Heavy, Highway, Building and Construction Teamsters, et al.

HEAVY, HIGHWAY, BUILDING AND CONSTRUCTION TEAMSTERS, ET AL. , 269 Heavy, Highway, Building and Construction Team- sters Committee for Northern California , Interna- tional Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America ; Teamster Local Union Nos. 94, 137, 150, 216, 287, 291, 315, 386, 431, 439, 490,533, 624, 684,890, 912 and 980, International Brotherhood of Teamsters , Chauf- feurs, Warehousemen and Helpers of America and California Dump Truck Owners Association Associated General Contractors of California, Inc.; Heavy, Highway, Building and Construction Team- sters Committee for Northern California , Interna- tional Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; Teamster Local Union Nos.'94, 137, 150, 216, 287, 291, 315, 386, 431, 439, 490, 533,624, 684,890, 912 and 980, International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America and California Dump Truck Owners Association. Cases 20-CC-1603 and 20-CE-113 December 15, 1976 DECISION AND ORDER On October 16, 1975, Administrative Law Judge E. Don Wilson issued the attached Decision in this proceeding. Thereafter, the General Counsel and the Charging Party filed exceptions and supporting briefs, and the Respondent filed exceptions and a statement of its position. The Board has considered the record and the attached Decision in light of the exceptions and briefs and has decided to affirm the rulings, findings, and conclusions-of the Administrative Law Judge only to the extent consistent herewith. The complaint alleges that Respondent Associated General Contractors of California, Inc., herein called AGC, and Respondent Heavy, Highway, Building and Construction Teamsters Committee for Northern California, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, herein called the Bargaining Committee, and Re- spondent Teamster Local Union Nos. 94, 137, 150, 216, 287, 291, 315, 386, 431, 439, 490, 533, 624, 684, 890, 912 and 980, herein collectively called the Teamsters or referred to as an individual Local, have entered into a collective-bargaining agreement con- taining certain provisions relating to-offsite subcon- tracting which are in violation of Section 8(e) of the Act on-their face and as construed and applied by the parties. The complaint further alleges that the Bar- gaining Committee and Teamsters have threatened, restrained, and coerced employer-members of AGC for an object of forcing or requiring the AGC employer-members to cease doing business with 227 NLRB No. 27 various subcontractors in violation, of Section 8(b)(4)(ii)(A) and (B) of the Act. It also alleges that the filing of grievances pursuant to unlawful contract clauses by the Union further violate the Act. By way of background, AGC, a California corpora- tion, is composed of contractor-members who are engaged in heavy, highway, building, and engineering construction in northern California. The AGC is engaged, among other things, in representing its contractor-members in labor ,relations matters, in- cluding negotiations and the execution of collective- bargaining agreements with various labor organiza- tions including the Teamsters Bargaining Committee and the various local unions affiliated with the Teamsters. The contractor-members of AGC in- volved herein include the Flintkote Company, herein called Flintkote; Teichert Construction, herein called Teichert; Piombo Construction Company, herein called Piombo; Aadco Construction Company, here- in called Aadco; and the Freeman-Sondgroth Com- pany, herein called Freeman. They are all general contractors who regularly subcontract the work of hauling and transporting offsite cargo and materials to various subcontractors including Green Creek, Inc.; R & B Trucking; Ben Salamoni Trucking Service; Wesley Bassett Trucking; and Alegre Truck- ing, herein referred to individually by name, or collectively as the subcontractors. Respondent Bar- gaining Committee is an organization of constituent Teamsters Unions and it exists for the purpose of negotiating, entering into, maintaining, and adminis- tering collective-bargaining agreements with various employers and multiemployer associations, including Respondent AGC. During the summer of 1974, AGC on behalf of its members, and the Bargaining Committee on behalf of the various Teamsters Union locals, entered into a Master Labor Agreement, herein called the MLA, to be effective on its face from June 16, 1974, until June 15, 1977. The contract contained section 30 C (1), (2), and (3) which relates to offsite subcontracting, and which the parties agreed would not be enforced until November 1, 1974. The aforesaid section of the contract provides as follows: C. (1) The Employer further agrees that when subcontracting work covered by this Agreement which is to be performed within the geographical area covered by this Agreement, but which is not to be performed at the site of the construction, alteration, painting or repair of a building, struc- ture, road or other work, he will subcontract such work only to an Employer or person who agrees that the persons performing such work, including owner-operators, will work in accordance with the schedule of hours and be paid in an amount, 270 DECISIONS OF NATIONAL LABOR RELATIONS BOARD separate and apart from the use of any equipment, which is equal to the wage rates including over- time and premium pay provided in this contract for appropriate classifications, and in addition will receive all other economic benefits as provided in this contract, including without limitation, holi- days and vacations which are at least equal to those available to Employees under this contract, provided, however, that with respect only to the Pension Benefits under this contract, the obliga- tion of the subcontractor shall be satisfied if he makes a payment to the person performing the work in an amount equal to the Employer contribution required for such work. Payment of the amount due persons performing work under this provision shall be made weekly by a separate check which shall not include any sum for the use of equipment, and a check stub shall be given to such person showing, by appropriate breakdown of the total, that the check includes the equivalent of the sum of money that would be due under this • Agreement for the classification in- volved. (2) With respect to Health and Welfare Bene- fits, the obligation of the subcontractor shall be satisfied if he makes a Health and Welfare Plan available and contributes to such plan for each person performing the -work. Such plan shall provide benefits equal to or better than those benefits provided for pursuant to Section 26 of this Agreement, or shall provide the maximum benefits available, based on a contribution by the subcontractor to the plan, equal to the Employer contribution required to be paid under the terms of this Agreement. In no event may cash pay- ments' be made to the person performing the work in lieu of a bona fide Health and Welfare Plan as herein provided. (3) In the event that work covered by this Agreement, other than work performed at the site of the construction, alteration, painting or repairs of a building, structure, road or other work, is performed by a subcontractor who is not signato- ry to this Agreement, but who is party to another agreement covering the work involved with a Local Union in the geographical area where the work- is to be performed, it shall not be a violation of this Section 30 C. If the work is performed under the provisions of such other agreement, nothing is intended to affect the right and obliga- tions of the parties to such other agreement. Around the end of October 1974, the parties prepared to implement section 30 C of the contract. Thus the AGC on October 24, 1974, and the Bargaining Committee notified their respective mem- bers that section 30 C would be put into effect and instructed them on the enforcement of the provisions. At about the same time, various Teamsters Unions were notifying other employers of the impending enforcement of section 30 C. In October 1974, Aadco, a general contractor and member of AGC, subcontracted the offsite hauling of construction aggregate material to Green Creek. Shortly thereafter Aadco General Manager Burbank informed Union Agents Gellepis and Gullo that it would be difficult for him to comply with section 30 because the job had been bid without regard to the consideration of the costs which section 30 C would involve. Gellepis and Gullo replied that section 30 C would be enforced and suggested that Burbank have Green Creek consider signing an agreement with Local 287 and pointed out that certain other subcon- tractors had done so.' In the next couple of weeks, according to Burbank, Gellepis phoned him twice, informing him that unless Aadco caused Green Creek to comply with the MLA by establishing separate checks, a health and welfare pension, and vacation plan or by signing an agreement with Local 287, economic action would be taken against the job. On November 29, 1974, Local 287 filed a grievance against Aadco. The grievance panel (the board of adjustment) subsequently held that Aadco was in violation of section 30 C because Green Creek had failed, inter alia, to pay equivalent benefits and to provide a health and welfare plan. Thereafter, Local 287 notified all AGC members and employers signatory to the MLA of the holding in the Aadco grievance, and of the fact that section 30 C would be enforced in the future. AGC also sent a similar notice to its members. Salamoni Trucking Service subcontracts to have offsite dirt and aggregate hauled for various general contractors, including Piombo and Raisch, who are AGC members. Late in October, Piombo and Raisch informed Salamoni that since section 30 of the MLA would be enforced the latter would be required to have a two-check system and a health and welfare program equal to or better than the one provided by the MLA. When Salamoni failed to comply, Local 216 filed a grievance against Piombo and obtained an arbitration ruling that because of Salamoni's failure to comply Piombo was in violation of Section 30. When informed that section 30 had to be complied with, Salamoni asked Union Agent Gellepis if Local 287 had an agreement that Salamoni could sign that would cost less than the MLA requirements. 1 By signing such an agreement, as permitted by sec. 30 C of the Master Labor Agreement, Green Creek would not have to meet the more costly requirements of the MLA. HEAVY, HIGHWAY, BUILDING AND CONSTRUCTION TEAMSTERS, ET AL. 271 Gellepis showed Salamoni a copy of a document entitled "Cargo Rock Agreement" and informed him that such an agreement had been signed by many other employers in the area. The Cargo Rock agreement was described by some at the hearing as a "bottom dump" agreement and by others as a "sweetheart" contract. It is typical of many of the contracts entered into by the unions and employers in the area which cover the same work as the MLA, but which are less costly than MLA requirements. Thus, a comparison of the economic terms of the Cargo Rock agreement and the MLA shows the following different costs to the employer for drivers: Cargo Rock MLA Wages-$6.75 per hr. $7.95 to $9.13 per hr. Health and Welfare-$66 per mo.$191.20 per 160-hr. mo. Pension-$10 per wk. - $26 per. 40-hr. wk. Vacation-.50 per hr. $1 per hr. Gellepis stated however that.in order to get such a contract, Salamoni, within 3 years, would have to acquire four or five power units and employ such Local 287 drivers so that by the end of the third year Salamoni's business would consist of 80 percent company-owned power units,- driven by employees represented by Local 287, and the use of owner- operators would be cut to 20-percent. At that point Salamoni had only one power unit and one employee and was accustomed to using 10 to 88 owner-operators. He told Gellepis that he did not have the resources to comply with Gellepis' request. Gellepis then stated that Salamoni could get an agreement by getting his 'owner-operators to sign pledge cards to join the Union. He acknowledged that this would require that the owner-operators be put on the payroll. Salamoni refused this latter offer but subsequently set up a "two-check system and a health and welfare plan. Gellepis, however, consid- ered this arrangement unsatisfactory and insisted that Salamoni make payroll deductions from the drivers. Wesley Bassett Trucking hauls offsite materials for AGC employer-members Freeman-Sondgroth and Piombo. In the fall of 1977,'Mario Gullo, a Local 287 official, informed T. Holmes, a Freeman official, of the enforcement of section 30 C. Shortly thereafter, Holmes' informed Bassett that Bassett must either put his owner-operators on the payroll and make -deduc- tions -or sign with the Union and make' health and welfare contributions in order to do business with Freeman. R -& B Trucking Company, an offsite subcontrac- tor, was informed by two AGCcontractor-members, Flintkote and Teichert, that R & B would have to comply with section 30 C of the MLA or have an agreement with the Teamsters in order to continue hauling offsite material. - In November 1974, Teichert told Alegre Trucking, its offsite subcontractor, that, in order to continue doing business with Teichert, Alegre would have to fulfill the requirements of section 30 C(l) and (2) of the MLA, or sign an agreement with the. Teamsters under section 30 C(3) of the MLA. The Administrative Law Judge dismissed the com- plaint in its entirety. In so doing, he noted that the complaint did not allege that section 30 C (1) was illegal and that, consequently, absent such an allega- tion or contention, he could not fmd section 30 C(l) to be unlawful. Regarding section 30 C(2), the Administrative Law Judge observed that a subcontracting clause which covers all the economic benefits which may be received by bargaining unit employees is a legitimate job protection objective of a labor organization. He stated that a subcontractor may be required to perform bargaining unit work at the same labor cost, including the cost of a health and welfare program, as would be imposed upon a principal employer if he were to do the same work by using employees subject to the collective-bargaining agreement. Accordingly, he concluded that section 30 C(2) is not an attempt by a labor organization to interfere with the labor relations of the subcontractor involved, but merely, shows an interest upon the part of the labor organiza- tion that subcontracting be restricted to situations where employees who perform the work involved will receive equal benefits. Regarding section 30 C(3) the Administrative Law Judge found that it would in fact be less expensive for an AGC member to subcontract work to a subcon- tractor who entered into a less costly separate contract with one of the Unions in order to escape the equivalency requirements of the MLA. However, inasmuch as the record revealed that the AGC had insisted on the inclusion of -section 30 C(3) _the Administrative Law Judge found that subsection (3) was not in the contract for the purpose of obtaining some objective of the Teamsters, nor stated in the contract to assist the Teamsters in their relationship with AGC. Rather, he concluded, the only purpose of subsection (3) is to achieve the employers' objectives in protecting their own economic interest. According- ly, he concluded Section '8(e) of the Act is not applicable and section 30 C(3) of the contract is not illegal. Having found that section 30 C in whole and in part was not illegal, the Administrative Law Judge stated he could not fmd the alleged 8(b)(4) violations. While we agree with the Administrative Law Judge's dismissal of the allegation regarding section 272 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ° 30 C(l) we are of the view that section 30 C(2) and (3) violates Section 8(e) of the Act. Section 8(e) of the Act makes it an unfair labor practice for an employer and a union to enter into an agreement, express or implied, whereby the employer agrees to cease dealing in the products of any other employer or to cease doing business with any other person. A literal construction of this section suggests the illegality of any agreement which results in preventing the employer from establishing a business relationship with another employer, or which, causes him to break off a relationship already established. The section, however, has not been construed to outlaw all agreements which produce such results. Contract clauses which purport to limit subcon- tracting to employers who are signatories to union contracts, so-called union signatory clauses, and contract clauses which purport to acquire for bar- gaining unit employees work which has traditionally been performed by employees of other employers, so- called work acquisition clauses, have been held to, violate the Act 2 Such clauses are viewed as not being designed to protect the wages and job opportunities of unit employees covered by the contract, but as directed at furthering general union objectives and undertaking to regulate the labor policies of other employers. Absent a direct relationship to protection of the work of unit 'employees, such clauses are considered as having an unlawful secondary effect and are proscribed by Section 8(b)(4) and (e). On the other hand, however, contract clauses whose basic aims are to limit subcontracting so as to preserve for unit employees work which has custom- arily been performed by them, or in some instances to recapture work regarded as fairly claimable, so-called unit protection clauses, and contract clauses designed to limit subcontracting of unit work to employers who maintain the same standards of employment, thus minimizing the economic incentive to subcon- tract, so-called union standard clauses, have been held to be lawful.3,The underlying rationale for the lawful character of unit protection and union stan- dard clauses is that they union has a primary interest in preserving unit work for unit employees and to insure that negotiated standards will not be under- mined. In an earlier proceeding4 involving. many of the parties who are involved in this case, it was found that section 30 C5 did not violate Section 8(e). In that case section 30 C, in pertinent part, read as follows: C. The Employer further agrees that when subcontracting work covered by this Agreement which is to be performed within the geographical area covered by this Agreement but which is not to be performed at the site of the construction, alteration, painting or repair of the building, road or other work, he will subcontract such work only to an Employer or person who agrees that the persons performing such work will work in accordance with the schedule of hours and will receive not less than the wages and economic benefits provided in this Agreement including holidays, vacations, premiums, overtime, health and welfare and pension contributions or benefits or their equivalent and any other programs or contributions required by this Agreement and who further agrees to submit any grievance or disputes concerning his performance or compli- ance with such undertaking to the procedures set forth in Section 15 of this Agreement. There the Board considered as the issue whether section 30 C required the subcontractor only to agree that its employees would receive the economic benefits of the contract, which would serve the lawful purpose of protecting the interest of the employees in the contract unit, or whether it also required him to adhere to the noneconomic terms of the contract which would be unrelated to the lawful purpose. In the majority view, the subcontractors' obligation under the contract was concerned solely with the economic terms thereof. In finding the clause to be lawful, the Board stated: Thus, the initial obligation required of him [the subcontractor] by section 30(C) is that he agree that his employees will receive not less than the wages and economic benefits, of the contract, which are then specified to include holidays, vacations, etc., "and any other programs" provid- ed for by the agreement. [l98&,NLRB at 1038.1 The majority viewed the contract language as unam- biguous and lawful on its face. While it is true that in General Teamsters, supra, the Board majority found section 30 C as then written to be a lawful subcontracting clause, that section, as written in the instant case, and in light of section 30 C (2) and (3) appears to present a situation different from that presented in General Teamsters. Neverthe- less, the complaint does not allege that section 30 C(l) violates the Act. Accordingly, we affirm, the 2 See, e.g., Retail Clerks Union Local No 1428 (Food Employers Council, 4 General Teamsters Local 386, International Brotherhood of Teamsters, Inc.), 155 NLRB 656 (1965). Chauffeurs, Warehousemen and Helpers of America (Construction Materials 3 Highway Truck Drivers and Helpers, Local 107, International Brotherhood Trucking, Inc.), 198 NLRB 1038 (1972). of Teamsters, Chauffeurs, Warehousemen and Helpers ofAmerica, et al (S & E 5 Sec. 30 C involved in that case was similar but not identical to sec. 30 C McCormick, Inc.), 159 NLRB 84 (1966). (1) in the instant proceeding. HEAVY, HIGHWAY, BUILDING AND CONSTRUCTION TEAMSTERS, ET AL. 273 Administrative Law Judge's dismissal of that portion of the complaint based on section 30 C(l) of the contract. Section 30 C(2) requires that nonunion subcontrac- tors establish a health and welfare plan which either provides benefits as great as those provided by the MLA health and welfare plan, or in financial terms costs the subcontractor as much as the MLA health and welfare plan. Under the first alternative then, the section suggests that if a subcontractor is able to establish equivalent benefits at costs lower than those in the MLA his total economic costs could conceiv- ably be less than total ' costs under MLA. To the extent that this is done, the financial incentive to subcontract is not reduced. Additionally, the last sentence of section 30 C(2) specifically states that "In no event may cash payments be made to the person performing the work in lieu of a bona fide Health and Welfare Plan as herein provided." This last sentence can only be interpreted to mean that a subcontractor would not be permitted to pay equivalent costs by merely paying its employees higher wages (which they may well wish to do) instead of establishing a health and welfare plan. Rather, specific benefits, at a specific level, must be provided for the employees of subcontractors. In State-Mart, Inc.,6 the union was purportedly engaged in "informational" picketing to inform the public-that State-Mart, the employer therein, was not complying with union area standards and was paying substandard wages. At a meeting to determine how that employer could comply with area standards, the union representative stated that State-Mart would have to provide benefits to its employees which were equal to benefits available under union benefit plans. The Trial Examiner there noted that area standards picketing was permitted so that the union could protect its interests in insuring that organized em- ployers were not driven out of business by unorgan- ized employers who would be at an economic advantage. He also noted, however, that if a union actually sought to bargain on behalf of unorganized employees the picketing would constitute an unfair labor practice. In finding that the union violated Section 8(b)(7)(C), the Trial -Examiner concluded (and his conclusion was adopted by the Board) that a demand for equivalent benefits of a specific character 6 Retail Clerks International Associatwn,.Local Union No. 899, AFL-CIO, et al (State-Mart, Inc., d/b/a Giant Food), 166 NLRB 818 (1967). 7 Our disseiiting colleagues state thatState-Mart Inc., supra, is inapposite to the present case basically because the union in that case was not the collective-bargaining representative for the employees on whose behalf it sought to bargain. We do not agree. In the instant case, although the Union was the collective-bargaining representative for the , unit employees, it, like the union in State-Mart, was not the collective-bargaining representative for the employees of the various subcontractors . While the Union was free to negotiate a contract clause which would assure that equivalent costs would resulted in the imposition -of working conditions on unorganized employees, stating . .. it would appear reasonable that a union might picket for equal wages or for equivalent costs, but when it undertakes to go beyond this and to dictate what benefits are to be granted, it is attempting to engage in pro tanto bargaining to gain benefits for employees which it does not claim to represent. [166 NLRB at 823-824.] We are of the view that section 30 C(2) has a secondary object. Thus, we note that it, in effect, provides that equivalent costs are not sufficient but requires that a health and welfare plan providing a specific level of benefits be set up. In so doing, that section does not seek to preserve work for unit employees but rather seeks to dictate the type of benefits payable to the subcontractor's employees, in derogation of such employees' Section 7 right to negotiate the type of benefits they seek individually, or collectively, through a representative of their own choosing. Accordingly, we find that section 30 C(2) violates Section 8(e) of the Act.7 Section 30 C(3) of the MLA -must be read in conjunction with section 30 C(l) and- (2). When the three subsections are read together the effect is that, although a subcontractor not party to the MLA must pay equivalent costs and benefits,-this requirement of equivalency can be avoided by 'a subcontractor who executes a separate agreement with another local union in the geographical area where the;work is to be performed. Thus, under the so-called `.`Bottom Dump" agreements, subcontractors have been per- mitted to perform unit work at costs considerably lower than those party to the MLA. In this: regard, section'30 C (3) has some object other than preserving unit work for union standards,- and violates Section 8(e) of the Act.8 The record reveals that Local 287 threatened Aadco with picketing, and economic action and subsequently filed a -grievance 'to force compliance with section 30 C(2) and (3) of the MLA. The record also reveals that Local 216 had occasion to file a grievance against an-employer for -the same purpose. Since the threats of picketing and economic action were made in support of contract provisions unlawful under Section 8(e), we find them violative of Section be borne by such subcontractors, with whom it had no contract, it was not free to dictate the specific type and level of benefits the subcontractors' employees would receive. 8 Our dissenting colleagues would find no violation because in their view the "sole 'objective of this section is the protection of the economic interests of the AGC, rather than union objectives elsewhere .....", The record reveals, however, that regardless of the AGC's motive with respect to sec. 30 C(3), the clear import of that section of the contract, in logic as well as in application, has been to require ofrsite subcontractors to execute agreements with the Teamsters. 274 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 8(b)(4)(ii)(A) and (B). Ets Hokin Corporation, 154 NLRB 839, 842-843 (1965). We do not agree , however, that the filing and processing of grievances limited to seeking enforce- ment of section 30 C(1) and (2) of the contract was also violative of Section 8(b)(4). It does not appear from the record that the grievances were filed for the purpose of accomplishing an unlawful object.9 Cf. Television Wisconsin, Inc., 224 NLRB 722, fn. 2, (1976). Rather, it appears that they were filed as a means of enforcing a colorable contract right. Such conduct is not, in our view, the kind of tactic calculated to restrain or coerce employees or employ- ers in the exercise of rights guaranteed by the Act. Cf. Hughes Markets, Inc., 218 NLRB 680, 683 (1975). CONCLUSIONS OF LAW 1. Associated General Contractors of California, Inc., and its contractor-members are employers engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Heavy, Highway, Building and Construction Teamsters Bargaining Committee, each of Respon- dent Teamsters Local Unions, and the Teamsters International are labor organizations within the meaning of Section 2(5) of the Act. 3. By entering, with Associated General Contrac- tors of California, Inc., into a collective-bargaining agreement which contains section 30 C (2) and (3), Respondent Unions have engaged in an unfair labor practice in violation of Section 8(e) of the Act. 4. By threats of picketing and economic action to enforce unlawful contract clauses, Respondent Lo- cals 287 and 216 engaged in unfair labor practices in violation of Section 8(b)(4)(ii)(A) and (B) of the Act. 5. By entering, with respondent labor organiza- tions, into a collective-bargaining agreement which contains the aforesaid section 30 C (2) and (3), Respondent Associated General Contractors of Cali- fornia, Inc., has engaged in an unfair labor practice within the meaning of Section 8(e) of the Act. THE REMEDY Having found that the Respondents have engaged in unfair labor practices, we shall order that they cease and desist therefrom and take certain affirma- tive action to effectuate the purposes of the Act. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that: A. Heavy, Highway, Building and Construction Teamsters Committee for Northern California, Inter- national Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; Teamster Local Union Nos. 94, 137, 150, 216, 287, 291, 315, 386, 431, 439, 490, 533, 624, 684, 890, 912, and 980, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, their offi- cers, agents, and representatives, shall: 1. Cease and desist from entering into and giving effect to section 30 C (2) and (3) of the Master Labor Agreement with the Associated General Contractors of California, Inc., to the extent found unlawful herein. 2. Take the following affirmative action designed to effectuate the policies of the Act: (a) Post at their business offices and meeting halls copies of the attached notice marked "Appendix A." 10 Copies of said notice, on forms provided by the Regional Director for Region 20, after being duly signed by an authorized representative of Respon- dents, as applicable, shall be posted by Respondents immediately upon receipt thereof, and be maintained by them for 60 consecutive days thereafter, in conspicuous places, including all places where notices to members are customarily posted. Reasonable steps shall be taken by Respondents to insure that said notices are not altered, defaced, or covered by any other material. (b) Sign and deliver to the Regional Director for Region 20 sufficient copies of said notice, to be furnished by the Regional Director for posting by Green Creek, Inc., R & B Trucking, Ben Salamoni Trucking Service, Wesley Bassett Trucking, and Alegre Trucking, if willing. (c) Notify the Regional Director for Region 20, in writing, within 20 days from the date of this Order, what steps the Respondents have taken to comply herewith. B. Teamster Local Union No. 287, International Brotherhood of Teamsters, Chauffeurs, Warehouse- men and Helpers of America, its officers, agents, and representatives, shall: 1. Cease and desist from threatening employers with picketing and economic action unless they comply with section 30 C (2) and (3) of the Master Labor Agreement. B Chairman Murphy is of the opinion that she would not find under any States Court of Appeals, the words in the notice reading "Posted by Order of circumstances that the filing of a grievance alone is violative of the Act the National Labor Relations Board" shall read "Posted Pursuant to a However, that issue is not presented here. Judgment of the United States Court of Appeals Enforcing an Order of the 10 In the event that this Order is enforced by a Judgment of a United National Labor Relations Board " HEAVY, HIGHWAY, BUILDING AND CONSTRUCTION TEAMSTERS, ET AL. 275 2. Take' the following affirmative action which is necessary to effectuate the policies of the Act: (a) Post at its business office and meeting halls copies ' of the -attached notice marked "Appendix B." 11 Copies of said notice, on forms provided by the Regional Director for Region 20, after being duly signed by an authorized representative of Respon- dent, shall be posted by it immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to members are customarily posted. Reasonable steps shall be taken by Respon- dent to insure that said notices are not altered, defaced, or coveredby any other material. (b) Sign and deliver to the Regional Director for Region 20 sufficient copies of said notice, to be furnished by the Regional Director for posting at the premises of Aadco, if willing. (c) Notify the Regional Director for Region 20, in writing;,-within-,20 days from the date of this Order, what, steps the Respondent has taken to comply herewith C. Associated General Contractors of California, Inc., and various of its employer-members, their officers, agents, successors, and assigns, shall: 1. Cease and desist from entering into and giving effect to section 30 C(2)_ and'(3) of the Master Labor Agreement with the respondent labor organizations to the extent found unlawful herein. 2. Take the following affirmative action which is necessary to effectuate the policies of the Act: (a) -Post at its business office and meeting halls copies -of the attached notice marked "Appendix C."12 The name of the posting employer must be filled in at the appropriate blank space therein. Copies of said notice, on forms provided by the Regional Director for Region 20, after being duly signed by an authorized representative of Respon- dent, and its employer-members, if applicable, shall be posted by it immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereaf- ter, in conspicuous places, including all places where notices to members and employees are customarily posted. Reasonable steps shall be taken by Respon- dent to insure that said notices are not altered, defaced, or covered by any other material. (b) Sign and deliver to the Regional Director for Region 20 sufficient copies of said notice, to be -furnished by the Regional ,Director for posting by 11 see fn. 10, supra. ' - 12 See fn. 10;supra 13 State-Mart, Inc., 166 NLRB 818 (1967), relied on by the majority, is inapposite to the present case-. There, a union which did not represent any employees of the employer whom it picketed was found in violation of Sec. 8(bX7) of the Act because it transgressed the lines of appropriate area standards picketing by attempting to bargain for the unrepresented employ- Respondent AGC and any of its employer-members, as applicable. (c) Notify the Regional Director for Region 20, in writing within 20 days from the date of this -Order, what steps the. Respondent has taken to comply herewith. - - MapipRs FANNING and, JENKINS, dissenting in part: We agree with our colleagues that section 30 C (1) of the MLA affords no basis for' finding a violation of Section'8(e) of the Act. Cf. General- Teamsters Local 386, etc., (Construction Materials Trucking), 198 NLRB 1038 (1972): For the'reasons stated by the Administrative Law Judge, we find additionally that section 30 C(2) and (3) of the' MLA does not violate Section 8(e) of theeAct. Section 30 C(2) of the MLA, which elaborates upon the obligations of subcontractors established ' in section 30 C(1), requires that a subcontractor provide his employees with health and welfare benefits equal to those received by bargaining unit employees. Our colleagues have held that by guaranteeing -the em- ployees of subcontractors benefits equal to those enjoyed by bargaining unit employees, the Union has interfered with the organizational rights of those employees. Under this reasoning, it is likely that no subcontracting clause with the primary purpose of protecting unit or area standards would survive the scrutiny of our colleagues. Such result is clearly not intended by Section 8(e). Rather, by guaranteeing that the standards of the bargaining .unit are protect- ed, the Union is pursuing a legitimate primary job protection purpose. The fact that a subcontractor is required to establish a benefits plan does not alter this conclusion.13 For it is well established that "a union has a legitimate interest in preventing the undermin- ing of work opportunities and standards of employees in a contractual bargaining unit by subcontractors who " do not meet the prevailing wage scales and employee benefits covered by the contract." General Teamsters Local 386, supra. Certainly, it is within the province of the Union, in the course of collective bargaining, to determine the best way to achieve job protection goals for the unit. And, as the Administra- tive Law Judge noted, health and welfare benefits provided by a group plan are, proportionately greater than those benefits that an individual employee may purchase for himself. Because the job protection purpose of section 30 C(2) constitutes a legitimate ees. The critical element to the violation was clearly the fact that the union did not represent the employees . In the present case, we are concerned with the Union's legitimate efforts through the collective -bargammg process to protect the job standards of employees whom it represents. I fail to see the logic in the majority's comparison of the present situation to the situation where the union is not the collective-bargaining representative of the employees on whose purported behalf it attempted to bargain. - 276 DECISIONS OF NATIONAL LABOR RELATIONS BOARD primary objective, we do not find that Section 8(e) of the Act has been violated. Section 30 C(3) of the MLA allows a subcontractor to perform work covered by the MLA under the terms of any other collective-bargaining agreement entered into with a union local without violating Section 30 C. In determining whether this section violates the Act, it is important to remember the "familiar rule, that a thing may be within the letter of the statute and yet not within the statute, because not within its spirit, nor within the intention of its makers." National Woodwork Manufacturers Associa- tion, 386 U.S. 612, 619 (1967). In view of the Administrative Law Judge's findings, we cannot find that section 30 C(3) falls within the proscriptions of Section 8(e) of the Act. What is critical here is the undisputed fact that the employer association, AGC, insisted upon the inclusion of this section in the face of vehement protests by the Union. As the Adminis- trative Law Judge noted, the AGC was motivated by the fact that some union locals enter into collective- bargaining agreements with subcontractors which provide for less wages and benefits than those established by the MLA. Therefore, it is ultimately less expensive for an AGC member to subcontract work to a subcontractor who is party to such an agreement. It is obvious that this section is an escape valve by which an AGC member can subcontract work without incurring any penalties and without having to foot the bill for the differences in wages and benefits between the MLA and a subcontractor's agreement. As the sole objective of this section is the protection of the economic interests of the AGC, rather than advancement of Union objectives else- where, Section 8(e) of the Act has not been violated. For these reasons, we would find no violation of Section 8(b)(4) of the Act and would dismiss the complaint in its entirety. APPENDIX A NOTICE To MEMBERS POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT enter into, maintain, give effect to, or enforce section 30 C (2) and (3) of our collective-bargaining agreement with Associated General Contractors of California, Inc., to the extent that it violates Section 8(e) of the National Labor Relations Act. HEAVY, HIGHWAY, BUILDING AND CONSTRUCTION TEAMSTERS COMMITTEE FOR NORTHERN CALIFORNIA, ET AL. APPENDIX B NOTICE To MEMBERS POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT threaten employers with picketing or economic action to enforce section 30 C(2) and (3) of the Master Labor Agreement. TEAMSTER LOCAL UNION No. 287, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA APPENDIX C NOTICE TO EMPLOYEES AND MEMBERS POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT enter into, maintain, give effect to, or enforce section 30 C(2) and (3) of our collective-bargaining agreement with Heavy, Highway, Building and Construction Teamsters Committee for Northern California, International Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America; Teamster Local Union Nos. 94, 137, 150, 216, 287, 291, 315, 386, 431, 439, 490, 533, 624, 684, 890, 912 and 980, International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America, to the extent that it violates Section 8(e) of the Act. ASSOCIATED GENERAL CONTRACTORS OF CALIFORNIA, INC. DECISION STATEMENT OF THE CASE E. DON WILSON, Administrative Law Judge: The Califor- nia Dump Truck Owners Association are herein referred to as CDTOA, and the Heavy, Highway, Building and Construction Teamsters Committee for Northern Califor- nia International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, herein called Teamsters Bargaining Committee and various named locals HEAVY, HIGHWAY, BUILDING AND CONSTRUCTION TEAMSTERS, ET AL. 277 with numbers, are herein referred to as Respondent Teamsters Local Unions, or individually called Respondent Teamsters Local Union No. 94, etc., and Associated General Contractors of California, Inc., is herein called Respondent AGC or merely AGC. The CC and CE cases have been consolidated and the Acting Regional Director on behalf of the National Labor Relations Board, herein the Board, issued the consolidated complaint and notice of hearing in this matter. The consolidated complaint was based upon a charge in Case 20-CC-1603, filed by CDTOA on February 3, 1975. An initial charge in Case 20-CE-113 was filed by CDTOA on February 3, 1975. A first amended charge in Case 20-CE-113 was filed by CDTOA on May 2, 1975. Based upon the consolidated complaint issued pursuant to the above charges on May 5, 1975, alleging that AGC and the Teamsters Committee for Northern Califor- nia and various of its locals committed various violations of the Act, a hearing in this matter was conducted before me from June 30 through July 2, 1975, at San Francisco, California. Briefs of outstanding quality have been received from the -Charging Party, the AGC, the Teamsters, and General Counsel. They have been fully considered. Upon the entire record in this case and from my observation of the witnesses, I make the following: FINDINGS OF FACT I. RESPONDENT'S BUSINESS AGC, a California corporation, is engaged, among other things, in representing its contractor members in the building and construction industry in labor relations matters, including negotiations entering into and adminis- tering collective-bargaining contracts with various labor organizations including the Teamsters Bargaining Commit- tee and various local unions affiliated with the Teamsters. Respondent AGC's Contractor Members included Flint- kote Company, Teichert Construction, Piombo Construc- tion Company, Aadco Construction Company, and Free- man-Sondgroth Construction Company. During the last year, the contractor members of AGC in the course of their construction operations, purchased and received- in the 1 For readability sake, it is set forth in the following footnote: C. (1) The Employer further agrees that when subcontracting work covered by this Agreement which is to be performed within the geographical area covered by this Agreement, but which is not to be performed at the site of the construction, alteration, painting or repair of a building, structure, road or other work, he will subcontract such work only to an Employer or person who agrees that the persons performing such work including owker-operators, will work in accordance with the schedule of hours and be paid in an amount, separate and apart from the use of any equipment, which is equal to the wage rates including overtime and premium pay provided in this contract for appropriate classifications, and in addition will receive all other economic benefits as provided in this contract, includingwithout linutation, holidays and vacations which are at least equal to those available to Employees under this contract, provided, however, that with respect only to the Pension Benefits under this contract, the obligation of the subcontractor shall be satisfied if he makes a payment tothe person performing the work in an amount equal to the Employer contributioon required for such work. Payment of the amount due persons performing such work under this provision shall be made weekly by a separate check which shall not include any sum for the -use of equipment, and a check stub shall be given to such person showing by appropriate breakdown of the total, that the check includes the equivalent of the sum of money that would be due under this Agreement for the classifications involved. State of California, supplies and material valued in excess of $1 million directly from suppliers located outside the State of California. At all material times, AGC andeach of its contractor members have been an employer engaged in commerce and in operations affecting commerce within the meaning of the Act. II. THE LABOR ORGANIZATIONS Respondent Teamsters Bargaining Committee is com- posed of constituent local unions including Respondent Local Unions in Northern California affiliated with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, and exists for a purpose of entering into, maintaining, and administering collective bargaining with various employers of multiem- ployer associations, including AGC, with respect to wages, hours, and working conditions of employees represented by the local unions. The Teamsters Bargaining Committee and each of Respondent's Teamsters Local Unions are labor organizations within the meaning of the Act. III. THE ALLEGED VIOLATIONS OF THE ACT All questions arising out of the pleadings and hearing in this matter are based upon whether various provisions of a subcontract clause in a contract violates Section 8(e) of the Act. Particularly in issue is the validity of section 30(C) of an agreement between AGC and -its various contractor members and Respondent Teamsters Bargaining Commit- tee and various of its local unions. Section 30(C) is the particular section in question. It consists of three parts, (1), (2), and (3).1 I find initially that should there be no violation of Section 8(e) of the Act proven by the General Counsel herein; there are no violations of Section 8(b)(4) of the Act. The substantial issue before me is whether any or all of the provisions of the subcontracting clause known as section 30 violate Section 8(e) of the Act. I shalt find that the subcontracting provisions contained in section 30 of the contract are lawful and, consequently, I need not consider (2) With respect to Health and Welfare Benefits, the obligation of the subcontractor shall be satisfied if he makes a Health and Welfare Plan available and contributes to such plan for each person performing the work. Such plan shall provide benefits equal to or better than those benefits provided for pursuant to Section 26 of this Agreement, or shall provide the maximum benefits available, based on a contribution by the contractor to the plant, equal to the Employer contribution required to be paid under the terms of this Agreement. In no event may cash payments be made to the person performing the work in lieu of a bona fide Health and Welfare Plan as herein provided. (3) In the event that work covered by this Agreement, other than work performed at the site of the construction, alteration, painting or repairs of a building, structure, road or other work, is performed by a subcontractor who is not signatory to this Agreement, but who is party to another agreement covering the work involved with a Local Union in the geographical area where the work is to be performed, it shall not be a violation of this Section 30 C. If the work is performed under the provisions of such other agreement, nothing herein is intended toaffect the right and obligations of the parties to such other agreement. In the body of this decision the various sections of par. C of the contract shall be referred to as (1), (2), and (3). 278 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the allegations of the complaint with respect to Section 8(bX4) of the Act. Section 30 of the contract concerns itself with the subcontracting of work performed away from the jobsites and, consequently, not governed by the provisions with respect to the construction industry found in Section 8(e) of the Act. Sections (1), (2), and (3) of paragraph 30 of the contract are separable and the validity of one does not depend upon the validity of another. Paragraph 30 of the contract among the Unions and AGC constitutes a subcontracting provision which con- cerns itself, particularly, with the subcontracting of work performed away from the jobsites. I find that there is no question but that a subcontractor may be required to perform bargaining unit work, at the same labor cost, including the cost of a health and welfare program, as would be imposed upon a principal employer if he were to do the same work by using employees subject to the collective-bargaining agreement. I am not at all impressed by the argument of counsel for the General Counsel that the subcontracting provision herein, which deals with health and welfare contributions, is in a class by itself because the subcontractor does not have the unfet- tered right to pay his drivers cash in an amount which would be equal to the health and welfare contributions such employees would have to pay under a collective-bargaining agreement, as an alternative to providing a health and welfare benefit. General Counsel strongly argues that a subcontracting clause may not require an employer to do more than pay the amount of equivalent labor costs. It is his position that for a union to require a subcontractor to see to it that his employees receive health and welfare benefits rather than weekly or monthly dollars and cents shows that the Union is not seeking to protect the economic interests of the employees in the bargaining unit but rather is seeking unlawfully to affect the labor relations of the subcontractor with his employees. We are here not dealing with sterile solutions to labor relations problems. The Board has considered and found that it would be necessary in applying Section 8(e) to determine the question of whether the challenged agree- ment served the "legitimate primary job protection pur- pose." By this standard, the health and welfare provision of this agreement is manifestly lawful. An employer may contribute dollars and cents to a health and welfare program, but the employees who are the beneficiaries of such a program receive a far greater protection than would be accorded by the mere payment of dollars and cents to them. It is well known throughout our economy that the larger the base for medical and other such coverage, the greater is the protection received by an individual who only receives cash. It is recognized throughout the business world that health and welfare benefits received under a large plan far exceed those which could be purchased by an individual. It seems plain to me that a subcontracting clause which covers all the economic benefits which may be received by bargaining unit employees is a legitimate job protection objective of a labor organization. It appears obvious to me that if a subcontractor has an employer who does not have health and welfare benefits equivalent to the bargaining unit, it has an employee who suffers. Thus, I find that section (2) is not an attempt by a labor organization to interfere with the labor relations of the subcontractor involved but merely shows an interest upon the part of the labor organization that subcontracting be restricted to situations where employees who perform the work involved will received equal benefits. This has always been the purpose of a lawful subcontracting clause. Now we turn to paragraph (3) of section 30(C). Plainly, subcontracting work within the bargaining unit may be performed pursuant to contracts, perhaps of another nature, with the Unions, if such an agreement exists between the subcontractor and the union concerned. General Counsel appears to claim that such provision is a violation of Section 8(e) of the Act, because possibly such subcontracting might result in a subcontractor being encouraged to enter into a contract with one of the unions in order to escape the equivalency requirements of para- graph (1) of section 30 of the contract. It appears clear from the evidence that it conceivably might be less expensive for a member of AGC to subcontract work to a subcontractor who pursues such a procedure rather than to someone who has no such agreement, or would have the work performed by employees within the bargaining unit. The entire record reveals that it was the AGC which insisted upon section (3) rather than the unions. The first step of the AGC was to obtain an agreement which would dispense entirely with the subcontracting provision of the contract. This was because some of the Teamsters unions contracted with subcontractors in such a manner that employees would receive less wages and less economic benefits. It was the AGC which demanded that it have a contractor's right to subcontract to such contractors, with no necessity of making up any differences in wages and economic benefits between the AGC's contract with the Union and a subcontractor's contract with the Union. While the Unions vehemently protested to inclusion of section (3), they finally agreed only because in the absence of such agreement a contract would not be available. Thus, section (3) is not in the contract for the purpose of obtaining some objective of the Teamsters nor stated in the contract to assist the Teamsters in its relationship with AGC. The only purpose of section (3) is to achieve the employer's objectives in protecting their own economic interest. Thus, Section 8(e) is not applicable. The validity of section 30(C)(1) is not an issue in this case Both the CDTOA and AGC appear to claim that section (1) violated Section 8(e) of the Act. In the absence of such a finding they appeared to urge that the Teamsters should be ordered not to enforce section (1). It is further urged that AGC agreed to section (1) as a quid pro quo for section (2) and (3) and if (2) and (3) are held invalid, section (1) should be held invalid with them. In the first place, the complaint does not allege nor does General Counsel allege, nor has it alleged, that section (1) violates the Act. General Counsel did not suggest that section (1) could be considered illegal in light of section (2) and (3). General Counsel would argue, apparently, that such paragraphs demonstrate an attempt of the Teamsters HEAVY, HIGHWAY, BUILDING AND CONSTRUCTION TEAMSTERS, ET AL. 279 to use all of paragraph 30. as a means of affecting the labor relations of subcontracts rather than merely to protect bargaining unit work. Of course, I find that even if section (2) and (3) were found illegal, section (1J alone is legal as General Counsel concedes. I cannot find that section (1) is invalid without such allegation or -contention by General Counsel. In any event, since I find paragraphs (2) and (3) to be legal, -I cannot and do not find section (1) of paragraph 30(C) to be illegal. Section (1), alone, is not illegal, and I am without authority to order its deletion from the contract. Please note that I find sections (2) and (3) to be legal. I find no violations of Section 8(b)(4) or (e) of the Act. Having found paragraph 30(C) of the complaint not to state a cause of action, I cannot find that in this case there was any violation of Section 8(b)(4) of the Act. Concluding findings Based upon the entire record, including testimony of witnesses and documentary evidence, before me, I find that the General- Counsel has failed to prove by a preponder- ance of the substantive and material evidence that Respon- dents have violated the Act in any manner. CONCLUSIONS OF LAW 1. At all material times AGC.and each of its contractor members have been an employer engaged in commerce and in operations affecting commerce within the meaning of the Act. 2. Respondent, Teamsters Bargaining Committee and each of Respondent Teamsters Local Unions, and the Teamsters International, are labor organizations within the meaning of the Act. General Counsel has failed to prove by preponderance of the probative evidence that either AGC and its Contractor Members or the Teamsters Bargaining Committee and its local unions or the International have violated the Act in any manner. [Recommended Order for dismissal omitted from publi- cation.]