Am-Del-Co., Inc.

698 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Am-Del-Co, Inc. and Compton Service Company, 3. Substitute the attached notice for that of the Jointly and William Keaton and Teamsters Local Administrative Law Judge. Union No. 688, affiliated with International Broth- erhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America and William Lee Kilzer. Cases 14-CA-8739, 14-CA-8746, and 14-CA- 8838 July 20, 1976 DECISION AND ORDER BY CHAIRMAN MURPHY AND MEMBERS FANNING AND PENELLO On March 16, 1976, Administrative Law Judge Robert W. Leiner issued the attached Decision in this proceeding. Thereafter, Respondent filed excep- tions and a supporting brief, and the General Coun- sel filed exceptions and a supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. 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 of the Administrative Law Judge and to adopt his recommended Order, as modified herein.' ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board adopts as its Order the recommended Order of the Administrative Law Judge, as modified below, and hereby orders that the Respondent, Am- Del-Co, Inc. and Compton Service Company, St. Louis, Missouri, its officers, agents, successors, and assigns, shall take the action set forth in the said rec- ommended Order, as so modified: 1. Delete paragraph 1(d) and insert the following as paragraphs 1(d) and (e) and reletter the remaining paragraphs accordingly: "(d) Threatening employees with the loss of union representation. "(e) Discouraging membership in the Union or any other labor organization by changing the status of its employees to that of `independent contractors' or by laying them off in order to disparage or under- mine the Union or because they engage in union or other protected concerted activities." 2. Insert the phrase "as well as those made inde- pendent contractors" after the words "following em- ployees" in paragraph 2(d). 1 The General Counsel excepts to the failure of the Administrative Law Judge to find that Supervisor Claude White violated the Act when, in re- sponse to a question concerning nonunion wages, he told warehouseman William Kilzer, in the presence of other employees , that Respondent would never be happy until it was a nonunion shop We find ment in this excep- tion White's statement impliedly threatens that Respondent would take steps to eliminate union representation and, as such , constitutes a violation of Sec 8(a)(1) of the Act We will modify the recommended Order and notice to employees accordingly The Administrative Law Judge found that Respondent in attempting, with some success , to change the status of several employees to make them "independent contractors" did not violate Sec 8 (a)(3) We disagree Rather, we find that its attempt to convert its employees to independent contractor status was part of its attempt to eliminate the Union and discourage mem- bership in and activities on behalf of it Accordingly , we find this conduct violative of Sec 8(a)(3) and ( 1) of the Act APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT refuse to bargain collectively with Teamsters Local Union No. 688, affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, herein called the Union, as the exclu- sive representative of all of our driver and helper employees, regarding wages, hours, and working conditions, including the effects of the decision to change to the owner-operator method of de- livery. WE WILL NOT give effect to the owner-operator agreements entered into with our employees in the appropriate unit. WE WILL NOT deal individually with drivers and helpers concerning their terms and condi- tions of employment in derogation of their bar- gaining representative. WE WILL NOT unilaterally change the wages, hours, and terms and conditions of employment of our drivers. WE WILL NOT modify the terms of our collec- tive-bargaining agreement with the Union in vi- olation of Section 8(d) of the Act. WE WILL NOT threaten employees with the loss of union representation. WE WILL NOT discourage membership in the Union, or any other labor organization, by changing the status of our employees to that of "independent contractors" or by laying them off in order to disparage or undermine the Union or because they engaged in union or other protect- ed concerted activities. 225 NLRB No. 93 AM-DEL-CO, INC AND COMPTON SERVICE CO. 699 WE WILL NOT threaten employees that there will be no further union contracts or threaten employees with late recall from layoff if they at- tempt to enforce their rights under the collec- tive-bargaining agreements with the Union or threaten employees with discharge if they file grievances. WE WILL NOT in any other manner interfere with, restrain, or coerce our employees in the exercise of their rights guaranteed by Section 7 of the Act. WE WILL bargain collectively with the Union, as the exclusive representative of all of our driv- er and helper employees, regarding wages, hours, and working conditions, including the ef- fects of the decision to change to the owner-op- erator method of delivery. WE WILL enforce the collective-bargaining agreement with the Union covering our drivers and helpers effective for the period of Novem- ber 1, 1973, through October 31, 1976. WE WILL reinstate Howard Brown, John Hol- leran, Ron Hale, Robert Temme, Steve Rell, Or- lan Mauldin, Jerry Neal, William Chandler, Charles Muschamp, Leo Bierman, Larry Caul- ley, Gerald Webb, William Keaton, Elmer Mc- Whorten, Harry Drozd, Lloyd Reid, Leroy Glazebrook, Walter Schaller, Lester Gruene- wald, and Sylvester Klemschmidt to the same positions in which they would be employed had they not been discriminated against or, if these positions no longer exist, to substantially equiva- lent positions, without prejudice to seniority or other rights and privileges, and WE WILL make them whole for any loss of earnings suffered by reason of our unlawful actions against them. WE WILL make whole William L. Kilzer for any loss of earnings he may have suffered by reason of his being laid off October 3 through November 10, 1975. All our employees are free to become or remain, or refrain from becoming or remaining, members of the above-named Union, or any other labor organiza- tion. AM-DEL-CO, INC. AND COMPTON SERVICE COMPANY, JOINTLY DECISION STATEMENT OF THE CASE ROBERT W. LEINER, Administrative Law Judge: This pro- ceeding under Section 10(b) of the National Labor Rela- tions Act, as amended, herein called the Act, was heard before me pursuant to due notice on December 3 and 4, 1975, in St. Louis, Missouri. On August 21, 1975, William Keaton, an individual, filed a charge alleging violation of Section 8(a)(1) and (3) against Compton Service Co, Inc., herein called Compton Service.' On August 22, 1975, Teamsters Local Union No. 688, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, herein called the Union, filed a charge against Compton Service alleging vi- olations of Section 8(a)(1), (3), and (5), and on September 25, 1975, the Union filed an amended charge against both Compton Service and Am-Del-Co, Inc., herein called Am- Del-Co. Am-Del-Co and Compton Service herein referred to as Respondent. The amended charge repeated the sub- stance of the original charge but named these two corpora- tions "jointly." On September 6, 1975, William Keaton similarly amended his 8(a)(1) and (3) charge, above, by naming Am-Del-Co and Compton Service "jointly." On October 10, 1975, William L. Kilzer, an individual, filed a charge alleging violation of Section 8(a)(1) and (3) against Am-Del-Co and Compton Service jointly. The above charges were duly served. On November 7, 1975, an order consolidating cases, complaint,' and notice of hearing was issued and duly served on the above-named Respondent. On November 14, 1975, Respondent Compton Service and Respondent Am-Del-Co filed separate answers.3 All parties were afforded full opportunity to participate 4 in the proceeding, to examine and cross-examine witnesses, i Prior to the opening of the hearing, Terry L Peebles, Esq , an attorney representing former employees of Compton Service who had become "own- er-operators" and allegedly independent contractors for Respondent Am- Del-Co, Inc and who had individual contracts with Am-Del-Co to render services to that corporation, sought, by motion filed and served prior to opening of the hearing, to intervene in the proceedings and to present evi- dence therein (G C Exh 1(z)) The motion was referred to me for decision at the opening of the hearing I denied the motion to intervene, because the interests of the alleged independent contractors appeared to me to be deriv- ative and would be fully protected by the position taken by the Respondent Am-Del-Co and Compton Service that Am-Del-Co's use of and contracts with the independent contractors were lawful The lawfulness of the con- tracts would be neither enhanced nor diminished by additional participa- tion of the intervenors Z An earlier consolidated complaint and notice of hearing was issued on September 30, 1975 Its allegation of violations of Sec 8(a)(1), (3), and (5) were, with additions, incorporated into the above-consolidated complaint Both Respondent corporations filed timely answers and Am-Del-Co filed a motion to dismiss as to it 3 At the hearing, Respondent Compton Service moved for a particulariza- tion of the complaint with regard to the names of employees to whom alleged threats by Respondent's agents were made and the names of em- ployees who were witnesses to such threats I denied the motion for the bill of particulars on the grounds that the complaint sufficiently specified the allegations to which Respondent must answer and the request for names was merely evidentiary. I granted so much of the motion for particulariza- tion, however, insofar as it did not cause General Counsel to reveal the names of prospective witnesses who were employees of Respondent In ad- dition, I denied Respondent's motion for disclosure of names of all persons whom General Counsel intended to call as witnesses as well as copies of all written statements furnished to the Board whether or not the person fur- nishing same would be called as a witness The Board's Rules and Regula- tions do not provide for an essentially prehearing discovery procedure, N L R B v Interboro Contractors, Inc, 432 F 2d 854 (C.A. 2, 1970), cert denied 402 U S. 915 (1971) On October 9, 1975, and on November 14, 1975, prior to opening of the hearing, Respondent Am-Del-Co moved to dismiss the complaint as to it on Continued 700 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and to argue on the record. Briefs were filed by the Gener- al Counsel, Compton Service, Am-Del-Co, and the Union. The briefs herein, particularly from General Counsel, were substantial, helpful, and have been considered. The instant amended complaint, dated November 7, 1975, alleges, inter alta, violation of Section 8(a)(1) of the Act because of various independent acts of interference, threats, and coercion against employees of the Respon- dent; alleges unlawful layoffs and discharges of named driver, helper, and warehouse employees and an unlawful attempt to convert driver employees into independent con- tractors all in violation of Section 8(a)(3) of the Act; and alleges various acts constituting unlawful refusals to bar- gain in violation of Section 8(a)(5) of the Act: unlawful direct bargaining with employees, unilateral conversion to an independent contractor system of delivery, and refusal to bargain concerning the effects of such conversion on unit employees. The complaint also alleges that Compton Service and Am-Del-Co are affiliated business, engaged in a common enterprise, with common officers, ownership, directors, and operations, constituting a "single integrated enterprise," each corporation being the "alter ego" of the other. The complaint alleges, and Respondent Compton Ser- vice admits, that all furniture and appliance truckdrivers and helpers employed by Compton Service, excluding office clericals, professionals, guards, and supervisors, constitute an appropriate unit and that at all times material herein the Union was and is the representative of such unit employees for collective-bargaining purposes under Section 9(a) of the Act. The complaint alleges and Compton Service also ad- mits that a unit of warehouse employees employed by Compton Service is an appropriate unit and at all material times the Union has been the statutory representative for collective-bargaining purposes of such unit. Upon the entire record of the case, including the briefs, and from my observation of the witnesses, I hereby make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE EMPLOYER 5 Del-Co are corporations duly organized under the laws of the State of Missouri. Compton Service admits that it and Am-Del-Co are cor- porations duly authorized to do business under the laws of the State of Missouri, but denies that it and Am-Del-Co are affiliated businesses engaged in a common enterprise, with common officers, ownership, directors, and opera- tions, constituting a single integrated enterprise, with such directors and officers formulating and administering a common labor policy for both companies and that each corporation is the alter ego of the other. The record shows that Compton Service was organized in 1967 and has main- tained its principal office and place of business at 1218 South Vandeventer, St. Louis, Missouri, where it was and is engaged in the business of providing furniture and appli- ance warehousing and delivery services for retail stores. Compton Service also admits that in the year ending De- cember 31, 1974, a period representative of its operations generally, in the course and conduct of its business, it re- ceived gross revenues in excess of $50,000 at its St. Louis, Missouri, place of business for services furnished to enter- prises in St. Louis, Missouri, each of which had annual gross retail sales in excess of $500,000, which enterprises annually purchased goods and materials, shipped directly to their respective metropolitan St. Louis stores, from points and States other than the State of Missouri in excess of $50,000. Compton Service admits that it is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. B. The Business of Am-Del-Co Am-Del-Co admits, and the record shows, that it is a corporation organized in November 1973 and duly author- ized to do business under the laws of the State of Missouri, but denies the status as a single integrated enterprise with, and alter ego of, Compton Service; denies that it main- tained its principal office and place of business at 1218 South Vandeventer, St. Louis, Missouri; denies that it has rendered services in the above-named amounts to the above-named retail stores in St. Louis; and denies that it is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. A. The Business of Compton Service The complaint alleges that Compton Service and Am- the grounds (1) that Am-Del-Co had never been a signatory to any contract with the Union, and (2) that Am-Del-Co had never been an employer of any of the employees, including the individual Charging Parties, named in the complaint General Counsel filed oppositions to both Am-Del-Co mo- tions to dismiss Am-Del-Co's motion of October 9, 1975, was referred to and denied by Administrative Law Judge Leff on October 22, 1975 The disposition of Am-Del-Co's renewed motion to dismiss dated November 14, 1975, will be made herein 5 Am-Del-Co denies the filing and service of the charges as to it and also denies all elements of allegations relating to the existence of a single inte- grated enterprise In view of my disposition, infra, of the allegations of "single integrated enterprise" and "alter ego," the denial of the filing and service of the charges and Am-Del-Co's other denials relating to its relation- ship to Compton Service are not dispositive on the question of the lawful- ness of the service of process on Am-Del-Co and its participation in the proceeding. C. The Relationship of Compton Service and Am-Del-Co On July 26, 1974, the Board issued its Decision and Order in Compton Service Company, Inc., 212 NLRB 557 (1974), wherein it dismissed allegations of violation of Sec- tion 8(a)(5) in a complaint issued on charges filed by Teamsters Local Union No. 688, International Brother- hood of Teamsters, but inter aha, found that Compton Ser- vice, Am-Del-Co, and Compton Leasing 6 constituted a single integrated employer. In that case, it was found that Compton Service, employing drivers, helpers, and ware- housemen, was engaged in the warehouse delivery business for various enterprises in the St. Louis area, employing 30 6 Compton Leasing is a corporation owned and controlled by the princi- pals herein, Hollis Garrett and Billy J Hunt Another corporation, Comco, Inc , engaged in the servicing of appliances, is also owned and controlled by Hunt and Garrett AM-DEL-CO, INC. AND COMPTON SERVICE CO. 701 to 35 employees in the project . It was noted, inter alia, that its customers included the J. C. Penney Company and that Compton Service was authorized to operate a delivery ser- vice in Missouri and Illinois. Half of the stock in Compton Service was owned by Billy J. Hunt, then, as now, Comp- ton Service's and Am-Del-Co's president, and by members of his family; the other half of Compton Service stock was owned by Hollis Garrett, vice president and secretary of both companies,' and his family. The Board's Decision, adopting the Administrative Law Judge's Decision in its entirety on this point, disclosed that Am-Del-Co, incorporated in November 1973, was engaged in the business of providing, "somewhat as a broker, own- er-operators to any enterprise with whom it could make a contract." It was noted that Hunt was president of Am- Del-Co and Garrett was vice president. Hunt and Garrett and their families at that time split the stock of Am-Del-Co in the same proportions as they did that of Compton Ser- vice. In the instant proceeding, Billy J. Hunt testified that he was the general manager of Compton Service and presi- dent of Am-Del-Co. He stated that Am-Del-Co maintains a warehouse and office at 1218 Vandeventer which is the principal office, warehouse, and place of business of Compton Service and Am-Del-Co. He testified that the of- ficers of Am-Del-Co were himself as president and treasur- er, Garrett as vice president, and the office clerical Helen Erby, as secretary of the corporation. He also testified that at present, and since January 1975, the directors of Am- Del-Co were no longer only Hunt and Garrett but were Hunt, Garrett, and their accountant, Max Biernbaum, as well as the attorney appearing for Compton Service, Whit- ney Harris, Esq. Hunt also testified that Am-Del-Co main- tains an office at 4030 Chouteau, St. Louis, the address of Am-Del-Co for corporate legal purposes. Only occasional- ly are any Am-Del-Co employees there. The warehouse, officers, clerical staff, and business activities are centered in 1218 South Vandeventer. Hunt also testified that since January 1975 there were six stockholders of Am-Del-Co, each with equal shares, rather than the Hunt-Garrett family ownership: Hunt; Garrett; the aforesaid accountant for Am-Del-Co and Compton Service, Max Biernbaum; Alex Lieberger, an insurance agent who writes the health insurance for management em- ployees of Compton Service; the office clerical for both Compton Service and Am-Del-Co Helen Erby; and one Dan Miller, an employee of Comco, a corporation in which Hunt and Garrett are co-partners. Hunt testified that the above-stated are directors and stockholder ownership had thus changed since the prior Board case.8 Hunt also testified that, with regard to Compton Service in the period January 1975 through October 1975, i.e., commencing 6 months after the Board's Decision, above, which are the dates material to the decision in the instant case, the officers of Compton Service were Hunt and Gar- 7 From time to time, Whitney R Harris, Esq, counsel to Compton Ser- vice herein, served as corporate secretary to Am-Del-Co 8 The changes in the officers and directors of Am-Del-Co since the prior Board Decision necessarily eliminates application of the doctrine of res,judt- cara to the issue of the integration of the several companies rett; the directors were Hunt, Garrett, and Attorney Whit- ney Hams; and the shareholders were Hunt, Garrett, and their families. These factors had not changed since the Board Decision. Hunt testified that Garrett and he are the day-to-day managers of the business of Am-Del-Co with Hunt doing the day-to-day operations and Garrett the administration. The roles are reversed with regard to Compton Service, Garrett being in charge of the day-to-day operations with Hunt playing the major role in administration and some role in day-to-day operations. The building and warehouse at 1218 South Vandeventer at the time of the hearing was being purchased by Compton Properties of which Hunt and Garrett are shareholders. Compton Service pays rent on the building with Am-Del-Co, in turn, paying rent to Compton Service. Hunt testified that one Ralph DeRouch was, and is, the employee of Compton Service who establishes the routes for and still dispatches the Compton drivers to make their deliveries. At the present time, he also establishes the routes for the owner-operators driving for Am-Del-Co and recalls owner-operators to drive for Compton under the collective-bargaining agreement, as employees of Compton Service. In spite of the changes of ownership of the stock of Am- Del-Co and changes in the board of directors, and in spite of the fact that Am-Del-Co had an office (but apparently not a regular place of business) not shared by Compton Service, I nevertheless find that the evidence shows no change of control of a substantial character from that ad- duced at the hearing before the Administrative Law Judge in the prior Compton Service Co. case, supra. Thus, I con- clude that merely because two-thirds of Am-Del-Co's stock is owned by Hunt's and Garrett's accountant, office cleri- cal, insurance agent , and employee (Dan Miller) of a cor- poration of which they control and own, does not divest Hunt and Garrett of control of Am-Del-Co. All of the "ma- jority" stockholders, on this record, are directly or indirect- ly subject to the economic power of Hunt and Garrett, much the same as are the children of Hunt and Garrett. In cases relating to the problem of "single integrated employ- er," economic actuality, rather than potential, is determi- native. Control rather than mere ownership is the core problem. Miami Newspaper Printing Pressmen's Local No. 46 [Knight Newspaper, Inc.] v. N L R.B., 322 F.2d 405 (C.A.D.C., 1963) Compton Service, according to the evidence of record, employs warehousemen, furniture-finishers, and truckdriv- ers and helpers, all of whom are represented for collec- tive-bargaining purposes by the Charging Party herein in separate contractual units. These employees are all em- ployed and work at the same address: 1218 South Vande- venter. These separate collective-bargaining agreements presently have common initiation and expiration dates: November 1, 1973, to October 31, 1976. Successive collec- tive-bargaining agreements between Compton Service and the Union, covering units of warehousemen and drivers and helpers, have been maintained since 1967. The unit of furniture-finishers, not involved herein, was added later. The labor relations policy and the daily adjustment of grievances of Compton Service are performed by Hunt and 702 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Garrett. Am-Del-Co, according to the testimony of Hunt and Garrett, employs no drivers or helpers, warehousemen or furniture-finishers. Nevertheless, the Am-Del-Co policy governing relations with the alleged independent contrac- tors many of whom, according to Hunt and Garrett, re- main employees of Compton Service when recalled to its service and when not acting as owner-operators for Am- Del-Co are directed by Hunt and Garrett. Thus, Hunt and Garrett laid off the Compton Service drivers and thereafter interviewed and executed owner-operator contracts with the same drivers, establishing the priority (i.e., seniority) in which they would be awarded work (on a first-come basis). Notwithstanding that there is a claim that Am-Del-Co has no employees, I nevertheless find, as will hereafter be not- ed, that the owner-operators working through Am-Del-Co and delivering for J. C. Penney are employees, (Carnation Company, 172 NLRB 1882 (1968), enforcement denied, 429 F.2d 1130 C.A. 9, 1970)) of Am-Del-Co and Compton Ser- vice, are subject to the same labor relations policies en- forced by the same persons, and are subject to the same supervision in the work, which is principally the delivery of furniture to J. C. Penney stores. Lastly, I find, as will hereafter be further explored, that Am-Del-Co and Compton Service, as alleged, are alter egos of each for the purpose of this case.9 It is clear on this record that Am-Del-Co and Compton Service had and have substantially the same operating personnel officers, directors, and shareholders (or that Hunt and Garrett, through economic power, effectively control the sharehold- ers and directors of the two corporations). It is also unde- nied that Compton Service and Am-Del-Co occupied and currently occupy the same premises, have the same office clerical and the same dispatcher. As will be seen, infra, they interchange employees as well.10 In the light of these facts it seems to me that the two corporations are so interrelated, in their function, management, ownership, operations, and centralized control of labor relations, that they constitute a single integrated employer within Board precedent, Radio and Television Broadcasting Technicians, Local Union 264 v. Broadcast Service of Mobil Inc., 380 U.S. 255 (1965); Park- lane Hosiery Co., Inc., 203 NLRB 597, 618 (1973); R. L. Sweet Lumber Company, 207 NLRB 529 (1973), enfd. 512 F.2d 785 (C.A. 10, 1975); Cowles Communications, Inc., 170 NLRB 1596, 1599 (1968); Sakrete of Northern California v. N.L.R.B., 332 F.2d 902 (C.A. 9, 1964). II. THE LABOR ORGANIZATION INVOLVED The complaint alleges, Am-Del-Co and Compton Ser- vice admit, and I find that Teamsters Local Union No. 9 Thus, I recognize Am-Del-Co's corporate existence and its ability to function, under other circumstances, as an organization devoted to sup- plying independent contractor "owner-operator" drivers to employers, much as Compton Leasing supplied temporary employees to employers Under the facts of this case relating to J C Penney, the record prevents such a conclusion Thus, although Am-Del-Co was not created as a device to engage in subversion of employees' Sec 7 rights (Rushton & Mercier Woodworking Co, Inc, 203 NLRB 123 (1973) ), it was used as such a device in the present situation 10 The dispatcher recalls owner-operators and dispatches them as "em- ployees " 688, International Brotherhood of Teamsters, is, and has been at all times material herein, a labor organization with- in the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Background The evidence shows that shortly after the Korean War, Hunt and Garrett formed a partnership for the sale and thereafter the delivery of used furniture. As their business progressed they changed the function of Compton Service and made it principally a public warehouse and delivery company whose principal customer was the J. C. Penney Company, for whom it did furniture and appliance ware- housing and for whom it made deliveries. By 1973 it also did warehousing for Speed Queen, the McGraw-Edison chain of stores,' 7 and the Spielberg Furniture Company. In early 1974, Compton Service and Compton Leasing (also having collective-bargaining agreements with the Union) employed more than 50 drivers and helpers servic- ing its several accounts. At that time, about 40 of the Compton Leasing's drivers and helpers serviced the Fa- mous-Barr Department store in St. Louis. These employees servicing Famous-Barr were employees of Compton Ser- vice and Compton Leasing covered by collective-bargain- ing agreements and drove trucks owned by Compton Ser- vice or Compton Leasing. Compton Service and Compton Leasing did not have an exclusive contract for delivery ser- vice with Famous-Barr but would furnish employees and trucks to perform deliveries to Famous-Barr when Fa- mous-Barr called upon them to do so. By early 1974, Fa- mous-Barr commenced using independent contractors (owner-operators of trucks) for their furniture and appli- ance deliveries. As Famous-Barr progressively failed, in successive months, to call upon Compton Service and Compton Leasing to perform delivery service, Hunt and Garrett went to Famous-Barr to discover what they could do to hold on to the business. Famous-Barr told them that Compton Service's operation, including prices, were not competitive. Compton Service then went to the Union to modify the collective-bargaining agreement's hourly wage pattern for its employees and to initiate an owner-operator contract to meet the competition. The Union refused to do so. Later in 1974, Famous-Barr ceased giving the Compton companies any of its business and, as a result, Compton Leasing terminated the employment of several dozen driv- ers and helpers. At about the same time, Compton Service, through Compton Leasing, had employees working at an employer known as Carafiol, a chain of furniture stores. In addition, Am-Del-Co supplied an owner-operator at Carafiol. Cara- fiol requested Compton Service to furnish an additional truck with an owner-operator and Am-Del-Co furnished 11 Hunt and Garrett, through Compton Leasing organized 1971, also fur- nished leased trucks and drivers to other employers in the St Louis area for the distribution and delivery of furniture and appliances. Compton Leasing was found by the Board in the prior Compton Service Co matter to be part of the single integrated unit with Compton Service and Am-Del-Co Re- spondent does not presently argue that Compton Leasing and Compton Service are not part of a single integrated enterprise AM-DEL-CO, INC. AND COMPTON SERVICE CO. 703 the truck and driver. This gave rise to the prior NLRB litigation and Compton Service withdrew from the Carafiol account. Thereafter, Compton Service's principal customer was the J. C. Penney Company which often required the services of Compton Service's remaining 25 drivers and helpers. Sometime before 1973, therefore, Hunt and Garrett, through Compton Service, performed warehousing and de- livery services, including furniture-finishing services for J. C Penney, and also delivery services for Famous-Barr, Spielberg, and other employers. In the early 1970's, some of the nationwide furniture re- tailers, Levitt, Crossroads, and Wickes, came into St. Louis area using owner-operator companies, so called indepen- dent-contractors, to make deliveries. In order to meet this competition, Hunt and Garrett organized Am-Del-Co in 1973. Am-Del-Co was organized, according to Hunt and Garrett, in order to permit them to meet the desires of customers who for economy and dependability wanted their delivery services performed by owner-operators rath- er than by employees of delivery companies. The owner- operators are paid on a "per-stop" or "incentive" basis rather than an hourly basis. This allegedly led to greater accountability, flexibility, and less expense. B. Business Status in 1975 On June 20, 1975, two representatives of J. C. Penney, Soots and Barnes, came to the South Vendeventer office with a list of complaints regarding J. C. Penney's furniture which was damaged in Compton Service's warehouse. Soots and Barnes also wanted to know how Compton Ser- vice was going to improve their performance, i.e., cut the price of its Penney deliveries. The Penney representatives told Hunt that Penney had been approached by owner- operator contractors; that Penney was looking at bids; and that Penney was seriously considering using owner-opera- tors to make deliveries rather than to continue with deliv- ery companies. Barnes and Soots then asked Hunt if there was any way that he could improve on the contract price between Compton Service and Penney. Hunt told them that there was no way there could be an improvement and that, in fact, by November 1975 Compton Service would have to increase its prices because the collective-bargaining agreement provided for such increased wages and health and welfare payments, that perhaps as much as a 10-per- cent increase would be necessary. Hunt said that Barnes then inquired if Am-Del-Co 12 would submit a bid to Pen- ney on a per-stop basis. Penney was no longer interested in a per piece method of delivery. Hunt testified that this was the first time that Am-Del-Co was ever discussed by Pen- ney and that Am-Del-Co had never made any bid for the Penney work prior to this time . From the conversation at this June 20 meeti,ig, Hunt knew that Penney would cancel the delivery contract with Compton Service. On July 8, 1975,13 Am-Del-Co submitted such a bid to 12 Barnes testified that while he solicited an owner-operator bid from Hunt through Am-Del-Co, he did not restrict the bid to one from Am-Del- Co, but rather told Hunt he wanted to bid on a "per-stop" basis 13 Hunt testified that on June 25, 1975, he called a meeting of his drivers and helpers with no union agent present or consulted and told them not J. C. Penney on a per-stop basis. In fact, a Penney official told Hunt on June 27 that if Hunt intended to remain com- petitive in the St. Louis market, he would have to have about a 25- to 30-percent decrease in cost. Penney repre- sentatives stated that there was no way they could afford the present rate much less an increase. The evidence shows that on July 18, Penney accepted the Am-Del-Co bid and on July 22, 1975, Garrett tele- phoned Barnes and received notification of the award to Am-Del-Co for delivery service beginning September 1.14 On July 24, 1975, Penney notified Hunt that pursuant to the terms of the Penney-Compton Service agreement by which Compton Service hourly paid drivers and helpers made delivery for Penney, it was canceling that agreement with the necessary 30-day notice.15 Hunt on July 28 then called a meeting of all the drivers and helpers, the ware- housemen and the furniture-finishers, and read them the Penney letter canceling the delivery contract as of the end of August 1975. He assured the warehouse employees that they, unlike the drivers and helpers, had nothing to fear. No union agent was present or invited. Three days later, on July 31, 1975, Hunt called a further meeting of the drivers and helpers with no union represen- tative invited or present and told them that Am-Del-Co had been awarded a contract to deliver for Penney. He told only of the necessity to improve their services but of the fact that outside owner-operator companies were bidding against Compton Service for the Penney account Charging Party Kdzer , a warehouseman, testified that at a meeting of warehousemen and finishers called by Hunt , Hunt told of Penney's dissatisfaction with damages and the desire for a 25-percent cut in costs Hunt testified he never mentioned any figures in the June 25 meeting Hunt said he got a 20- to 30-percent figure in a June 27 conversation with a Penney official in Chicago Other employees (Holleran and Gruenewald) corroborated the June 25 date 14 The agreement provides, inter aka I Am-Del-Co will route all deliveries according to the most practical schedule 2 The warehouse will stage all merchandise in designated loading areas 3 All merchandise will be inspected, properly protected (blanket wrap- ped, etc) and loaded by Am-Del-Co 4 Responsibility for all merchandise loaded will be assumed by Am-Del- Co 5 Trucks will be kept clean and in good mechanical condition 6 Drivers and helpers will wear uniforms 7 Am-Del-Co will, at all times, be courteous and cooperative with J C Penney customers 8 Charges for the delivery services provided will be per the rates quoted herein 9 The Delivery agreement will be for a period of one year, automatically renewable from year to year thereafter, with 90 days cancellation clause 10 For the purpose of this contract a "stop" is defined as 13 A Am-Del-Co Supervisor will be available to assist in all situations that may arise He will also closely supervise the activity and performance of all drivers and helpers 14 We propose that J C Penney and Am-Del-Co work out a delivery schedule that will level the amount of deliveries over a period of a week 15 We propose to handle the transfer operation with one man, a tractor and six (6) 20' to 30' trailers The trailers are to be spotted one at each store and two at the warehouse at all times The driver to take a loaded trailer from the warehouse to a store, spot it at the docks and pick up a loaded trailer of deliveries or merchandise and return to warehouse This to be repeated for each store as many days as necessary to get the job done 15 The Penney cancellation letter (Resp Exh 1) is dated July 24, 1975 704 DECISIONS OF NATIONAL LABOR RELATIONS BOARD them that Am-Del-Co would give the Compton Service driver and helper employees first opportunity to become owner-operators under the auspices of Am-Del-Co. He told them that Am-Del-Co was interested in "companies" and not in "individuals," and if they wanted to form a partnership or corporation, Am-Del-Co would sign a con- tract with them to perform delivery services for the Penney account. When one of the drivers inquired whether there would be a union or not, Hunt told them that with regard to the owner-operators, themselves, it was a matter of in- difference to Am-Del-Co whether the owner-operators signed contracts with the Union covering themselves or any employees of theirs. Am-Del-Co thereafter signed con- tracts with nine owner-operators. Five of the nine were former Compton Service employees, the remaining four not being previously associated with Compton Service. However, as General Counsel notes eight former Compton Service employees (Brown, Drozd, Reis, Glazebrook, Gruenewald, Kleinschmidt, Hale, and Holleran) actually performed delivery work for Penney. In addition, 14 other Compton drivers and helpers were offered owner-operator contracts. Meanwhile, on or about July 26, Compton Service re- ceived written notice of the cancellation of the Penney con- tract (Resp. Exh. 1, dated July 24, 1975) and Compton Service notified the Union, on July 30, 1975, of the cancel- lation (G.C. Exh. 7, dated July 30, 1975). This was the first notification to the Union of the cancellation. 16 On the basis of McDermott's credited testimony, he con- tacted Garrett by telephone on the next business day (Au- gust 4) after receiving Compton Service's notice of the Pen- ney termination and asked him to set up the meeting to discuss the effect of the cancellation on the drivers and helpers. They set up a meeting for the following day, Au- gust 5, 1975, at 2 p.m. The meeting was held in Compton Service's offices at 1218 South Vandeventer. At the meet- ing Hunt told the union agents (McDermott and Carroll) of the cancellation of the delivery contract and of Penney's dissatisfaction with the service they were getting from Compton. McDermott asked to bargain on severance pay. Hunt described how the owner-operator companies were attempting to take over the Penney account and he stated that Am-Del-Co had put in a bid. At this point McDermott offered to bargain on the question of a new method of 161 do not credit that notification of the cancellation to the Union took place as early as July 15, as Hunt's and Garrett's testimony sometimes indicates, for Hunt clearly testified that the Union was notified of the Pen- ney cancellation "after we received the official cancellation of the contract from Penney's, within a matter of a few days " Since Penney's letter is dated July 24, notification to the Union was not as early as July 15 McDermott of the Union testified , and I credit him, that the first notification that he re- ceived of the cancellation was by a letter delivered in the mail on July 31 Barnes' testimony does not at all support Garrett's testimony that on July 22 Barnes told Garrett that "Compton is finished " Barnes said that the con- tract had been awarded to Am-Del-Co on July 22 It is highly improbable that Hunt or Garrett would tell the Union that Penney had canceled the contract even before Am-Del-Co (which had submitted the bid on July 8) was awarded the contract and before official notice of the Penney cancella- tion Moreover, Garrett testified that he notified Union Agent McDermott on July 22 (the same afternoon of the morning he spoke with Barnes) However, Garrett also testified that McDermott was not to be in St Louis until July 24. In any event, I do not regard the matter of when the Union was first notified of cancellation to be dispositive of any right or obligation compensation of unit employees and to discuss "per stop" compensation rather than the contract's hourly wage. Mc- Dermott and Hunt agree that Hunt, in view of the Union's prior position regarding the Famous-Barr account, was pleased with the Union's willingness to discuss changing the method of compensation to a per-stop basis. The par- ties agreed to meet again on August 8, 1975, to further discuss the matter. But on the next day August 6, 1975, Garrett telephoned McDermott and told him that Am-Del- Co had been awarded the contract to deliver Penney furni- ture and "therefore there would [be] no need to get into further discussion on the 8th and therefore the meeting would be cancelled." On the afternoon of August 15, 1975, McDermott sent a telegram to Hollis Garrett, care of Compton Service, requesting immediate negotiation of the effects of the closing of Compton Service on the affected employees. Garrett telephoned McDermott on August 19 and said he was willing to discuss the matter. They set up a meeting for August 25. At the meeting of August 25, 1975, Garrett says that he told McDermott that he wanted to make it "crystal clear to the Union" that Compton Service was not going out of business and still had a 3-year contract for warehousing with J. C. Penney Company and 3-year collective-bargain- ing agreements covering the drivers and helpers, the ware- house employees, and the furniture-finishers. He told Mc- Dermott that Compton Service lost the delivery business with Penney, 17 that he was not refusing to negotiate and would like to work out an incentive contract for Compton Service in order to become a competitive and even try to get back the Famous-Barr account. Garrett said that Mc- Dermott refused and said that he was interested only in the Penney business and would not bargain on anything else. McDermott remembers that at the meeting he requested severance pay for the individuals who would no longer be working for Compton Service since he believed that Comp- ton Service was going out of business. Hunt responded that there would be no severance pay, that the drivers and help- ers would remain on Compton's seniority list for 12 months according to the collective-bargaining agreement. McDermott testified that he still wanted to negotiate production incentives and modify the collective- bargaining agreement to keep the employees employed. He told Hunt that it did not make any difference to the Union what the name of the delivery company doing the Penney deliveries was, but that the delivery of goods for J. C. Penney was work that belonged to members of the unit and that unit employees should be doing the work. He told Hunt that Respondent had an obligation to bargain over the matter. Hunt answered that there was no obligation for Compton 17 Barnes , Penney's representative , previously told Garrett of the award of the contract to Am-Del-Co When Garrett told Barnes that the Union was willing to negotiate a new contract, Barnes answered that "the decision had been made on the corporate had [sic] that we were going to go owner- operator in the St Louis metro district and that if Am-Del-Co could not fulfill the terms of that contract , then we would probably [give it] to Mer- chants [Home Delivery] " In view of Barnes' total testimony , and particular- ly his testimony regarding J C Penney's desire to switch from a "per- piece" to "per stop" compensation, I do not regard "owner-operator" to be synonymous with "per stop " There is no inconsistency in paying an "em- ployee" on a "per stop" basis In any event, Barnes told Hunt that he wanted "a contract based on a per stop basis" AM-DEL-CO, INC. AND COMPTON SERVICE CO 705 Service to negotiate or give severance pay since it was not out of business, and certainly Am-Del-Co was not involved and was under no obligation to negotiate since it had no employees and no contract with the Union. McDermott testified that the meeting resulted in nothing further and he prepared and submitted a grievance alleging a violation of the collective-bargaining agreement's recognition clause 11 because the Company was at that time bargaining individ- ually with driver-helper unit employees without consulting the Union. On August 28, Garrett telephoned McDermott and told him that he had answered the grievance. Compton Service's position was that there had been no contract vio- lation. In response to a further union grievance that there was a contract violation regarding transfer of unit work,19 Compton Service took the same position that there was no contract violation. On August 30, McDermott visited Compton Service's premises and found them closed. There was only one per- son present and he was changing the name on Compton Service's trucks to Am-Del-Co. The next business day, September 2, was the first day that Am-Del-Co was performing the delivery of Penney goods from the Compton warehouse. McDermott visited the warehouse and found Hunt on the dock supervising the movement of goods. McDermott asked Hunt to bargain with the Union and negotiate either a contract or severance pay. Hunt told him that he did not intend to negotiate and was not interested in talking any further. He told McDer- mott that he intended to do business with the owner-opera- tors and that was "the end of it." C. The Layoff of Employees of Compton Service; September 2, 1975 On September 2, 1975, Compton Service laid off 20 driv- ers and helpers, comprising the employees named in para- graph 6(a) and (b) of the amended complaint.20 Hunt testified that he gave each of these drivers and helpers an opportunity to become owner-operators driving as independent contractors for Am-Del-Co. After they were laid off by Compton Service, they, or at least some of them, have been recalled from time to time pursuant to contract seniority to work for Compton Service in perform- ing intermittent delivery services for the Spielberg Furni- ture account. When working for Compton Service they use the three remaining Compton Service trucks not sold or leased to owner-operators. In fact Compton began to recall some of them as early as the first week of September 1975 19 The current (November 1, 1973-October 31, 1976) collective-bargain- ing agreement (G C Exh 8), art I, sec 2 "The Employer will [not] negoti- ate [with] any of its employees in the Bargaining Unit covered hereby unless it be though duly authorized representative of the Union " 19 Art XIV requires any transferee of bargaining unit work, inter aha, to either employ all unit employees, with all contract seniority, wages, and fringe benefits or pay them severance pay 2 The laid-off employees were Harry Drozd, Lloyd Reid, Leroy Glaze- brook, Walter Schaller, Lester Gruenewald, Syvester Klemschmidt, Howard Brown , John Holleran, Ron Hale, Robert Temme, Steve Rell, Orlan Maul- din, Jerry Neal, William Chandler, Charles Muschamp, Leo Bierman, Larry Caulley, Gerald Webb, William Keaton, and Elmer McWhorten Of the 20 named Compton Service employees who were laid off on September 2, 1975, as above noted, 5 signed contracts to become owner-operator drivers for Am-Del- C0.21 Several other former Compton drivers and helpers, nonsigners, also worked on these owner-operator trucks as drivers or helpers. These five used the same trucks that they formerly used as employees of Compton Service to deliver goods for J. C. Penney. The laid-off employees had been notified that they were going to be laid off on the last workday of August 1975. Hunt testified that there are between 8 and 12 former Compton Service trucks of a total of 14 being driven by owner-operators for Am-Del-Co. These trucks are leased by Compton Service to the owner-operators. The owner- operators' contract and the leases were drafted by Hunt, Garrett, and their attorney, Whitney Harris.22 In addition, Hunt testified that Compton Service aside from leasing the 21 The "owner-operator" contract provides, in substance WHEREAS, Am-Del-Co is engaged in the business of delivering furniture and appliances through owner-operators in the greater St Louis metroplitan area, and WHEREAS, operator is an owner-operator desirous of contracting for deliver- ies of furniture and appliances for Am-Del-Co as an independent contractor in said area NOW, THEREFORE , IT IS MUTUALLY AGREED AS FOLLOWS I Operator agrees to deliver such furniture and appliances as Am-Del- Co may request of Operator from time to time in the greater St Louis metroplitan area 2 Operator will provide its own delivery truck, blankets, dollies, equip- ment and personnel and will carry public liability insurance on the truck, naming Am-Del-Co a co-insured 3 Operator will collect C O D payments from customers and remit the same daily to Am-Del-Co 4 Operator will be responsible for loss and will carry cargo insur- ance 5 Operator will be responsible for bodily injury or property damage to third parties and will carry public liability insurance naming Am- Del-Co a co-insured 6 Operator will be responsible for hiring and discharging any employees which Operator utilizes 7 For the service rendered, Operator will be paid the amount per stop set out in the attached Rate Schedule 8 Operator will obtain any licenses, permits, or certificates required by public authority, 9 In all things under this contract Operator is, and shall be an indepen- dent contractor, solely responsible for the employment of personnel used in the performance of the contract and for the manner in which its obligations hereunder are performed 10 This contract shall be for an indefinite period and shall continue in effect until terminated by either party on thirty days' notice to the other I C PENNEY DELIVERIES SCHEDULE OF DELIVERY RATES $8 00 Per Stop 900 Per Stop ADDITIONAL CHARGES A Pick-ups from customers to be returned B Special Deliveries-Deliveries requiring special equipment, such as block and tackle, or additional manpower, will be considered as "Special " The regular delivery crew will make every effort to complete all deliveries with normal crew and equipment if unable to do so, the driver will call the office for instructions prior to taking any further action C Time deliveries-Whenever it is necessary to make a delivery at or near a specific time, every effort will be made D Wrong and/or incomplete addresses and not-at-home -Every effort will be made to locate the customer and complete the delivery 22 It reads That Lessor does hereby lease unto Lessee for use in the operation of Lessee's business one Continued 706 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 8 to 12 trucks to owner-operators who drive as independent contractors for Am-Del-Co also sold two trucks outright to drivers who had been employees of Compton Service be- fore the layoff of September 1975. Of the 8 to 12 Compton Leasing and Compton Service trucks that were leased to former drivers for Compton Service, 4 to 6 of these trucks are used on the Penney account Hunt admitted that the principal customer of Compton Service before September 1975 was J. C. Penney and the primary customer of Am-Del-Co commencing September 1975 was J. C. Penney. He also stated that the owner-oper- ators and the laid-off Compton drivers hired by the owner- operators who are driving trucks for Penney deliveries are driving the same trucks that they drove for Compton Ser- vice or Compton Leasing prior to September 1975 in mak- ing Penney deliveries. In sum, the work of the owner-operators is distributed according to the priority in which the former Compton Service drivers signed the contracts with Am-Del-Co. As above noted, Ralph DeRouch, the Compton Service dis- patcher, dispatches for Am-Del-Co. In his absence, Hunt or Garrett plan the routes. DeRouch also dispatches the recalled owner-operators as employees of Compton Ser- vice. The owner-operators may not refuse Am-Del-Co's or- der for delivery and, when delivering on an account for Penney, may not have goods other than Penney's aboard. The owner-operator agreement, as General Counsel notes, sets forth the exact compensation the owner-operators are to receive per stop, for non-delivering, etc.; requires clear- ance from Am-Del-Co in the use of special devices for delivering and is terminable on 30-day notice; directs that C.O.D. payments are to be remitted daily; most important, Am-Del-Co, under this agreement with Penney, is obligat- ed to Penney to provide a supervisor who will "closely su- pervise the activity and performance of all drivers and helpers." Barnes testified that Penney looks to Am-Del-Co for performance and not to the owner-operators. The owner-operators who drive leased (former Compton Service or Leasing) trucks furnish gas, oil lubricants, and tires. Am-Del-Co maintains the liability insurance, license tags. The lease is for renewable periods of 1 year. Major I Lessor agrees at its own expense to furnish all necessary State and City License tags, except carrier permits 2 Lessee agrees to furnish at its own expense all fuel, oil and other lubricants required to operate the vehicle 3 Lessee agrees to provide at its own expense tires and tubes for operation of the vehicle 4 Lessee will provide at its own expense regular washing and clean- ing of the vehicles, to maintain the interior and exterior thereof in a clean condition and to provide all signs or lettering 5 Lessor agrees to maintain in full force on all vehicles during the continuous [sic] of this agreement automobile public liability insurance repairs are the responsibility of Am-Del-Co less $100 de- ductible. It thus appears from the foregoing that Am-Del-Co, un- der the Penney contract, the vehicle lease, and the owner- operator agreement, has the obligation to closely supervise the work of the owner-operators; has effectively estab- lished the pay per stop and their seniority system; does the routing; obliges them to carry certain (Penney) freight and proscribes inclusion of other items in a load when so en- gaged; does the heavy truck repairs, maintains insurance on the trucks; and may cancel the owner-operator agree- ment on 30-day notice. From these facts, counsel for the General Counsel ar- gues that two results follow: (1) that Am-Del-Co is merely the alter ego of Compton Service, apart from being a single integrated company with it; and (2) that "owner-opera- tors" who worked for Am-Del-Co are actually Am-Del-Co "employees" and therefore since they are employees of an alter ego remain employees of Compton Service. With regard to alter ego, the General Counsel asserts that the above facts support his conclusion that Am-Del- Co and Compton Service in substance have the same di- rectors, daily management, office ownership, and an effec- tive interchange of employees, common supervision, com- mon customers, and common property and location. These factors, present in abundance in this case, indicate that under the Board criteria, Compton Service and Am-Del- Co not only constitute a single integrated enterprise, but in their relation to Penney, are mere reflections or alter egos of each other 23 That two owner-operators own former Compton trucks and, when not on the Penney service, do some other deliveries does not affect this conclusion. I find and conclude in agreement with General Counsel that Am-Del-Co is the alter ego of Compton Service insofar as it is a device to continue the same delivery service to J. C. Penney and not withstanding that it is not a corpo- rate device invented, from the first, to avoid dealing with the Union. Cf. Rushton & Mercier, supra. It is the absolute dominion and an interchangeability of the corporations in the Penney matter which Hunt and Garrett exercise which is evident. See Parklane Hosiery Co, supra at 614. With regard to the further assertion that the "owner- operators" of Am-Del-Co are actually its employees and thus the employees of Compton Service, the General Counsel asserts that the evidence establishes that Am-Del- Co "has the right to control" both the end and the means of the work of the owner-operators of Am-Del-Co. This com- mon law concept, adopted by the Board, distinguishes be- tween "employees" and "independent contractors," Carna- tion Company, 172 NLRB 1882 (1968); Parklane Hosiery Co., supra. In support of this conclusion, the General Counsel asserts that the evidence shows that the owner- operators have no control over (1) scheduling the use of the trucks; (2) determining the persons for whom they will de- 8 This lease shall remain in force and effect as to each vehicle cov- ered hereunder for a period of one (I) year from year to year but not to exceed a total of four (4) such renewals Either party hereto shall have the right to cancel and terminate this lease as to any such vehicle at any anniversary of its date in service, by giving written notice as to his desire to purchase any one of the vehicles 9 This contract is understood by both parties to be a contract of leasing only 23 Southport Petroleum Company, 8 NLRB 792, 315 U S 100 (1941), N L R B v Deena Artware, Inc, 361 U S 398 (1960), N L R B v Hopwood Rennning Co, Inc, 98 F 2d 97 (C A 2, 1938), Parklane Hosiery Co, Inc, supra, Royal Typewriter, A Division of Litton Business Systems, inc, 209 NLRB 1006 (1974), American Needle & Novelty Company, 206 NLRB 534 (1973), Rushton & Mercier Woodworking Co, Inc, 203 NLRB 123 (1973), Borden, Inc, 192 NLRB 31 (1971), 181 NLRB 109 (1970) AM-DEL-CO, INC AND COMPTON SERVICE CO 707 liver, if they are delivering Penney work, i.e., working for Am-Del-Co; (3) the delivery routes; (4) they are supervised under the Am-Del-Co Penney agreement by the same su- pervisors (Hunt, Garrett, Ralph DeRouch) who supervised them when they were working for Compton Service; (6) the compensation received for their work; (7) the responsibility for the major maintenance of the vehicle equipment; and (8) the terms of the agreements under which they work including the seniority rules under which they obtain jobs from Am-Del-Co. Further, their status is terminable on 30- day notice. I agree with counsel for the General Counsel that 24 the evidence establishes, therefore, that the means and end results of work remains in the control of Am-Del- Co rather than with the owner-operators. The Board, with court approval, has found persons who would otherwise be operating as independent contractors to be "employees" under such circumstances especially in view of Am-Del- Co's failure to relinquish control over the ability of the drivers to profit, to choose customers, to vary their routes, etc. Deaton, Inc., 187 NLRB 780 (1971); Ace Doran Haul- ing & Rigging Co., 214 NLRB 507 (1974); Borden, Inc., supra; N.L R B. v. United Insurance of America, 390 U.S. 254 (1968); Carnation Company, supra, enforcement denied 429 F.2d 1130 (C.A. 9); and Johnson's Industrial Caterers, Inc., 197 NLRB 352 (1972), affd. 478 F.2d 1208 (C.A. 6, 1973). D. Violations of Section 8(a)(3); Independent Violations of Section 8(a)(1) The Layoffs of Gerald Gaugh, Steven Reis, and William Kilzer The complaint not only alleges the discharge of 14 named truckdrivers and helpers on September 2,25 when Respondent Compton Service admits only that it laid them off, but it also alleges that on September 8, 1975, Respon- dent laid off Gerald Gaugh; on September 12, 1975, Re- spondent laid off Steve Reis; and on or about October 3, 1975, Respondent laid off William Kilzer, in each case, in violation of Section 8(a)(1) and (3) of the Act because of the Respondent's attempt to discourage employee member- ship in and activities on behalf of the Union. The three are warehousemen. 24 Aside from Am-Del-Co and Compton's mandatory duty to supervise the "owner operator," i e , "right to control" them in the way they do their jobs, and aside from Barnes' unrefuted testimony that Penney looks only to Am-Del-Co for performance by the owner-operators, Am-Del-Co's control over them is manifested by the 30-day termination clause in the agreement Similarly , if the routes and compensation are predetermined, and if there is a prohibition against carting goods other than Penney goods when working under the Am-Del-Co/Penney contract, the area in which this allegedly independent enterprise can operate seems to be rather limited Two owner- operators , Holleran and Gruenewald, failed to indicate , in their testimony, either the time available for non-Penney work or whether they performed such work 25 With the 6 drivers and helpers who became owner-operators, there were 20 drivers and helpers laid off No explanation was made why the newly hired owner-operators, who were laid-off Compton employees, were not included among those allegedly discharged a. Gerald Gaugh Gerald Gaugh testified that he was first employed by Compton Service in June 1974 and worked in that capacity up to September 8, 1975, when he was laid off. The record shows that he was the warehouseman with least seniority and, from time to time, was laid off during the 14 months of his employment. In mid-June 1975, he had a conversation with his super- visor, Claude White 26 On that day, Gaugh was not work- ing, having been previously laid off. He had observed a nonunion, nonunit employee working on a Compton Ser- vice truck for 2 days. He went into Claude White's office and told him that there was a person working on the truck in violation of the contract and that he was going to file a grievance about it. White told him that he would be "better off not to file a grievance"; and that "Mr. Bill Hunt would possibly work me longer if I did not file a grievancc." 27 Gaugh did not file the grievance and worked for a month and a half thereafter as a warehouseman. He testi- fied that in the prior year during the period of June and July he had worked but, as "last man on the totem pole," he was laid off from time to time. As above noted, Gaugh was laid off from his job as a warehouseman working for Compton Service on Septem- ber 8, 1975, Respondent alleges it laid him off due to lack of work. On October 16, 1975, while in layoff status, he was working as a helper to a driver of one of the Am-Del-Co trucks. While working on the dock at Compton Service, he had a conversation with Supervisor White. White asked him if he had been getting any work since he had been laid off and Gaugh told him that he had not been getting any work. White then said to him: If they don't give up this deal on the Union and the labor doesn't give up this deal suit against Am-Del-Co that the Company would fold up and J. C. Penney would take their deliveries and take it to Merchant Company because they had given a lower bid than Am-Del-Co. The complaint alleges that the conversation between Gaugh and White violated Section 8(a)(1) of the Act and that Gaugh's layoff on September 8 was discriminatorily motivated and in violation of Section 8(a)(3) of the Act. Supervisor Claude White did not testify at the hearing. Furthermore, neither Hunt nor Garrett contradicted in any way Gaugh's testimony nor was there any other testimony 26 Respondent Compton Service admits in its answer that warehouseman Claude White, President Billy H Hunt, and Vice President Hollis Garrett are supervisors within the meaning of Section 2(11) of the Act and agents of Compton Service In its answer, Am-Del-Co admits only that Hunt is the president and Garrett is the vice president of Am-Del-Co On all the facts and circumstances above, including their power to manage the day-to-day business affairs of Am-Del-Co as the chief operating officers thereof, I find and conclude that Hunt and Garrett are supervisors of Compton Service and Am-Del-Co within the meaning of Section 2(11) of the Act and agents thereof 27 Art XXXIII, Work Stablization, in the agreement covering the ware- house unit, effective November 1, 1973, through October 31, 1976, provides, in substance, that if there is insufficient work for a warehouseman, and all drivers and helpers are employed, the Company must offer the work to the senior employee as a driver or helper if he is qualified to handle the equip- ment and to perform the work (G C Exh 9) It is under this provision that Gaugh testified that he intended to file the grievance 708 DECISIONS OF NATIONAL LABOR RELATIONS BOARD adduced to contradict Gaugh. From the above, with White being an admitted supervisor, it seems to me that Supervi- sor White was promising Gaugh extra work beyond that to which he was entitled as the least senior warehouse em- ployee if he would refrain from filing a grievance. I find that this promise of a benefit if he refrained from exercis- ing his contractual right was tantamount to a promise of a benefit if he would refrain from protected concerted activi- ty. I conclude that such a promise or suggestion was un- lawful within in the meaning of Section 8(a)(1) of the Act. Kendrick Cartage Co., 188 NLRB 534 (1971); Beech Air- craft Corp., 196 NLRB 68, 72 (1972); General Stencils, Inc, 178 NLRB 108 (1969), enforcement denied 472 F.2d 107 (C.A. 2, 1972). The fact that White suggested that it was not he, but President Hunt, who would confer the benefit on Gaugh if he would refrain from initiating the grievance does not limit Respondent's violation of the Act. J W. Mays, Inc., 147 NLRB 942, 964 (1964), enfd. as modified 356 F.2d 693 (C.A. 2, 1966); Layton Oil Company, 128 NLRB 252, 253, 271 (1960). While it is true that the complaint further alleges only that on October 16, 1975, White threatened an employee with discharge because employees filed charges with the National Labor Relations Board, wherein Gaugh testified that White, in fact, stated that Am-Del-Co would "fold up" if "labor" didn't give up the suit against Am-Del-Co, I conclude the matter was fully litigated, undenied, and that it was a prediction to go out of business if the employees and the Union did not refrain from pressing their unfair labor practice charges against Am-Del-Co. This threat, by White, further violates Section 8(a)(1) of the Act. Notwithstanding my findings of violations of Section 8(a)(1) because of the above unlawful threat and promise made directly to warehouseman Gaugh, I am unable to conclude that there is any testimony or other evidence of record which would indicate that Gaugh was discriminato- nly laid off, as alleged, on or about September 8, 1975, or at any other time. On the contrary, Gaugh, with least se- niority in the warehouse unit, admitted, on cross-examina- tion, that, when he was in layoff status and had discovered that a nonunion employee was working as a helper on a Compton Service truck, Compton Service attempted to and did reach him by telephone seeking to have him return to work. Under these circumstances, I do not find any dis- criminatory element in the selection and laying off of Gaugh, especially in view of the fact that he was last in seniority. I shall therefore recommend that paragraph 6(c), insofar as it alleges the discriminatory and unlawful layoff of Gaugh in violation of Section 8(a)(1) and (3) of the Act, be dismissed. When Gaugh was laid off he was replaced by Steve Reis, a warehouseman next higher in seniority. b. Steve D. Reis Ronald E. Kennon, a Compton Service warehouseman and the warehouse shop steward at that time, and Steve Reis, a warehouseman, testified that in mid-August 1975 they entered Hunt's office complaining that there had been a contract violation because an employee lower on the se- niority list, Gaugh, had been recalled rather than Reis Reis told Hunt that he intended to file a grievance. Reis said that he wanted to be paid in conformity with the terms of the contract for the time that Gaugh had been working and that failing that he would file a grievance. Hunt an- swered: "Do what you have to do but if you file that griev- ance I probably won't be able to use you for a while but if you don't use it you get to work tomorrow." Reis did not file the grievance and was recalled to work in the next 2 or 3 days. Such a promise and assurance by Hunt is similar to that made by White to Gaugh and represents an unlawful promise of a benefit if the employee, Reis, would refrain from filing a grievance, a right permitted and guaranteed under the collective-bargaining agreement. This violates Section 8(a)(1) of the Act. Even if the conversation might otherwise be construed as a rough adjustment of a griev- ance in view of the presence of the shop steward, there is also a threat not to use him "for a while" if he filed a grievance. Such a threat, coupled with the promise, more clearly violates Section 8(a)(1) of the Act as a threat of late recall if Reis pressed his rights under the contract within the grievance procedure. Hunt testified that it was his recollection that Reis' testi- mony concerning the conversation in Hunt's office in the presence of Shop Steward Kennon was "basically right." Hunt testified that in view of Reis' absence and the Company's continuous unsuccessful attempts to contact him, he believed that Reis had quit the Company. Hunt testified that Supervisor White had on numerous occasions tried to contact Reis but had been unsuccessful in doing so. Reis did not deny this. He testified that he had spoken to White on many occasions and had agreed to come back to work except that the limited offers of work were not ac- ceptable to Reis under the terms of the collective-bargain- ing agreement. Hunt testified that he told Reis that he did not believe that Reis had a legitimate claim and that if Reis wanted to file a grievance, the shop steward was present and would write it for him. Hunt testified that he would honor the grievance and take it through the grievance pro- cedure. Hunt said, however, that he told Reis and Kennon "if we would settle it in the office, then, if Reis was avail- able for work, Hunt would put him to work." Thus, the testimony of Kennon and Reis show that Hunt threatened not to use Reis if he filed the grievance, but that if he didn't file the grievance he would be used for work the next day. Hunt, on the other hand, testified that he was attempting to settle the matter in the presence of a shop steward before Reis filed an actual grievance. I do not credit Hunt's testimony that he made the avail- ability of work conditional on the work itself becoming available for Reis. I view this conversation as part of a pattern wherein the Respondent's supervisors, Hunt and White, seek to avoid unit employees filing grievances and attempt to give them rewards for their refraining from and engaging in activities which are protected under the Act and permitted under the contract. When such rewards are conditioned upon such refraining, the recipient of such re- ward naturally is placed at an advantage over all other employees in the unit and is encouraged to refrain from engaging in activities protected by the Act. While this may seem unduly technical in that it resulted in a benefit to the employees rather than a detriment, the experience and ra- tionale developed over the years by the Board, with court AM-DEL-CO, INC. AND COMPTON SERVICE CO. 709 approval, dictates that such conduct by the employer amounts to interference, restraint, and coercion. N.L.R B. v. Exchange Parts Company, 375 U.S. 405 (1964). Moreover, here Hunt was not merely attempting to in- formally adjust the grievance (in the presence of the shop steward) by promising a benefit . He was coupling it with a threat . Such a statement raises the conversation out of the merely technical . As alleged, I find it violates Section 8(a)(1) of the Act. Thereafter, around September 8 and 9 , Reis twice pro- tested to Claude White the practice of Am-Del-Co employ- ees doing warehousemen 's work . White answered on both occasions that he would take care of it. Reis was laid off, in seniority, 2 days later. I perceive no evidence indicating that Reis, because of the above conduct or other activities, was unlawfully se- lected for layoff. Reis was only one step senior to Gaugh on the warehouse seniority list and he was laid off in se- niority 4 days later. Lastly, no pretextual or other device is suggested by the evidence, notwithstanding that the layoff may have occurred immediately following his protest. The timing here raises no prima facie suspicion. c. The testimony of William L. Kilzer,• violation of Section 8(a)(3) Kilzer, third from the bottom in seniority, and above Gaugh and Reis, testified that he worked for Compton Ser- vice as a general warehouseman commencing August 1973. He testified that he worked from August 19, 1973, through the end of 1974 as a warehouseman and was laid off. In April 1975, he was recalled as a driver-helper. He did not return to work at the warehouse until May 21, 1975, and worked as a warehouseman until his layoff on October 3, 1975. He was recalled on November 11, 1975, and was laid off on November 19, 1975, until his recall on December 1, 1975. At the time of the hearing he was employed as a warehouseman. Kilzer testified that on the afternoon of May 21, 1975, he was present at a conversation between Hunt, White, and the warehousemen and furniture-finishers. The conversa- tion took place immediately after the last break. Hunt told the assembled employees that J. C. Penney was very upset about the condition of the warehouse and that there would probably be no more union contracts with the employees at the warehouse unless they got it straightened out and kept it straightened out. Kilzer stated that Hunt told them that he wanted the work of straightening out the warehouse to be done by Compton Service employees. Hunt said that if they didn't do it, then they would be replaced by "people who probably would be taking our jobs." During this testi- mony, counsel for Am-Del-Co objected on the ground that the witnesses' testimony was conclusionary and did not re- flect the actual statement of Hunt. Kilzer reiterated that Hunt said that there would "never be another union con- tract in the warehouse unless we got the warehouse straight and kept it straight." 28 There is no testimony from Re- spondent refuting the alleged conversation, although Hunt denied other similar statements made allegedly to Keaton and Kilzer. It appears to me that, as alleged in paragraph 5(d) of the complaint, Respondent's President Hunt made the above statement which is clearly coercive within the meaning of Section 8(a)(1) of the Act. The fact that Presi- dent Hunt was using the threat that there never would be another union contract as a lever to cause the employees to maintain the warehouse in better condition is no justifica- tion of this threat. The statement that there would never be another union contract for the warehouse employees, made May 21, 1975, violates Section 8(a)(1) of the Act whether viewed as a threat to withdraw union recognition or to adversely affect working conditions in the future. Kilzer also testified that on June 16, 1975, Hunt called a meeting of the warehousemen and furniture-finishers in front of the freight elevators. Beside Hunt, Supervisor Claude White was at the meeting. Hunt said that J. C. Penney was demanding a 25-percent across-the-board cut among the warehousemen and driver-helpers in the cost of drivers and helpers, and that there would never be another union contract with the warehousemen or with the drivers and helpers unless those units would make a reduction in cost. In that same conversation, Kilzer said that Hunt said that unless the employees cease damaging the furniture, "nonunion help would take our jobs from us and that we would be working for less money." Hunt testified that he recalled that there were a series of meetings held in or about the middle of June 1975, and that he believed that the conversation that Kilzer was testi- fying about occurred on or about June 29, 1975. Hunt testi- fied that there were several meetings with warehousemen, furniture-finishers, and the driver-helpers because of the sloppy condition and poor production in the warehouse and among the drivers. Hunt, however, particularly denied that he said anything about J. C. Penney demanding a 25- percent cut in cost. He said that these meetings were an attempt at "jacking up the people to get them to perform a little better." Hunt also denied, as Kilzer alleged, saying that there would be no damage problem once Am-Del-Co took over the delivery service. While Hunt admitted saying that he would issue warning letters where there had been a failure to make proper reports of damage or where there was continued damaging of furniture, he denied saying that unless this was done, nonunion employees would take the present employees' Jobs. On this record, I credit Kilzer and discredit Hunt's deni- als insofar as they are not in accordance with Kilzer's ver- sion of the event. I conclude that what actually occurred was that Hunt, indeed, was attempting to cause the em- ployees to perform better and that the threat of no further union contract, as it occurred in other instances of Hunt's conversations with employees, including Keaton and Mus- champ, and Supervisor White's conversation with employ- ees, came into the conversation. I find that such statements are a violation of Section 8(a)(1) of the Act as unlawful threats. Kilzer testified that the day after he was at this meeting with Hunt and White (Kilzer places this at June 17, 1975), 28 Respondent's suggestion that there was a confusion between the Union's contract and Penney's contract with Respondent is not supported by this testimony 710 DECISIONS OF NATIONAL LABOR RELATIONS BOARD he had a conversation with Supervisor Claude White. With six other warehousemen and furniture-helpers present, Kil- zer asked Supervisor White what was going to happen next and "what our rate of pay would be if we were working nonunion." White answered: "Bill Hunt and Hollis Garrett would not be happy until we were working for $2.50 or $3 an hour." White added that Hunt would never be happy until it was a nonunion shop. In view of the fact that Kilzer asked this question, I do not regard White's answer (and White did not testify at the hearing) to have constituted an unlawful threat that the shop was indeed going nonunion. What White said was that Hunt would never be happy until the shop was nonunion and that if it were nonunion they would be working for $2 an hour. I find this to be an opinion of White's in an area in which he had no control and it is not a threat nor did it restrain Kilzer or the other employees especially since it was an answer to Kilzer's question. Kilzer also testified that around July 17, 1975, Hunt, in a meeting of warehousemen and furniture-finishers, told the assembled employees that J. , C. Penney was demanding a 25-percent cut; that Compton Service was going to have to do away with the delivery service; and that Am-Del-Co would do the delivery service and it would be nonunion. Kilzer also said that Hunt said that there was a great possi- bility that the warehouse would not be union because Am- Del-Co was submitting a bid to do their warehouse work for J. C. Penney. Hunt denies, in substance, that he said that there would never be another union contract with reference to this meeting . Hunt explained that there may well have been a misunderstanding in regard to the two contracts involved: one being the contract between Compton Service and the Union which was never canceled and the second being the contract between Compton Service and J. C. Penney which indeed was canceled. In particular, Hunt denies say- ing anything about a 25-percent cut. The General Counsel argues that this testimony 29 is supportive of paragraph 5(g) of the complaint. The complaint alleges that on or about July 23, 1975, Hunt told employees, in an attempt to un- dermine their support of the Union, that Respondent was being pressured by its customers to go nonunion. Assum- ing arguendo that such an allegation, indeed, constitutes a violation of Section 8(a)(1) of the Act, I do not find that it is supported by the credible evidence. I shall therefore rec- ommend that it be dismissed. However, I find from the credible testimony of Kilzer, contrary to Hunt's denial, that he did mention a 25-percent cut and did state that Am-Del-Co would be a nonunion employer taking over the delivery business. While I do not credit Kilter's recollec- tion that Hunt said that there was a great possibility that the warehouse would become nonunion because Am-Del- Co was submitting such a bid to J. C. Penney, I find that the prediction regarding Am-Del-Co as a nonunion em- ployer constitutes a clear statement that Compton Service and Am-Del-Co were becoming nonunion and that the em- 29 General Counsel also points to the testimony of employee Muschamp where Muschamp testified that Hutt told the driver-helpers that he was "receiving pressure" from customers to cut the cost and that nonunion com- panies were getting the work ployees would no longer have the benefit of union repre- sentatives. I discredit Hunt because such a remark is con- sistent with mutually corroborated testimony of Keaton, Muschamp, and other employees and with the relations between Penney and Respondent. The complaint alleges that Kilzer was unlawfully laid off on October 3. The General Counsel points to the fact that Gaugh protested the employment of an employee out of seniority and was laid off; and that Reis protested Am- Del-Co employees coming into the warehouse and doing warehouse work and within 2 days of his protest was laid off. I found no violation of the Act therein. Kilzer, protesting on September 10, 12, and 30 the con- tinued violation of contract by Respondent in that Am- Del-Co employees were invading the warehouse and were doing warehousemen's work, was met at first only by Su- pervisor White's admonition to go along with the program or else they would not be working. On October 1, 1975, however, White told Kilzer that if he didn't go along with the "program" of having Am-Del-Co employees come into the warehouse, "I am just going to have to lay you off." Kilzer answered that he was not going to go along with the program and that Respondent would just have to lay him off. White then said to Kilzer: "Why don't you get hold of your union?" and White laughed. Kilzer told him that he would get the Union. Kilzer telephoned McDermott that (Wednesday, October 1, 1975) night and McDermott said he would be there on Friday, October 3, 1975. That Friday morning, October 3, Union Agent McDermott called a meeting of warehousemen and furniture-finishers in the warehouse lunchroom on breaktime. Kilzer said that Su- pervisor White was standing in the doorway at the time of the meeting. I infer, in the absence of contradiction, that he observed the occurrences. McDermott said that they were going to file a grievance under the contract. All the ware- housemen signed the filed grievance. On the morning of October 3, 1975, at about 10 o'clock, Kilzer signed the grievance and he was notified that afternoon at 2:45 p.m. that he was laid off. Although Respondent denied discriminatory motivation in the laying off of Kilzer, I believe that the record evi- dence herein shows that Kilzer's treatment was quite dif- ferent from that accorded to warehousemen Gaugh and Reis. Although it is true that Kilzer was next in line for layoff, he was the subject of a clear, direct threat of layoff because of protesting working conditions and contract vio- lations whereas Gaugh and Reis were not. Whereas Gaugh and Reis were persuaded not to file grievances, Kilzer brought in the union agent and caused the whole ware- house unit to join in the grievance. And most important, whereas Gaugh and Reis could expect the remedy of some money from Compton Service, to recompense their partic- ular grievance, Kilzer was setting in motion interference with Respondent's ability to salvage the entire Penney business through the use of the Am-Del-Co device. Gaugh and Reis were nuisances; Kilzer was causing serious trou- ble. I believe that the evidence with regard to the threat of layoff by White, the timing of the layoff immediately after the filing of the grievance, with White an observer of the union meeting, and the above-enumerated reasons, consti- tuted a prima facie case for the discriminatory layoff of AM-DEL-CO, INC. AND COMPTON SERVICE CO 711 Kilzer as opposed to warehousemen Gaugh and Reis. In view of the prima facie case, it was incumbent upon Re- spondent to come forward with an explanation both rebut- ting the prima facie case and showing the reason for the layoff. It did neither. In view of this, I shall recommend that the Board find as I do that Kilzer was laid off in the period of October 3, 1975, through November 10, 1975, in violation of Section 8(a)(1) and (3) of the Act. I add that Respondent's recalls of Kilzer after laying him off do not substantially alter my conclusion. The layoff, according to this record, was to underline the necessity of "going along" with the use of Am-Del-Co employees performing tasks otherwise performed by Compton Service warehouse em- ployees. Had Kilzer not been recalled it would have been obvious that his discipline was that of discharge. There is no evidence that Kilzer continued to protest. On the basis of all the evidence of the record, I shall therefore recommend that paragraph 6(c) of the complaint, alleging the unlawful layoffs of warehousemen Gaugh, Reis, and Kilzer be dismissed as to Gaugh and Reis be- cause of a failure of proof; and that the layoff of Kilzer, in the period of October 3, 1975, through November 10, 1975, be found a violation of Section 8(a)(1) and (3). The consolidated amended complaint also alleges that, in violation of Section 8(a)(1) and (3) of the Act (paragraph 6(a) of the complaint), Respondent attempted to convert Harry Drozd, Lloyd Reid, Leroy Glazebrook, Walter Schaller, Lester Gruenewald, and Syvester Kleinschmidt from employees into independent contractors; and that such attempt was based upon a desire by Respondent to discourage employee membership in and activities on be- half of the Union. While it is true, as hereinafter noted, that Respondent did attempt and did successfully attempt to change the status of these employees to "independent contractors," there is no evidence of record that this was done in an attempt to discourage their membership in the Union, to interfere in their concerted activities on behalf of the Union or otherwise, or to undermine or disparage the Union. All drivers were treated the same. I shall therefore recommend to the Board that section 6(a) of the consoli- dated amended complaint be dismissed for lack of evi- dence of discriminatory motive 30 in Respondent's attempt- ing to change the status of the above-named employees and that of other employees into independent contractors This does not mean, as noted below, that such a change did not carry with it other violations of the Act. There exist, as noted below, various instances of Re- spondent engaging in acts of interference, restraint, and coercion, in violation of Section 8(a)(1) of the Act, and an unlawful layoff of warehouse employee Kilzer in violation of Section 8(a)(1) and (3). I am persuaded from the entire record herein that Respondent's action in this case seeking other means of preserving its business with its largest cus- tomer, J. C. Penney, while perhaps not motivated by an intent to discriminate against its employees on the basis of their union membership was motivated by design to rid 70 While an effect of conversion to owner-operator status is that the em- ployees may leave the Union, that is not necessarily true or the intended result itself of the union contract. Town & Country Manufacturing Company, Inc., 136 NLRB 1022 (1962), enfd. 316 F.2d 846 (C.A. 5, 1963); Clevenger Logging, Inc., 220 NLRB 768 (1975). I am persuaded that notwithstanding the economic exigencies it faced with the impending loss of the Penney contract, Respondent embarked on a campaign of threat- ening employees, disparaging the Union, sought to avoid paying the wages and benefits of the existing Compton Ser- vice contract, and chose, without notification to the Union or an opportunity to bargain, to abandon the Union and the contract in favor of going over to an owner-operator situation. Pay'n Save Corporation, 210 NLRB 311 (1974). The fact that part of the Compton Service driver-helper unit of employees survives is not determinative. Pay'n Save Corporation, at 321, In. 19. E. Violation of Section 8(a)(5) and 8(d) of the Act The complaint alleges the existence and appropriatness of a truckdriver and helper unit and a separate warehouse employee unit. Compton Service admits the allegation and Am-Del-Co denies it. Having found that Am-Del-Co and Compton constitute a single integrated employer, I con- clude that Am-Del-Co's denial does not raise a material issue with regard to the appropriateness of these units. Sim- ilarly, where Compton Service admits and Am-Del-Co de- nies that the Union was the majority representative in those units, Am-Del-Co's denial does not raise a material issue . The complaint also alleges the existence of a collec- tive-bargaining agreement covering each of those units ef- fective November 1, 1973, through October 31, 1976. Am- Del-Co's denial of the existence of the collective-bargain- ing agreements covering both units similarly does not raise a material issue . Some recapitulation is in order. The evidence of record therefore shows that on July 8, 1975, Respondent submitted a bid to J. C. Penney under the Am-Del-Co name to perform a delivery service thereto- fore fulfilled by Compton Service drivers. This July 8 bid followed a June 20 meeting with J. C. Penney wherein Respondent Compton knew that Penney had been approached by owner-driver companies, that Penney wanted a bid submitted whereby deliveries on a per-stop basis would be made, and that Penney would can- cel the Compton Service contract. The evidence shows that on July 18, 1975, Penney ac- cepted the Am-Del-Co bid and that pursuant to a July 22, 1975, telephone call from Garrett to Barnes at Penney, Garrett knew that Am-Del-Co was the successful bidder. On July 24, 1975, Penney sent a letter to Compton (Resp. Exh. 1) terminating the 3-year delivery agreement between Penney and Compton effective August 30, 1975. On July 30, 1975, Compton Service notified (G.C. Exh. 7) the Union that the Penney contract had been terminated, the effective date being August 31, 1975. Noting that the termination of the Penney contract affected only the driv- ers and helpers, Hunt wrote to the Union that he would notify the drivers and helpers on July 31, 1975, of the ter- minations. This was the first notification, as above noted, 712 DECISIONS OF NATIONAL LABOR RELATIONS BOARD that Respondent gave the Union with regard to the cancel- lation of the Penney contract.31 McDermott received Compton Service's July 30 letter on July 31, contacted Respondent, and arranged a meeting for August 5. It was at this August 5 meeting that Hunt told McDermott that Am-Del-Co was submitting a bid for the work. According to McDermott's credited testimony, Mc- Dermott asked Hunt and Garrett at this August 5 meeting to negotiate some sort of "per-stop" contract covering the drivers and helpers. Hunt and Garrett agreed to a meeting of August 8. On August 6, however, Garrett telephoned McDermott and told him that the Am-Del-Co contract had been accepted by Penney and that there was no need for further discussion.32 In any case, on August 15, 1975, McDermott sent a mailgram to Compton requesting Compton to bargain over the effects of the closing of Compton Service on the drivers and helpers in the unit. At a meeting of August 25, 1975, McDermott requested sever- ance pay for the drivers and helpers who would be termi- nated. Hunt refused to discuss severance pay and noted that Compton was not going out of business. Nevertheless, McDermott asked Hunt and Garrett to negotiate severance pay for the drivers and helpers who would be laid off. It was at this August 25 meeting that McDermott told Hunt and Garrett that it made no difference to him what compa- ny under Respondent's control actually performed the Penney deliveries. McDermott stated that unit employees should be doing the job and should be doing it under a labor contract which the Union was willing to modify. Hunt answered that there was no need for Compton Ser- vice to negotiate and that Am-Del-Co was not covered by any agreement with the Union. Hunt reiterated that Comp- ton was not going out of business. It was as a result of this August 25 meeting that the Union filed a grievance alleg- ing breach of the contract because of violation of the rec- ognition clause in that Respondent was bargaining individ- ually with union employees and a further grievance relating to the transfer-of-work clause. On September 2, McDermott again visited the Respondent's warehouse and asked Hunt to negotiate either a new contract or severance pay. Hunt again stated that he did not intend to negotiate and was not interested in talking any further. Hunt stated that Respondent would do business with the owner-operators and "that is the end of it." Analysis and Conclusions Section 8(d) of the Act 33 requires, in substance, that the collective-bargaining agreements cannot be altered without the consent of the parties except by following the statutory 31 McDermott admitted hearing rumors before July 31 of a change in Penney's method of operation-as early as April 1975 32 i am unable to see what consequences would flow even if I accepted Hunt's and Garrett's version of the facts whereby they notified McDermott of the Union that there had been notification of Penney 's cancellation of the Compton contract as early as July 15, 1975 33 In pertinent part Sec 8 (d) provides that . where there is in effect a collective -bargaining contract covering employees the duty to bargain collectively shall also mean that no party to such contract shall terminate or modify such contract, unless the party desiring such termination or modification- provisions relating to such changes . Oak Cliff-Golman Bak- ing Company, 202 NLRB 614, 616 (1973); Osage Manufac- turing Company, 173 NLRB 458, 461-462 ( 1968). There is no question in this case that Respondent , faced with what it regarded as economic problems of the first magnitude (loss of the Penney business), sought to continue its busi- ness with J . C. Penney by resort to owner-operators oper- ating on a per-stop basis as Penney specified . In order to meet the problem posed by Penney's undoubted demand (that Penney delivery work be accomplished on a per-stop basis) Respondent, through Am-Del-Co, submitted a suc- cessful bid to Penney covering the delivery operation. Knowing as early as June 20, 1975, that Penney would cancel the Compton contract and having submitted the Am-Del-Co bid on July 8, and having been awarded the Am-Del-Co contract on July 22, in mid-term of Respondent's contract (covering the drivers and helpers) between the Union and Compton Service , Respondent switched to an owner-operator method of delivery without consulting the Union and without notifying the Union 34 until August 5 of its intent to do so on September 1. In addition it did not follow the statutory scheme for chang- ing the wages, hours, and other terms and conditions of employment of the unit drivers and helpers who signed contracts with new terms of employment as "owner opera- tors." No further discussion is necessary to show that the mid-term unilateral changes in the contract terms by Compton Service , laying off its drivers and helpers and soliciting all of them and hiring some of them as owner- operators and changing their terms and conditions of em- ployment with individual contracts violated Section 8(d) of the Act and also independently violated Compton Service's and Am-Del-Co's obligation to bargain collectively with the Union within the meaning of Section 8(a)(5). Carnation Company, 172 NLRB 1882 ( 1968), enforcement denied 429 F.2d 1130 (C.A. 9); Oak Cliff-Golman Baking Co., supra; Borden, Inc, supra; N. L. R. B. v. Huttig Sash and Door Com- pany, 337 F.2d 964, 967 (C.A. 8, 1966). The crux of this case, as it appears to me , is that Respon- dent Compton Service undoubtedly felt itself under severe economic pressure by Penney. However, Penney did not direct or require that the work, done on a per-stop basis, be performed under a contract by Am-Del-Co or by indepen- dent contractors. What the evidence showed that Penney required was the ability to pay "per stop" for its delivery (1) serves a written notice upon the other party to the contract of the proposed termination or modification sixty days prior to the expiration date thereof (2) offers to meet and confer with the other party for the purpose of negotiating a new contract or a contract containing the proposed modi- fications, (3) notifies the Federal Mediation and Conciliation Service within thirty days after such notice of the existence of a dispute (4) continues in full force and effect all the terms and condi- tions of the existing contract for a period of sixty days after such notice is given or until the expiration date of such contract , whichever occurs later 34 The case does not present the issue of whether Respondent must bar- gain on the decision to change from employees to independent contractors even though Respondent sold or leased most of its trucks Compare Adams Dairy, Inc, 350 F 2d 108 (C A 8 , 1965) with Royal Typewriter Company, A Division of Litton Business Systems, Inc, 209 NLRB 1006, 1012 ( 1974) Here, Respondent insists Compton Service is fully in business as an employer of employees (on layoff status for much of the time ) AM-DEL-CO, INC. AND COMPTON SERVICE CO 713 service.35 Up through August 5, 1975, all that had occurred was that Respondent submitted a bid based on a per-stop method of delivery for J. C. Penney under the Am-Del-Co corporate name. On August 5, the Union was willing to negotiate a per- stop method of delivery. With the Union at this time will- ing to bargain on a change in the contract, Respondent, on August 6, decided not to bargain with the Union but to take the position that Am-Del-Co, not covered by any union collective-bargaining agreement, was free to negoti- ate and contract with Penney free of any collective-bar- gaining agreement with the Union. While the reasons for such a position are not entirely clear on this record, the testimony of Penney's distribution center manager in the St. Louis area, John J. Barnes, was significant. Barnes testi- fied that, with regard to the use of owner-operator delivery services, Penney would have accepted a bid from Compton Service just as it accepted the bid from Am-Del-Co. Barnes testified that Penney did not demand that Hunt submit a bid under the Am-Del-Co name: he said that he wanted an owner-operator "concept" in delivery. This means a "per stop" plan. Penney had no concern for the relationship of the drivers to Am-Del-Co. While it is true that Barnes testi- fied that he asked Hunt if Hunt was interested in submit- ting a bid through the Am-Del-Co corporation, he was un- willing to swear to the fact that he restricted the bid to Am-Del-Co. Similarly, McDermott cautioned Respondent that he didn't care under what name Respondent bid for the Penney work; it belonged to unit employees. However, in the view I take of the case, it was immaterial in this case if Barnes had restricted it to Am-Del-Co. For Respondent, whether through Am-Del-Co or any other corporate de- vice, was not free to deal with Penney outside the scope of its obligation to the Union. Since Am-Del-Co and Comp- ton Service constituted a single integrated employer, and for the purpose of the relation to Penney, alter egos of each other, Respondent was under an obligation to deal with the Union notwithstanding it used the Am-Del-Co device in submitting the bid to Penney The inference I feel com- pelled to draw, under the facts of this case, is that Comp- ton saw an opportunity to escape its obligation to the Union with regard to salvaging a major segment of its busi- ness by taking the position that Am-Del-Co, a nonsignato- ry to any union agreement was free to deal with Penney outside Compton Service's obligation to the Union with regard to the drivers and helpers In addition, Re- spondent's initiation of a new method of operation with Penney was undertaken unilaterally and without notice to or bargaining with the Union until the events amounted to a fait accompli or, indeed, were set in motion. When the Union moreover, requested bargaining on the effects of the conversion of the operation from hourly employees to an 35 Barnes of J C Penney on cross-examination by counsel for the Gener- al Counsel (Miller) Q Did Mr Hunt indicate to you under which company he was going to submit a bid? A No Q What did you tell him? A I told him we wanted a contract based on a per stop basis owner-operator plan, Respondent refused to bargain. This unilateral action and refusing to bargain on the effects thereof constitute violations of Section 8(a)(5) of the Act. Royal Typewriter Company, 209 NLRB 1006, 1012 (1974).36 The violation in refusing to bargain on "effects" would be perfected even assuming that the unilateral action was eco- nomically motivated and the owner-operators were no lon- ger unit employees but independent contractors and the action was viewed as a partial liquidation. Johnson's Indus- trial Caterer's, Inc., 197 NLRB 352, 356 (1972), citing N.LR.B. v. Adams Diary, Inc., supra. The General Counsel also argues that even if Am-Del- Co and Compton Service are not a single integrated enter- prise and alter egos of each other, Am-Del-Co nevertheless continued to have an obligation to bargain with the Union as the successor of Compton Service. General Counsel ar- gues that Am-Del-Co, having the same customers, identical equipment, many of the same employees, the same loca- tion, and the same function as the predecessor and having commercial operations without a hiatus of service, neces- sarily is the "successor" of Compton Service under the Board law. N.L.R.B. v. Burns International Security Service Inc, 406 U.S. 272 (1972). In my view of the case, it is not necessary to reach or analyze the question of Am-Del-Co as the successor of Compton Service, having found that it constitutes a single integrated enterprise with Compton Service and its alter ego for purposes of entertaining J. C. Penney business. Defenses 1 In its persuasive brief demonstrating the economic straits enveloping Respondent, Compton Service and Am- Del-Co note that notwithstanding the above facts, on Janu- ary 9, 1976, Penney terminated its contract with Am-Del- Co effective January 14, 1976 According to Respondent, the basic issue in the case therefore has become moot and the only issue to be decided is whether there should be backpay for the Compton Service employees who were laid off (on the theory that they would have had the work if Am-Del-Co had not performed the Penney work) in the period September 2, 1975 (the date on which Am-Del-Co commenced the Penney's deliveries) to January 14, 1976 (the date on which, according to Respondent, the employ- ees regardless of working for Am-Del-Co or otherwise would necessarily have been laid off in view of the loss by Am-Del-Co of the Penney contract). This matter is not properly before me and should be left to a backpay pro- ceeding. In its brief, Respondent also admits that the Union sug- gested the possibility of modifying the collective-bargain- ing contract so as to provide for compensation on a incen- tive basis (i.e., per stop) rather than on an hourly basis. Respondent, however, states that Penney thereafter ad- vised Respondent that it had accepted the Am-Del-Co pro- posal and that it was not interested in any further contract with Compton. In this assertion, I believe that Respondent goes too far. For, as I have found, Barnes was interested in a per stop basis for Penney delivery and not interested 36 General Counsel did not suggest that Respondent was obligated to bargain on the "decision" to convert to "owner-operator " 714 DECISIONS OF NATIONAL LABOR RELATIONS BOARD particularly in who performed such deliveries and the tech- nical legal relationship of the drivers to Am -Del-Co. With- out supporting material, Respondent further argues that- "Compton could not possibly compete with owner -opera- tor companies , even if its union contract obligations were converted to a per stop equivalent " 37 The problem with Respondent's position is that it never gave the Union an opportunity to bargain on the question on how far the Union might be willing to withdraw from its otherwise ob- durate position taken in the Famous-Barr case. Thus, when the Respondent cut off McDermott on August 6 from bar- gaining on August 8 with regard to changing the terms and conditions of the contract , Respondent never could discov- er dust how far the Union was willing to go in changing, i.e., lessening, the wages and other terms and conditions of employment, so that Compton or Am-Del-Co could meet the competition imposed by the other owner -operator com- panies beyond the existing contract "converted to a per stop equivalent." 2. To the extent that Respondent defends on the ground the simple economic survival was the cause of and excuse for its actions , the courts and Board have held to the con- trary. East Bay Union of Machinists, Local 1304, United Steelworkers of America, AFL-CIO [Fibreboard Paper Products Corp] v. N.L. R.B, 379 U.S. 203 ( 1964); Carnation Company, supra; Oak Cliff-Golman Baking Co., supra. 3. Respondent also relies on the Board's holding in Compton Service Company, Inc., 212 NLRB 557 (1974). That decision, issued July 26, 1974, found that Compton Service, Compton Leasing, and Am-Del-Co constituted a single integrated employer but also dismissed allegation of violations of Section 8(a)(5) with regard to an official of the single integrated employer suggesting to three employ- ees of Compton Leasing that they become owner-operators for Am-Del-Co in delivering merchandise for an employer by the name of Carafiol . The general manager of Am-Del- Co at the time, Murry Hines, asked three employees of Compton Leasing to consider the matter of driving as own- er-operators for Am-Del-Co in delivering appliances for Carafiol . Subsequently , each of the Compton Leasing em- ployees declined to enter into the relationship . The facts showed that the Famous -Barr enterprise , for whom the Compton Leasing drivers drove, was progressively discon- tinuing the use of Compton Leasing employees and going to the use of owner-operators . The three employees, drivers for Famous-Barr, were very low on the Compton Leasing seniority list, and in view of Famous-Barr going to the owner-operator method of delivery, could not expect em- ployment . The fact also appeared that the three men to whom Hines spoke were told that they could both drive as owner-operators for Am-Del-Co on the Carafiol account and continue to work for Famous-Barr whenever they were reached on the seniority list to drive for Famous-Barr un- der the union contract's terms and conditions. The complaint in that case alleged violations of Section 8(a)(5) in that respondent engaged in direct bargaining 37 Emphasis supplied 38 The alleged unlawfullness was unlawful direct bargaining and unlawful subcontracting without bargaining with employees in violation of the union's status as the statutory collective-bargaining representative of the em- ployees; and in addition, that respondent had already uni- laterally subcontracted unit work to owner-operators with- out notice to the union. With regard to the allegation of violation due to direct dealing, the Board held, in affirming the Administrative Law Judge, that the three employees contacted by Am-Del-Co were not offered "employment" and no change in their working conditions as employees of Compton Service. It was held that the terms and conditions which Am-Del-Co was soliciting the employees about were outside the employment relationship of the employees with Compton Leasing and were not inconsistent with it. With regard to the second allegation of the complaint, that re- spondent had a duty to bargain with the union concerning the subcontracting of the delivery service at Carafiol, the Board again, affirming the conclusion of the Administra- tive Law Judge, found that no bargaining duty arose in the situation. In particular, it found that the decision to use an owner-operator at Carafiol rather than to expand the use of employees of Compton Leasing at the Carafiol unit was a decision solely of Carafiol and not of respondent. When Carafiol declined to request additional employees for Compton Leasing but instead requested an owner-opera- tor, Am-Del-Co came forward with an owner-operator plan to meet Carafiol request The case at bar is readily distinguishable, it seems to me, from the prior Compton Service case. In the first place, the erstwhile employees of Compton Service who were driving for J. C. Penney in the present case were in fact being induced to drive for J. C. Penney as owner-operators. In the prior Compton Service case, the employees were not laid off from Famous-Barr and then asked to drive as owner- operators for Famous-Barr There was no chance for them to work at Famous-Barr which was switching to owner- operators and they were then being asked to go to Carafiol, as a separate place of employment, as owner-operators. The second ground of distinction, as I see it, is that in the prior case there was no solicitation by the customer for bids on "per stop" basis. There was merely a request by Carafiol to be supplied with owner-operators. In the case at bar, however, J. C. Penney desired bids on a "per stop" basis. As I have found above, contrary to Respondent, Penney did not say it would reject a Compton Service bid and insist that Am-Del-Co submit a bid. As Barnes testi- fied, he was willing to accept bids and would have re- viewed bids from any company including Comtpon Ser- vice. The fact is that Hunt and Garrett refused to engage in any bargaining with the Union with regard to a per stop basis contract for J. C. Penney, which the Union was will- ing to bargain about on August 5, which necessarily caused the Am-Del-Co bid to be accepted as such. Although Respondent's actions, on this record, in spite of antiunion disparagment do not necessarily reflect a scheme to rid itself of the Union when it first submitted the bid to J. C. Penney, by the time it dealt with the Union in early August 1975 it was clear that, through reliance on the fact that Am-Del-Co had no collective-bargaining agreement with the Union, Respondent was motivated, with regard to sal- vaging the J. C. Penney business, by a desire to abandon AM-DEL-CO, INC. AND COMPTON SERVICE CO. 715 the Union's expensive contract with employees and to go on the nonunion basis with owner-operators. In view of this conclusion, I am constrained to find that the employees named in subparagraph 6(b) were terminat- ed because of Respondent's failure or refusal to bargain in good faith with the Union and because it had determined that Am-Del-Co, a nonsignatory to any union contract, would be the vehicle through with Respondent could con- tinue in business on a nonunion basis. Thus I find that the layoff of the 14 employees named in paragraph 6(b) violat- ed Section 8(a)(3) of the Act. F. Other Independent Violations of Section 8(a)(1) of the Act The complaint alleges violation of Section 8(a)(1) of the Act in that commencing in or about the last week of Feb- ruary, Respondent, by Hunt and Garrett, threatened the employees that there would be no further union contract after its expiration. While I was suspicious of the credibility of certain testimony of employee-witnesses called by Gen- eral Counsel, particularly Keaton, Muschamp, and Caulley (because of Muschamp's and Caulley's desire to testify with regard to their estimations and conclusions of what the Respondent's officers said rather than what they actu- ally said; and with regard to Keaton, because of what I observed as an evident animus against the employer), I nevertheless noted a similarity of testimony with regard to Hunt and Garrett telling employees, in various contexts, that there would be no further union contract. Thus, in finding independent violations of Section 8(a)(1), I find that Hunt told Caulley in or about the last week of Febru- ary that he need not worry about the next contract because there would be no contract when this was in response to Caulley's assertion that certain working conditions be changed. I also find that Hunt said the same thing to Kea- ton on or about March 1 when Keaton told Hunt that he wanted the bid system for daily job assignments made more definite in the next contract. I further find that Gar- rett told Muschamp and Keaton on or about April 1 that: "There aren't going to be any more contracts around this place, you can take that for what its worth " in response to Muschamp and Keaton complaining about the difficulty in loading a tractor into their truck. I also find, as discussed above, a violation of Section 8(a)(1) in Hunt's promise in the middle of June 1975 to Gerald Gaugh that he would probably work Gaugh longer if Gaugh did not file a grievance. I do not find a violation of the Act with Hunt telling Kilzer and other employees that J. C. Penney was putting pressure on Respondent to cut costs and that nonunion companies were attempting to get the work. Insofar as the complaint alleges, in paragraph 5(g), that on or about July 23, 1975, Hunt told the drivers and helpers that Respon- dent was being pressured by its customers to go nonunion thus attempting to undermine employee support for the Union, this was not substantiated by any testimony. Rath- er, what Hunt told the employees was that it was being pressured by J. C. Penney to have a cut in cost and that nonunion operators were seeking to get the business away from Respondent. I do not regard this statement as a viola- tion of the Act. I shall, and do, therefore recommend that the complaint be dismissed insofar as this statement was made. It is also alleged that, in violation of Section 8(a)(1), on or about August 4, 1975, Hunt told employees that he would disregard union seniority for those employees who agreed to work for Am-Del-Co. I credit Muschamp 's testi- mony that at a meeting called by Hunt on July 31 to per- suade driver and helper employees of Compton Service to become owner-operators delivering for Penney under the auspices of Am-Del-Co, Hunt told them that the employ- ees who first sign their employment contract as owner-op- erators with Am-Del-Co would get first crack at doing the job for Penney. In so doing, Respondent was soliciting its employees, during the term of the lawful collective-bar- gaining agreement and in the face of an obligation to bar- gain only with their statutory representative, to change their wages, hours, and other terms and conditions of em- ployment in violation of Section 8(a)(5). I find this to be a violation of Section 8(a)(1) as well. I also find that it was, indeed, an attempt to unilaterally change their seniority status as delineated in the contract. As above noted, I have found Hunt's conversation with Kennon and Reis during the second week of August 1975 to be a violation of Section 8(a)(1) in that there was both a threat not to employ Reis and a promise to give him em- ployment if he should decline to file a grievance. I find this to be a violation of Section 8(a)(1) of the Act, based upon the unlawful threat and the unlawful promise of a benefit where Reis merely attempted to voice his rights under the collective-bargaining agreement. Supervisor Claude White did not testify at the hearing. I find that when he told Kilzer on or about September 12, 1975, that if Kilzer did not go along with the program of permitting Am-Del-Co's owner drivers into the warehouse, he would have to lay off Kilzer. Kilzer at this point was merely attempting to enforce his rights as he saw them under the collective-bargaining agreement because the Am-Del-Co owner-operators and their employees were taking away work normally performed by warehouse em- ployees. The threat by White to lay off Kilzer if Kilzer did not cease attempting to enforce his contract rights was a violation of Section 8(a)(1) of the Act as an unlawful threat. To the extent that Hunt or Garrett denied the above statements, that Am-Del-Co was nonunion and that there would not be another contract, I find their denials to be unconvincing. The statements quoted by the above em- ployees were obviously widespread and were consistent with Respondent's erroneous conclusion that Am-Del-Co, having undergone some changes of ownership, was no lon- ger a single integrated employer as found by the Board and was not bound by the union contract. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent set forth above, in connec- tion with the operations of the Respondent, have a close, 716 DECISIONS OF NATIONAL LABOR RELATIONS BOARD intimate, and substantial relationship to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. in the compliance stage of this case to limit the monetary loss if any occasioned by this order. Upon the basis of the foregoing findings of fact, and upon the entire record in this case , I make the following: V. THE REMEDY Having found that the Respondent is engaged in certain unfair labor practices, I shall recommend that it cease and desist therefrom and take certain affirmative action de- signed to effectuate the policies of the Act. Having found that Respondent unlawfully changed the wages, hours, and conditions of employment of its drivers and helpers; having found that Respondent unlawfully laid off a warehouseman because of his engaging in union ac- tivities and unlawfully laid off certain drivers and helpers by virtue and consequence of, and following its desire to escape from, recognizing the Union as representative of dnvers delivering for J. C. Penney and its refusal to bar- gain with the Union concerning modifying the existing col- lective-bargaining agreement; and having found that Re- spondent refused to bargain on the effects of such terminations, I shall recommend that all the drivers and helpers, including those who became owner-operators be restored to their former or substantially equivalent posi- tions, without prejudice to their seniority or other rights and privileges, and that Respondent make each of them and warehouseman William L. Kilzer whole for any loss of pay, including loss of fringe benefits, they may have suf- fered by reason of such changes in the terms of their em- ployment. I shall also recommend that Respondent restore and maintain in effect all collective-bargaining terms relat- ing to wages, hours, and conditions of employment of the drivers and helpers. Backpay shall be computed in the manner set forth in F. W Woolworth Company, 90 NLRB 289 (1950), plus interest at 6 percent per annum as de- scribed in Isis Plumbing & Heating Co., 138 NLRB 716 (1962). I shall also cause the cancellation of the owner- operator contracts, Parklane Hosiery Co., supra, and shall recommend the posting of an appropriate notice. I have considered and rejected a more limited backpay order, N.L.R.B. v. Transmanne Navigation Corporation, 380 F.2d 933 (C.A. 9, 1967), which is often recommended in unlawful partial shutdowns unaccompanied by discrimina- tory motiviation. Royal Plating and Polishing Co, Inc., 148 NLRB 545, 548 (1964). See Interstate Tool Co, Inc., 177 NLRB 686, 687 (1969); Johnson's Industrial Caterers Inc., supra, Bordens, Inc., supra. The significant fact is that Compton Service remains in business with its warehousemen furniture-finishers and, from time to time, its drivers and helpers still functioning. Thus a return to the status quo ante is not unreasonable. Stone & Thomas, 221 NLRB 573 (1975); Parklane Hosiery Co, supra. The remedial order in this case, it seems to me, will not place Respondent in an unfair position nor will it place an unfair burden upon Respondent in view of the fact that any loss of business, especially loss of the J. C. Penney contract by Compton Service in July, 1975, as well as any loss of the Penney contract by Am-Del-Co in January 1976, and the effects thereof on employees may be shown CONCLUSIONS OF LAW 1. Respondent, Am-Del-Co and Compton Service, cor- porations authorized to do business under the laws of the State of Missouri, referred to jointly as Respondent, jointly are, and each of them is, an employer engaged in com- merce within the meaning of Section 2(6) and (7) of the Act 2. Teamsters Local Union No. 688, affiliated with Inter- national Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America, is a labor organization within the meaning of Section 2(5) of the Act. 3. The following constitute units appropriate for purpos- es of collective bargaining within the meaning of Section 9(b) of the Act: (a) All furniture and appliance truckdrivers and helpers employed by Respondent, excluding office clerical employees, professional employees, guards, su- pervisors, and all other employees as defined in the Act. (b) All warehouse employees employed by Respon- dent, excluding office clerical employees, professional employees, guards, supervisors, and all other employ- ees as defined in the Act. 4. At all times material herein the Union has been the exclusive bargaining representative of the employees in the aforesaid units within the meaning of Section 9(a) of the Act. 5. At all times material herein, Am-Del-Co and Comp- ton Service have maintained such interrelation of opera- tions, management, ownership, centralized control of labor relations, interchange of employees, common supervision, similarity of customers, common utilization of property and equipment, and common location, as to constitute a single integrated enterprise and alter egos of each other. 6. At all material times herein, the persons who, prior to September 1, 1975, were employees included in the unit specified above in paragraph 3(a) as drivers and helpers for Compton Service and who thereafter became "owner-oper- ators" for Am-Del-Co nevertheless remained subject to Respondent's direction and control with regard to the ends and means of their work and remained employees of Re- spondent within the meaning of the Act. 7. Commencing in February 1975, and continuing there- after, Respondent, by its agents Hunt, Garrett, and White interfered with, restrained, and coerced its employees by threatening employees in the unit in paragraph 3 that Re- spondent would never sign another contract with the Union; threatening that there would no longer be a union representing said employees and that there would never be contracts covering the warehousemen or the drivers and helpers; threatening employees with late recall to employ- ment if they filed grievances; and threatening employees with layoff if they did not cease attempting to enforce their rights under collective-bargaining agreements, all in viola- tion of Section 8(a)(1) of the Act. AM-DEL-CO, INC. AND COMPTON SERVICE CO. 717 8. In the period October 3 through November 10, 1975, Respondent laid off its warehouseman, William L. Kilzer, in violation of Section 8(a)(1) and (3) of the Act. 9. On August 31, 1975, Respondent laid off Howard Brown, John Holleran, Ron Hale, Robert Temme, Steve Rell, Orlan Mauldin, Jerry Neal, William Chandler, Charles Muschamp, Leo Bierman, Larry Caulley, Gerald Webb, William Keaton, and Elmer McWhorten 39 as a consequence of Respondent's refusal to bargain with the Union and desire to disparage and undermine the Union. 10. Commencing about August 6, 1975, and at all mate- rial times thereafter, Respondent, in violation of Section 8(a)(5) of the Act, has refused to bargain collectively with the Union, by inviting, soliciting, and inducing its driver and helper employees to enter into individual contracts of employment with Respondent in derogation of their bar- gaining representative; by entering into individual con- tracts with its driver employees, thereby modifying the ex- isting collective agreement without complying with the requirements of Section 8(d)(1), (2), (3), and (4) of the Act; and by refusing to bargain with the Union regarding the effects of the decision to change its method of delivery to owner-operators 40 Upon the foregoing findings of fact, conclusions of law, and upon the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: ORDER41 Respondent Am-Del-Co, Inc., and Compton Service Company, jointly, its officers, agents, successors, and as- signs, shall: 1. Cease and desist from- (a) Failing and refusing to bargain collectively with Teamsters Local Union No. 688, affiliated with Interna- tional Brotherhood of Teamsters, Chauffeurs, Warehouse- men and Helpers of America, as the exclusive representa- tive of all its employees in the following appropriate unit regarding the effect of the decision to change the method of delivery to owner-operators: All furniture and appliance truckdrivers and helpers employed by Respondent, excluding office clerical employees, professional employees, guards, supervi- sors, and all other employees as defined in the Act. (b) Continuing to give effect to any owner-operator agreement with its employees in the previously described appropriate unit of drivers and helpers. (c) Inviting, soliciting, or inducing any of the driver or 39 Six other drivers and helpers who may have been induced to become owner-operators were not named as discriminatees in the complaint I make no conclusion as to them 40 Respondent's sale and lease of its trucks to the owner-operators deliver- ing for Am-Del-Co to J C Penney did not divest Respondent of control over the trucks and over the drivers 41 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, and recommended 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 be deemed waived for all purposes helper employees to enter into individual contracts of em- ployment or dealing individually with any of its employees in the previously described appropriate unit of drivers and helpers in derogation of their bargaining representative, or unilaterally changing their terms and conditions of em- ployment, or modifying the collective-bargaining agree- ment with the Union without complying with the provi- sions of Section 8(d) of the Act. (d) Discouraging membership in the Union or any other labor organization by laying off employees because they engage in union activities or engage in other protected con- certed activities or because of an attempt by Respondent to disparage or undermine the Union. (e) Threatening employees that there would be no fur- ther union contracts covering either of the appropriate units of employees described above in paragraph 3 or threatening them with late recall from layoff if they at- tempted to enforce their rights under the collective-bar- gaining agreements with the Union or threatening them with loss of employment if they file grievances pursuant to the terms of said collective-bargaining units. (f) In any other manner interfereing with, restraining, or coercing its employees in the exercise of their rights guar- anteed in Section 7 of the Act. 2. Take the following affirmative action required to ef- fectuate the policies of the Act: (a) Upon request, bargain in good faith with the Union concerning the above unit of drivers and helpers found to be appropriate with respect to wages, hours, and other terms and conditions of employment and the effects of said employees of the decision to change to the owner-operator method of delivery. (b) Honor and enforce the terms of the collective-bar- gaining agreement with the Union in the drivers and help- ers unit effective from November 1, 1973, to October 31, 1976. (c) Notify individually, and by the posting of the at- tached notice, all employees in the appropriate unit above with whom Respondent has made individual agreements or arrangements as owner-operators or has attempted to do so that it will no longer offer, solicit, enter into, continue, or enforce such agreements or arrangements, without preju- dice to the assertion of the employees affected to any legal rights they may have acquired under such agreements or arrangements. (d) Offer to reinstate the following employees 42 to the same positions in which they would have been employed had they not been discriminated against or, if these posi- tions no longer exist, to substantially equivalent positions, without prejudice to seniority or other rights and privileges, and make them whole for any loss of earnings suffered by reason of the unlawful refusal to continue them in employ- ment, in the manner set forth in the section herein entitled "The Remedy." (e) Preserve and, upon request, make available to the Board and its agents, for examination and copying, all pay- roll records, social security payment records, timecards, 42 Howard Brown, John Holleran, Ron Hale, Robert Temme , Steve Rell, Orlan Mauldin, Jerry Neal, William Chandler, Charles Muschamp, Leo Bi- erman, Larry Caulley, Gerald Webb, William Keaton, and Elmer McWhor- ten 718 DECISIONS OF NATIONAL LABOR RELATIONS BOARD personnel records and reports, and all other records neces- sary to determine the amount of backpay due hereunder. (g) Post at its place of business on South Vandeventer, St Louis, Missouri , copies of the attached notice marked "Appendix." 43 Copies of said notice, on forms provided by the Regional Director for Region 14, after being duly signed by Respondent's representative, shall be posted by it immediately upon receipt thereof and be maintained by 43 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 read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board" it for 60 consecutive days thereafter in conspicuous places, including all places where notices to employees are cus- tomarily posted . Reasonable steps shall be taken by Re- spondent to insure that said notices are not altered, de- faced, or covered by any other material. (h) Notify the Regional Director for Region 14, in writ- ing, within 20 days from the date of this Order , what steps the Respondent has taken to comply herewith. (i) Make whole William L . Kilter for any loss of pay he may have suffered by reason of Respondent 's action in laying him off in the period October 3 , 1975, through No- vember 10, 1975, in the manner set forth in the section of this Decision entitled "The Remedy."