Joint Council of Teamsters No. 42

320 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Joint Council of Teamsters No. 42, International Brotherhood of Teamsters, Chauffeurs, Warehouse- men and Helpers of America and Merle Riphagen Joint Council of Teamsters No. 42, International Brotherhood of Teamsters, Chauffeurs, Warehouse- men and Helpers of America and Merle Riphagen and Associated General Contractors of California, Inc.; Building Industry Association of California, Inc.; and Engineering and Grading Contractors As- sociation, Inc., Parties to the Contract. Case 21- CC-1424 and 21-CE-122 June 28, 1974 DECISION AND ORDER On May 31, 1973, Administrative Law Judge Louis S. Penfield issued the attached Decision in this pro- ceeding. -Thereafter, the General Counsel filed excep- tions and a supporting brief, and Respondent filed an answering brief. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings, findings, and conclusions, as modified herein, of the Administrative Law Judge and to adopt his recommended Order. We agree with the Administrative Law Judge, but for different reasons, that the Respondent Union did not violate Section 8(e) and 8(b)(4)(ii)(A) and (B) of the Act by entering into and enforcing agreements with various employer associations and individual contractors whereby the general contractors obligated themselves to be financially responsible for the delin- quencies of their subcontractors in the event the latter failed to make contractually required payments to the Union's trust funds. As noted by the Administrative Law Judge, the alleged unlawful clauses in the instant case are sub- stantially similar, if not identical, to those considered by the Board in General Teamsters, Chauffeurs, Ware- housemen and Helpers, Local 982, International Broth- erhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (Associated Independent Owner-Op- erators, Inc.), 181 NLRB 515. There the Board held that, in the absence of sufficient extrinsic evidence as to the manner in which the union enforced such clauses, the Board would make no determination as to the legality of the clauses or the union's conduct in relation thereto. The General Counsel has produced evidence in this case that the Union exerted pressure against La Mirada Trucking Company, a member of the Engineering Contractors Association, to assume financial responsibility for the delinquencies of Merle Riphagen, its subcontractor. The facts with respect to the operations of La Mirada; its president, Charles W. Poss; and C. W. Poss, Inc., a sister corporation, of which Poss is also president, were sparsely litigated. The record reveals that La Mirada is a "broker" for small independent truckers, such as Riphagen, and that the latter's several trucks with drivers are em- ployed by La Mirada on an hourly basis to haul dirt for various contractors in the Los Angeles basin area. La Mirada does not own any trucks or employ any employees. It operates merely as an intermediary be- tween contractors needing trucks and drivers and owners of trucks who need employment. There is some evidence that Poss or a supervisory employee of C. W. Poss, Inc., supervises the loading of Riphagen's trucks at the borrow pit from which the dirt is to be hauled and occasionally visits the jobsites where the dirt is deposited. Riphagen testified that a "foreman" of La Mirada or C. W. Poss, Inc., had the demand slips at the borrow pit to keep a record of the time the trucks were loaded and reloaded. La Mirada operates a dispatch system to direct and control the operation of Riphagen's trucks when employed by La Mirada. To establish a violation of the secondary boycott provisions of the Act the burden was on the General Counsel to prove by a preponderance of the evidence that Respondent Union restrained or coerced a sec- ondary or neutral person to cease doing business with another independent person. This record, in our opin- ion, is insufficient to warrant the conclusion that La Mirada, Poss, or C. W. Poss, Inc., was a neutral or uninvolved person with respect to the operations of Merle Riphagen. The evidence suggests rather that Poss and his corporations were engaged in a joint business venture with Riphagen, to the extent the lat- ter was utilized by Poss, to supply trucks and drivers for the hauling of dirt where such services were re- quired by other contractors. Accordingly, without passing upon the Administra- tive Law Judge's different rationale, we shall dismiss the complaint in its entirety. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Rela- tions Board adopts as its Order the recommended Order of the Administrative Law Judge and hereby orders that the complaint herein be, and it hereby is, dismissed in its entirety. MEMBER JENKINS, concurring: I concur with Members Fanning and Penello in dismissing the 8(b)(4)(ii)(A) and (B) and 8(e) allega- tions in these cases on the grounds that the fringe benefit provisions constitute permissible work stan- dards clauses. Contrary to them, however, for the rea- sons set forth in my dissent in Raymond O. Lewis (Arthur J. Galligan), 148 NLRB 249, and my concur- 212 NLRB No. 5 JOINT COUNCIL OF TEAMSTERS NO. 42 321 rence in International Union of Operating Engineers, Local Union No. 12 (Griffith Company), 212 NLRB No. 4, I would adopt the Administrative Law Judge's determination that in this case, with respect to the fringe benefit fund clauses, the principal work unit is comprised of all employees employed by association members and individual signatories to the master agreement in the classifications provided in the con- tract. CHAIRMAN MILLER and MEMBER KENNEDY, dissenting: The reader of this Decision will better appreciate our dissent in this case if we first set forth a descrip- tion of the posture in which the majority's gossamer opinion would leave this case . We do not agree with the majority that La Mirada was not a neutral person within the meaning of Section 8(b)(4)(ii)(A) and (B) and Section 8(e) of the Act. Unlike them, therefore, we must pass on the Administrative Law Judge's dif- ferent rationale for dismissing the complaint. Our consideration and rejection of both the ma- jority's and the Administrative Law Judge 's ration- ale are explicated below . Moreover, the fringe bene- fit provisions of the contract which the Respondent Union applied to La Mirada here are, for all material purposes, identical to those similarly invoked by the charged union in our companion decision , issued to- day, in International Union of Operating Engineers, Local Union No. 12 (Griffith Company), 212 NLRB No. 4.1 For the purpose of decisional economy, and because this case sheds additional light on the object In Griffith the contract language in issue is the following- Article I, Paragraph B-15. The Trustees of the Trust Funds, through their Administrator, shall furnish each Contractors Association and the Union, with a list of delinquent Contractors each month . The Contrac- tor agrees that he will not subcontract any portion of his job to any Contractor whose name appears on the delinquent list until such Con- tractor has paid all delinquent monies to the various Trust Funds (a) Any disputes between the parties concerning the payment or non- payment of monies due the Trust Fund are not subject to Article V [Procedure for Settlement of Grievances and Disputes] of the Agree- ment 16. In the event the Contractor subcontracts to any such delinquent Subcontractor, in violation of the foregoing, the Contractor shall be liable to the Trustees for all accrued delinquencies of the Subcontractor and shall withhold sufficient funds from monies due or to become due such Subcontractor and shall pay the sums over to the Trust Funds. If a Subcontractor becomes delinquent after commencing work for the Contractor, the Contractor shall be liable for all delinquencies incurred on the job after ten (10) days following the date of the delinquency list on which the Subcontractor's name first appeared The Contractor shall terminate the contract of the Subcontractor who fails to properly correct his delinquency. (a) Where the Contractor fails or refuses to make payments required under the above provisions , the Union shall have the right to withhold services from any or all jobs of such Contractor. In the instant case the contested language is the following 102A.2 The 10th calendar day after such notice is sent by the admin- istrative office, the general contractor shall become financially responsi- ble for all delinquent fringe benefit payments that accrued on his job after the ten-calendar-day-notice period for payments owed by any subcontractor. The contractor may terminate the subcontractor of said delinquent subcontractor, or subcontractors, thereby limiting his liabili- ty, on that job, to the period from the 11th day after such notice is sent of such clauses, we have integrated our dissent in the Griffith case into our opinion here. Contrary to the majority, we find that the Respon- dent Union has entered into and applied the fringe benefit provisions of the contract to La Mirada in violation of Section 8(b)(4)(ii)(A) and (B) and Section 8(e) of the Act.2 For the reasons set forth below, we firmly believe that the Board's decisions here and in Griffith come dangerously close to eradicating the sec- ondary boycott proscriptions of the Act. The fallacy of the Administrative Law Judge's basis for dismissal of the complaint here in Riphagen, with by the administrative office to the termination of such contract on that job. 102.4 3 Where a contractor contracts with a listed delinquent subcon- tractor, or subcontractors , the contractor may terminate the subcontract of such delinquent subcontractor , or subcontractors, thereby limiting the contractors liability, on that job, to the period from the commence- ment of the work under the subcontract to the date of termination of that subcontract 102.4.4 The union may give written notice to a listed delinquent contractor, or subcontractor, (with a copy to the general contractor) to pay the delinquent amount due all trust funds. Within five days from the giving of such notice, the union shall withhold service from any or all jobs of such delinquent contractors, or subcontractors, if proper payment is not made 102 4 5 Where the general contractor fails or refuses to make pay- ments required under the above provisions, the union shall have the right to withhold service from any or all jobs of such general contractor 2 Three issues which the Administrative Law Judge and, of course, the majority find it unnecessary to pass on are (a) whether the demand for $11,000 supported by the Union's contractual right was coercion proscribed by Sec. 8(b)(4), (b) whether the administrator is an agent of the Union thereby inculpating the latter for its coercive conduct ; and (c) whether the 8(e) jobsite proviso has any application to this case. First, there would seem little room for doubt that the $11,000 demand was coercive. These interrelated fringe benefit clauses of the master agreement not only authorize the imposition of monetary liability, but also sanction a union strike to enforce that liability Poss, owner of La Mirada, was cogni- zant that La Mirada would be struck if he failed either to pay or cancel Riphagen's contract Realistically, La Mirada had no alternative but to cease doing business with Riphagen. We find that the administrator's demand on La Mirada constituted an unlawful coercive threat proscribed by Sec. 8(b)(4)(ii)(B). Ets-Hokin Corporation, 154 NLRB 839, enfd 4Q5 F.2d 159 (C A. 9, 1968), cert. denied 395 U.S. 921 (1969). See also Member Kennedy's dissenting opinions in Southern California Pipe Trades District Council No. 16 of the United Association (Associated General Contractors of California, Inc.), 207 NLRB No. 58, and Southern California Pipe Trades District Council No 16 (Kimstock Division, Tridair Industries, Inc), 207 NLRB No. 59. Chairman Miller, who did not join Member Kennedy's dissent in the California cases cited in the preceding sentence, nevertheless believes the circumstances of this case to be quite different. Assessing an employer with an amount of delinquency liability over which he has had no control, is, in the Chairman's view, quite different from the above cases in which the parties had agreed upon a fair means of determining reasonable compensation for a breach of agreement which was within the parties' control. Secondly, the trust fund administrator is clearly an agent of Respondent Union The administrator is hired by the board of trustees of the respective funds Those boards are composed of an equal number of employer and union appointees who serve at the absolute pleasure of the appointing au- thorities . The power of the funds, through the administrator, to impose and demand payment of delinquent contributions is delineated in the master agreement itself, along with the Union's right to strike for failure to comply with the demand Board precedent clearly holds that the trustuees, and their administrators, are agents of the employer associations and the Respondent Union. J. J. Hagerty, Inc, 139 NLRB 633, 637. Finally, the jobsite proviso to Sec. 8 (e) is inapplicable here. The Board has previously held that these identical contract provisions are unlawful self-help clauses proscribed by Ets-Hokin, supra General Teamsters, Chauffeurs, Ware- housemen and Helpers, Local 982, IBT (Associated Independent Owner-Opera- tors, Inc ), 181 NLRB 515 322 DECISIONS OF NATIONAL LABOR RELATIONS BOARD which Member Jenkins agrees, needs only brief analy- sis. The Administrative Law Judge concluded that the principal work unit here is comprised of all employees who work for association members or individual "Short Form" signatories to the master agreement. However, there is no evidence that the short-form employers have ever bargained in the multiemployer unit . Lacking that history, the short-form employers' adoption of the association-negotiated Master Agree- ment does not suffice to include them in the mul- tiemployer unit,' and does not establish an industry- wide bargaining unit .4 Indeed, on this point Members Fanning and Penello are in complete agreement, as evidenced by their opinion in Griffith. Clear Board precedent establishes that La Mirada (the coerced contractor) and Merle Riphagen (the primary party) are not part of the same bargaining unit, industrywide or otherwise, but rather comprise separate bargaining and work units. Hence the basic issue, both here and in Griffith, is whether La Mirada and the offended contractors in Griffith are secondary persons to the Unions' dispute with their subcontractors. The Supreme Court's oft- quoted statement of the principles determinative of whether activity is "secondary," set forth in National Woodwork,' holds union conduct to be secondary where: I . . . the tactical object of the agreement and its maintenance is [the boycotted] employer, or benefits to other than the boycotting employees or other employees of the primary employer thus making the agreement or boycott second- ary in its aim. The touchstone is whether the agreement or its maintenance is addressed to the labor relations of the contracting employer vis-a- vis his own employees.6 As the Supreme Court also said in this case, Section 8(e) and Section 8(b)(4)(A) were enacted by Congress primarily to close the loopholes in Section 8(b)(4)(B) (formerly 8(b)(4)(A) ), and were not intended to alter the previously determined definition of secondary boycott set forth in prior decisions of the Supreme Court. One such decision, together with subsequent Board decisions concerning the same species of con- tractual arrangements in issue here, requires a con- clusion that La Mirada and the offended contractors in Griffith are secondary parties. That case is 3 Moveable Partitions, Inc, 175 NLRB 915 See also International Photog- raphers of the Motion Picture industries, Local 659 of the international AIh- once of Theatrical Stage Employees and Moving Picture Machine Operators of the United States and Canada (MPO-TV of California, Inc Y-A Produc- tions, Inc), 197 NLRB No 134, enfd 477 F.2d 450 (C A D C, 1973), cert. denied 414 U S 1157 (Jan 21, 1974) 4 Raymond 0 Lewis, et al (Arthur J Galligan), 148 NLRB 249 5 National Woodwork Manufacturers Association v N L.R B, 386 U S 612 (1967) 6 Ibid. at 645. N.L.R B. v. Denver Building and Construction Trades Council, 341 U.S. 675 (1951), wherein the Supreme Court faced a situation where a general contractor for the construction of a commercial building award- ed a subcontract for electrical work to a nonunion employer. The union picketed the entire job and thereby effectively forced the general contractor to terminate the electrical's contract. The Court expli- cated two principles material to the case at hand. The first was that the union could attain its ultimate pur- pose only by forcing the general contractor to termi- nate its contract with the electrical subcontractor. Therefore, it was scarcely open to question that an object of the strike, if not the only one, was to force the general contractor to cease doing business with the electrical contractor, and therefore the strike vio- lated Section 8(b)(4)(A).7 Secondly, the Court explic- itly held: We agree with the Board also in its conclusion that the fact that the contractor and subcontrac- tor were engaged on the same construction pro- ject, and that the contractor had some supervision over the subcontractor's work, did not eliminate the status of each as an indepen- dent contractor or make the employees of one the employees of the other. The business relationship between independent contractors is too well estab- lished in the law to be overridden without clear language doing so.8 [Emphasis supplied.] Having proceeded this far, something should be said about the majority's "joint business venture" opinion in Riphagen herein. Even conceding them their reading of the record,9 they have failed utterly to supply any legally sufficient nexus in logic or philoso- phy between their statement on the one hand that La Mirada and Riphagen were engaged in a "joint busi- ness venture," and their statement that "this record . .. is insufficient to warrant the conclusion that La Mirada . . . was a neutral or uninvolved person with respect to the operations of Merle Riphagen." This is an inartful exercise in semantics. We recall no case, nor does the majority cite one, where the offended 7 Now Sec. 8(b)(4)(B) Thus, Sec 8(b)(4)(A) was violated where an object of the union's conduct was to force a cessation of business, despite the fact that the ultimate purpose of the unions was to have union working standards observed on the project Bangor Building Trades Council, A FL-CIO (Davison Construction Company, Inc), 123 NLRB 484, enfd, 278 F 2d 287 (CA I. 1960) 8 Denver Building Trades, supra, 689-690 The Court reaffirmed this princi- ple in N L R B v Local 825, International Union of Operating Engineers, AFL-CIO, 400 U S 297 (1971) 9 A concession which we do not make La Mirada operates by first con- tracting with either ajobsite contractor who needs fill, or by contracting with a "borrow pit" owner who has sold his fill and needs to have it transported Riphagen has no part of this facet of the business And, on the other hand, La Mirada has no control over Riphagen's trucks or his employees We also fail to see what C W Poss, Inc , has to do with this case, since it was neither named in the complaint nor shown to have been involved in the events herein JOINT COUNCIL OF TEAMSTERS NO. 42 323 person was not in some way "involved" with the "op- erations" of the primary person whether it was by virtue of the sale of a product, or by ownership of the construction site, or by purchase of services, particu- larly by subcontract. Indeed, the majority's analysis would hold that the general contractor and its electri- cal subcontractor in Denver Building Trades were "in- volved" in the "operations" of each other, that they were therefore a "joint business venture," 10 and that the Supreme Court necessarily erred in holding the general contractor to nevertheless be a neutral and unoffending person vis-a-vis the labor relations of the electrical subcontractor" But the Supreme Court has already ruled that the facts that the contractor and subcontractor are engaged on the same construction pro- ject, and that the contractor had some supervision over the subcontractor's work, do not eliminate the status of each as an independent contractor or make the em- ployees of one of the employees of the other, Denver Building Trades, supra. During the years since enactment of Section 8(b)(4)(A), the Board has followed these principles in cases too numerous to warrant citation, 12 and particu- larly with respect to the maintenance of agreements just such as are in issue here. In Calhoun Drywall,13the general contractor was a party to a collective-bargain- ing agreement containing guarantee fringe benefit clauses which the Board found in Barker 14 (wherein the Board previously considered on a per se basis the type of clauses presented here) to be essentially identi- cal to the clauses contested here. In Calhoun, the gen- eral contractor (Oberman) subcontracted drywall work to a nonunion contractor (Calhoun) whereupon the union enforced the fringe benefit guarantee provi- sions against the general contractor. The union con- tended, as Respondent Union does here, that the 10The majority fails to say what they intend by the phrase "joint business venture " To the extent that they construe it to mean that La Mirada and Riphagen are to some degree engaged in the same enterprise, then they also must include the "borrow pit" owner, the construction site owner and his general construction contractor, and presumably the State of California or its subdivisions which built the highways used by Riphagen's trucks. " The majority does not contend that La Mirada and Riphagen are not independent contractors The complaint alleges , and the answer admits, that La Mirada (as a number of EGCA) and Riphagen each is, and has been at all times material herein, a person engaged in commerce within the meaning of Sec. 8(b)(4),(u)(A) and (B) and Sec. 8(e) of the Act. Clearly the General Counsel has met his burden of proving that La Mirada is a-prima facie neutral and unoffendmg person vis -a-vis the employees and labor relations of Riphagen In Griffith, the majority finds that prima facie showing rebutted, a matter dealt with later herein. Furthermore, the analysis of the majority does not deal with at least half or more of the delinquencies the Union seeks to exact from La Mirada, since even in 1972 Riphagen performed no more than 50 percent of his work for La Mirada 12 See, e g , Metal Polishers, Buffers, Platers and Helpers International Union, A F. of L, 86 NLRB 1243 13Orange Belt District Council ofPainters No 48, AFL-CIO (Calhoun Dry- wall Company), 153 NLRB 1196, enfd. 365 F.2d 540 (C A.D.C., 1966). 14 General Teamsters, Chauffeurs, Warehousemen and Helpers, Local 982, IBT (Associated Independent Owner-Operators, Inc), 181 NLRB 515 clauses were work standards provisions and therefore primary. The Board rejected this defense, finding that the union's conduct was unlawfully aimed at aiding union members generally. Moreover, the Board said, since the nonunion subcontractor had no employees subject to the collective-bargaining agreement, the fringe benefit funds could not have used the general contractor's payments on behalf of the subcontractor to benefit the latter's employees, and such payments would have been a penalty imposed on the general contractor for failing to subcontract to a union sub- contractor. The Board stated: It is therefore apparent that if the Respondent's conduct were to be held lawful, it would have to be on the theory that it was designed to protect wages and job opportunities of Oberman's em- ployees, represented by the Respondent Painters, who were engaged in work similar to that done by Calhoun; i.e., drywall construction work. These employees would constitute the "principal work unit." But Oberman employed no painters or tapers or any other employees engaged in dry- wall construction work on this project: and at no time did Oberman have a contract with the Re- spondent Painters.15 Furthermore, in-Los Angeles Building & Construc- tion Trades Council, et al. (Portofino Marina), 150 NLRB 1590, the Board found that the respondent unions were engaged in a primary labor dispute with the subcontractor over the latter's alleged delinquent welfare payments, and that by picketing the general contractor, rather than the subcontractor, the unions violated the Moore Dry Dock 16 standards and thereby violated Section 8(b)(4)(i) and (ii)(B) of the Act. The necessary predicate for the Board's conclusion was that the general contractor was not a primary party to the dispute, and the unions were illegally, forcing the general contractor to remedy the subcontractor's de- linquency. And recently, in Local 272, International Association of Bridge, Structural and Ornamental Iron Workers, AFL-CIO (Miller & Solomon Construction Corp.), 195 NLRB 1063, the Board found unlawful picketing of a general contractor, who had no con- tract with the picketing union, with an object of forc- ing the general contractor to make good a defaulting subcontractor's debt ($26.26) to the union's pension and welfare funds. The Board held that the general contractor was a neutral party, not otherwise con- cerned with the dispute between the union and the defaulting subcontractor. Turning now to the case at hand, we find that La Mirada, the prime contractor, and Riphagen, the sub- 11 153 NLRB at 1201. 16 Sailors' Union of the Pacific, AFL (Moore Dry Dock Company ), 92 NLRB 547. 324 DECISIONS OF NATIONAL LABOR RELATIONS BOARD contractor, ' are independent contractors and were doing business within the meaning of the Act.'7 Ri- phagen is merely a "Short Form" signatory to the Master Agreement and, by virtue of established Board law, each constitutes a separate and distinct bargaining and work unit.'8 It is clear that an object of the Union's conduct here was to force La Mirada to cease doing business with Riphagen, inasmuch as that is the action required, and indeed realistically expected, of La Mirada as the only alternative to La Mirada's payment of the $11,000 delinquency alleg- edly due from Riphagen.'9 On this basis it is apparent that a violation of the secondary boycott sections of our Act has been made out, unless it can be shown that La Mirada's employees' interest in preserving their work or work standards is directly affected by Riphagen's fringe benefit payment delinquencies. Such is the Respondent's defense here, which relies essentially for legal support on the rationale of Dixie Mining Company, 188 NLRB 753. The majority also relies on Dixie Mining (although they do not cite it specifically), as did the Administrative Law Judge, for their decision dismissing the complaint in Griffith. We disagree on two grounds. The first, which in our view disposes of the instant case concerning Riphagen, is that Dixie Mining has no applicability to the instant case for the simple, but controlling, fact that La Mirada retains no employees subject to the Master Agreement performing any work covered by its fringe benefit clauses. The Board recognized this distinction as controlling long ago in Local 47, International Brotherhood of Teamster, Chauffeurs, Warehousemen and Helpers of America, AFL, et al. (Texas Industries, Inc.), 112 NLRB 923, enfd. 234 F.2d 296 (C.A. 5, 1956). There the Board held that the coerced general contractors clearly were secondaries to the unions' wage dispute with the subcontractors, since the former had only one part-time employee each represented by the unions, as to whom the general contractors had agreed to the wage demands. Rather, the Board held, the unions' concern was with the wages of the subcon- tractors, and therefore the dispute was not over the conditions of employment of the general contractors' employees or the subcontracting of those employees' jobs, and thus the general contractors were secondary persons. Thus the instant case stands on the same footing as Miller and Solomon and Calhoun Drywall where the pressured employers clearly had no interest in or control over the work sought to be preserved and maintained by the union's conduct. The mere fact that La Mirada has signed a short-form adoption of 17 Denver Building Trades, supra 19 Moveable Partitions, Inc, supra, Calhoun Dry Wall, supra 19 Denver Building Trades, supra the master agreement in this case is of no importance, since without employees in the covered work classifi- cations that agreement is essentially lifeless. The lack of employees subject to the Respondent Union'sjuris- diction clearly eliminates any legitimate interest Re- spondent Union might have as to who La Mirada does business with, since, as in Calhoun, the only prin- cipal work unit for which the Union could have an interest in maintaining work standards demonstrably does not exist. Under controlling precedent, La Mira- da is a neutral independent contractor which has no interest in and no right of control over the labor rela- tions between the Respondent and Riphagen. Denver Building Trades supra; George Koch Sons, Inc., 201 NLRB No. 7. Secondly, assuming arguendo that La Mirada em- ployed employees who were covered by La Mirada's contract with the Respondent Union, and thus war- ranted consideration on the same plane as the pres- sured contractors in the accompanying Griffith case, our view is that the Dixie Mining decision is clearly distinguishable. In the present cases, the Unions have applied these fringe benefit guarantee clauses in order to reach jobsites, employers, and work units, so dis- tant in time, distance, and contractual relationship from the pressured contractors, that the Unions' ap- plication of the contract to them embroils the contrac- tors in labor disputes unknown to them, and so far removed from them that the contract cannot be con- strued as protecting the work preservation interest of the coerced contractors' employees. In Griffith the Administrative Law Judge conclud- ed that these contract provisions serve the primary purpose of preserving unit work standards by discour- aging subcontracting to persons who supposedly per- form covered work more cheaply by virtue of their reduced labor cost 20 resultant from failure to pay fringe benefit contributions.21 This, the Administra- tive Law Judge reasoned, was the rationale of Dixie Mining. In Dixie Mining,22 however, the Board was con- fronted with the application of a labor contract which required that each signatory employer which pur- chased nonunion coal pay 80 cents per ton into the union welfare fund on coal which the normal 40-cent- per-ton royalty rate had not been paid. The Board 20 There does not appear to be any evidence, either here or in Griffith, that this is in fact so 21 Contrary to the Administrative Law Judge, we see no relevance in the fact that the prime contractors may recoup their payments from their subcon- tractors The issue here is whether the Union may lawfully coerce the prune contractors into making these payments in the first instance. 22 Chairman Miller dissented in Dixie Mining in any event, and Member Kennedy would not apply the Dixie Mining reasoning beyond the facts of that case. Member Kennedy joined the majority decision in Dixie Mining only because he viewed the conclusions reached 'in that case warranted on the facts adduced under the limited scope of the record. Member Kennedy would limit that decision to the peculiar facts of that case. JOINT COUNCIL OF TEAMSTERS NO. 42 325 found that the evidence established that wage, fringe, and working standards of employees in nonsignatory mines were generally lower than those established in the National Bituminous Wage Agreement and that the 80-cent payment to which signatories were obli- gated on nonsignatory coal purchases bore a reason- able relationship to the wage and fringe benefits differential between signatory and nonsignatory oper- ators. Accordingly, the Board held that the purpose of the 80-cent clause was to remove the economic incen- tive a signatory might have to buy coal produced by substandard labor. The distinction between Dixie Mining and the pre- sent cases is manifest. In Dixie Mining the signatory coal operator was required to make the 80-cent pay- ment only on the coal which it purchased from a coal producer using substandard labor, but in the instant cases the object of the Unions' conduct is not merely to require the prime contractors to make equalizing payments with respect to the work which they them- selves subcontract and which might affect the work standards of their own employees, but they are also in the Unions' view responsible for the delinquent con- tributions which their subcontractors became respon- sible for while working for other persons, at other times, at other jobsites, as to all of which the prime contractors involved here may have had and probably did have no connection whatsoever, on behalf of em- ployees not employed in the work unit for which the prime contractors here are responsible 23 The jobs on which the subcontractors may have defaulted on the fringe benefit obligations may and probably do no longer exist, and quite likely involved other prime contractors more directly responsible with whom the pressured contractors here may never have had any contact, or who may no longer even be in business. Thus, in the instant case, Riphagen had been re- ceiving subhauling work form La Mirada since 1968. In 1972 only approximately 50 percent of the subhaul- ing work which Riphagen performed was given him by La Mirada. The Union's claim that Riphagen was $11,000 in arrears on his payments to the fringe bene- fit funds is not confined to whatever delinquencies Riphagen might have incurred while doing business with La Mirada. La Mirada was never informed of v This inquiry is the type which the Supreme Court ruled was necessary in National Woodwork. There the Court enunciated the principle that whether the contract and its enforcement violated Sec. 8(e) and 8(b)(4)(B) . cannot be made without an inquiry into whether, under all the surrounding circumstances,38the Union's objective was preservation of work. . or whether the agreements and boycott were tactically calcu- lated to satisfy union objectives elsewhere 38 As a general proposition, such circumstances might include the remoteness of the threat of displacement by the banned product or services, the history of labor relations between the union and the em- ployers who would be boycotted and the economic personality of the industry. See Comment, 62 Mich. L. Rev. 1176, 1185 et seq ( 1964). precisely what the $11,000 amount represented. Obvi- ously assuming a state of facts most favorable to Re- spondent, no more than half of the $11,000 could have accrued while Riphagen was working for La Mirada, if the delinquencies all occurred only during 1972. It is quite clear from a reading of the fringe benefit guarantee clauses in dispute herein, moreover, that that is precisely the intent of the clauses-to reach and impose liability for all delinquencies upon who- ever may currently be doing business with the delin- quent contractor. The scope of these clauses is immeasurably broader than those in Dixie Mining, where the coal mine operator had only to answer for the impact on his employees of his own subcontract- ing, and did not have to underwrite the harm caused to other work units by the contractual relationships between other persons over whom he had absolutely no control. But here, and in Griffith, the Union is in substantial part enmeshing prime contractors in an- cient labor disputes of other employers as to work units with which they have no connection, at jobsites which may or may not still be in existence and with which the pressured contractors may or may not have had a connection, and with respect to delinquencies which may be or may not have been legitimately as- sessed. In their Griffith opinion, the majority discloses their concern for the integrity of the trust funds, which they would protect for the benefit of the "interests of em- ployees of all employers." But only employees of sig- natory employers participate in those benefits, and we cannot imagine any clearer proof that the Unions are seeking to aid union members generally across unit lines. As the majority concedes, the Unions are sepa- rating the benefits from the bargaining units, and are requiring from the employers in each and every bar- gaining unit an indemnity for union members' bene- fits no matter where or for whom they work-an in- demnity not tied to the maintenance of standards of the bargaining unit, but rather covering the entire industry to the extent of its union organization. One other aspect of the majority's opinion in Grif- fith which causes us grave concern is the notion that employers and unions may do away with the second- ary boycott provisions of the Act by private consen- sus. Section 8(e) prohibits the entering into of any contract whereby the employer agrees to cease doing business with any other person. Voluntarism is com- pletely immaterial.''{ In this regard the majority mis- u Member Kennedy pointed this out in his dissents in the Southern Califor- nia Pipe Trades cases, supra. Chairman Miller, while not viewing the facts in those California Pipe cases as establishing an agreement to cease doing busi- ness but rather as an agreement to resolve disputes as to legitimate damages for breach of agreement, agrees with Member Kennedy here (as pointed out in fn. 2, supra) In his view, the agreements here would create a liability for an amount of money wholly beyond the employer's control unless he ceased to do business with another entity, and thus are tantamount to agreements to cease doing business 326 DECISIONS OF NATIONAL LABOR RELATIONS BOARD reads the Supreme Court's National Woodwork opinion, supra. The part of the opinion referenced by the majority lies within the Court's discussion, at pages 638-642, of whether work preservation agree- ments were intended to be proscribed by Congress under Section 8(e). But, earlier in its opinion, at pages 633-634, the Court clearly stated that Section 8(e) was enacted to close the loophole in the existing legislation whereby secondary boycott agreements themselves were not then unlawful under the Act. We quote: The Landrum-Griffin Act amendments in 1959 were adopted only to close various loop- holes in the application of § 8(b)(4)(A) which had been exposed in Board and court decisions. We discussed some of these loopholes, and the par- ticular amendments adopted to close them, in Labor Board v. Servette, Inc., 377 U.S. 46, 51-54. We need not repeat that discussion here, except to emphasize, as we there said, that "these changes did not expand the type of conduct which § 8(b)(4)(A) condemned, that is, union pressures calculated to induce the employees of a secondary employer to withhold their services in order to force their employer to cease dealing with the primary employer." Id., at 52-53. Section 8(e) simply closed still another loop- hole. In Local 1976, United Brotherhood of Car- penters v. Labor Board (Sand Door), 357 U.S. 93, the Court held that it was no defense to an unfair labor practice charge under § 8(b)(4)(A) that the struck employer had agreed, in a contract with the union, not to handle nonunion material. However, the Court emphasized that the mere execution of such a contract provision (known as a "hot cargo" clause because of its prevalence in Teamsters Union contracts), or its voluntary ob- servance by the employer, was not unlawful un- der § 8(b)(4)(A). Section 8(e) was designed to plug this gap in the legislation by making the "hot car- go" clause itself unlawful. The Sand Door decision was believed by Congress not only to create the possibility of damage actions against employers for breaches of "hot cargo" clauses, but also to create a situation in which such clauses might be employed to exert subtle pressures upon employers to engage in "voluntary" boycotts. Hearings in late 1958 before the Senate Select Committee ex- plored seven cases of "hot cargo" clauses in Teamsters Union contracts, the use of which the Committee found conscripted neutral employers in Teamsters organizational campaigns. [Fns. omitted.][Emphasis supplied.] As we have said, then, the issue is whether the claus- es are to preserve work of unit employees, or whether the clauses reach neutral persons and are therefore secondary and unlawful. Since each type of contract is the product of an "agreement," logical analysis of this difference is aided not one whit by the volun- tariness of the boycott, since by Section 8(e) Congress specifically interdicted secondary boycott agreements It is the majority's semantics, not ours, which inject the irrelevancy. We acknowledge that the literal lan- guage of Section 8(e) does not provide for the work preservation exception which the Supreme Court held to be encompassed by Section 8(e). While in National Woodwork the Court upheld the legality of the agree- ment, it did so because the union had a primary dis- pute with its own employer over preserving its members' traditional work tasks which the employer in effect had contracted out. But the Court did not base its holding in any part on the employer's signa- ture to the agreement. We have expressed ourselves at length in this opin- ion in setting forth our analysis of why the particular provisions in issue in these cases are not directly relat- ed to the employees of these neutral contractors. We find that such agreements, however "voluntary," are directly violative of the law Congress passed, as it has been interpreted by the decisions of the highest court in the land. Congress has the power to alter the clear language of the statute and of the decisions of the Supreme Court, but until it does so, the majority deci- sions in both this case and in Griffith leave the Board floundering in the "Bramble Bush." For the reasons set forth above, we find that the labor disputes caused by the fringe benefit delinquen- cies are too remote to the coerced contractors here and in Griffith, and that the impact of those disputes on the work units of the threatened contractors is oblique and does not make these pressured contrac- tors primary persons to the disputes. We conclude that La Mirada and the pressured contractors in Grif- fith are in fact unoffending secondary persons within the meaning of Denver Building Trades, supra, and we would hold that the Respondent Unions have entered into and applied the contract provisions here and in Griffith, in violation of Section 8(b)(4)(n)(A) and (B), and Section 8(e) of the Act. DECISION STATEMENT OF THE CASE Louis S. PENFIELD, Administrative Law Judge: This con- solidated proceeding was heard before me in Los Angeles, California, on February 8, 1973, with all parties repre- sented.' The complaint is based on charges and amended charges filed in each case on September 29, 1972, and De- 1 Representatives of the three associations who were parties to the contract were duly notified of the proceeding but did not put in appearances or file briefs JOINT COUNCIL OF TEAMSTERS NO. 42 327 cember 15, 1972, respectively, by Merle Riphagen, an indi- vidual. The consolidated complaint issued on December 20, 1972, and alleges that Joint Council of Teamsters No. 42, International Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America, herein called Respon- dent Union, engaged in unfair labor practices in violation of Section 8(e) and Sections 8(b)(4)(ii)(A) and (B) of the Act. All parties were given full opportunity to participate in the hearing and after the close thereof Respondent Union and the General Counsel filed briefs. Upon the entire record in this consolidated proceeding and upon my observation of the witnesses and their de- meanor, I make the following: construction industry proviso of Section 8(e). Respondent Union's demand, made through its alleged agents Construc- tion Teamsters Security Trust and Construction Teamsters Vacation Holiday Trust, herein collectively called the Trust Funds, that La Mirada, as a condition of continuing to subcontract dirt hauling to Riphagen, pay the trust funds the amount of Riphagen's delinquency is further alleged to be violative of Section 8(b)(4)(ii)(A) and (B) of the Act. Respondent Union claims the contract provisions in ques- tion to be primary in nature and aimed only at protecting work standards of employees in the principal work unit, and thus both the contract provisions and any efforts to invoke and enforce them to be lawful. The facts are not in dispute and the issue before us is one of law. FINDINGS OF FACT 1. JURISDICTION Merle Riphagen is an individual doing business in South- ern California as a sole proprietor of a dirt hauling business. La Mirada Trucking, Inc., herein called La Mirada, is a dirt hauling contractor in Southern California serving the build- ing and construction industry. On frequent occasions to be described more particularly below La Mirada subcontract- ed dirt hauling to Riphagen. Associated General Contractors of California, Inc., here- in called AGC, Building Industry Association of California, Inc., herein called BIA, and Engineering and Grading Con- tractors Association, Inc., herein called EGCA, are each employer associations which exist for, and engage in, collec- tive bargaining, and negotiate collective-bargaining agree- ments on behalf of their employer-members with various labor organizations including Respondent Union. La Mira- da is an employer-member of EGCA. The employer-mem- bers of AGC, BIA, and EGCA on whose behalf the associations have executed a multiemployer multiassocia- tion collective-bargaining agreement are engaged in busi- ness as contractors in the building and construction industry in Southern California. Riphagen, also in business in the same industry, is an individual party signatory to the same agreement. In the aggregate the employers annually purchase and receive supplies valued in excess of $50,000 which come to them directly from suppliers located outside the State of California. I find the employer-members of the associations, La Mirada and Riphagen collectively to be engaged in businesses affecting commerce within the mean- ing of the Act, and assertion of jurisdiction to be appropri- ate. II THE LABOR ORGANIZATION INVOLVED Respondent Union is a labor organization within the meaning of Section 2(5) of the Act. III THE ALLEGED UNFAIR LABOR PRACTICES The conduct alleged as violative of the Act relates to certain provisions of Respondent Union's contract with the employer associations. These clauses are alleged to beper se violative of Section 8(e) of the Act because their impact is claimed to be secondary in nature and not protected by the A. The Multiassociation Labor Agreement This agreement is entitled Master Labor Agreement Be- tween Southern California General Contractors and Re- spondent Union. It will be referred to herein as the master agreement. The master agreement was executed on Decem- ber 10, 1971, to remain in effect until June 15, 1974. The contractor members of the various associations are engaged in construction work in Southern California. The master agreement purports to cover persons working for these con- tractors either on jobsites or in shops or yards. Its coverage includes a wide variety of classifications of persons engaged in driving and repairing trucks. This equipment in some instances will operate exclusively off the highway, while in others it will operate both on and off the highway. The master agreement contains detailed provisions covering wages, hours, and working conditions, as well as grievance and other clauses frequently found in collective-bargaining agreements. It also provides covered workers with various fringe benefits including a health and welfare plan, paid vacations, and pensions. Since in the construction industry workers normally move from one contractor to another as jobs start and finish, there must be means to insure proper credit for such earned fringe benefits. This is accomplished by requiring that each covered employer pay designated sums for each hour a worker is employed into trust funds established and administered jointly by Respondent Union and the contracting associations. The administrators of the trust funds are required to credit the individual employees appropriately and to disburse the earned benefits pursuant to contract terms. The master agreement requires each cov- ered employer to pay the sums due on behalf of each of his employees to the trust funds on a regular monthly basis. The trust funds report delinquencies in such payments to Re- spondent Union and the association, and'are authorized to institute legal steps against delinquent employers. In addi- tion to moving directly against a delinquent employer the master agreement also provides that contractors may be- come liable, for delinquencies of their subcontractors who are also covered by the master agreement. It is these clauses that the General Counsel attacks, and they read in full as follows: 102.4.2 The 10th calendar day after such notice is sent by the administrative office, the general contractor shall become financially responsible for all delinquent fringe benefit payments that accrued on his job after 328 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the ten-calendar-day-notice period for payments owed by any subcontractor. The contractor may terminate the subcontract of said delinquent subcontractor, or subcontractors, thereby limiting his liability, on that job, to the period from the 11th day after such notice is sent by the administrative office to the termination of such contract on that job. 102.4.3 Where a contractor contracts with a listed delinquent subcontractor, or subcontractors, the con- tractor may terminate the subcontract of such delin- quent subcontractor, or subcontractors, thereby limiting the contractors liability, on that job, to the period from the commencement of the work under the subcontract to the date of termination of that subcon- tract. 102.4.4 The union may give written notice to a listed delinquent contractor, or subcontractor, (with a copy to the general contractor) to pay the delinquent amount due all trust funds. Within five days from the giving of such notice, the union shall withhold service from any or all jobs of such delinquent contractor, or subcontractor, if proper payment is not made. 102.4.5 Where the general contractor fails or refuses to make payments required under the above provisions, the union shall have the right to withhold service from any or all jobs of such general contractor. By such clauses the prime or general contractor in effect becomes a guarantor for his delinquent subcontractor al- though he can limit his liability by removing him from the job. The clauses are obviously designed both to put pressure on the delinquent subcontractor to remedy his own delin- quency in order to avoid losing thejob, and to safeguard the employees and the integrity of the fund by insuring that if he cannot or will not pay up another responsible party will pay the trust funds the amounts due. The General Counsel argues that these clauses have a secondary thrust because their effect is either to penalize the prime contractor or make him "cease doing business" with the subcontractor with whom Respondent Union has the primary dispute. All members of the three associations are of course bound by the provisions of the master agreement. In addition to these association members, however, other persons engaged in like construction industry work may become parties to the master agreement by signing what is known as the short form agreement. This is in substantial measure a paraphrase of the master agreement itself. The signatory employer rec- ognizes Respondent Union as the statutory representative of his employees, and agrees to be bound by the terms of the master agreement including the obligation to make the required reports and payments for the fringe benefits to the trust funds. As indicated above Merle Riphagen is a party signatory to the short form agreement. While the master agreement refers to the trust funds and contains the provisions relating to the handling of delin- quencies, the Construction Teamsters Security Trust and Construction Teamsters Vacation Holiday Trust are each set up by separately executed agreements signed by Respon- dent Union and the associations. Each fund is controlled by a board of trustees comprised of equal numbers of associa- tion and union representatives. The individual trustees are appointed by the association and union representatives re- spectively. Each trustee serves until death, resignation, or removal. Removal may be effected by the appointing power at any time, and for any reason whatsoever. Day to day operation of the trust funds is conducted by a trust fund administrator. It is incumbent on the administrator to de- termine when delinquencies occur, and to initiate steps to obtain the sums due if at all possible. A delinquency first becomes known when the employer's report and contribu- tion is not received. The administrator, however, has no way of knowing the prime contractors for whom a delinquent subcontractor may have been working He is dependent on receiving, and usually obtains, such information from union or employer sources. When the administrator receives infor- mation regarding the identity of the prime contractor it is the regular practice to send such prime contractor a form notice advising him of the delinquency of his subcontractor. This notice is tailored to the above-quoted provisions of the master agreement, and undertakes to alert the prime con- tractor to the fact that he may become liable for the delin- quency if he continues to use the services of the delinquent subcontractor. All delinquent payments whether made by the primary contractor owing the obligation, or by the guar- antor contractor are received into the fund and credited to the particular covered employees entitled to the benefits B. The Controversy Giving Rise to the Instant Case Merle Riphagen owns and operates three sets of bottom dump trailer tractor units. He operates one himself and employs two drivers. Riphagen functions in the Los Angeles area construction industry as a dirt fill subhauler. He ob- tains his work through the use of individuals or firms known as brokers. La Mirada operates as such a broker. The busi- ness of a broker is to supply trucks to excavating or other contractors to meet their hauling needs. These trucks are supplied by the broker to the contractor on a per hour basis. Some brokers, including La Mirada, own no trucks at all and meet the needs of the contractors by dispatching sub- haulers like Riphagen. The subhauler will most frequently be sent by the broker to what is known as a borrow pit which may be defined as a source of dirt. His truck will be filled under the direction of a contractor operating the excavating and loading equipment there, and he will be directed to drive it to ajobsite. On occasions excavations will occur at one jobsite and the subhauler will take the dirt from that jobsite to another where fill is needed. Riphagen testified that in his own case his average haul over the highways from source tojobsite would be from 7 to 8 miles. When subhau- lers arrive at a jobsite the load is dumped pursuant to the instructions of a contractor job foreman there. The dump- ing process consists in releasing the bottom trap of the trailer and leaving the jobsite without even stopping the truck. When one load has been delivered the truck then goes back to the source for another. Riphagen had been using La Mirada as a source of sub- hauling jobs since 1968. In 1972 approximately 50 percent of the subhauling work which Riphagen obtained came to him through La Mirada. As noted above La Mirada func- tions exclusively as a broker, owning no trucks and using only subhaulers to supply the hauling needs of the contrac- tors with whom it does business As we have seen La Mirada JOINT COUNCIL OF TEAMSTERS NO. 42 329 is a member of EGCA and bound by the terms of the master agreement. La Mirada is wholly owned by Charles W. Poss. In addition to operating as a broker under the name of La Mirada, Poss also is in business as a grading and excavating contractor. In such capacity he may furnish loading equip- ment to borrow pits or other sources . In this capacity Poss sometimes calls upon La Mirada to supply trucks for haul- ing purposes. The administrator of the trust funds at some point, not precisely fixed in the record, became aware that Riphagen was delinquent in his trustfund payments . Steps were taken to collect from Riphagen including the initiation of legal proceedings against Riphagen directly. In addition to this, however, in a manner not disclosed by the record, the ad- ministrator of the trust funds also learned that La Mirada was a prime contractor for whom Riphagen was doing su- bhauling. At this point following the usual practice the ad- ministrator sent a form letter to Riphagen dated September 5, 1972, which reads in full as follows: Please take notice that Merle Riphagen, who is signato- ry to a collective bargaining agreement with the Team- sters Joint Council No. 42, is a delinquent contractor (or subcontractor) who has failed to pay fringe benefit contributions to the Construction Teamsters Security Trust and Construction Teamsters Vacation Holiday trust as required by the aforesaid labor agreement. Under your labor agreement, if you use or continue to use the services of the aforesaid contractor you will be liable for all accrued delinquent contributions as well as any unpaid future fringe benefit contributions. If the aforesaid contractor has commenced work on your jobsite prior to receipt of this notice, and if his name has not previously appeared on the delinquency list furnished by the trust funds administrator to you or your association then you will be liable for all future unpaid fringe benefit contributions arising 10 days from the receipt of this notice ; otherwise your liability will depend on the date of the last delinquency list and the date you first used the contractor. The amount of unpaid fringe benefit contributions known to be due from the aforesaid contractor to the Trust Funds is: approximately $ 11,000. On September 6 when Riphagen called the La Mirada dispatcher he was told of the letter and that until the delin- quency was cleared up he could no longer use Riphagen's trucks. Since that time Riphagen has done no work for La Mirada. C. Discussion of the Issues and Conclusions We now come to the question as to whether or not upon the undisputed facts set forth above the General Counsel has established as a matter of law that Respondent has engaged in unlawful conduct within the meaning of Section 8(e) and Section 8(b)(4)(ii)(A) and (B) of the Act. The Gen- eral Counsel contends that these facts signify the thrust of the clauses and their attempted enforcement to be second- ary in;nature and thus violative of the Act. Respondent Union contends the clauses to be primary and designed to protect and maintain union standards, and thus any "cease doing business" effect resulting therefrom to be purely inci- dental. Respondent Union also contends that it has no re- sponsibility for the 8(b)(4) aspects of the case because this conduct was undertaken by the trust funds as separate enti- ties and not as agents of Respondent Union. A determination of the secondary or primary nature of the disputed contract provisions within the meaning of Sec- tion 8(e) will in substantial measure resolve all other issues. The General Counsel points out that historically Section 8(b)(4), the so-called secondary boycott provision of the statute, was designed to limit the scope of disputes between management and labor . Thus certain conduct of a union could be directed lawfully only against an employer with whom it had a primary dispute , and its efforts to enmesh other employers not directly involved in this primary dis- pute were proscribed . As interpreted by the Board and the courts the 1947 amendments, however, were found to have a somewhat limited application . Thus while the Board could enjoin certain union conduct directly leveled against the secondary as distinguished from the primary employer, the secondary employer was not protected where there existed a contractual provision between the contracting union and the primary employer requiring that the latter do no busi- ness with employers who did not meet certain union stan- dards or sign certain union agreements . It was to outlaw such so-called "hot cargo" clauses in contracts that Con- gress in 1959 enacted the provisions of Section 8(e). This section in pertinent part reads as follows: (e) It shall be an unfair labor practice for any labor organization and any employer to enter into any con- tract 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 : Provided, That nothing in this subsection (e) shall apply to an agreement be- tween a labor organization and an employer in the construction industry relating to the contracting or subcontracting of work to be done at the site of the construction, alteration, painting, or repair of a build- ing, structure, or other work... . The literal language of the section would appear to pros- cribe all contracts whereby an employer agrees to "cease doing business with any other person." It developed, howev- er, that such literal construction was viewed as inconsistent with the legislative history, and that agreements, even though they result in some measure of "cease doing busi- ness," will be permitted where their essential thrust is prima- ry rather than secondary. Thus it has been held that an employer may lawfully agree to refrain from contracting out any bargaining unit work because the primary purpose of such a clause would be viewed as protecting unit work, even though such an agreement would have the incidental effect of requiring the employer to cease doing business with other 330 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employers.' On the other hand, however, clauses in an agreement designed to blacklist specified employers, or classes of employers, because their products or labor poli- cies are objectionable to the contracting union are regarded as principally directed at limiting or disrupting business relationships with others, rather than conferring direct ben- efits and protecting unit employees, and hence they are deemed to be unlawful. As specific clauses came up for scrutiny within the gener- al criteria, various distinctions were spelled out. Thus cases have drawn a basic distinction between so-called "work preservation" and "work acquisition" clauses, and between so-called "union standards" and "union signatory " clauses. Where the basic objective of the clause appears as protec- tion and preservation of the work of the contracting union, or as protection of the wages and working conditions of the unit employees by limiting subcontracting to employers maintaining similar standards , the clauses will be regarded as lawful .4 On the other hand , if the principal objective of the clause is to seek work for unit employees which has been customarily performed by employees of other employers, or if the clause is aimed at requiring an employer to do busi- ness solely with other employers who are signatory to the union contract, then its thrust is deemed to be secondary and aimed at limiting the number of employers with whom an employer can do business, or at disrupting existing busi- ness relationships, and is deemed unlawful .5 The distinc- tions are expressed with particular clarity in Orange Belt District Council No. 48 v. N. L.R.B., 328 F .2d 534 (C.A.D. C.). In that case the court stated: The test as to the "primary" nature of a subcontractor clause in an agreement with a general contractor has been phrased by scholars as whether it "will directly benefit the employees covered thereby ," and "seeks to protect the wages andjob opportunities of the employ- ees covered by the contract ." We have phrased the test as whether the clauses are "germane to the economic integrity of the principal work unit," and seek "to pro- tect and preserve the work and standards (the union) has bargained for," or instead "extend beyond the (contracting) employer and are aimed really at the union's difference with another employer." We must look to the challenged clauses in the instant case in the light of the foregoing rationale to determine their primary or secondary character. The Board has previously considered numerous clauses in Z Service and Maintenance Employees Union, Local No 399, AFL-CIO, (Kal-Efron, d/b/a Superior Souvenir Book Company), 148 NLRB 1033, Ohio Valley Carpenters District Council (Cardinal industries inc,), 136 NLRB 977; Milk Drivers Union, Local 753 (Pure Milk Association), 141 NLRB 1237 J District 9 iAM [Greater St Louis Automotive Trimmers & Upholsterers Assn J v NLRB , 351 F.2d 33 (C A D C, 1962), N L R B v Joint Council of Teamsters No 38 [California Assn of Employers], 338 F 2d 23 (C A 9, 1964) Meat and Highway Drivers Local 710 (Wilson and Co), v N L R B, 335 F 2d 709 (C A D C , 1964), Truck Drivers Local 413 [Brown Transfer Port and Patton Warehouse Inc] v N L R B. 334 F 2d 539, (C A D C, 1964), Orange Belt District Council of Painters No 48 [Calhoun Drywall Co I v N L R B, 328 F 2d 534, (C A D C, 1964) 5 N L R B v Joint Council of Teamsters No 38 [Arden Farms Co J, 338 F 2d 23 (C A 9, 1964), Meat and Highway Drivers Local No 710 v N L R B, supra, Truck Drivers Local 413 v N L R B, supra the construction industry multiemployer contract that was a predecessor to the one now before US .6 Among the clauses before the Board in the previous case were some which appear to have been similar, if not identical, to those now under challenge in the instant case. In Barker Trucking the Board held there to be insufficient evidence for it to find the then existing fringe benefit delinquency clauses per se un- lawful, and in the absence of extrinsic evidence indicating the manner in which such clauses had been enforced it made no finding as to their legality. The General Counsel argues that we have before us now sufficient extrinsic evi- dence concerning Respondent Union's efforts to enforce such clauses to establish the object thereof to be secondary and unlawful. It is pointed out that Respondent Union's primary dispute was with Riphagen over unpaid fringe ben- efits. It is asserted that the provisions of these contract clauses have the effect of enmeshing La Mirada, a neutral prime contractor, by making it a guarantor for Riphagen's liability as the penalty for its continuing to do business with Riphagen. This "cease doing business" alternative is claimed to signify the clauses and their enforcement to have a secondary, and thus unlawful, aim. The General Counsel in substantial measure relies on the Board's decision in the so-called Calhoun case to support the contention that the fringe benefit delinquency clauses have a secondary object 7 In Calhoun a general contractor had a contract with a building trades council providing, among other things, that should he "subcontract any work and the subcontractor fails to pay the wages or fringe benefits pro- vided under the appropriate agreement with the union affili- ated with the council ..." the general contractor would become liable to pay such wages and fringe benefits. Cal- houn was a nonunion subcontractor doing "drywall work" for the general contractor. Pressure was brought to compel the general contractor to comply with the contract provi- sions by paying the sums called for, or ceasing to do busi- ness with Calhoun. The Board rejected a defense that this was lawful primary activity designed to protect the work standards of a "union affiliated with the council." It was reasoned that the conduct could not have been undertaken to force the general contractor to pay fringe benefits on behalf of Calhoun's employees, since the trust funds could not receive sums for employees of employers not signatory to the contract with the affiliated union. Nor could the sums be deemed to benefit the general contractor's employees in a "principal work unit" since he had no employees on the job doing "drywall work" except those of Calhoun. There- fore the Board held the object was to impose "strictly a penalty" on the general contractor "for failing to subcon- tract to a union subcontractor." This was deemed a second- ary object and hence unlawful. The General Counsel argues the instant case to be like Calhoun in that La Mirada, like the general contractor in Calhoun, also had no employees who might benefit from enforcement of the guarantee provi- sion. Thus it is argued that the clauses and their enforce- ment here, as in Calhoun, have a secondary object and must be deemed unlawful. I disagree. 6 General Teamsters, Chauffeurs, Warehousemen & Helpers Local 982, et at (Associated Independent Owner-Operators, Inc), 181 N LR B 515 7 Orange Belt District Council of Painters No 48, AFL-CIO (Calhoun Dry- wall Company), 153 NLRB 1196 JOINT COUNCIL OF TEAMSTERS NO. 42 331 The General Counsel's argument overlooks an important distinction between Calhoun and the instant case. In Cal- houn the general contractor and Respondent Union were parties to the same contract, but Calhoun, the subcontrac- tor, was a party to no agreement whatsoever. In the instant case Respondent Union, La Mirada, and Riphagen are all parties to the same collective-bargaining agreement. The Board properly found in Calhoun that there existed no work unit for the guarantee clause to protect since all the "drywall work" being done on the general contractor's job was not covered by any contract at all. Thus it became reasonable to conclude that the real aim of respondent unions was to compel the general contractor to cease doing business with the nonunion subcontractor. Had Riphagen been a non- union subcontractor possibly we might face a similar situa- tion here, but Riphagen and La Mirada are both bound to the same contract. In addition we may also note that in Calhoun the contract provisions are found in a so-called "building trades council" type of contract whereby the con- tracting union sought to bind-general contractors to subcon- tract only to employers having agreements with unions affiliated with the council. Such contract did not purport to cover the wages, hours and working conditions of any spe- cific group of employees. In the instant case we are dealing with a comprehensive labor contract purporting to cover one whole segment of construction industry work in a large area. A consideration of the scope of this contract suggests the work unit issue to be far different from that before the Board in Calhoun. Thus the master agreement purports to set standards for wages, hours, and working conditions of all persons driving trucks in the construction industry as it operates in the Southern California area. The members of the associations, together with the individual signatories to the short form agreement, comprise a varied group of employers each of which supplies some sort of needed service in this branch of the construction industry. Both association members and individual party signatories are equally bound to pay the contract wages and to pay the fringe benefits in the form of required payments to the trust funds. It is characteristic of the construction industry that the employment history of most workers will show them as working for numerous con- tractors snice jobs are constantly starting and finishing. The use of the trust funds to collect and disburse contract fringe benefits serves both a statutory purpose and as a practical means of insuring that covered employees are credited for benefits earned regardless of the number of employers for whom they may have worked. The same fringe benefits are ultimately disbursed to covered employees by the trust funds whether such employees have worked for one or more industry contractors, or whether or not any particular con- tractor has been an association member or an individual party signatory to the master agreement. In providing for the fringe benefits the contracting parties are clearly under- taking to set up adequately funded trusts which will main- tain a continuing solvency, and at all times be able to disburse the negotiated benefits. The integrity of these funds will in substantial measure depend upon required contributions neither being evaded nor falling in arrears. Delinquencies if permitted to become widespread could ad- versely affect every employee covered by the contract. The primary obligation to keep up required payments of course resides in the immediate employer of any covered worker. To the extent he completely fulfills such obligation nothing further will be needed . The disputed provisions, however, reasonably recognize that there may be employers, most likely the smaller and less adequately financed ones, who may be unable or unwilling to meet such primary obliga- tions. The contract provisions seek to insure that when this occurs neither the employees of the delinquent employer nor the fund as a whole will suffer, because the prime con- tractor is required to guarantee that fund payments will be kept up so long as he continues to use the services of a delinquent subcontractor. Unlike Calhoun where it was im- possible for the fund to receive fringe benefits on behalf of Calhoun's employees because Calhoun was not a party to any contract, payments made by La Mirada, or any other guarantor prime contractor, could be received by the fund and credited to the employees of Riphagen, since Riphagen was also a party to the master agreement. Unlike Calhoun where the challenged contract did not purport to cover any specific group of identifiable employees , the master agree- ment here specifically purports to benefit a readily identifia- ble group comprised of workers in the designated classifications who work for any covered employer. In view of the foregoing, and contrary to the claim of the General Counsel I view the principal work unit here to be comprised of all employees who work for association mem- bers or individual party signatories to the master agreement in the classifications which are therein set forth. The Gener- al Counsel argues the work unit not to be so broad, contend- ing that there are separate work units comprised on the one hand of employees of association members, and on the other hand of employees of individual party signatories to the master agreement. The General Counsel cites a recent Board decision in National Maritime Union of America, AFL-CIO; Commerce Tankers Corporation (Vantage Steam- ship Corporation), 196 NLRB 1100, in support of this propo- sition. I do not regard this decision as controlling. Commerce Tankers covered collective-bargaining contracts in the maritime industry which differ in many ways from the collective-bargaining agreement before us. In addition the particular situation before the Board in that case concerned the effect of the sale of a vessel to someone who was not a party to any contract. A guarantee clause affecting parties to the same contract such as we find in the instant case was not involved. I regard the Board's holding in Commerce Tankers as limited to the somewhat unique facts of that case, and do not view the case as a broad holding that in industrywide master agreements generally individual par- ties signatory necessarily comprise work units separate from that of the association members on whose behalf the master agreement had been negotiated. If the principal work unit be deemed comprised of all workers covered by the master agreement it becomes abun- dantly clear that the clauses attacked are designed to protect and preserve work standards for all unit employees, and to insure the integrity of the funds which implement the nego- tiated fringe benefits. Thus any secondary effect which would come about when a prime contractor acting in accor- dance with the provisions of these clauses would cease doing business with a delinquent subcontractor would ap- 332 DECISIONS OF NATIONAL LABOR RELATIONS BOARD pear purely incidental to the lawful primary object of per- serving the work standards of the principal work unit. Accordingly, I find the clauses attacked by the General Counsel to be primary rather than secondary, and not to be proscribed by Section 8(e) of the Act, and I shall recom- mend the dismissal of such allegations in the complaint. The allegations of Section 8(b)(4)(ii)(A) and (B) pertain exclusively to attempts by Respondent Union to invoke and enforce the clauses which have been considered above. In- asmuch as I have found such clauses to have a primary object efforts by Respondent Union to enforce them would have a primary rather than a secondary thrust, and would thus be lawful. In addition having found such clauses to be primary in object it becomes unnecessary to consider Re- spondent Union's claim that it is not responsible for con- duct undertaken by the Trust Funds. Nor is it necessary to consider the General Counsel's contentions which relate to the applicability of the jobsite proviso to Section 8(e) of the Act. Accordingly I recommend that the complaint be dis- missed in its entirety. Upon the basis of the foregoing findings of fact and the entire record in this case, I make the following: CONCLUSIONS OF LAW businesses affecting commerce within the meaning of Sec- tion 2(2), (6) and (7) of the Act. 2. Respondent Umon is a labor organization within the meaning of Section 2(5) of the Act. 3. Respondent Umon has not, as alleged in the com- plaint, engaged in unfair labor practices proscribed by Sec- tion 8(e) or Section 8(b)(4)(ii)(A) and (B) of the Act. Upon the foregoing findings of fact, conclusions of law and the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: ORDERS It is hereby ordered that the complaint herein be, and it hereby is, dismissed in its entirety. 8 In the event no exceptions are filed as provided by Section 102 46 of the Rules and Regulations of the National Labor Relations Board , the findings, conclusions and recommended Order herein shall , as provided in Section 102 48 of the Rules and Regulations, be adopted by the Board and become its findings, conclusions , and Order, and all objections thereto shall be deemed waived for all purposes 1. The employer-members of AGC, BIA, EGCA, La Mirada and Riphagen are collectively employers engaged in