for failure to join the Union and pay dues.3 The Union claims that the additional relationship between the owner-operators and United Van Lines, Inc., an ICC authorized nationwide carrier, for whom the owner-operators also perform household moving services under contract between Santini and United Van Lines, Inc., provides added evidence of the employee status of the owner-operators. If the owner-operators are employees of Si.ntini, then the Umon committed no hot cargo or secondary boycott violations respecting them. However, the Union further argues, if the owner-opera- tors are not employees, the Union's conduct through contract and work stoppage, was lawful primary action to recapture work of the bargaining unit employees lost (the Union claims) to the independent contractors, and not unlawful secondaiy action under the secondary boycott and hot cargo provisions of the Act. The defense has framed the two principal issues to be decided, namely, are the contracting owner-operators independent contractors or employees of Santini; and, if they are independent contractors, is the Umon nevertheless free to take contract and strike actions directed at Santini, to compel the independent contractors to join the Union or require Santini to cease doing business with them if they refuse, as a means of recapturing for the bargaining unit employees work allegedly lost to the independent contrac- tors. The case was tried in New York City, March 22, 23, and 24, 1973. By agreement of the parties, the record includes the 3 days' testimony in February 1973 before the United States District Court, see fn. 1, supra. Also, with agreement of the parties, the Union was permitted to include in the record, after the trial concluded March 24, 1973, additional documents from the files of United Van Lines, Inc. (United), which documents were not available at trial. In response to a subpoena by the Union, United had representatives at the trial, one of whom testified at length and produced various documents, but United was not a party to the case. General Counsel, the Union, and the Charging Party have filed briefs. Santini has not filed a brief, but orally stated its views at the opening of the trial, to wit, the owner-operators are independent contractors and not Santini employees, and that Santini was taking no position on the alleged violations of the Act. Upon the entire record in the case,4 including my observation of the witnesses and consideration of the briefs, I make the following: FINDINGS OF FACT 1. JURISDICTION Santini is a New York corporation with offices and places of business in the city and State of New York, Miami, Florida, and Chicago, Illinois, engaged in provid- ing local and interstate moving services and related services. In the representative period of a year prior to the filing of the complaint, Santini performed services valued in excess of $1 million, of which services valued in excess of $50,000 were derived from its interstate trucking operations. As it admits, Santini is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. The Union is a labor organization within the meaning of Section 2(5) of the Act, as the parties admit. 11. THE UNFAIR LABOR PRACTICES A. The Business of Santini Santini is in the business of moving household goods, moving office furnishings and equipment called commer- cial moving, and of providing packing and related services for foreign shipment or export of goods. Santini's base is New York City. It has an office and terminal on Jerome Avenue and a fine arts division on 49th Street. Its export division is in Maspeth, New York; and, principally for the promotion of its long distance moving to and from New York and other parts of the country, Santini has established branch offices in Miami, Florida, and Chicago, Illinois. In terms of hauling, the moving industry of metropolitan New York City has developed three operational categories: (1) local, comprising New York City and a distance outside within a (rough) radius of 100 miles; (2) short haul or local short haul, comprising distances between 100 and 500 miles of New York City; and (3) long distance, all hauling beyond 500 miles of New York City. Santini which is one of the larger, if not largest, of the New York City moving companies, engages in all three categories of hauling, although it does very little short haul work. According to Leo Santini, executive vice president for domestic operations, the company's local household moving in the 10-year period 1962-72 declined greatly to the point of producing only about $100,000 to $200,000 annual revenue; whereas local commercial moving multi- plied 50 times or better in the 10-year period, producing $2 million in 1972. 2 The complaint erroneously spells the Charging Party's name "Lieb " 3 In this connection, following the filing of the unfair labor practice charges, the Union requested Santini that it "discharge" 13 named owner- operators who had failed to pay union dues Santini did not terminate its contracts with these 13 owner-operators. 4 General Counsel has moved, on notice to the parties, for several transcript corrections, which have not been objected to and which are in order While there are a number of other corrections that might have been suggested on all sides, since the correct intendment of the language is fairly ascertainable from the context in which the errors appear, I have limited the corrections to these proposed by General Counsel [Corrections here set forth are omitted from publication.] 186 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The local moving, both household and commercial, is done by direct employees of Santini. The drivers and helpers are members of the Union. Santini's revenue from long distance moving of house- hold goods has also experienced a dramatic growth since 1962, according to Vice President Santini, from a position of losing money on long distance moving prior to 1962. In that year, Santini began contracting as an experiment with owner operators of tractors for the loading and hauling of household goods in Santini trailers and delivery to the households at the long distance destinations. According to Vice President Santini, their New York competitors had already been doing this profitably, and Santini was the last major New York company to enter into such contracts. The 1962 experiment was successful, said Vice President Santini, and the company increased its contracting until by the beginning of 1967 all long distance moving was done for Santini by contractors. Vice President Santini testified that the changeover in the 1962-66 period came about easily, and involved no company pressure, because, earlier, drivers had left Santini to go into contracting with competitors, and other drivers were eager to try, since the contractors made more money (out of the commissions or percentages of moving charges even though paying expenses) than employees (on hourly wages).5 In addition, among older drivers and some others, there was a reluctance to continue or to begin to engage in over-the- road driving that meant absences from home, and among some there was a desire to get out of driving altogether; and for these employees, new jobs with Santini opened up in the growing field of commercial moving.6 The period 1962-72 showed a big growth in long distance moving revenues for Santini, particularly in the second half, 1967-72. Prior to 1956 Santini did all of its booking of moves at the New York office and got little return haulage to New York, or elsewhere, compared to what it carried from New York to one of its most important long distance destinations, Florida. In 1956, Santini opened a branch office in Miami seeking to improve its return bookings. The going was slow at the start, said Vice President Santini. Revenue in long distance moving from Florida in 1956 totalled only $6,000. However, he said it caught on after a time, and the growth was dramatic (his language). In 1962, long distance moving revenue from Florida rose to $51,000, 1966 produced $302,000, and 1972 went to $820,000. Other revenue was generated, mostly attributable to the long distance mov- ing,7 so that the 1966 carrier operation from Florida produced a total of $483,000 or about one-fifth of the total New York-Florida revenue of $2,523,000, and the 1972 carrier operation from Florida rose to $1,381,000 or almost two-fifths of the total 1972 New York-Florida revenue of $3,608,000. 5 Vice President Santini testified that, at the start in 1962, Santini gave some financial assistance in the form of loans to enable a few of its drivers to purchase equipment to convert to contracting, but that such assistance was limited only to former employees, and involved help in financing only 5 or 6 tractors out of the total equipment owned by the 55 to 60 contractors with whom Santini has dealt since 1962 At the time of the trial, he said, all loans for equipment had been paid off by the contractors involved 6 An interesting example was the Union's secretary-treasurer, Charles Martelli, who became a full-time union official in 1965 Previously, for 14 Vice President Santini testified that Santini is an interstate carrier that has operating rates authorized by the Interstate Commerce Commission (ICC) for 28 states. It does not operate as Santini outside those 28 states. When its vans go beyond the 28 states, they do so in relationship and pursuant to contract arrangements with the national carrier, United, which enjoys nationwide authorization from ICC for carnage of household goods. Santini, like several hundred other moving companies throughout the country, is an agent or franchise representative of United, booking long distance moving business, providing local services of packing and storage, and providing the equipment and personnel for loading, hauling, and unloading the household goods. Santini provides the moving equipment and personnel by making available to United, under lease arrangements, the equipment and moving services that Santini has contracted for from its contractors. The leases (designated "permanent" for year round, "master" for intermittent, and "peak" for seasonal), though they differ as to the degree of use of the equipment on United's papers, do not indicate or contemplate any change in relationship between Santini and its contractors or between Santini and its employees, and expressly declare that any personnel provided by the franchise representative (Santini) shall not be considered employees of United (Exhs. U-3 and -4). In this connection, as testified to by Earl Freitag, United's vice president for administration, United has no direct employees who are drivers for it. Apart from about 28 to 30 contractor drivers who have contracts directly with United, according to Freitag, the bulk of the drivers are the owner operators of the equipment contracted to Santini and other franchise representatives and leased by them to United. (In some instances where a contractor owns more than one tractor, or is not driving what he owns, the driver is a person or persons employed by him-see testimony of Thomas Wolfe regarding his relationship to contractor Earl Harris.) In no case, said Freitag, does the owner-operator or driver under contract with Santini have any contract directly with United. Santini hauls (always by its contractors) throughout the United States for United, said Vice President Santini. It also books moves for United, some of which it hauls as a United agent and most of which is hauled by other United agents. Santini's New York office was the No. 2 booker in 1972 (it previously had been No. 1) of the 500-600 offices in the country that book for United, and Santini's Miami and Chicago offices also account for substantial bookings. In 1972, out of Santini's total revenues of $9 million, about $1 million was derived from bookings and haulings for United (approximately half from haulings, and the other half from bookings and related sources) .8 As already indicated, since 1967 Santini has performed years he had been a Santini employee By his own account, in the period 1951-56 he was a helper and local driver, in the period 1956-62. he drove long distance, and in 1962, and continuing until he became a union official in 1965, he became a layout man and a foreman in commercial moving 7 Vice President Santini noted a study showing that every $100 of long distance line haulage generated $40 of accessonal revenue-in packing, unpacking, storage, etc 8 Vice President Santini testified that on United bookings for which Santini acts as hauling agent, Santini receives 70 percent of the hauling (Continued) LOCAL 814, TEAMSTERS all of its long distance moving (either on Santini or United bills of lading) through the instrumentality of the owner- operators or owner-drivers or contract drivers (as they are variously called) of the power equipment (tractors) leased by them to Santini. In 1972-73, according to Vice President Santini, there were 24 such owner-operators or drivers under contract with Santini. While, based on bookings, Santini was entitled to have had 9 or 10 vans, operated by such contract drivers, under permanent lease to United; meaning continuously in United's operation throughout the year, Santini was 2 or 3 short and had only 6 or 7 under permanent lease. The remainder of the long distance equipment and drivers were under master lease arrangements (except for a few who moved only intra- Florida), which allowed for an occasional United haul, usually a one-way outgoing or back haul, and some few were under peak load lease which called for continuous use on United bills of lading in a peak period. B. Union Relationships Santini is one of about 300 moving and storage companies of greater New York City who comprise 6 trade associations known collectively as the Moving and Storage Industry of New York, N.Y. (Industry). Since the 1930's, the Industry has bargained for the employer members as a whole with the Union, and entered into successive contracts which have provided the continuing contract relationships between the Union and the employer mem- bers of the associations. According to Herman Bader, president of Bader Broth- ers Van Lines, an independent interstate carrier (independ- ent meaning not an agent for a national van line such as United), and a member of the Industry negotiating committee for the past 18 years, there are about 20 companies among the approximately 300, who do any significant amount of long distance moving out of or into New York City. These 20 companies are among the largest of the New York companies and all have contracted their long distance moving to owner-operators .9 Bader Brothers was one of the first of the approximately 20 New York moving companies who are in long distance moving to use contractors for its long distance moving, starting in 1948, and Santini was the last of these New York companies to convert to the contracting method, starting in 1962, completed by 1967. At the time of the 1971 union contract negotiations, according to President Bader, there were (and still are) a total of between 250-300 owner drivers who had contracted with New York City moving companies for long distance moving. In contrast, for the total Industry there were (and still are) about 1,800 revenue (out of which come the contractors' percentages for their work) For bookings which it does not haul, Santini receives a 20 percent booking commission, and if the order it places did not originate with Santini it splits part of the booking commission with the originator In addition there are some revenues derived by Santini from United shipments that may come into or through Santini's warehouse 9 Bader testified that, apart from the 20 companies engaging in the long distance moving, there are a few smaller companies that go into New England, within a 500-mile radius of New York City, the so-called short haul These companies, said Bader , are not geared up for the real long distance work (beyond 500 miles of New York City) and use employees under the union contract for short haul They seldom go beyond the 500- 187 regular full-time employees, and an additional 1,200 part- time employees, the latter fact attributable to the seasonal nature of the moving business. Of the 1,800 regular full- time employees, approximately 1,000 are employed by the handful of the largest companies, of which Santini is one, among the 300 companies who comprise the Industry. The Union's concern about use of the owner-operator method of moving first became visible in the 1962-65 contract between the Union and the Industry (Exh. GC-3). Article 12(g) of that contract provided that the owner- operator commission or percentage method of operation would not be practiced on local work; that the percentage or commission method of operation would not be practiced on long distance moving (by employees); and that the Union and Industry would designate representatives to explore jointly the effects of owner-operator operation on long distance moving. In the 1965-68 union-industry contract (Exh. GC-4), article 12(g) of the 1962 contract was repeated in an article 23, entitled "Owner-Operators," including a reference for study of the owner-operator operation on long distance moving to a joint labor management board. A new article 26, entitled "Subcontracting," appeared in the 1965-68 contract. It provided that no employer may subcontract all or part of the work or services it contracts for, except with union approval; and that in the event of such contracting all employees employed by both the prime and subcontrac- tor shall be on the payroll of the prime contractor, who shall be liable for the wages, fringe benefits, and other conditions provided by the union-industry contract. In the 1968-71 union-industry contract (Exh. GC-5), the "Owner-Operators" article 23 of the preceding contract (Exh. GC-4) became new article 24, again reiterating the intention to study the subject; and the previous "Subcon- tracting" article 26 (of Exh. GC-4) became new article 23 (of Exh. GC-5) with added language stressing negotiation with the Union as well as consent. In the current 1971-74 union-industry contract (Exh. GC-6), the previous "Subcontracting" article 23 (of Exh. GC-5) was repeated, again as article 23 (of Exh. GC-6). President Bader testified, without contradiction, that the "Subcontracting" article was regarded as having to do with local, and not with long distance, moving; and that neither his company, which has subcontracted long distance moving continuously since 1948, nor any other member of the Industry has been the subject of a union claim that subcontracting of long distance moving (that has been done without negotiation with the Union and without requesting its consent) was a breach of article 23 on subcontracting. i5 Notwithstanding the expressions of intention in three mile range, he said Contract drivers, on the other hand, according to Santini's Traffic Manager Sclafam , do not like and frequently reject short haul moving because it is not lucrative for them When Santini finds it necessary, on occasion , to ask a contract driver to handle a short haul move, Santini will pay him more than the standard 50 percent haulage commission , and pays from 60 percent to 70 percent of the haulage charge 10 In corroboration, Vice President Santini noted, without contradiction, that the Union has never claimed that Santini breached the article on subcontracting, since the time Santini began converting in 1962, without' requesting union negotiation or consent , to owner operator contracting for long distance moving; and that in the 1972 discussions Union Secretary- Treasurer Martelli had with him, looking to compel Santini 's coverage of (Continued) 188 DECISIONS OF NATIONAL LABOR RELATIONS BOARD collective-bargaining contracts, from 1962 to 1971, to jointly study the matter of owner-operator operation in long distance moving, there was no study, according to President Bader. Nonetheless, in the 1971 negotiations for the current contract, according to Bader, the Union brought in a demand that the concept and method of operation by independent contractors had to go and that all who drove or worked on the long distance moving vans would have to be considered employees of the moving companies. The demand was presented, said Bader, in a manner indicating that, unless the Industry agreed, no drivers would be available for any purpose. The positions of the two negotiating parties, as described by President Bader (and there was no other testimony on the subject), was the following: 1. The industry negotiators were of the view that the owner-operators were independent businessmen, third parties for whom the union-industry negotiators could not negotiate, and not under the control of the few New York City moving companies with whom some 250-300 of them had contracted The bulk of the long distance van line business was carried on by major companies outside New York City, all of whom utilized owner operators; and the member companies of the New York City industry should not now be subject to a different mode of operation, that was imposed by a New York City union local who could not impose its views or control outside New York, and that would take the member companies out of competition for the long distance hauling. 2. The umon negotiators' position was that they didn't want to know of owner-operators or independent contrac- tors, that all doing work for company members of the Industry should be defined as employees under the union contract. Bader emphasized that the union negotiators did not say they wanted to displace the contract drivers with employees, and they did not ask or suggest that the existing group of owner-operators be physically displaced by another group of persons to do the work. Bader noted that one of the umon negotiators, Attorney Simon, said the Union wanted to recapture the long distance hauling lost over the years to the owner-drivers. President Bader testified that there were no employee drivers available then, and there were none available at the time of trial, for long distance driving; that the Union has a problem in getting and providing any men for any kind of work in the busy season; and that the Union did not express the view at the 1971 negotiations that it wanted the owner-operators to cease doing the long distance work because regular employees would do the work if the owner- operators were not doing it.11 According to President Bader, the industry negotiators analyzed their situation and recognizing that, of the 300 companies represented, the great majority had no concern with long distance moving, and that the Industry as a whole did not want a strike12 or an end of the contract negotiations on the long distance moving issue, agreed to the owner-operators as employees under the union contract , there was no mention of a claimed breach of art 23 on subcontracting ii As indicated by Bader, and noted supra, there were a few companies that did some short haul moving ( 100-500 miles from New York City) and an occasional long distance move (beyond 500 miles) with employees, and, said Bader, a provision relating to them came into the current contract, Exh. accept the Union's demand. This became article 24 of the current 1971-74 contract (Exh. GC-6), and provides as follows: Article 24---Contract Employees A.I. All persons performing long distance driving under contract to an employer covered by this agreement (whether as "owner-operator," "owner driver," "percentage driver," "commission driver," or otherwise) shall be covered by this agreement as employees (hereinafter referred to as contract employ- ees). 2. Contract employees shall be covered by this contract limited to those provisions set forth in this section and including the Union Security, Pension and Welfare provisions, Legal Separability, No-Strike, Grievance and Arbitration clauses and Union Check- Off. 3. The employer shall make appropriate provision for Contract' Employees as employees under Social Security Workmens Compansation and Unemploy- ment Insurance benefits. 4. The employer specifically reserves the right, consistent with its Agency Van Line Agreement, to control the manner and means and details of and by which Contract employees perform services as well as the ends to be accomplished. All other details and economic arrangements shall be the subject of a contract between the owner of the vehicle and the employer party to this agreement provided that they shall not conflict with the provisions of this article 24. 5. Contract employees shall be compensated under a "Separate Check" system, and other compensation and benefits under this agreement shall be separately compensated. 6. This agreement shall not be used to deplete the number of regular long distance drivers (other than Contract employees) presently employed by employers covered by this agreement. 7. The employers shall in the assignment of work opportunities to Contract employees adhere to, as far as is practicable in the efficient operation of the employers business, assign work and attempt to equally distribute earning opportunities in a manner consistent with said employees qualifications, length of service with the employer, earning opportunities of said employees, equipment capabilities and agency van line agreement. (First in first out dispatch shall not be considered a violation of the equal earning opportuni- ty.) 8. The foregoing agreement with respect to con- tract employees shall automatically be renewed upon the expiration of this agreement and renewals thereaf- ter, and shall be reopened only upon the conclusion of a national agreement with the major van lines covering Contract employees on a national basis. GC-6, art I I(1), recognizing entitlement of such a driver, who has been away from home for 5 consecutive days or more to 2 days leave without pay for personal business 12 Contemporaneously, there was a 3-week strike before negotiations were completed over the industry wage offer. LOCAL 814, TEAMSTERS B. All loading and unloading of trucks operated by Contract employees covered by this Agreement , within metropolitan district, shall be performed by employees of the Employer. These employees shall be from the Employer's seniority list if available. Employees laid off shall be deemed available , and shall be recalled by the Employer in seniority order. The union-security article, incorporated by paragraph A,2 of article 24, is article 13, a typical union-security provision requiring employees (after 31 days, etc.) to become and remain members of the Union or (on notice) suffer discharge from employment. President Bader testified that none of the owner-opera- tors were invited to participate in the union -industry contract negotiations and no one appeared on their behalf. C. Union and Santini Action Vice President Santini testified that in May 1972 the Union requested a list of Santini's contractors, and that it was supplied to the Union on May 24, 1972. On August 14, 1972, Union Secretary-Treasurer Martelli sent Santini a letter (Exh. GC- 10) stating that Santini had violated article 24 of the union contract (Exh. GC-6) by failing to adjust operations to conform with its "contract em iloyees" provisions. Two weeks later, on August 28, Martelli dispatched a letter to each of the Santini contractors (Exh. GC- 11), including a copy of the union contract and a union membership application, and suggesting among other things that it was necessary as well as desirable that they join the Union. Also in August or September 1972, Martelli came to see Vice President Santini and they discussed the effect of article 24. Vice President Santini expressed concern that a change in status from contractor to employee would be prohibitive in additional costs to the Company and to the contractors . He supplied some figures, indicated that the margin of operation would not allow the Company to pick up the extra cost, and stated his belief that the contractors could not afford and would not pay the extra cost to them, and that the Company would lose its contractors. Among other things, Vice President Santini noted that the change in status of the contractors to employees would make Santini responsible for the contractors' hired help, with responsibility for workmen's compensation insurance, tax withholding, and other costs. Union Agent Martelli replied it was not the Union's intent to saddle Santini with these costs, to which Vice President Santini replied it would legally follow from the change of contractor status to employee status . Martellt said he would check with his lawyers. Martelli made no suggestion that Santini use its hourly wage employees to do the long distance moving, according to Vice President Santini, but he did say Sant,m would have to use the long distance contract drivers in accordance with the union contract and if they were not covered in as "employees," Santini could not use them. There may have been another later discussion with Martelli, said Vice President Santini , but in any event on September 26, 1972, Santini sent a letter to each of its contractors (Exh. GC- 12) noting that each had been sent the Union's letter of August 28 telling them of their 189 obligation tojoin the Union, under the union contract, and that the Union had now set a deadline of September 29. The letter continued, that because the union contract also required Santini to make contributions on their behalf to the union welfare and pension funds and created other costs, Santini was requesting a renegotiation of the existing contract with each of them . On the following day, September 27, Santini sent the Union a copy of the Santini September 26 letter to its contractors , with an updated list of the contractors (Exh. GC-13). Neither the Union letters, nor the Santini letters, to the contractors appeared to have induced any action by them to affiliate with the Union. On October 30, 1972, according to both Vice President Santini and Santini's traffic manager, Sclafani (and as stipulated by the parties), the Union caused a work stoppage at Santini's Jerome Avenue facility. Sclafani testified that the employees were outside and three union officials were present when he arrived in the morning. Sclafani and the company safety director met with the three union officials and the shop steward . The union officials made clear, said Sclafani, that the time had come for the owner-drivers to start joining the Union , and, as Union Agent Bracco said , unless the applications started coming in now there would be continued work stoppage and possibly work stoppages at Santini 's export division in Maspeth and at its fine arts division on 49th Street. Union Agent Bracco submitted a timetable , said Traffic Manager Sclafani , that in 20 days Santini would have been in touch with all of its owner -drivers, and by that time only those who had submitted membership applications to the Union would be permitted to load or unload in the metropolitan district (of New York City) and anyone who had not submitted a membership application would not be permitted to load or unload. Traffic Manager Sclafani testified that he agreed to the Union's proposition, feeling sure that management would agree with him to end the work stoppage . The strike ended about 4 or 5 hours after it began, with Sclafani's agreement to get signed membership applications of the contract drivers to the union representatives as he obtained them, to refuse to allow nonsigners to load or unload, and to pay the employees for the loss of time involved in the work stoppage. After discussing the subject with President Godfrey Santini, Traffic Manager Sclafani spoke , he testified, to each owner-driver present or reporting into the New York area. Sclafani told each owner driver of the October 30 work stoppage, and of the Company's dilemma if he did not join the Union Local ; and that Santini would not be able to permit him to load or unload his van if he did not join the Union. Sclafani claimed he made no "specific requests" for the contract drivers to sign ; nevertheless, he obtained a number of signed applications and turned them over to the Union , permitting the signers to load and unload in New York. Some contract drivers refused to join the Union, said Sclafani, and Santini would not allow them to load or unload in New York. Under date of November 10, 1972, the Union dispatched to Santini requests that it discharge , pursuant to union- security article 13 of the union contract , 13 named contract 190 DECISIONS OF NATIONAL LABOR RELATIONS BOARD drivers who had not joined the Union and paid union dues (Exh. GC-14). Santini did not terminate its contracts with these contractors. On November 20, there was a further work stoppage, according to Vice President Santini. In the meantime, the charge against the Union and Santini was filed with the Board on November 8, 1972, by Charging Party Leib, a Florida lawyer representing three of the Florida based contractors of Santini. D. Status of Contracting Owner Operators in Santini's Long Distance Moving 1. The indicia From the testimony of Santini's Vice President Santini and Traffic Manager Sclafam, United's Vice President Freitag, and Thomas Hugh Wolfe, who was first an employee of a contractor with Santini (commencing in 1967) and later a contractor himself with Santini (com- mencing in 1969 and terminating in January 1973); and from typical contracts between Santini and its contractors, the contracts between Santini and United, and related documents, the indicia for determining whether the contracting owner operators are independent contractors or employees of Santini have emerged. Ownership of Power Units: Typically, the owners of the power units or tractors that pull the trailers in the long distance moving are the contractors of Santini. Santini does not own the tractors, but in most, though not all, cases owns the trailers that the contractors haul with their tractors. More often than not the operator or driver of the tractor is its owner and the contractor with Santini, but in some instances the driver may be an employee of the contractor. Thomas Wolfe was in that category, starting as a codriver with contractor and owner-operator Earl Harris, and taking ovei for a period the sole driving when Harris was injured and could not drive. When Harris acquired ownership of more than one tractor (as has been the case with some others of the contractors), Wolfe leased one of the tractors from Harris (Exh. GC-15) and he (Wolfe) directly entered into a contract with Santini making the leased tractor and his services as contractor available for Santini business.13 Wolfe's contract relationship continued even after Harris had terminated his contract for his other tractors with Santini. By the contract arrangement, using the 1971 form (Exh. GC-7, Santini-Wolfe) which Vice President Santini said was basically the same contract as used since 1962 with minor modifications, the contractor undertakes to make his tractor available during the term of the contract for the exclusive use of the carrier (Santini) and to provide the moving services with the combined tractor-trailer equip- ment on the carrier's shipping contracts or bills of lading.14 13 Some of the contractors have incorporated, and Vice President Santini identified several who have done so 14 The exclusive use provision stems from the ICC regulation that permits an authorized carrier to perform authorized transportation with equipment he does not own, provided that the contract or lease for the equipment gives him the exclusive possession, control, and use of the equipment, and that he assumes complete responsibility in respect thereto, for the duration of the contract or lease In the case of a long term lease of equipment entered into by an authorized carrier of household goods, who wishes to make only intermittent use of the equipment, such exclusive use Remuneration: Remuneration from the carrier to the contractor for all services performed by his vehicle, himself, and employees, is computed at various percentages of the rate schedules that the carrier charges the shipper (see, for example, articles 19, 20, and 21 of contract, Exh. GC-7, and testimony of Vice President Santini). The rate schedules are usually tariff rates approved by the ICC and may sometimes be carrier bid prices at less than tariff rates. While the percentages tend to be similar for similar work under most contracts, they also vary for specific or special circumstances. Thus the usual percentage of the transpor- tation service charge allowed the contractor is 50 percent on tariff rates and 53 percent on bid prices at less than tariff rates. However, some contractors receive 52-1/2 percent for transportation in the summer or peak service months; two contractors, who own and supply their own trailers as well as tractors, receive 65 percent; and for short haul (between 100 and 500 miles), which is not as profitable as long distance and which the contractors tend to reject, and for certain specific trips, usually in the summertime, Santini will pay a range of percentages from 55 percent to 70 percent. There are certain additional charges for additional and accessorial services to the shipper, and, where a percentage is provided in the contract for the contractor, the remuneration may range as high as 100 percent for handling of bulky items, to 75 percent or 80 percent for packing, to 50 percent for waiting time. It should be noted that the contractors have no minimum income guarantee from Santini, nor are they compensated for overtime or compensated in any other manner than by their percentage share of the allowable charges. Contractor Control of Operation: The services for which the contractor is remunerated by the carrier (Santini) embrace execution of the complete order of the shipper to the carrier to accomplish the move of the shipper's household goods from the household of origin to the household of destination. The services involve some preliminary packing or crating (unless, as in some larger moves, packing and crating is done preliminarily by the employees of Santini), loading of the moving van from household of origin, hauling over-the-road from point of origin to destination, unloading the shipper's goods in the household of destination, collecting payment from the shipper at destination (90 percent of Santini's household moving is c.o.d.), and promptly accounting for payments to the carrier. In a typical long distance move, an estimator (for Santini) goes to the shipper's home and leaves or mails an estimate of cost. An order is written up, including a pickup date arranged with the shipper by the Santini sales department (in consultation with the dispatcher). Delivery time is spread over a period of time, usually 3 to 8 days provision need only apply during the times that the equipment is operated by or for the carrier See Exh S-I containing 49 CFR § 1057 4(a)(4) In contrast to the equipment that he has leased for the exclusive use of the carrier, the contractor or owner operator is not subject to any similar "exclusive use" obligation upon his personal services by reason of his contract with the carrier or ICC regulation Thus, he may perform the services required by hiring others, and may himself drive other equipment for other carriers if he has the time and organization (testimony of Vice President Santini and contractor Wolfe) LOCAL 814, TEAMSTERS after pickup. A call slip, the order for service, and a bill of lading are then turned over by the sales department to the dispatcher. The dispatcher projects moves chronologically and geographically, and accumulates loads of a group of individual moves per van, going into a particular area, that are both practical and advantageous for the contractor drivers to accept. In this connection the greatest percentage of Santini's long distance moving on its own bills of lading is New York-Florida and New York-Chicago. On moves outside Santini's certificated territory, United's dispatching at Fenton, Missouri, will be alerted by phone or mail and handles the assigning of loads, although a suggestion that a Santini contractor is or will be available in the area will frequently be followed. Santini contractors haul a consid- erable amount of New York-Los Angeles moving on United bills of lading. While load assignments to the contractor drivers are on a "first come-first served" basis they are usually being worked out in advance of arrival by communication between dispatcher and contract driver, according to Traffic Manager Sclafani, because the contractor may refuse a load without penalty. If he refuses a load he does not necessarily go to the bottom of the list, he may even be called next, depending on the reason for the refusal. The dispatcher frequently juggles orders to work out an accommodation between carrier and contractor needs and preferences, said Sclafani, so that when a driver comes in the entire load for him has usually been established and accepted by him. The dispatcher turns over to the contract driver the several orders for service and bills of lading that will comprise the load, and he proceeds to the homes of the shippers for pickup of their household goods. In the course of so proceeding he will obtain a weight ticket for the unloaded (tare) weight of his truck, since weight of the goods is an ingredient of the charge for moving, and will pick up helpers to assist him with the loading. In hiring loading helpers, the contractors obtain them where they can, frequently in warehouses in various cities. In any event the contractors make their own arrangements and pay for the help as their employees (in keeping with the contract provision with Santini, see for example arts. 3 and 4 of contract, Exh. GC-7). In New York City, since 1971 (because of par. B of disputed art. 24 of the union contract, Exh. GC-6), Santini has required its contractors to select helpers from the Santini seniority list of employees, if available, but if not available, the contractors are free to hire whom they wish. If a contractor takes men who are on the Santini seniority list, Santini will pay the men but bill the contractor for the time he uses such men. The contractor driver proceeds to the residences of the several shippers, for loading. This is his first contact with the shippers and he establishes delivery contact informa- tion with each of them for the several destinations. (Santini has no procedure on how the contractor must contact the shipper before delivery.) In each case the contract driver prepares an inventory (important for inspectional and claims purposes). Except where preliminary packing of goods has been done for a large move in advance by Santini employees, the contractor and his helpers will do 191 whatever packing and crating is necessary , using his own materials obtained at his own expense from whatever source he chooses (see art. 2(b) of the contract, exh. GC-7). In loading the moving van, the helpers usually do the carrying and the contract driver usually does, or supervis- es, the placement of the goods in the van . There is no supervision of the move by Santini personnel. Sclafani testified that Santini has no posted or mailed rules or regulations for the contract drivers. Pursuant to ICC regulations , the contract driver gives the household shipper a copy of the bill of lading , scale weight ticket, and inventory (which both sign at place of origin and destination). In proceeding with the loaded van to its destination, the contract driver obtains the scale gross weight. The contractor hires any helpers and a codnver as his employees, if he thinks such help is necessary or desirable, subject only to the Department of Transportation (DOT) requirement that the second driver shall have supplied a completed DOT form, for the carrier, establishing that he meets DOT driver qualifications. The contractor sets his own hours of work and those of his helpers, subject only to DOT limitation ; and selects his own routes in making deliveries, subject only to the legal limitation that when operating under Santini bills of lading (as distinguished from United bills of lading), he may not operate in States for which Santini has no ICC certifica- tion. Neither Santini nor United conduct any road surveillance or supervision of the contract drivers. The contract drivers are not obliged to call in each day (as salaried employees had been), said Vice President Santini, but frequently do call in for availability of additional tonnage, or for latest information on location or contacting the shippers for delivery. Contractor and carrier are responsible for payment of their own communications to each other and each must prepay such communications (art. 17 of contract, Exh. GC-7). In effecting delivery of the household goods into the destination households of the shippers, again the contrac- tor hires, as his employees , such helpers as he needs from whatever local source is available (except that recently in New York City he has been obliged to use Santini's seniority list of employees, if any are available, under the disputed union contract art. 24 , discussed supra ). Santini exercises no supervision, through any of its employees, over the unloading of the vans and delivery into the households of the shippers. After effecting delivery, collecting the charges, and remitting them , the contract driver indicates to dispatch his availability for the next assignment. Vice President Freitag of United testified that, for goods moving on its bills of lading , United does not supervise the contractor operations in any phase-be it loading , unload- ing, or hauling-that United has no employees , program, or directives for seeing these functions done in a certain way, that it does no checking of the performance of the contract drivers and has no directions for their supervising codrivers, and that it has no policy or program respecting the type of helpers for loading and unloading. Bearing in mind that United's lease arrangements with Santini in effect adopt, and do not purport to alter, 192 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Santini's contract arrangements with its contractors, the summary of the operational practice would indicate that both Santini and United follow the expressed written intention of the Santini contracts with its contractors, that the contractors will completely direct operations and performance of the services , including direction and control of employees utilized (art. 5 of the contract, Exh. GC-7), and that the carver will not endeavor to control the manner or prescribe the method of doing the portion of its business contracted for by the contractors (art. 22 of the contract, Exh. GC-7). Costs and Incidents of Operation• The costs and incidents of operation are borne by the contractors in a pattern consistent with the operational responsibility they have assumed. The contractor hires and pays for his help, and is responsible for tax and social security withholding, payments, and reporting affecting them, and provides his own workmen's compensation and employer's liability insurance for them. (In this connection, neither the contractor nor his employees are accounted for on the carrier's books for tax or social security withholding, etc., or for workmen's compensation insurance, or for other requirements or benefits relating to employees of the carrier.) The contractor pays the operating costs of the equip- ment-fuel, oil, garaging. parking, scales , tolls, ferries, and road use taxes. He pays for the repairs of his tractor, and makes his own arrangements for repairs , fuel, garaging, and parking. While the expense of maintenance of trailers owned by the carrier is borne by the carrier, nevertheless the contractor is responsible to maintain the tires and tubes of the trailer (see arts. 8 and 10 of the contract, Exh. GC-7). The contractor pays for the overnight accommoda- tions and other living expenses on the road. He pays for, and arranges procurement of, his own packing materials. The contractor pays for his base state license plates, and the carrier pays for licenses in other states in which it wants the contractor to operate. The contractor pays for public liability and property damage insurance on the "bobtail" operation of the tractor unhooked from the trailer, and the carrier pays for public liability and property damage on the operation of the combined tractor-trailer. As already indicated, the contractor must obtain and pay for work- men's compensation and employers liability insurance for those he employs. The contractor is responsible for loss of goods or damage in the course of moving the household goods. For shortages, he must reimburse the carrier for the actual amount paid the claimant . For breakage of fragile items he must also reimburse the carrier the actual amount paid the claimant. For other damage claims a formula has been established, by which the contractor must reimburse the carrier $10 per item to a maximum of $100 per shipment. (See art. 14 of contract, Exh. GC-7.) All of the enumerated burdens and responsibilities of the contractor are in effect whether he is operating on United or Santini bills of lading. Contract Provisions and Practices for Public or Carrier Benefit: Because the long distance household moving business is subject to governmental regulation for protec- tion of the consumer and for highway safety, the contracts between carrier and contractor include provisions directly required to be included by law, such as the provision giving exclusive use of leased equipment to the authorized carrier (already discussedsupra). Other provisions may be included in the contracts or practices adopted, because governmen- tal regulation places ultimate responsibility for compliance with certain requirements upon the carrier, notwithstand- ing the delegation of performance of the moving function by contract. As the result of several reviews of inspection practice by DOT, it was determined that periodic 60-day vehicle and equipment inspection was suitable. Such a provision appears in Santini contracts, requiring the contractor to have the inspection required by DOT made every 60 days. with the cost of inspection shared between the carrier and contractor (art. 9 of contract, Exh. GC-7). Santini requires the contractors to submit those reports to it and keeps a record of them. United does not pay or contribute to payment for the inspections (or necessary repairs) of such vehicles and equipment leased to its service , but it does keep a record of the inspections, since by law it would be required to stop operation of a vehicle in its service that was not inspected or in proper working condition. For inspections, the contractors may use any approved inspec- tion stations. In the matter of accidents , the Santini contracts provide that liability for damage as a result of fault of the contractor shall be upon the contractor (art. 8 of contract, Exh. GC-7). On reporting accidents, Traffic Manager Sclafani testified that Santini is required by DOT to report accidents. In consequence, he said, Santini has required the contract drivers to notify it of any accidents. Vice President Freitag of United testified that DOT requires a periodic review of each driver, hence United keeps a record of chargeable (fault of van operator) and nonchargeable accidents ; and if one driving on their account is involved in too many or too serious accidents, United's safety department may suspend him from United 's service on prior notice to the franchise representative with whom the driver is a contractor or employee of a contractor. (As the witnesses testified, a suspension from United's service would not sever the driver's contract or relationship with Santini, and he would continue to drive for Santini so long as his contract was in force.) Of course the review of drivers' records is not limited to involvement in accidents. Thus, violation of DOT rules on driver use of drugs or alcohol would also result in suspension ; or failure of the driver to maintain daily logs required by DOT might also result in suspension (though not mandatorily). DOT and ICC have requirements that drivers keep daily logs, fill out load manifests, and submit certificates of physical examinations ; and both Freitag and Sclafani indicated that United and Santini check on these require- ments being met. In this connection , it is significant that neither Santini nor United purport to exercise disciplinary authority over the contractors (or contractors' employees) or to invoke disciplinary penalties or reprimands ; and that the only remedy available and invoked where there is dissatisfaction with contract performance (including the contractor's failure to comply with government regulations, which LOCAL 814, TEAMSTERS compliance is an express obligation under the contract) is termination of the contract in Santini's case, or suspension (meaning elimination) of the contract driver from Umted's service in United's case. For Santini to terminate the contract, it must give 30 days' notice to the contractor, except that it may terminate the contract without notice if the contractor has failed to comply with his obligation to collect and account for money due on bills of lading or has participated in falsification of a weight certificate or vehicle load manifest. On his part, the contractor may terminate his contract with Santini at any time on written notice specifying the date of termination, provided he shall complete any outstanding work (see art. 25 of contract, Exh. GC-7). Since the contractor has no separate relation- ship with United, even on the permanent (year-round) lease of his equipment by Santini to United, he can drop out of United's service anytime he chooses and go back to Santini, as Vice President Freitag pointed out. If he terminates his contract with Santini, the contractor owes no separate notice to United. Santim requires that each contractor deposit with it a $3,000 cash reserve, on which it pays interest, and which it holds for the final settlement of accounts on termination of the contract (art. 18 of contract, exh. GC-7). During the life of the contract, the contractor will also accumulate credits in a credit account with Santini as his commissions accrue. Since the contractor needs cash for current expenses on work to be performed pending final calculation of commissions for work done, Santini has provided a system of cash advances against credits in the contractor's credit account (which is a non-interest-bearing account). For purpose of identification in operation, the tractors and trailers operating under Santini bills of lading are painted with the Santini colors and lettering. Only the tractors and trailers on permanent lease to United (operating year round on United bills of lading) are painted with the United colors. No United markings or decals are placed on those vehicles that are on master (intermittent) lease to United. On the other hand, there is no requirement that the contract drivers wear a uniform, and there has been no criticism of contract drivers for not wearing a uniform, according to contractor Wolfe. In his own case, said Wolfe, he bought and put some Santini patches on some uniforms he wore for ease of identification with customers. Relationship of the United Operation: Under the preceding hearings there has already been noted many if not most of the important aspects of the Santini contractors' participa- tion in United's operation. As indicated, there is no direct contract relationship between United and any of the Santini contractors, and they and their moving equipment became available to United to the extent that their tractors and trailers or Santini trailers are leased by Santini to United. Even under the permanent, year-round, lease arrangement, the tie is nebulous since the contractor or cortract driver may drop out of United's service anytime he chooses and go back to Santini service. While on United's or Santini's service, as already noted, the contractor is in complete charge of loading, unloading, and hauling without supervision by United or Santini 193 personnel; and, as is the case with Santini, the contractor, whether operating equipment under permanent or master lease to United, may refuse loads without penalty. The Santini contract drivers become available to United by virtue of the same process that makes them contract drivers for Santini, i.e., they are interviewed by Santini's Traffic Manager Sclafam in connection with agreeing upon a contract with Santini and the starting date. There is no application form. Usually, said Sclafani, Santini's contrac- tors have been qualified, experienced drivers; nevertheless, because of DOT regulations, each completes a question- naire covering his background and physical status. United is furnished a copy, in the event the contract driver is to be used in its work; and if United is satisfied that the contract driver appears (from the questionnaire) to meet DOT requirements, and registers no objection with Santini, it is established that the contract driver may haul United tonnage. However, as already indicated, United may not sever a contract diver's contract if it is dissatisfied with his performance; it may suggest that the driver not operate further on United papers and he will go back to work on Santini papers. Beginning in 1971, United instituted a van operator training program for permanent lease drivers. The inten- tion to include master and peak lease drivers was rescinded, said Vice President Freitag, although if any of these asks to attend (or the franchise representative on his behalf asks) they may attend. The training consists of an open discussion (among those attending) on maintenance, a lecture on safe operation on the highways, and a question and answer review of DOT and ICC regulations. United's files indicate that eight Santini contract drivers have taken the training program, and there have been no suspensions of a driver from United's service for failure to attend. United has also instituted a performance awards pro- gram under which it awards gifts for outstanding perform- ance by van operators, taking into account such things as revenue hauled and absence of law violations or accidents. Vice President Freitag testified that United has no system of direct communications with its van operators, and no mailing system for their home addresses, but sends any communications to them through the franchise representative. United has prepared an operator' s manual (Exh. U-10), which is a compilation of factual and legal data useful to a van operator, but copies of it have been sent to the franchise representatives for them to distribute among contract drivers as appropriate. United does not follow up on the distribution, said Vice President Freitag; and Traffic Manager Sclafani testified that Santini has no policy on distribution of United's manuals and that no record is kept of their distribution to the contractors, and has no policy of checking for compliance with items in the manual. United has also prepared an agency manual (Exh. U-9) for the franchise representatives themselves but, as Vice President Freitag testified, United does not send its representatives around to see to compliance with the provisions of the manual. 194 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 2. Independent contractors What is significant to the controlling effect of Greyvan on the case at bar is that in Greyvan, even though using the broader "economic reality" test for defining employee under the pre-1947 National Labor Relations Act, the Supreme Court arrived at independent contractor status for the owner-drivers, which was the same result reached by the circuit and district courts below, applying the common law right-of-control-test (331 U.S. at 716-717) that has since turned out to be the standard for the Board and courts under the post-1947 Act. Looking more closely at Greyvan, the ICC-authorized carrier had its principal office in Chicago with agencies in many cities for soliciting household moving business, and operated in 38 States and Canada. As early as 1930, before passage of the Social Security Act, the carner company had adopted the system of contracts with owner drivers of trucks to do the hauling for it. The company also had trucks of its own, driven by truckmen who were admittedly company employees. Thus (like Santini in this case) the company did its moving business under the two systems, one with contractor truckmen and the other with direct employee truckmen.15 The owner-drivers were required under their contracts to haul exclusively for the carrier company, furnishing their own trucks, equipment, and labor necessary to pick up, handle, and deliver shipments. They were obligated to pay all expenses of operation, including fire, theft, and collision insurance that the company might specify (which turned out to be a blanket company policy for which the owner drivers were charged proportionately). The company carried and paid for cargo insurance. It was the contrac- tors' responsibility to pay for loss or damage to shipments and to indemnify the company for loss caused by them or their employees. The company paid for all Federal or state permits or certificates to operate the contractors' vehicles in the company's service as a motor carrier. The contractors were obligated to collect all money due the company from shippers, to turn such money in at the offices to which they reported after delivery, and to post a $1,000 bond and cash deposit of $250 against final settlement of accounts. The contractor was required at all times to personally drive his truck or to be present on it when a competent relief driver was driving, except in certain emergencies; and he was required to follow all rules, regulations, and instructions of the company. The instructions included directions as to where and when to load freight. (These several requirements are not imposed on the Santini contractors.) All shipping orders or bills of lading were to be between the carrier company and the shipper, and if new freight was tendered to the contractor he was to notify the company so that it could complete the bill of lading in its name (a requirement similar to the Santini contracts' provision). As remuneration, the contractors received a percentage of the tariff charged to the shipper by the company varying between 50 percent and 52 percent, and a bonus up to 3 percent for satisfactory performance. The owner operators of the motorized equipment who have contracted with the earner Santini for long distance moving of household goods are, in my view, independent contractors and not employees of Santini. Central to this conclusion is the net total of the evidence that each of the contractors has within his own control the means of performing the contracted moving services and the method of performance, unsupervised in execution by the carrier whose business he performs. The restrictions upon hum are largely those imposed by law on the governmentally regulated busmess of moving household goods by motor carrier, both with regard to consumer protection and highway safety. The standard applied in differentiating "employee" from "independent contractor" under the Act is the common law agency test, N.L.R.B. v. United Insurance Co. of America, 390 U.S. 254, 256 (1968). This was made clear in the Taft-Hartley amendments (1947) of the Wagner Act, Id. Earlier, under the Wagner Act, the Board and the courts had rejected the "power of control" concept in favor of a broader concept of "economic reality" in defining "employee" under the Act, N L.R.B v. Hearst Publications, 322 U.S. 111, 128-129 (1944), and see further explanation in Harrison v. Greyvan Lines (sub nom United States v. Silk), 331 U.S. 704, 713-714 (1947). Congressional reaction to this construction was adverse, and the 1947 amendment of Section 2(3) of the Act specifically excluded "any individu- al having the status of independent contractor" from the definition of employee. "The obvious purpose of this amendment was to have the Board and the courts apply general agency principles in distinguishing between em- ployees and independent contractors under the Act." N.L.R. B. v. United Insurance Co., supra, 390 U.S. at 256. Thus since Taft-Hartley, "In determining whether an individual is an employee or an independent contractor, the Board has consistently applied the common law right- of-control test. Under this test, an employer-employee relationship exists when the employer reserves the right to control not only the ends to be achieved, but also the means to be used in achieving such ends. On the other hand, where control is reserved only as to the result sought, an independent contractor relationship exists. The resolu- tion of this question depends on the facts of each case, with no one factor being determinative." Fleet Transport Company, Inc., 196 NLRB 436, 439 (1972). This history is useful because, lust prior to Taft-Hartley, the Supreme Court decided in Harrison v. Greyvan Lines, supra, that owner-drivers under contracts and in circum- stances similar to those here, with a carrier like Santini, for the interstate moving of household goods, were independ- ent contractors and not employees of the carrier. The determination was for the purpose of deciding whether the owner-drivers were employees under the coverage of the Social Security Act of 1935, and in making its determina- tion the Supreme Court said it would "follow the same rule that we applied to the National Labor Relations Act in the Hearst case." 15 A contract between the company and a Teamster's local required all truckmen to be members of the union. LOCAL 814, TEAMSTERS The contractors were required to paint the designation "Greyvan Lines" on their trucks. Each truckman was obliged to take a short course of instruction in the company's methods of doing business before he started hauling for the company. In addition there was issued to each a manual detailing the conduct of truckmen in performance of their duties. (A company official testified that the manual was impractical and that no attempt was made to enforce it.) The company maintained a staff of dispatchers who issued orders for the contractors' movements. but not the routes to be used by them. At intervals, the contractors were to report their positions to the dispatchers. Each of the contracts was terminable at any time by either party. This summary of the Greyvan contracts and practice (derived from the Supreme Court's opinion) provides a remarkable likeness to the Santini contracts and practice: but with the indication that the carrier company control over the contractors in Greyvan was tighter than with Santini and its contractors in several respects, notably requiring the contractors to follow all rules, regulations, and instructions of the company including directions on where and when to load freight, requiring the personal driving or supervision of the truck by the contractors at all times, and requiring each of them to take a course of instruction before commencing to haul. Under this set of facts, and recognizing that the contract truckmen and their assistants were from one standpoint an integral part of the Greyvan freight transporting business, the Supreme Court was nevertheless impressed that the energy, care, and judgment of the contract truckmen conserve the equipment they own and increase their earnings, that they hire their own assistants, pay their own expenses with minor exceptions, and depend upon their own initiative. judgment, and energy for a large part of th success, 331 U.S. at 716. "[W ]here the arrangements lea e the driver owners so much responsibility for investment and management as here, they must be held to be independent contractors. (Citations omitted.) These driver-owners are small businessmen. They own their own trucks. They hire their own helpers. In one instance they haul for a single business,la in the other for any customer.17 The distinction, though important, is not controlling. It is the total situation, including the risk undertaken, the control exercised, the opportunity for profit from sound management, that marks these driver- owners as independent contractors." 331 U.S. at 719. In my view, the decision in Greyvan is a persuasive as well as controlling precedent for finding that the Santini contractors are independent contractors, who by compari- son enjoy even greater freedom from the carrier company's control than did the Greyvan contractors. The Board, in more recent times, has added cumulative precedents for the same result. In Reisch Trucking and Transportation Co., Inc., 143 NLRB 953 (1963), the company was a motortruck common carrier with terminals in New York, New Jersey, Pennsylvania, and Maryland. The company was party to a 16 This is a reference to the contract truckmen for Greyvan 17 This is a reference to the contract truckmen in the companion Silk 195 union contract with a Teamster's union local, on a multiemployer basis, that covered the company's 15 "city" dnvers based at the Baltimore terminal, who were admitted employees engaging strictly in local cartage work with company equipment in the Baltimore-Washington area. The union local sought to include an over-the-road unit comprising several owner-drivers of tractors and a non- owner-driver retained by an owner of an additional tractor, who were under contract with the company to haul company owned or controlled trailers to and from the company's Baltimore and Pennsauken, New Jersey, termi- nals, at night. The company opposed the unit on the ground that the owner-drivers were not its employees but independent contractors and that the nonowner driver was an employee of an independent contractor. The Board found that the relation between the company and the owners of the tractors was governed by a standard lease (in use since 1956), for 30 days, automatically renewed for like periods unless terminated on 30 days' notice by either party (and there was evidence that a number of owners had terminated such leases). Under ICC regulations, the tractors were leased to the company for its exclusive use. The trailers hauled were sealed and the drivers did not engage in pickup or delivery of goods and had no contact with the company's customers. The drivers received a trip slip and manifest for each trailer hauled and had to maintain a log on each trip. Under the lease the owner of the tractor undertook to provide the vehicle as the company required it together with a competent driver who remained the employee of the tractor owner, paid by him. Operational costs of the tractor (gas, oil, etc.) and maintenance were the tractor owner's responsibility and he was responsible for damage to it or the company trailer, but the company paid for public liability and property damage insurance on the tractor- trailer. The company paid for licenses, taxes, and fines assessed against the tractor when in company use, and the company was responsible for compliance with ICC safety regulations and requirements for vehicle identification. Unlike the city drivers, the owner-drivers did not participate in any safety program and were not subject to company rules that applied to the company drivers. The owner-drivers were governed by the ICC rules and regulations. The contractor, of course, purchased and paid for his tractor and paid for its license in the home State, Maryland, but the company paid for licenses in other states. The contractor paid for collision-fire-theft insur- ance, the company paid for cargo insurance. While the contractor would get his tractor maintenance performed where he chose, the company conducted periodic inspec- tion of the tractors. Remuneration to the contractors was $50 per round trip between Baltimore and Pennsauken, plus tolls, plus $2 per hour for excess waiting time. There were also some occasional extra jobs off the usual run at a fixed fee plus mileage. Orders were assigned through the company 's central dispatch on call to the drivers, who were free to refuse a case, who had an arrangement with Silk , a coal dealer for delivery of coal to his customers, but who had the privilege of hauling for others 196 DECISIONS OF NATIONAL LABOR RELATIONS BOARD run or extra job without reprisal. The company exercised no disciplinary authority over the contract drivers. The company did no withholding of income tax or social security payments from contractors or their drivers and provided no workmen's compensation or fringe benefit coverage for them. The Board held, 143 NLRB at 956-957, that the owner- drivers were independent contractors and that the non- owner-drivers were employees of independent contrac- tors, and not employees of the company. The Board noted particularly the bona fide and absolute ownership of the tractors by the contractors, which gave rise to an mference of control over the manner of performance associated with the status of independent contractor. It regarded as significant in demonstrating the entrepreneurial nature of the contractors the fact that they determined whether to drive the tractors themselves or employ others to do so. Additionally, that the contractors could control, in part, their profit or loss not only by deciding whether or not to drive themselves, but also by diligence and efficiency in the repair and maintenance of their tractors by persons of their choosing. The Board saw substantial independence in the virtual freedom of the contractor to decide whether to take an assignment, and in selecting routes of travel; and noted the contract expression of intent to establish an independ- ent contractor relationship. Lastly, said the Board, "The control exercised by the Company over the work of owners and drivers is for the purpose of complying with the rules and regulations of the Interstate Commerce Commission and is not inconsistent with the independent contractor relationship." 143 NLRB at 957. In Fleet Transport Company, Inc., supra, the Board had an issue similar to that in Reisch Trucking, supra. The Teamsters union local was seeking, and the company resisting, a unit that included tractor owner-operators, and their nonowner-drivers, who were under contract to a motortruck common carrier for, in this case, the intrastate (Florida only) transportation of petroleum products on behalf of several large oil companies. The company operated subject to the regulations of the Florida Public Service Commission (FPSC), which had adopted the federal Department of Transportation (DOT) regulations with some few modifications. Thus the contract driver had the prescribed duties relating, among other things, to submitting daily logs and maintenance and accident reports, checking equipment before operation, providing inspections at regular intervals, and displaying the compa- ny's name and certificate number on the tractor. The tractor, leased by the company, could not under FPSC regulations be simultaneously leased to another carrier; but the owner-operator could lease other tractors he might own to other carriers and he could drive for other carriers as well as for the company (a situation similar to that of the Santini contractors in the case at bar). Without detailing here all of the details of the contract relationship, the Board concluded that the owner-operators were independent contractors, that the nonowner-dnvers were employees of independent contractors, and that neither were employees of the company and were therefore excluded from the unit. The Board found that the contractor, and not the company, determined what days and hours to work, what routes to use, where to have repairs made and to purchase fuel, and where to park his tractor when not in use. He was free to refuse loads without penalty and to decide whether to hire or fire a driver, what work rules to impose on his drivers, and what rates of pay and fringe benefits his drivers would receive. Essentially, said the Board, the only indicia of control over the means of delivering the petroleum retained by the company were those required by the FPSC. 196 NLRB 436, 439. The Board made two additional points in resolving the issue against a finding of an employer-employee relation- ship: (1) the termination clause of the lease, which gave the company an option to terminate by notice at specified intervals, with automatic renewal of the lease if the option were not exercised, is entirely consistent with independent contractor status; and (2) the fact that the company unilaterally determined the rates of commission paid to the owner-operators, and the terms of the lease, may show that the company's bargaining power is vastly superior to that of the owner-operator, but such inequality of bargaining power is not peculiar to an employer-employee relation- ship, 196 NLRB at 439, fn. 7. Again, in Conley Motor Express, Inc., 197 NLRB 624 (1972), the Board had the question of whether contractors who were owner-operators of tractors leased by them to the certificated motor carrier, and the nonowner-drivers of such vehicles, were properly includable in a unit of over- the-road truckdrivers. The carrier company had leased 27 tractors, 25 of which were owner operated. Two of the owner-operators leased two tractors each to the carrier and each supplied a driver for his second tractor. In addition, the company leased 10 trailers from owner-operators and also had in service 25 of its own trailers. The contractors and their equipment were mainly used for hauling steel from Pittsburgh area steel mills to consignees in five States. The company also had three tractors of its own, driven by three salaried employees, usually on short hauls or for work in which contractors did not wish to engage. The Board disagreed with the Regional Director that the carrier had created an employer-employee relationship with the contractors. It noted three factors which might tend to support the view that they were employees: (1) the degree of control over equipment and personnel reserved to the company required by and consistent with state and Federal (ICC and DOT) regulation of motor carriers, (2) the fact that the company unilaterally set the rates of compensation for the contractors, and (3) evidence that the company had liberal policies on cash advances, interest- free loans, and free loans of equipment to contractors in emergencies. However, said the Board, these three factors alone did not establish that the company controlled the means by which the contractors performed their day-to-day transport and delivery duties under the lease agreements. On the contrary, the following five factors suggest that the controls exercised by the company related solely to results to be achieved under the leases, and that an employer- employee relationship had not been established: (1) the contractors exercised a very substantial degree of freedom in scheduling the use of their equipment and in rejecting LOCAL 814, TEAMSTERS 197 loads offered which they considered undesirable; (2) they were free to trip lease their equipment to other carriers; (3) they paid virtually all the costs of operation and mainte- nance of their equipment; (4) they were subject to almost no day-to-day supervision or control by the company; and (5) there was no pattern of regular discipline of contract drivers for acting contrary to any prescribed means or method of operation designed by the company. According- ly, the owner-operators were found to be independent contractors and the nonowner-drivers to be their employ- ees and not employees of the company.18 The foregoing examination of these precedents of independent contractor status in the moving and trucking industry, from Greyvan to Reisch to Fleet to Conley, provide over a span of the last 25 years the judgment of the Supreme Court and the Board that, even in a governmen- tally regulated business, arrangement for doing business, similar to that in this case, whereby small businessmen undertake performance of part of the principal function of the larger businessman, is indeed independent contracting. Comparing the facts of the cases, the Santini arrangement appears to make as strong a case, if not stronger in some respects, for independent contractor status. As in the other cases, the Santini contractors have all of the entrepreneurial indicia of investment in the ownership of expensive power units, in some cases multiple units and ownership of trailers as well, and shoulder all of the costs and arrangements of their operation and maintenance and the risks and costs of damage, including loss or breakage of the household goods in their care. For their recompense, the contractors share a portion of the tariff charges that the carriers are permitted to charge the shippers. These percentages are prescribed by the contracts and are generally uniform, but there appears to have been some individual bargaining on certain accessori- al charges and there clearly is bargaining by the contrac- tors and carrier on the percentages for the occasional short haul the contractors may do. There are no minimum guaranties of earnings from carrier to contractor, and to the extent that advances for cash needs may be made to the contractor these are not carrier moneys but come out of the contractor's own credits for past earnings with the carrier. The Santini contractors, who must be and are qualified to drive under DOT regulations, are not obliged to drive the equipment they lease to Santini but may lure and provide others who likewise qualify. The Santini contrac- tors may refuse, and sometimes have refused, loads offered to them without penalty. Once responsibility to pick up and deliver a load has 18 Note also the consonant holding in Gold Medal Baking Co, Inc, 199 NLRB 895 (1972), finding an independent contractor relationship between a bakery and the owner-operators of trucks distributing the bakery's products There are a number of other Board decisions in the trucking field where owner-operators have been held to be employees rather than independent contractors, such as Deaton, Inc, 187 NLRB 780 (1971), The Aetna Freight Lines, 194 NLRB 740 (1971), Florida-Texas Freight, Inc, 197 NLRB 976 (1972), Pony Trucking, Inc, 198 NLRB No 59 (1972), and the recent decision of my colleague Administrative Law Judge Sidney Sherman in a moving company case, Local 814, International Brotherhood of Teamsters (Molloy Brothers Moving and Storage, Inc), 208 NLRB No 43 (1974). 1 make no attempt, here, to distinguish in detail the facts and results in those been accepted from the carrier's dispatcher, the contractor is in full charge from pickup to delivery. The contractor hires as his employees his own help at the points of origin and destination to assist in packing, loading, unloading, and, as is necessary, the over-the-road driving. He supervises these tasks and optionally participates in or assists in their performance. The carrier, on whose bills of lading the contractor is working, does not supervise or direct any portion of the moving operation from pickup to delivery. The contractor selects his own routes for delivery, and the hours of work for himself and his men (within DOT limitations); and the expenses incident to effectuat- ing delivery such as fuel, tolls, overnight accommodations, and communications are his burden. None of this relationship and its incidents, including freedom from carrier direction and supervision of perform- ance, are altered when the Santini contractor is moving household goods on the bills of lading of the national carrier-United. Santini, to comply with ICC regulation, has leased to United, either for year-round use (permanent lease) or intermittent use (master lease), its right to use the contractor's equipment, but there is no contractual relationship between United and the Santini contractor, with whom United deals and communicates through Santini. A contract driver may drop out of United's service anytime he chooses and revert wholly to Santini service. Neither Santini nor United purport to have any system of disciplining contract drivers. The United training program for operators of permanent lease vehicles is in essence a form of refresher for experienced drivers but even if the program were more than that it would not be inconsistent with the independent contractor relationship, see Greyvan, supra. The United awards for good performance are no more than a bonus in addition to the agreed remuneration, see Greyvan, supra. The requirements on the contract drivers for physical examinations, keeping of daily logs, periodic inspections of equipment, and the like are requirements arising from government regulation which, as the Board has said more than once, are not inconsistent with the independent contractor relationship, see Rersch and Fleet, supra. In all of the transactions and relationships between the contractors, on the one hand, and the carriers, Santini and United, on the other, including the performance of functions, recompense, the keeping of books, and the accounting to government agencies, insurance companies, and the like, the contractors are not treated or carried or recompensed as employees of the carrier. On the contrary, the contractors are dealt with and accounted for as independent contractors of the carrier Santini, and their cases, from the facts and results in the case at bar and the precedents upon which I have relied and regard as more closely related However, I do note one general characteristic from reading the cited decisions that have found an employer-employee relationship, namely the stress on a layer of carrier regulation put upon the contractor beyond what was required by government regulation, impairing the contractor's independence This is not the situation in the case at bar The evidence indicated conformity with [CC and DOT requirements-not more-and the ICC and DOT regulations themselves are compatible with, and contemplate that there will be and can be independent contractor as well as employer- employee relationships in the business of household moving by motor carrier 198 DECISIONS OF NATIONAL LABOR RELATIONS BOARD contracts with Santini state the intention to establish that relationship. The total facts warrant the finding that the contractors are independent contractors. E. 8(e) Violation 19 Article 24 of the union contract (Exh. GC-6), set out in ful under heading B, above, requires that any person doing long distance driving under contract with an employer covered by the union contract, whether as owner-operator or commission driver or otherwise, shall be covered by the union contract as an employee, called contract employee. However, it is further provided that, except for the specific provisions of the article, the details of economic and other arrangements between the contract employees and the employer shall be the subject of the individual contracts bet,veen them. The specific provisions of article 24 make applicable to the contract employees the union-security, union checkoff, pension and welfare, no-strike, grievance and arbitration, and separability clauses of the union contract. However, the employer is to compensate the contract employees under a "separate check" system, and is to provide them social security, workmen's compensation, and unemploy- ment insurance benefits under the separate compensation system. There is reserved for the employer the right, consistent with its agency van line agreement, to control the manner of performance of contract employees, and to assign work in a way that attempts to reconcile equal earning opportunity with seniority, qualifications, equip- ment capabilities, and agency van line agreement. First-in- first-out dispatch is stipulated not to be a violation of equal earning opportunity. Lastly it is provided that the agreement (under the article) shall not be used to deplete the number of •egular long distance employees, as distinguished from contract employees, presently em- ployed by covered employers. An additional paragraph B, article 24B, requires that loading and unloading within the metropolitan district of trucks operated by contract employees shall be performed by employees on the covered employer's seniority list, if available, including employees in layoff status. Except for compliance with article 24B, Santini did nothing effectual to comply with article 24 until, under compulsion of the union demand of October 30, 1972, accompanied by a work stoppage or strike and threat of more, Santini sought to require its contractors to join the Union, and succeeded with some. 19 Sec 8(e) of the Act provides, in pertinent part (e) It shall be an unfair labor practice for any labor organization and any employer to enter into any contract or agreement, express or implied, whereby such employer ceases or refrains or agrees to cease or refrain from handling, using, selling, transporting or otherwise dealing in any of the products of any other employer, or to cease doing business with any other person, and any contract or agreement entered into heretofore or hereafter containing such an agreement shall be to such extent unenforceable and void 20 The same primary vs secondary object test applies to determine violations of Sec 8(b)(4), since the "hot cargo" provision , Section 8(e), is a complement of the "secondary boycott" provisions of Section 8(b)(4), in effect banning agreements to achieve a secondary boycott in advance, National Woodwork Manufacturers Association v N L R B, 386 U S 612, 634-635(1967) 21 Testimony of Vice President Santini and Traffic Manager Sclafani of The inquiry, then, is whether the object of the Union's conduct and of the agreement respecting the contract drivers (article 24) was "primary"-intended to preserve fairly claimable unit work to unit members in the employ of the contracting employer-or "secondary"-aimed at regulating the labor policies of other employers including self-employed persons. If the object was primary, the agreement did not violate Section 8(e) of the Act, even if its incidental effect caused the employer to cease doing business with other persons ; whereas if the purpose was secondary , such as limiting subcontracting to employers who recognize the union or who are signatory to a contract with it or who are members of it, the agreement was unlawful and a violation of Section 8(e), Retail Clerks International Association Local 1288 (Nickel's Pay-Less), 163 NLRB 817 , 818-819 ( 1967), affd. 390 F.2d 858, 861-862 (C.A.D.C., 1968), finding violations of Section 8(e) and 8(b)(4)(i) and (ii)(A), among other things.20 The circumstances surrounding article 24, looked at from the situation of Santini alone or of the Industry (New York City multiemployers association ) as a whole, indicated 21 that over the period 1962 through 1966, Santini converted completely from employee long distance moving to contractor long distance moving,22 that Santini was the last of the approximately 20 Industry companies who engage in long distance moving to so convert, and Bader Brothers was among the first, starting in 1948 . Numerically, most of the Industry companies have not and do not engage in long distance moving (except as order takers for others). A few of the Industry companies, Santini among them, have done and do some short haul (100-500 miles of New York City) using employees ; but for Santini this has been a very small amount of its business . Only on rare occasions , usually in an emergency, has a Santini employee been asked to do a move over 500 miles, under the conditions existing in the last several years. On the other hand , the long distance contractors are not interested in (because unprofitable for them) and have seldom done short haul under the conditions existing in the last several years; when they have done short haul, usu^ ily to meet the carrier's emergency, they have generally been able to exact from the carrier a higher percentage of the hauling revenue than is normally paid for long distance hauling. Immediately prior to 1962, Santini did all of its long distance moving with approximately 12 employees who spent about 65-75 percent of their time on such work, according to Vice President Santini.23 Currently , Santini has 24 contractors, who do nothing but long distance Santini. Union Secretary-Treasurer Martelli , and President Bader of Bader Brothers for the Industry, related portions of which have already been discussed under headings A, B, and C, above 22 Long distance meaning over 500 miles The current union contract still carries over an old definition of long distance as meaning over 90 miles, but the testimony, already described under heading A, indicated that this is obsolete, that up to 100 miles of New York City is regarded as local, between 100 and 500 miles is short haul, and over 500 miles is long distance 21 Union Secretary-Treasurer Martelli thought the number between 1955 and 1962 was more like 40 employees, but there were comings and goings in employment in the 7-year period and he was not able to establish this as the number of such employees at a given time Moreover , his figure was highly improbable, since Santini did much less long distance business per year in that period than it has done in the subsequent 1962-72 period and currently when it now utilizes 24 contractors for its long distance moving LOCAL 814, TEAMSTERS moving on Santini or United bills of lading, representing an enormous increase in long distance business, particular- ly in the period 1967-72 (see heading A, supra ). Nine of the 24 Santini contractors are based in Florida. Including Santini's contractors, there are between 250 and 300 contractors, all told, doing the long distance moving of the 20 New York City companies so engaged. While there has been practically total conversion from employee to contractor long distance moving by the (New York City) Industry in the period 1948-67, there has not been a lessening of unit jobs, and there has been some increase for two reasons: (1) the increase of long distance moving has generated related work, performed by bargain- ing unit employees, calculated in revenue at about 40 percent of the long distance revenue; and (2) although local household moving business has declined, there has been a great increase in local commercial moving, performed by bargaining unit employees.24 President Bader testified that his company, and others, have used contractors for long distance moving continu- ously since 1948, and that his company, like others, has no employee on its payroll doing long distance moving. When the "subcontracting" article was first introduced into the 1965-68 union contract (as article 26), its terms required specific union approval for subcontracting and that all employees of the subcontractor shall be on the payroll of the prime contractor.25 Nevertheless, neither then, nor since, according to Bader, was there any claim by the Union that his company, or any other doing long distance hauling by means of contractors, was in violation of the subcontracting article (now article 23), which he asserted, without contradiction, related only to local moving business (despite its more general wording). Vice President Santini buttressed this view of the situation with uncon- tradicted testimony indicating no complaints from the Union that Santini violated the subcontracting article either in the course of effectuating its changeover in long distance moving from employees to contractors, or in the 1972 discussions between the union representatives and Santini where the Union took the position that the contractors must join the Union. . Moreover, according to President Bader, when the "contract employees" article 24 came into the 1971 negotiations and union contract, there was no bargaining proposal that the companies use their employees in place of the long distance moving contractors. Nor did the Union take the position that it wanted the moving contractors displaced by bargaining unit employees (not- withstanding it wanted the contractors defined as employ- ees), because there were not then and are not now bargaining unit drivers available for long distance driving, said Bader. Indeed, said Bader, the Union has a problem in 24 In this connection, commercial moving requires about three times more helpers per driver than household moving. The testimony indicated that the number of drivers represented by the Union in 1972-73 was about the same as in 1962, but the number of helpers has increased substantially 25 The article was repeated in the 1968-71 union contract and in the 1971-74 union contract as art. 23, except that it provided for negotiating with the Union on the matter of any subcontract 26 Union Secretary-Treasurer Martelli s assertion that there are many qualified and willing employees for long distance moving fell rather flat in 199 providing any additional men for any kind of moving, particularly in the busy season, noting some expenences.26 Again, Vice President Santini buttressed this view of the situation, indicating that in the Union's 1972 discussions with him concerning the contractors joining the Union, there was no suggestion that Santini use its hourly employees to do long distance work, or that such employees would or could do such work. In sum, apart from talk by a union lawyer at the Industry-Union negotiation about seeking to recapture bargaining unit work, see heading B, supra, for a number of years (since at least 1967) there has been no body of bargaining unit employees, including Santini employees, who have performed long distance moving or for whom to preserve or recapture the long distance household moving business. As developed by the record of this case, the plain fact is that in New York City, at least, the moving business has undergone several gradual changes over a period of years and, among these, has turned for long distance performance to a new breed of small independent businessmen, frequently not based in New York, and capable and willing to move constantly about the country with their own power units. The New York City Industry bargaining unit employees have apparently adjusted to the changes without economic loss, acquiring increased local work (and possibly more desirable work than long distance hauling from the standpoint of a local employee). Against this background, it is useful to turn to what was said and held by the Third Circuit Court of Appeals in A. Duie Pyle, Inc v. N.LR.B., 383 F2d 772, 777-778 (1967), cert. denied 390 U.S. 905 (1968), concerning the union contract provision that required owner operators and fleet owners to become employees and thus to join the union in order to retain the work which they have been doing on subcontract. On their face these requirements are "secondary" in their purpose as well as their result. They do not require a carver to put an end to subcontracting, but only to terminate it as to its subcontractees who refuse to become members of the union. Thus, their effect is to make the continuance of the relationship between the employer and an independent contractor depend upon the latter's decision to become a member of the union if he is an owner-operator and to require his employees as well as himself to become members of the union if he is a fleet-owner. The requirement therefore makes the central test of the employer's continuing to do business with such an individual his internal labor policy and not his maintenance of union wage scales or similar conditions which otherwise might adversely affect the unit members. This is substantially similar to provisions which permit an employer to subcontract only with third parties who are unionized. Such provisions have light of his April 1971 communication to the Industry about the need for a training program to meet the shortage of manpower in the whole of the moving business and his indication at trial that no program had been started. Moreover, Traffic Manager Sclafani testified that the Union has never come to him to say that Santini 's use of contractors was taking work from a Santini employee driver, or that one of the Santini employee drivers would like to do long distance moving as an employee. On the contrary, he said, employees have on a number of occasions come to him asking if they might become contract drivers 200 DECISIONS OF NATIONAL LABOR RELATIONS BOARD repeatedly been struck down under § 8(e) as imple- menting illegal secondary objectives. See, e.g., N. L. R. B. v. Joint Council of Teamsters No. 38, 338 F.2d 23, 28, 30-31 (9 Cir. 1964); Meat & Highway Drivers, Dockmen, Helpers & Misc. Truck Terminal Employees, Local Union No. 710, etc. v. N.L.R.B., 335 F.2d 709,717 (D.C. Cir. 1964); District No. 9, International Association of Machinists v. N.L.R.B., 114 U.S. App. D. C. 287, 315 F.2d 33, 36-37 (1962). The present provisions, to the extent that they require the subcontractees to become employees and members of the union, therefore must also be declared invalid. As in the case of secondary boycotts generally, a union may not employ a collective bargaining agreement with one employer as a means of effectuat- ing its object to coerce another employer to unionize. Nor may it by this means seek to coerce self-employed persons to become union members. Congress has made this clear by § 8(b)(4)(A) which prohibits secondary boycotts with an object of "forcing or requiring any employer or self-employed person to join any labor ... organization ...:. The self-employed owner- operator is as much entitled to protection from coercion to join a labor organization as is a fleet- operator who may have one or even many employees.27 In Meat and Highway Drivers Local 710 [Wilson & Co.], v. N. L. R. B., 335 F.2d 709, 717 (C.A.D.C., 1964), cited with approval in Pyle, supra, the court of appeals struck down as violating Section 8(e) of the Act a "union signatory clause" under which the employer engaged to make all effort to subcontract with cartage companies who employed mem- bers of the union local, saying that the clause "requiring or encouraging a boycott of cartage companies who do not have union contracts is a violation of Section 8(e). To make selection of subcontractors turn upon union approval bears only a tenuous relation to the legitimate economic concerns of the employees in the unit, and enables the union to use secondary pressure in its dispute with the subcontractors." 2s Still later, the District of Columbia Circuit citing Pyle, supra, with approval, affirmed the Board (163 NLRB 817) in Retail Clerks Union Local 1288 v. N L.R.B., 390 F.2d 858, 861-862 (C.A.D.C., 1968), supra, holding that a clause of the union contract with retail stores, requiring that demonstrator employees of suppliers of the stores must comply with the contract and become union members, was a union signatory clause in violation of Section 8(e) of the Act, and that union striking and picketing to obtain the clause constituted violations of Section 8(b)(4)(i) and (ii)(A) and 8(b)(3) of the Act. 27 On remand, Highwa) Truck Drivers and Helpers, Local 107 etc, 199 NLRB 531 (1972), the Board accepted the court's view of the contract clause as the law of the case and found that the contract clause violated Sec. 8(e) of the Act, and that the umon violated Sec 8(b)(4)(i) and (u)(A) of the Act by inducing employees of McCormick to strike or threaten to strike and by coercing McCormick, with an object of forcing McCormick to enter the prohibited agreement. 28 The court distinguished and held valid a "work allocation clause," requiring that meat deliveries in Chicago he made by local employees In Milk Wagon Drivers and Creamery Workers Local Union No. 66, 181 NLRB 882 (1970), a clause of the union contract with employer distributors of dairy products required that all jobbers delivering milk for the distributors shall be members of the union. The Board held that the clause violated Section 8(e) of the Act since it required the distributors to compel the jobbers, whom it found to be independent contractors, to become members of the union. It was found that the objective of the clause was secondary in nature-enhancement of the union's institutional interests-and a means to use one employer to coerce self- employed persons to become union members. From the foregoing, it would therefore appear that article 24 of the union contract in this case, requiring the independent contractors of Santini to become employees of Santini and members of the Union, in its terms and effect violates Section 8(e) of the Act. Section 8(e) makes it an unfair labor practice to "enter into" any such forbidden agreement. Article 24 first came into being in April 1971. The charges in this case were filed November 8, 1972. Nevertheless, the violation of "entering into" the unlawful agreement, prohibited by Section 8(e), is established when a respondent, whether union or employ- er, reaffirms the illegal agreement or insists on its enforcement within the 10(b) period, namely, within the 6 months prior to the filing of the charge. Dan McKinney Co., 137 NLRB 649, 653-657 (1962); Milk Drivers and Dairy Employees, Local Union No. 537, 147 NLRB 230, 231 (1964). Here, both the Union and Santini reaffirmed, and thereby entered into, the unlawful article of the union contract well within the 6-month period before November 8, 1972, as detailed under heading C above. Thus, the Union notified both Santini and its contractors of the necessity to comply with article 24 in August 1972; warned Santini to comply in September 1972; engaged in work stoppages and threatened more to obtain compliance in October and November 1972; and demanded that Santini terminate the contracts of thirteen contractors who refused to join and pay dues to the Union in November 1972. Santini, on its part, requested the contractors to renegotiate their contracts in September 1972; agreed with the Union to solicit and solicited union memberships from its contractors in October and November 1972; and refused to permit loading or unloading by contractors who would not join the Union in October and November 1972. The violation of Section 8(e), by both the Union and Santini, was established. covered by the union contract, on the ground that it had a primary work preservation objective, that involved recapture of work (as distinguished from work acquisition, said the court) which the local deliverymen had lost when meat packers moved out of Chicago, 335 F 2d at 712- 714. But note also a distinction placed on this holding in Local Union Wo 282, Teamsters (D Fortunato, Inc.). 197 NLRB 673 (1972), where the Board held a union contract clause violated Sec 8(e), and union action violated Sec 8(bX4)(i) and (iiXA)(B). because the clause and action were viewed as an attempt to "recapture" work not performed by bargaining unit employees. LOCAL 814, TEAMSTERS 201 F. 8(b)(4) Violations29 For the purposes of this case, Section 8(b)(4)(i) and (ii)(A) forbade the Union from engaging in or inducing strike action or threatening or coercing an employer on two counts: (1) where an object was to require an employer or self-employed person (Santini's contractors) to join the Union, and (2) where an object was to require an employer or self-employed person (Santini) to enter into the "hot cargo" agreement prohibited by Section 8(e); and Section 8(b)(4)(i) and (ii)(B) forbade the Union from engaging in action to achieve the secondary objectives it had sought to impose in advance through the agreement that contra- vened Section 8(e). As noted, under heading E, supra, in Pyle and its remand Highway Truck Drivers Local 107, and in Retail Clerks Local 1288, where the union in each case had engaged in a strike to obtain a clause forbidden by Section 8(e) that included compelling self-employed persons or employees of another employer to become union members, the Board and courts found violations of Section 8(b)(4)(i) and (ii)(A) (as well as violations of Section 8(e)). In Highway Truck Drivers and Helpers, Local 107 (E. A. Gallagher & Sons), 131 NLRB 925 (1961), enfd. 302 F.2d 897 (C.A.D.C., 1962), the Board and court found violations of both Section 8(b)(4)(A) and (B). In that case, Gallagher was a trucking company that did local cartage in the Philadelphia area with its wage employees, and longer distance over-the-road hauling of steel, that included points in Pennsylvania and New Jersey using independent contractor owner operators who were paid on a ton-mile basis. The union struck for a clause in its contract with Gallagher which, the Board found, would curtail deliveries by independent contractors in a 40-mile radius of Philadel- phia and cause Gallagher to cease doing business with the independent contractors. The Board found that the contract provision would contravene Section 8(e) of the Act, and that the strike by the union with an object of compelling inclusion of the provision violated Section 8(b)(4)(i) and (ii)(A) of the Act. And, said the Board, since a further object of the strike necessarily was the forcing of Gallagher to cease doing business with the independent contractors, the union also violated the secondary boycott provision in Section 8(b)(4)(i) and (ii)(B), 131 NLRB at 932. In the case at bar, the Union has engaged in work stoppages at Santini's place of business and threatened more, with an object of forcing the independent contrac- tors of Santini to join the Union, clearly in violation of Section 8(b)(4)(i) and (ii)(A). zs Section 8(b)(4)(i) and (u)(A) and (B) provides as follows 8(b) It shall be an unfair labor practice for a labor organization or its agents- (4)(1) to engage in, or to induce or encourage any individual employed by any person engaged in commerce or in an industry affecting commerce to engage in, a strike or a refusal in the course of his employment to use, manufacture, process, transport, or otherwise handle or work on any goods, articles, materials, or commodities or to perform any services, or (ii ) to threaten, coerce, or restrain any person engaged in commerce or in an industry affecting commerce, where in either case an object thereof is IA) forcing or requiring any employer or self-employed person to join any labor or employer organization or to enter Likewise, the Union's coercive insistence on Santini's compliance with the illegal article 24, including work stoppages and threats of more, was a reaffirmation and therefore reentry of the illegal article, also in violation of Section 8(b)(4)(i) and (ii)(A). N.L.R.B. v. Milk Drivers and Dairy Employees Local Union No. 584, 341 F.2d 29, 33 (C.A. 2, 1965). Because an object of the work stoppages and threats of further work stoppages was to force Santini to cease doing business with its independent contractors who would not join the Union, such conduct was a violation of Section 8(b)(4)(i) and (ii)(B) of the Act. CONCLUSIONS OF LAW 1. The long distance moving contractors with Santini are independent contractors and not Santini employees. 2. By engaging in, and inducing and encouraging employees of Santini to engage in, work stoppages, and by threatening, coercing, and restraining Santini by means of work stoppages and threats of additional work stoppages, with an object of forcing Santini to enter into and give effect to an agreement prohibited by Section 8(e) of the Act and with an object of forcing the independent contractors of Santini and their employees to become members of the Union and with an object of requiring Santini to cease doing business with its independent contractors if they do not become members of the Union, the Union has engaged in unfair labor practices in violation of Section 8(b)(4)(i) and (ti)(A) and (B) of the Act. 3. By entering into and giving effect to an agreement with the Union whereby Santini agreed to refrain from doing business with its independent contractors in contra- vention of Section 8(e) of the Act, the Union and Santini have engaged in unfair labor practices in violation of Section 8(e) of the Act. 4. These unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. THE RFMFDY It will be recommended that the Union and Santini cease and desist from engaging in the unfair labor practices, and take certain affirmative action designed to effectuate the policies of the Act. Because of the coercion involved, the affirmative action includes reimbursement of the Santini contractors by the Union for all union initiation fees and dues unlawfully collected from them. Upon the foregoing findings of fact, conclusions of law, into any agreement which is prohibited by section 8(e): (B) forcing or requiring any person to cease using , selling, handling, transporting, or otherwise dealing in the products of any other producer, processor, or manufacturer, or to cease doing business with any other person. or forcing or requiring any other employer to recognize or bargain with a labor organization as the representative of his employees unless such labor organization has been certified as the representative of such employees under the provisions of section 9: Provided, That nothing contained in this clause (B) shall be construed to make unlawful, where not otherwise unlawful, any primary strike or primary picketing. 202 DECISIONS OF NATIONAL LABOR RELATIONS BOARD anc the entire record, and pursuant to Section 10(c) of the Act, there is hereby issued the following- recommended: ORDER 30 A. Respondent Union, Local 814, International Broth- erhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, its officers, agents, and representa- tives, shall: 1. Cease and desist from: (a) Engaging in, or, inducing or encouraging employees of Santini or other employer engaged in commerce or in an industry affecting commerce, to engage in a work stop- page, or 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 Santini, or any other employer engaged in commerce or in an industry affecting commerce, where an object thereof is either (1) to force or require Santini or any other employer or person to enter into or give effect to an agreement prohibited by Section 8(e) of the Act, or (2) to force or require the independent contractors of Santini or other employer or self employed person to join the Union or other labor organization, or (3) to force or require Santini to cease doing business with its independent contractors. (b) Entering into, giving effect to, or enforcing the agreement, article 24 of its collective-bargaining contract (1971-74) to which Santini is party, found unlawful under Section 8(e) of the Act. 2. Take the following affirmative action which is necessary to effectuate the policies of the Act: (a) Post in its business offices, meeting halls, and places where notices to members are customarily posted, copies of the attached notice marked "Appendix A." 31 Immediately upon receipt of said notice, on forms to be provided by the Regional Director for Region 2, the Union shall cause the copies to be signed by one of its authorized representatives and posted, the posted copies to be maintained for a period of 60 consecutive days thereafter in conspicuous places, including all places where notices to members are customarily displayed. Reasonable steps shall be taken by the Union to insure that said notices are not altered, defaced, or covered by any other material. (b) Mail or deliver additional signed copies of said notices to the Regional Director for posting by Santini, if willing, at locations where notices to its employees are customarily posted. (c) Reimburse the contractors of Santini, or any employees of such contractors, for all initiation fees, dues, or other moneys each may have been required to pay to the Union by reason of the enforcement of the unlawful article 24 of the Union's collective-bargaining contract to which Santini is party. Reimbursement shall include interest at the rate of 6 percent per annum, added to the sum due each, computed on the basis of separate calendar quarters with interest to begin running as of the last day of the calendar quarter for initiation fees, dues, or other moneys exacted or due in that calendar quarter, until compliance with this reimbursement order is achieved. (d) Notify the Regional Director for Region 2, in writing, within 20 days from the date of this Order, what steps the Union has taken to comply herewith. B. Respondent Santini Brothers, Inc., its officers, agents, successors, and assigns, shall: 1. Cease and desist from entering into, giving effect to, or enforcing the agreement , article 24 of the collective- bargaining contract with the Union (1971-74) to which contract Santini is party, found unlawful under Section 8(e) of the Act. 2. Take the following affirmative action designed to effectuate the policies of the Act: (a) Post at its places of business copies of the attached notice marked "Appendix B.".32 Immediately upon receipt of said notice, on forms to be provided by the Regional Director for Region 2, Santini shall cause the copies to be signed by one of its authorized representatives and posted, the posted copies to he maintained for a period of 60 consecutive days thereafter in conspicuous places, includ- ing all places where notices to employees are customarily posted . Reasonable steps shall be taken by Santini to insure that said notices are not altered , defaced, or covered by any other material. (b) Notify the Regional Director for Region 2, in writing, within 20 days from the date of this Order, what steps Santini has taken to comply herewith. iU In the event no exceptions are filed as provided by Sec 102.46 of the Rules and Regulations of the National Labor Relations Board, the findings. conclusions, recommendations, and Order herein shall, as provided in Sec. 102 48 of the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall he deemed waived for all purposes ii In the event that the Board's 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 be changed to read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." 32 See fn. 31. supra APPENDIX A NOTICE To MEMBERS POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board having found, after a trial, that we violated the National Labor Relations Act, we hereby notify you that: WE WILL NOT engage in, and we will not induce or encourage employees of Santini Brothers, Inc. (Santi- ni), or of any other employer engaged in commerce or in an industry affecting commerce, to engage in a work stoppage, or strike, or refusal in the course of their employment to use or handle any material or to perform any services, and WE WILL NOT threaten, coerce, or restrain Santini or other person engaged in commerce or in an industry affecting commerce, where in either case an object thereof is either (1) to force or require Santini or other employer or person to enter into or give effect to an agreement prohibited by Section 8(e) of the National Labor Relations Act, or (2) to force or require the independent contractors of Santini or other employer or self employed person to join the Union or other labor organization, or (3) to force or require Santini to cease doing business with its independent contractors. LOCAL 814, TEAMSTERS WE WILL NOT enter into, give effect to , or enforce the agreement, article 24 of our collective-bargaining contract (1971-74) to which Santini is party, found unlawful under Section 8 (e) of the National Labor Relations Act. WE WILL reimburse, with interest, the independent contractors of Santini, or any employees of such contractors, for initiation fees and dues each may have been required to pay to the Union because of enforcement of the unlawful article 24 of the Union's collective-bargaining contract to which Santini is party. LOCAL 814, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA (Labor Organization) Dated By (Representative) (Title) This is an official notice and must not be defaced by anyone. This notice must remain posted for 60 consecutive days from the date of posting and must not be altered, defaced, or covered by any other material. Any questions concern- ing this notice or compliance with its provisions may be directed to the Board's Office, 36th Floor, Federal Building, 26 Federal Plaza, New York, New York 10007, Telephone 212-264-0306. APPENDIX B 203 NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board having found, after a trial, that we violated the National Labor Relations Act, we hereby notify you that: WE WILL NOT enter into, give effect to, or enforce the agreement, article 24 of our collective-bargaining contract (1971-74) with Local 814, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (the Union), which agreement was found unlawful under Section 8(e) of the National Labor Relations Act. SANTINI BROTHERS, INC. (Employer) Dated By (Representative) (Title) This is an official notice and must not be defaced by anyone. This notice must remain posted for 60 consecutive days from the date of posting and must not be altered, defaced, or covered by any other material. Any questions concern- ing this notice or compliance with its provisions may be directed to the Board's Office, 36th Floor, Federal Building, 26 Federal Plaza, New York, New York 10007, Telephone 212-264-0306.