Teamsters Local 917 (Peerless Importers)

TEAMSTERS LOCAL 917 (PEERLESS IMPORTERS) 349 NLRB No. 97 1057 Local 917, International Brotherhood of Teamsters and Peerless Importers, Inc. Case 29–CE–128 May 11, 2007 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN BATTISTA AND MEMBERS LIEBMAN AND SCHAUMBER On March 30, 2005, Administrative Law Judge Ray- mond P. Green issued a decision in this case dismissing the complaint. The Charging Party filed exceptions and a supporting brief, the Respondent filed an answering brief, and the Charging Party filed a reply brief. On Sep- tember 30, 2005, the Board issued a Decision and Order reinstating the complaint and remanding the proceeding to the judge to issue a supplemental decision.1 On March 15, 2006, the judge issued the attached deci- sion on remand. The General Counsel filed exceptions, the Charging Party filed exceptions and a supporting brief, the Respondent filed an answering brief, and the Charging Party filed a reply brief. The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the decision on remand and the record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings,2 and con- clusions3 only to the extent consistent with this Supple- mental Decision and Order. In his decision on remand, the judge dismissed the complaint, which alleged that Teamsters Local 917 (the Respondent) violated Section 8(e) by grieving Peerless Importers Inc.’s (Peerless) failure to assign unit employ- ees certain work, by arbitrating that grievance, and by securing an arbitration award holding that the parties’ collective-bargaining agreement prohibited Peerless from failing to assign the work to unit employees under the circumstances in this case. We reverse and find that the Respondent violated Section 8(e). I. FACTS Peerless, the Charging Party, is an employer engaged in the distribution of alcoholic beverages throughout the 1 Teamsters Local 917 (Peerless Importers), 345 NLRB 967 (2005) (finding that the judge had abused his discretion by dismissing the complaint sua sponte to sanction Peerless for failing to comply with a subpoena). 2 The Charging Party has effectively excepted to some of the judge’s credibility findings. The Board’s established policy is not to overrule an administrative law judge’s credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect. Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have carefully examined the record and find no basis for reversing the findings. 3 No party excepted to the judge’s finding that Sec. 10(b) does not bar the Board from finding that the Respondent violated Sec. 8(e). New York City Metropolitan area. The Respondent represents a unit of Peerless’ drivers and helpers. Five clauses in the parties’ collective-bargaining agreement require Peerless to use unit employees to transport bever- ages to and from its facility, with exceptions not relevant here.4 Peerless purchases beverages from several suppliers, including Diageo North America Inc. (Diageo). Before October 1, 2002, Peerless was one of two New York dis- tributors of Diageo’s beverages. On that date, Peerless and Diageo entered into a Distribution Agreement, mak- ing Peerless the exclusive Diageo distributor in the New York City Metropolitan area. When negotiating the 2002 distribution agreement, representatives of Diageo and Peerless did not discuss which of the parties would transport the beverages from Diageo to Peerless. Moreover, the Distribution Agree- ment does not expressly address this issue. However, the distribution agreement does give Diageo authority to unilaterally change “Sales Terms,” except for “remit- tance” terms: Prices and the terms and conditions of sale (“Sales Terms”) shall be in accordance with Diageo’s then in effect Sales Terms as may be modified from time to time by Diageo without the consent of [Peerless], pro- vided, that, Diageo will not make any material change in its remittance terms (except with respect to credit as provided below) without the consent of [Peerless]..5 For many years, Peerless’ unit employees transported Diageo’s beverages from Diageo’s facilities to Peerless’ facility.6 Unit employees continued to transport Dia- geo’s beverages during the first 6 months under the Dis- tribution Agreement (from October 2002 to April 2003). In March 2003, Diageo informed Peerless that it was instituting a nationwide program called “Delivered Pric- ing.” Diageo’s representatives explained the program’s details in a PowerPoint presentation. Under the program, Diageo would transport certain brands to Peerless and charge Peerless for delivery in the purchase price of those brands. In April 2003, Diageo implemented its delivered pric- ing program and began using its employees to transport 4 The clauses are set forth in the attached supplemental decision. 5 Peerless’s president, Antonio Magliocco, testified that “Sales Terms” include how the beverages are transported. This testimony is unrebutted. 6 Some of Peerless’ other suppliers transported their beverages to Peerless. Peerless’ unit employees transported all of Diageo’s bever- ages until April 2003. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1058 some of its brands to Peerless. Unit employees no longer transported these brands to Peerless.7 The Respondent filed a grievance in November 2003 alleging that Peerless breached the collective-bargaining agreement by failing to use unit employees to transport all of Diageo’s beverages. In the ensuing arbitration, Peerless defended on the ground that it lacked the right to control the disputed work and that the Respondent was violating Section 8(e) by attempting to apply the collec- tive-bargaining agreement to work that Peerless no longer controlled. On September 28, 2004, an arbitrator issued an award finding that Peerless breached the col- lective-bargaining agreement by “permitting merchan- dise from Diageo North America to be delivered to the Company’s [i.e., Peerless’] warehouse by non-bargaining unit personnel.” The arbitrator delayed issuing a remedy and instead permitted Peerless to file an unfair labor practice charge: If the Company does not file an unfair labor practice charge with the NLRB within 60 days of the date of this Award, or if the NLRB does not issue a complaint after such a charge is filed, the Arbitrator will hold a hearing at the request of either party to determine the appropriate remedy. Peerless filed an unfair labor practice charge on Octo- ber 6, 2004. On December 30, 2004, the General Coun- sel issued a complaint. II. JUDGE’S DECISION ON REMAND The judge dismissed the complaint. He reasoned that a party does not violate Section 8(e) by enforcing an agreement to preserve work traditionally performed by unit employees. He found that unit employees had tradi- tionally transported beverages from Diageo to Peerless, except when no unit employees were available on a par- ticular day. The judge rejected Peerless’ arguments that it did not have the right to control the disputed work. Rather, the judge recommended dismissing the complaint because he determined that there was insufficient evi- dence in the record to conclude whether Diageo or Peer- less made the decision that Diageo would deliver certain brands to Peerless. III. ANALYSIS Section 8(e) makes it unlawful for a union and an em- ployer to “enter into” an agreement expressly or implic- 7 Peerless’s director of operations, Salvatore Geneva, testified that he was present at the PowerPoint presentation. Geneva testified that he never objected to Diageo taking over the transportation, and that, to the best of his knowledge, nobody from Peerless objected. Geneva also testified that Peerless’s unit employees continue to transport some of Diageo’s brands. This testimony is unrebutted. itly requiring the employer “to cease or refrain from han- dling, using, selling, transporting or otherwise dealing in any of the products of any other employer, or cease do- ing business with any other person.”8 Notwithstanding Section 8(e)’s broad wording, the Supreme Court has held that Section 8(e) does not prohibit all agreements that require an employer to cease doing business with another employer. The Supreme Court and the Board have long interpreted Section 8(e) to permit “primary” agreements and to prohibit only “secondary” agree- ments.9 A valid work-preservation agreement is a lawful primary agreement. National Woodwork Mfrs. Assn. v. NLRB, 386 U.S. 612, 644–645 (1967). The Supreme Court has established the following analysis for determining whether an agreement is a law- ful work-preservation agreement: Whether an agreement is a lawful work preservation agreement depends on “whether, under all the sur- rounding circumstances, the Union’s objective was preservation of work for [bargaining unit] employees, or whether the [agreement was] tactically calculated to satisfy union objectives elsewhere. . . . The touchstone is whether the agreement or its maintenance is ad- dressed to the labor relations of the contracting em- ployer vis-à-vis his own employees.” National Wood- work, supra, 386 U.S. at 644–645 []. Under this ap- proach, a lawful work preservation agreement must pass two tests: First, it must have as its objective the preservation of work traditionally performed by em- ployees represented by the union. Second, the contract- ing employer must have the power to give the employ- ees the work in question—the so-called ‘right of con- trol’ test of [NLRB v. Pipefitters Local 638, 429 U.S. 507 (1977)]. The rationale of the second test is that if the contracting employer has no power to assign the work, it is reasonable to infer that the agreement has a secondary objective, that is, to influence whoever does have such power over the work. “Were the latter the case, [the contracting employer] would be a neutral by- stander, and the agreement or boycott would, within the intent of Congress, become secondary.” National Woodwork, supra, at 644–645. 8 See Air Line Pilots Assn., 345 NLRB 820, 823 (2005) (union vio- lated Sec. 8(b)(4)(ii)(B) by filing a grievance and a counterclaim with an object of forcing an employer to enter into and comply with an agreement prohibited by Sec. 8(e)). 9 NLRB v. Longshoremen ILA, 447 U.S. 490, 504 (1980) (“Although § 8(e) does not in terms distinguish between primary and secondary activity, we have held that, as in § 8(b)(4)(B), Congress intended to reach only agreements with secondary objectives.”); NLRB v. Long- shoremen ILA [II], 473 U.S. 61, 78–79 (1985). TEAMSTERS LOCAL 917 (PEERLESS IMPORTERS) 1059 NLRB v. Longshoremen ILA, 447 U.S. 490, 504–505 (1980) (emphasis added); see also NLRB v. Longshore- men ILA [II], 473 U.S. 61, 74–76 (1985); National Woodwork Mfrs. Assn. v. NLRB, 386 U.S. 612, 644–645 (1967). The inquiry is often an inferential and fact-based one, at times requiring the drawing of lines “more nice than obvious.” NLRB v. Longshoremen ILA, above at 81 (citing Electrical Workers v. NLRB, 366 U.S. 667, 674 (1961)); National Woodwork Mfrs. v. NLRB, above at 645. Further, the right-to-control test is not mechanical or wooden. Plumbers Local 438 (George Koch Sons, Inc.), 201 NLRB 59, 64 (1973), enfd. 490 F.2d 323 (4th Cir. 1973). The Board will look at “not only the situation the pressured employer finds himself in but also how he came to be in that situation.” Id.; see also Electrical Workers Local 501 (Atlas Construction Co.), 216 NLRB 417, 417 (1975), enfd. 566 F.2d 348 (D.C. Cir. 1977). If the employer is not truly an “unoffending employer,” the Board will find no violation in a union’s attempt to en- force an agreement to retain disputed work. An em- ployer may not be considered “unoffending,” and there- fore neutral, if it “actively and knowingly contracted away its control by initiating the very restrictions which ultimately gave rise to the union’s demands . . . or if the coerced employer was, in fact, given control of the work at issue but, of its own volition, withheld the work from the union.” Atlas Construction, above at 417 (emphasis in original). In the absence of affirmative action by the employer, however, the employer would be an unoffend- ing neutral. Id. It is clear that the agreement between Peerless and the Union, as interpreted and applied by the arbitrator, im- pairs the business relationship between Peerless and Dia- geo. That is, the agreement, as interpreted by the arbitra- tor, prohibits Peerless from doing business with Diageo as long as Diageo insists upon delivering the product to Peerless.10 Concededly, the unit employees have histori- 10 Our dissenting colleague views this conclusion as speculative, and cites Manufacturers Woodworking Assn. of Greater New York, Inc., 345 NLRB 538 (2005), and Heartland Industrial Partners, 348 NLRB 1081 (2006) in support of her view. Manufacturers Woodworking is distinguishable. There, the issue was whether a multiemployer bargain- ing group violated Sec. 8(a)(1) by filing a demand for arbitration to cause the union to require employees to engage in an unlawful secon- dary boycott. The Board disagreed, The possibility that an arbitrator might issue an award that could result in a secondary boycott, and that the union could thereafter coercively compel employees to participate in such a work stoppage, was deemed too speculative to establish a violation of Sec. 8(a)(1) based on the demand for arbitration alone. Here, no such speculation is required. An arbitrator has issued an award against Peerless, and that award makes clear that the parties’ collective-bargaining agreement does not allow Peerless to permit cally performed that work. However, as discussed above, the “work preservation” defense has a second prong. If the employer of the unit employees has lost control of the work, and such loss of control was not ini- tiated by it or at its own volition, the work preservation defense is not a valid one. NLRB v. Plumbers Local 638, supra at 525–526. See also Atlas Construction, supra at 417 (right of control doctrine “presumes an employer to be ‘neutral’ if that employer, when faced with a coercive demand from its union, is powerless to accede to such a demand except by bringing some form of pressure on an independent third party.”) We conclude that, under this test, Peerless did not have the right of control.11 As detailed above, the distribution agreement by its terms gives Diageo the authority to unilaterally change “Sales Terms.” The Distribution Agreement defines “Sales Terms” as “Prices and the terms and conditions of sale.” The “terms and conditions” of the sale normally include the means by which the product will be deliv- ered. Consistent with the usual understanding of the term, Peerless’s president, Antonio Magliocco, testified that the phrase “Sales Terms” includes whether Diageo or Peerless would deliver the freight.12 Accordingly, we find that Diageo’s contractual authority included the right to insist that it deliver the beverages to Peerless as a condition of sale and Peerless, by agreeing to those terms, lost the right to control the disputed work. In April 2003, Diageo exercised its right of control by assigning to its own employees the work of delivering some of its products to Peerless. There is no evidence that Peerless initiated this change, which was announced by Diageo in March 2003. The most that can be said is that Peerless did not actively resist it. However, given the contractual authority possessed by Diageo, it does not appear that Peerless had a legal leg on which to stand. Conceivably, Peerless could have refused to do business with Diageo under the Diageo dictate, but that could have involved a breach of contract suit, and, in any event, Diageo to deliver its products to Peerless. In addition, an 8(e) violation does not require a showing of coercion. Member Schaumber also finds Heartland distinguishable. In Heart- land, the issue was whether the disputed clause, on its face, violated Sec. 8(e). Unlike this case, Member Schaumber notes that there was no allegation in Heartland that the clause had been applied in an unlawful manner. Chairman Battista dissented in Heartland and would have found the 8(e) violation. 11 No party has excepted to the judge’s statement that the General Counsel had the burden of proving that Peerless did not have the right of control over the disputed work. We conclude that a violation of Sec. 8(e) has been made out regardless of which party has the burden of proof on this issue. 12 Diageo’s decision to deliver some of its products to Peerless also affects their price, because Diageo charges a higher price for products it delivers. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1060 would have resulted in a loss of the unit work. See NLRB v. Plumbers Local 638, supra at 514 (union unlaw- fully pressured neutral employer with an object of either forcing primary to change its manner of doing business or forcing neutral to cease doing business with it). This analysis leads to the last issue, which is whether Peerless can be said to be an “unoffending employer” who merits the Act’s protections. Plumbers Local 438 (George Koch Sons, Inc.), 201 NLRB 59, 64 (1973), enfd. sub nom. George Koch Sons, Inc. v. NLRB, 490 F2d 323 (4th Cir. 1973) (cited with approval in NLRB v. Plumbers Local 638, supra at 523 fn. 11). A coerced employer may forfeit neutral status if, by contracting away its right of control, it affirmatively engages in con- duct “which the employer could reasonably conclude would conflict with his collective-bargaining obligations, coupled with the absence of any demand for such con- duct by an independent third party.” Atlas Construction, supra at 417 (emphasis in original). In applying this test, the employer’s actions at the time it negotiates away the right of control are a circumstance to be considered, but are not alone determinative. Instead, the Board also will consider whether, at the time of a union’s demand for disputed work, the employer was powerless to assign it. Id. at 418. Here, Peerless is not an offending employer. While the agreement negotiated in 2002 gave Diageo the au- thority to unilaterally change “Sales Terms,” there is no evidence that the parties contemplated that this provision would result in the reassignment of delivery work. In- deed, the unit employees continued to perform the work for 6 months after the agreement. Under these circum- stances, we cannot say that Peerless “could reasonably conclude” that its acceptance of this agreement conflicted with its obligation under its collective-bargaining agree- ment to assign delivery work to unit employees. Atlas Construction, supra. Further, even if Peerless understood that Diageo might one day take over the delivery function, that does not mean that Peerless was an offending employer. There is nothing to suggest that Peerless was the initiator of the agreement which gave Diageo that power. It defies logic and common sense to say that Peerless was the initiator of a clause which gave Diageo certain rights. Finally, it was clearly Diageo, not Peerless, which made the deci- sion at issue, viz. the decision to take over the delivery function. Thus, at the time the Respondent demanded the work in April 2003, by its effort to enforce the collec- tive-bargaining agreement, Peerless, like the employer in Atlas Construction, supra, was “powerless to assign” it to unit employees. Accordingly, it was an “unoffending employer” at all times material to this case. Contrary to the dissent’s assertion, we have not me- chanically applied the Board’s right-to-control test. We have found that, under the distribution agreement, Peerless lacked a right to control the disputed work, a point which our dissenting colleague assumes for argument’s sake. We have also carefully examined how Peerless found itself in a position where it lacked a right to control. Under all the circumstances, we find that Peerless did not engage in affirmative conduct that could render it an “offending” employer. Accordingly, the Respondent could not law- fully pursue and secure an interpretation of the collective- bargaining agreement that would forbid Peerless from assigning work that Peerless did not control. Our dissenting colleague argues that a union will not likely be privy to the details of an employer’s conduct in contracting away its right of control. She further posits that, in these circumstances, a union might not be able to determine in advance whether it is committing an unfair labor practice by pursuing contractual arbitration. The distinction between lawful primary and unlawful secon- dary activity, however, frequently turns on the terms of contractual arrangements between the primary employer and an asserted neutral, regardless of whether the union is privy to those terms. See, e.g., Oil Workers Local I- 591 (Burlington Northern Railroad), 325 NLRB 324, 329 fn. 26 (1998). Moreover, an employer has a statu- tory duty to provide requested information that allows a union to decide whether to process a grievance. NLRB v. Acme Industrial Co., 385 U.S. 432 (1967). In the instant case, the Union did not even seek such information. It simply proceeded against Peerless without regard to who had control. Our analysis is not inconsistent with the Board’s deci- sion in Milk Wagon Drivers Local 603 (Drive-Thru Dairy, Inc.), 145 NLRB 445 (1963), a readily distin- guishable case relied on by the dissent. In that case, Pevely Dairy had a contract with the union that forbade customer pickup of product at Pevely’s dock if such pickups resulted in a loss of work or reduction in hours for drivers represented by the union. Nonetheless, Pevely agreed that Drive-Thru, a customer, could pur- chase dairy products from Pevely at its dock, and trans- port the products to Drive-Thru’s store using nonunit employees.13 That agreement, by its terms, was “in derogation of” Pevely’s lawful work preservation agree- ment with the union. Indeed, a loss of unit work was inevitable once Pevely entered into it. By contrast, the distribution agreement gave Diageo the right to assign 13 Pevely had not allowed dockside sales to other customers, and the disputed work had consistently been performed by unit employees. On these facts, the Board found that the union engaged in lawful primary activity when it refused to allow Drive-Thru to make the deliveries. TEAMSTERS LOCAL 917 (PEERLESS IMPORTERS) 1061 the disputed work in this case. A loss of unit work was neither inevitable nor foreseeable at that time, but was instead the result of decisions made by Diageo 6 months later. Had Diageo decided not to implement delivered pricing, Peerless employees would have continued per- forming the delivery work and there would have been no violation of the work preservation agreement.14 Similarly, Dairy Workers Local 83 (Sealtest Foods Di- vision), 146 NLRB 716 (1964), is distinguishable. In that case, Sealtest made “the first move” by permitting customers to pick up products at the Sealtest dock. Id. at 722. By contrast, in the instant case, Peerless’ customer, Diageo, made the decision to implement delivered pric- ing. Nor does Plumbers Local 120 (Mechanical Contrac- tors’ Assn. of Cleveland), 168 NLRB 991 (1967), war- rant a different result. In that case, Wrightco had a con- tract with the union under which employees were to per- form fabrication work on piping two inches or less at the jobsite. Wrightco, however, entered into a contract with Trane which specified that such piping would be factory installed. The Board concluded that the union’s object in threatening not to connect such units was to preserve contractual work, and thus its conduct did not violate the Act. Again, it is plain here that Peerless did not specifi- cally and expressly contract away any delivery rights in 14 Our colleague criticizes our distinction of Drive-Thru Dairy and Mechanical Contractors’ Assn. of Cleveland. However, our discussion of those cases is clearly grounded on the accepted principle that if a company is an “unoffending employer” as defined in our jurisprudence, it is a neutral, and a union’s attempt to enforce an agreement would therefore violate Sec. 8(e). In each of those cases, the employer was not truly an “unoffending employer,” since the loss of control of the work involved was by its own volition. That is not the situation here. Our colleague also asserts that the employer’s culpability does not re- solve the issue of the union’s objective, and that from a union’s perspec- tive, the only issue that matters is that the work has been lost. That posi- tion is at odds with the well-established “unoffending employer” doctrine. Indeed, the Supreme Court has rejected as “untenable under the Act” the view that a union’s efforts to enforce a lawful work preservation clause must necessarily be viewed as primary and not an unfair labor practice. NLRB v. Plumbers Local 638, supra at 515–517. Member Schaumber further notes that Drive-Thru Dairy was de- cided in 1963, well before the seminal Supreme Court cases delineating the scope of the Act’s secondary boycott provisions. See NLRB v. Longshoremen ILA, supra at 504; NLRB v. Longshoremen ILA [II], 473 U.S. 61 (1985); NLRB v. Plumbers Local 638, 429 U.S. 507 (1977); National Woodwork Mfrs. Assn. v. NLRB, 386 U.S. 612 (1967). The same is true of Sealtest Foods, also cited by the dissent. These cases also predate the Board’s decision in George Koch Sons, Inc., supra, wherein the Board outlined both the right of control and unoffending employer doctrines. Neither case analyzes the union conduct at issue therein in light of those tests. In these circumstances, he would give greater weight to the later Board decisions for the purpose of resolving the issue presented in this case. Chairman Battista relies solely on the fact that Drive-Thru Dairy and Sealtest are distinguishable from the instant case. its agreement with Diageo, and thus we cannot find that the loss of work was of Peerless’ own doing. In sum, the Respondent’s enforcement of the require- ment that Peerless use unit employees to transport bever- ages to and from its facility impairs its business relation- ship with Diageo and, as shown above, Peerless was an unoffending neutral without the right to control the dis- puted work. Thus, the Respondent violated Section 8(e) by seeking to enforce the relevant provisions of its col- lective-bargaining agreement under these circumstances. ORDER The National Labor Relations Board orders that the Respondent, Local 917, International Brotherhood of Teamsters, Floral Park, New York, its officers, agents, and representatives, shall 1. Cease and desist from seeking to enforce or apply, through grievance or arbitration, any collective- bargaining agreement with Peerless Importers Inc., a person engaged in commerce or in an industry affecting commerce, where an object thereof is to cease doing business with Diageo North America Inc. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) Withdraw the grievance filed in November 2003 and the subsequent demand for arbitration. (b) Reimburse Peerless Importers Inc. for all reason- able expenses and legal fees, with interest, incurred in defending against the grievance and arbitration demand. (c) Within 14 days after service by the Region, post at its business office and meeting hall copies of the attached notice marked “Appendix.”15 Copies of the notice, on forms provided by the Regional Director for Region 29, after being signed by the Respondent’s authorized repre- sentative, shall be posted by the Respondent and main- tained for 60 consecutive days in conspicuous places including all places where notices to members and em- ployees are customarily posted. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. (d) Furnish the Regional Director for Region 29 signed copies of such notice for posting by Peerless Importers Inc., if willing, at its premises. (e) Within 21 days after service by the Region, file with the Regional Director a sworn certification of a re- sponsible official on a form provided by the Region at- 15 If this Order is enforced by a judgment of a United States court of appeals, the words in the notice reading “Posted by Order of the Na- tional Labor Relations Board” shall read “Posted Pursuant to a Judg- ment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board.” DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1062 testing to the steps that the Respondent has taken to comply. MEMBER LIEBMAN, dissenting. As the Supreme Court has explained, the “touchstone” of Section 8(e) of the National Labor Relations Act is whether a union’s challenged agreement is “addressed to the labor relations of the contracting employer vis-à-vis his own employees” and thus is primary, not secondary, in nature.1 “Although broadly worded, Section 8(e) was not intended to prohibit a labor organization from execut- ing or enforcing . . . an agreement when its objective is to preserve for its members bargaining unit work or to re- acquire work previously performed.”2 That is precisely what the respondent union did here, in successfully pur- suing a contractual grievance when the employer failed to use bargaining-unit employees to perform work that, by contract, they had traditionally performed. The ma- jority’s finding of a violation is based on a mechanical application of the Board’s “right-to-control” test, focus- ing on whether the employer has the power to give em- ployees the work in question. This approach is contrary to both Board and Supreme Court precedent, which re- quire that all the circumstances here be carefully ana- lyzed. I. The Charging Party, Peerless Importers, Inc., distrib- utes wine and spirits in the New York City area. The Respondent, Local 917, International Brotherhood of Teamsters, represents drivers who have, for many years, transported goods to Peerless’s warehouse. Peerless and Local 917 have a contract that requires Peerless use bar- gaining-unit employees to handle such shipments. Peerless purchases beverages from several distributors, including Diageo North America Inc. On October 1, 2002, Peerless and Diageo entered into a distribution agreement making Peerless the exclusive distributor for Diageo’s goods in the New York City area. From Octo- ber 2002 until April 2003, the Local 917-represented 1 National Woodwork Mfrs. Assn. v. NLRB, 386 U.S. 612, 645 (1967). In pertinent part, Sec. 8(e) states: It shall be an unfair labor practice for any labor organization and any employer to enter any contract or agreement, express, or implied, whereby such employer ceases or refrains or agrees to cease or refrain from handling, using, selling, transporting, or otherwise dealing in any of the products of an other employer, or cease doing business with any other person, and any contract or agreement entered into heretofore or hereafter contain such an agreement shall be to such extent unenforce- able and void. 2 Newspaper & Mail Deliverers (Hudson News), 298 NLRB 564, 566 (1990) (fn. omitted), citing National Woodwork Mfrs. Assn., supra, and NLRB v. Longshoremen’s Assn., 447 U.S. 490 (1980). employees continued to handle Diageo’s shipments as they had before. In April 2003, Diageo implemented a new pricing sys- tem called “Delivered Pricing.” Under that program, Diageo would ship certain of its brands to Peerless, and then charge Peerless for the price of delivery. Although this meant Local 917 employees would no longer handle those brands, no one from Peerless objected to the pro- gram. In November 2003, Local 917 filed a grievance alleg- ing that Peerless was violating the parties’ collective- bargaining agreement by allowing Diageo to deliver goods. In September 2004, an arbitrator found that the “plain language of the Agreement gives the Union juris- diction over the work of picking up merchandise.” He delayed his remedy pending the resolution of this case. II. Local 917’s pursuit of its contractual grievance against Peerless had no discernible object other than the preser- vation of work that Peerless admits has historically been performed by bargaining-unit employees. Indeed, for the Union to recapture that work, Peerless and Diageo must continue to do business, not “cease doing business,” in the words of Section 8(e).3 Of course, union activity does not become secondary simply because it results in some disruption of business relationships. See, e.g., Long- shoremen’s Assn., 473 U.S. 61, 78 fn. 18 (1985).4 The majority acknowledges that the agreement here thus meets the first test of a lawful work preservation agreement, as articulated by the Supreme Court: it “ha[s] as its objective the preservation of work traditionally performed by employees represented by the union.”5 But the majority concludes that the agreement does not sat- isfy the second, “right to control” test: that the “contract- ing employer must have the power to give the employees the work in question.”6 In the majority’s view, Peerless, as a consequence of its distribution agreement with Dia- 3 It is wholly speculative at this point to say, as the majority does, that the arbitrator’s potential remedy for the contractual breach would necessarily have required Peerless to end its relationship with Diageo. Cf. Heartland Industrial Partners, 348 NLRB 1081, 1085 (2006) (the General Counsel did not show that agreement authorized arbitrator to order employer to cease doing business with second employer); Manu- facturers Woodworking Assn. of Greater New York, Inc., 345 NLRB 538, 542 (2005) (General Counsel did not show that compliance with potential arbitration award would require union to violate Sec. 7 rights of represented employees). 4 In contrast, the Board has long held that contract clauses that seek to acquire for bargaining unit employees work that has traditionally been performed by employees of other employers “are considered as having an unlawful secondary effect.” Teamsters (California Dump Truck Owners), 227 NLRB 269 (1976). 5 Longshoremen’s Assn., supra at 504. 6 Id. TEAMSTERS LOCAL 917 (PEERLESS IMPORTERS) 1063 geo, lacked that power, and thus Local 917’s effort to enforce its collective-bargaining agreement with Peerless necessarily had a secondary objective, influencing Dia- geo. But a proper application of controlling law demon- strates that the Local used lawful means—indeed, Fed- eral labor policy’s preferred means for settling labor dis- putes—toward a lawful end.7 A. The Supreme Court, echoing the Board, has explained that the “right to control” test is not determinative, nor may it be applied without considering all of the relevant circumstances. See NLRB v. Enterprise Assoc., 429 U.S. 507, 524 (1977) (Plumbers). In the Plumbers case, the Court quoted with approval the Board’s statement that: [T]he Board has always proceeded with an analysis of (1) whether under all the surrounding circumstances the union’s objective was work preservation and then (2) whether the pressures exerted were directed at the right person, i.e., at the primary in the dispute. . . . . In following this approach, however, our analysis has not nor will it ever be a mechanical one, and, in addi- tion to determining under all the surrounding circum- stances, whether the union’s objective is truly work preservation, we have studied and shall continue to study not only the situation the pressured employer finds himself in but also how he came to be in that situation. And if we find that the employer is not truly an “unof- fending employer” who merits the Act’s protections, we shall find no violation in a union’s pressures. . . even though a purely mechanical or surface look at the case might present an appearance of a parallel situation. Id. at fn.11 (emphasis added; paragraph divisions altered), quoting Plumbers Local 438 (George Koch Sons, Inc.), 201 NLRB 59, 64 (1973).8 Here, a careful look at how Peerless came to be in the situation that precipitated this case demonstrates that Peerless was not an “unoffending employer” and that Local 917’s objective was “truly work preservation.” 7 See generally Paperworkers v. Misco, Inc., 484 U.S. 29, 37 (1987) (discussing Federal labor policy in favor of grievance-arbitration and citing Sec. 203(d) of National Labor Relations Act). 8 Accord: NLRB v. Longshoremen’s Assn., supra at 81 (“The various linguistic formulae and evidentiary mechanisms we have employed to describe the primary/secondary distinction are not talismanic nor can they substitute for analysis”). There is no dispute that Local 917 drivers delivered goods from Diageo to Peerless, not only before Peerless and Diageo entered into an exclusive-distribution agree- ment, but even for 6 months afterward. Only when Dia- geo later implemented the “Delivered Pricing” program (which the majority concludes Diageo had the contrac- tual right to do)9 did Peerless stop assigning the work to Local 917 drivers. Although Local 917 drivers histori- cally had handled Diageo’s shipments, Antonio Magliocco, president of Peerless, admitted that during the 6-week negotiation of the distribution agreement, there was no discussion of who would be moving freight. Thus, Diageo did not insist, as a condition of continuing to do business with Peerless, that Diageo employees make deliveries formerly handled by Local 917- represented employees. Magliocco also testified that the procedure that Peerless and Diageo have for resolving disputes was not invoked in connection with Diageo’s setting the terms of sale or its moving of its own ship- ments. In short, Peerless contracted away its right to control that work. That makes all the difference. In Plumbers Local 120 (Mechanical Contractors’ Assn. of Cleveland), 168 NLRB 991, 992 (1967), the Board held that an em- ployer cannot “contract away the performance of its work and then claim the status of a neutral.”10 B. The majority properly acknowledges that the right-of- control test “is not mechanical or wooden,” but nonethe- less applies the test just that way in following the Board’s decision in Electrical Workers Local 501 (Atlas Construction Co.), 216 NLRB 417 (1975), enfd. 566 F.2d 348 (D.C. Cir. 1977). There, the Board described prior decisions as holding that [A]n employer could not be considered “unoffending” and therefore neutral, if it actively and knowingly con- tracted away its control by initiating the very restric- tions which ultimately gave rise to the union’s demands . . . or if the coerced employer was, in fact, given con- trol of the work at issue but, of its own volition, with- held the work from the union. . . . [T]he coerced em- ployer’s forfeiture of neutral status was based on some affirmative conduct which the employer could reasona- 9 No court or arbitrator has been called on to interpret the Peerless- Diageo agreement. I assume for the sake of argument that the majority is correct in concluding that Diageo had a contractual right to handle the delivery work. 10 See also Painters District Council 20 (Uni-Coat Spray Painting), 185 NLRB 930, 932 (1970) (refusing to apply right-of-control test where employer contracted away control, “knowingly setting stage for potential conflict” between work-related agreements and collective- bargaining agreement). DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1064 bly conclude would conflict with his collective- bargaining obligations, coupled with the absence of any demand for such conduct by an independent third party such as a general contractor or project owner. 216 NLRB at 417 (emphasis in original). Here, the majority observes that there is no evidence that Peerless initiated Diageo’s implementation of the Delivered Pricing program, which deprived Peerless of the right to control the work at issue.11 “The most that can be said,” the majority notes, “is that Peerless did not actively resist it.” And while Peerless, by agreeing to the Distribution Agreement, gave Diageo the contractual authority to later implement the Delivered Pricing pro- gram, “there is no evidence that the parties contemplated at the time that th[e] provision [in the Distribution Agreement] would result in the reassignment of delivery work.” Thus, in the majority’s view, there is no basis to find that Peerless ‘could reasonably conclude’ [in the words of Atlas Construction] that its acceptance of the [Distribution Agreement] would conflict with its obliga- tion under its collective bargaining agreement to assign delivery work to unit employees.” The majority errs in relying on Atlas Construction, a case with only superficial similarities to this one.12 Atlas Construction revolved around the operation of the tem- porary power supply on a construction project. That work was never offered by the general contractor (Atlas) to the two neutral employers, subcontractors—and thus the work had never been performed by subcontractor employees represented by the respondent unions. The Board rejected the approach of an administrative law judge, who had found no violation based on his view that the two subcontractors “simply did not try hard enough to secure the operation of the temporary power supply from Atlas at the negotiation stage of the subcontracts.” 216 NLRB at 418. That approach, the Board explained, was “realistically futile, as well as administratively un- manageable”—although the Board also pointed out that “[w]hat a subcontractor does at this stage is a circum- stance to be considered.” Id. Here, of course, Peerless employees represented by Local 917 were performing the work in question, at the 11 In fact, the record is similarly bereft of any evidence that Peerless did not initiate its loss of control. As the judge found, “[n]either the General Counsel nor the Charging Party produced any witnesses to establish when, how or who made the decision to shift the work of delivering the goods from the employees of Peerless to the employees of Diageo.” 12 In light of Plumbers and George Koch (which emphasized the need to analyze every case on its own facts), the discussion of prior decisions in Atlas Construction does not mean that the “right to con- trol” test would be satisfied only in the circumstances recognized previ- ously. time that Peerless voluntarily entered into the Distribu- tion Agreement with Diageo, and continued to perform that work afterwards, until Diageo implemented the De- livered Pricing Program—with no objection at all from Peerless.13 That is surely a “circumstance to be consid- ered” in the words of Atlas Construction. Contrary to the majority, there is no inherent inconsistency between the collective-bargaining agreement and the distribution agreement, preventing Peerless from reaching an agree- ment with Diageo that would have been consistent with the agreement between Peerless and Local 917. Indeed, pursuant to the work-preservation clauses of the collec- tive-bargaining agreement, Local 917-represented em- ployees handled all of Diageo’s shipments for 6 months after the distribution agreement was reached and con- tinue to handle some of Diageo’s freight. In comparable circumstances, the Board has refused to find a violation of Section 8(e). See Milk Wagon Drivers Local 603 (Drive-Thru Diary), 145 NLRB 445 (1963). There, the employer (Pevely) sold dairy products to retail outlets, including Drive-Thru. Pevely and Drive-Thru entered into an agreement providing that “Pevely would sell . . . products to Drive-Thru at ‘dockside’ cost based on Drive-Thru’s willingness to pick up its purchases at Pevely’s dock.” Id. at 447. The union representing Pevely’s drivers objected, relying on its collective- bargaining agreement with Pevely, which prohibited cus- tomers who normally received their product via delivery from picking up products at Pevely’s dock. The union instructed members not to load Drive-Thru’s truck. The Board found no unfair labor practice, concluding that “Pevely’s agreement to sell to Drive-Thru at dockside was in derogation of its contract” with the union and that the union’s strike was intended to “protect the work of Pevely’s drivers.” Id. at 448.14 The majority argues that Drive-Thru Dairy is distin- guishable because in that case “a loss of unit work was inevitable” once the two employers entered into their agreement, while here “a loss of unit work was neither inevitable nor foreseeable” when the distribution agree- ment between Peerless and Diageo was concluded.15 But 13 The majority, as indicated, insists that Peerless could not reasona- bly have known that entering into the Distribution Agreement would ultimately strip Peerless of the right to control the work. But that asser- tion is contradicted by the majority’s own view that the Distribution Agreement unquestionably gave Diageo the right to control the work (when it ultimately chose to exercise that right). If the implication of the Distribution Agreement is so clear to the majority, one wonders, then why was it not clear to Peerless? 14 For a case involving similar facts, and a similar result, see Dairy Workers Local 83 (Sealtest Foods Division), 146 NLRB 716 (1964). 15 Member Schaumber argues that Drive-Thru Dairy (decided in 1963) and Sealtest Foods (decided in 1964) are entitled to little weight because they predate the Board’s decision in George Koch Sons, Inc., TEAMSTERS LOCAL 917 (PEERLESS IMPORTERS) 1065 what mattered in Drive-Thru Diary was that the employ- ers’ agreement was “in derogation” of the collective- bargaining agreement, just as the distribution agreement was here. While it may not have been inevitable that Diageo would choose to exercise its right under the agreement, it was foreseeable, given the majority’s find- ing that the agreement clearly gave Diageo the right of control over delivery of its products. Diageo would not have bargained for a contractual right that it never fore- saw exercising. The majority attempts to distinguish Mechanical Con- tractors’ Assn. of Cleveland, supra, on what amounts to the same unsatisfactory basis, observing that here “Peer- less did not specifically and expressly contract away any delivery rights in its agreement with Diageo.” Considering the aims of Section 8(e) of the Act, it is not clear what statutory purpose is served by requiring that an employer must “specifically and expressly” con- tract away the right of control, before a union may law- fully pursue a work-preservation grievance. As the Su- preme Court has explained, The rationale of the [right-to-control] test is that if the contracting employer has no power to assign the work, it is reasonable to infer that the agreement has a secon- dary objective, that is, to influence whoever does have such power over the work. Longshoremen’s Assn., supra at 504–505. The major- ity’s restatement of the right-to-control test is not grounded in this rationale. The demonstrable culpability of an employer who acts with the specific intent to evade a collective-bargaining agreement does not resolve the issue of the union’s objective. From the union’s stand- point, what matters is simply that employees have lost work that they traditionally have performed, as guaran- teed by the collective-bargaining agreement. The union will not likely be privy to the details of the employer’s conduct with respect to the contracting away of its right supra, and the “seminal Supreme Court cases delineating the scope of the Act’s secondary boycott provisions.” I disagree with my colleague’s understanding of the law’s develop- ment in this area. Drive-Thru Dairy and Sealtest—which have never been overruled or questioned—are perfectly consistent with the right- of-control test as it has come to be applied: not mechanically, but with consideration of the particular factual circumstances of a case. The two cases were decided in an era when the Board sometimes distinguished between primary and secondary activity “simply in terms of a right-of- control test.” George Koch Sons, supra, 201 NLRB at 64. George Koch Sons, of course, disavowed that approach. It seems fair to say, then, that Drive-Thru Dairy and Sealtest represent the counter-trend to the decisions addressed in George Koch Sons and thus that the two cases anticipated later developments. to control, but these facts are dispositive under the major- ity’s test.16 III. Here, “under all the surrounding circumstances the un- ion’s objective was work preservation” and “the pres- sures exerted were directed at the right person, i.e., at the primary in the dispute.”17 Local 917-represented em- ployees had a clear contractual claim to the work at issue, which they had historically performed. The Local as- serted that claim through lawful, contractual channels against the contracting party, Peerless (not Diageo), and it prevailed. The majority’s holding, then, means not only that Local 917 has no legal means to rectify Peer- less’s breach of contract, but that the Local may be sanc- tioned under the National Labor Relations Act for even pursuing the matter. In short, Peerless’s agreement with Diageo trumps Peerless’s prior agreement with the Local. That result has no firm support in Federal labor law. Accordingly, I dissent. APPENDIX NOTICE TO MEMBERS POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated Federal Law and has ordered us to post this no- tice and comply with its terms. FEDERAL LAW GIVE YOU THE RIGHT TO To form, join, or assist any union To choose representatives to bargain with us on your behalf To act together with other employees for your benefit and protection To choose not to engage in any of these protected activities. WE WILL NOT seek to enforce or apply, through griev- ance or arbitration, any collective agreement with Peerless Importers Inc., a person engaged in commerce or in an industry affecting commerce, where an object thereof is to cease doing business with Diageo North America Inc. WE WILL withdraw the grievance filed in November 2003 and the subsequent demand for arbitration. 16 Indeed, under the majority’s test, a union cannot be certain, in ad- vance, whether it will be committing an unfair labor practice simply by pursuing contractual arbitration. That situation seems legally unten- able. 17 Plumbers, supra, 429 U.S. at 524, quoting George Koch Sons, su- pra, 201 NLRB at 64. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1066 WE WILL reimburse Peerless Importers Inc. for all rea- sonable expenses and legal fees, with interest, incurred in defending against the grievance and arbitration demand. LOCAL 917, INTERNATIONAL BROTHERHOOD OFTEAMSTERS Rachel Zweighaft, Esq., for the General Counsel. Gene M. J. Szuflita, Esq., for the Respondent. Allen B. Roberts, Esq. and Donald B. Krueger, Esq., for the Charging Party. SUPPLEMENTAL DECISION RAYMOND P. GREEN, Administrative Law Judge. This case was remanded to me and the hearing was held on January 11, 2006. 1 The charge was filed by Peerless Importers Inc. on October 6, 2004, and the complaint was issued on December 30, 2004. In substance, the complaint alleged: 1. That Peerless, located at 16 Bridgewater Street, Brooklyn, New York, is engaged in the distribution of alcoholic bever- ages. 2. That Diageo North America Inc., located at 450 Park Ave. South, New York, New York, is engaged in the wholesale dis- tribution of alcoholic beverages. 3. That on or about May 17, 2004, Peerless and the Union entered into an agreement retroactive to November 11, 2002, that states: 3.27. Scope of Agreement. The handling of all rail- road shipments, whether it be piggy back, tractor-trailer, flexi-van, or any other type of railroad conveyance, and those of freight consolidators and car loading companies, and freight brought via water or water borne, fish-back or birdy-back, originating elsewhere and terminating any- where within Kings County, New York County, Bronx, Queens, Nassau and Suffolk Counties, bounded roughly by a line starting on the North Shore of Poet Jefferson and running southward through Coram in the middle and on down to Patchogue on the South Shore, and in Staten Is- land and within a radius of fifty miles into the State of New Jersey, must be done by employees covered by this Agreement. 3.28. The unloading, loading and transportation of merchandise at freight depots, domestic and foreign, has been and continues to be unit work within the scope of this Agreement. All freight consigned to wine and whisky wholesalers, distributors, distillers, rectifiers or other proc- essors or receivers of same, under contract to the Union, shall be handled and hauled from anywhere within the ar- 1 I initially dismissed the complaint because the Charging Party re- fused to turn over certain documents, in unredacted form, that the Un- ion had subpoenaed and which I determined were necessary to its de- fense. However, the Board disagreed with what it considered to be a drastic solution to an issue that could have been resolved by less drastic means. At the resumed hearing, I stated that my order requiring the production of the unredacted documents still stood. The Charging Party, instead of complying, turned over a redacted version of the documents to the Union. eas mentioned above to the Employer's receiving and shipping premises in accordance with the following stipu- lations and conditions, provided, however, if the Em- ployer, at its option, assigns at least two employees as regular platform workers, the employer shall not be re- quired to employee drivers and helpers for each outside vehicle. 3.29. Merchandise shipped from anywhere within the Continental United States or its Possessions, including Puerto Rico, whether by steamship, steamship container, or steamship van, piggyback, fishy-back, birdy-back, rail- road car or van, shall come to rest somewhere with the ar- eas mentioned above, there to be handled and transported to the wholesaler by employees covered by this Agree- ment. 3.30. The Employer shall transport all such merchan- dise arriving in above named conveyances with its own equipment and with a chauffeur and helper from the sen- iority list assigned to each truck. The chauffeur must re- main with the load he or she has picked up until it is fully unloaded. 3.31. Merchandise in foreign commerce from other countries or commonwealths, arriving at ports in the United States or arriving at foreign ports and subsequently shipped here, whether loaded in vans, containers, tanks or other conveyances and all consignments of wines and liq- uors, or part thereof, when arriving or conveyed in barrels, casks, hogshead, pipes, tanks, or other type bulk liquor carrier, whether originating domestically or imported, shall be unloaded and/or transported wholly in the state of its arrival, by chauffeurs and helpers covered under the Agreement. Pier and piggyback may exceed six hundred 4. That starting in or about April 2003, Diageo began making deliveries of alcoholic beverages directly to the Employer's Brooklyn facility.2 5. That in or about November 2003, the Respondent at- tempted to apply the provisions of the agreement to the deliver- ies made by Diageo by filing a grievance alleging that Peerless was violating the agreement by allowing Diageo to make deliv- eries of alcoholic beverages directly to the Brooklyn facility. 6. That on or about June 28, 2003, the Union took the afore- said grievance to arbitration thereby entering into and reaffirm- ing the agreement described above. This agreement, as applied, is alleged to violate Section 8(e) of the Act. Based on the entire record, including my observations of the demeanor of the witnesses and after considering the arguments of counsel, I make the following FINDINGS AND CONCLUSIONS I. JURISDICTION The complaint alleges, the Answer admits and I find that the Charging Party is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. The answer 2 At the opening of the hearing, the General Counsel amended this allegation to change the date from October to April 2003. TEAMSTERS LOCAL 917 (PEERLESS IMPORTERS) 1067 also admits and I find that the Union is a labor organization within the meaning of Section 2(5) of the Act. II. THE FACTS Diageo, a company located in Stanford, Connecticut, is in- volved in the importation of alcoholic beverages to the United States.3 It is a subsidiary of Diageo PLC, which is based in London. Among the well known brands that it sells are Smir- noff vodka, Bailey’s Irish Cream, Johnny Walker, and Tan- queray. Peerless is a wholesale distributor of wines and spirits. It is located in Greenpoint, Brooklyn, and it distributes these prod- ucts in the metropolitan New York area. Its customers include retail wine and liquor stores, plus restaurants and hotels. It employs about 750 persons. Peerless purchases wines and liquors from various suppliers including Diageo. In October 2002, it entered into an exclusive arrangement with Diageo to distribute the latter’s products in the New York area. Previously, Peerless was one of two New York wholesalers who purchased Diageo’s products. For many years, the Union has represented the drivers and helpers employed by Peerless. Pursuant to the contract be- tween the Union and Peerless, those employees have been as- signed by Peerless to move freight not only from Peerless to its customers, but also from piers, railroad yards, and storage fa- cilities to Peerless’ warehouse in Greenpoint. This has been a longstanding practice, consistent with the express language of the contract provisions quoted above. Except in those circum- stances where Peerless did not have sufficient drivers available and the Union therefore agreed to a particular waiver, the em- ployees of Peerless have been exclusively assigned to bring goods from its suppliers’ receiving locations to Peerless’ ware- house. This was also the case when Peerless did business with Diageo before they entered into the exclusive agreement in 2002. As noted above, Peerless and Diageo entered into a contract in October 2002 wherein Peerless was chosen, over a bid by another wholesaler, to be the exclusive wholesaler of Diageo’s products in New York. This agreement is more than 40 pages long and appears (at least to me), to be quite complex. Pre- sumably it took some time and expertise to negotiate. It ap- pears that pursuant to this agreement Diageo can, at least theo- retically, unilaterally establish the prices of the beverages it sells to Peerless. On the other hand, if it deems the price for any particular product to be too high, Peerless can reduce or eliminate its purchases of those particular beverages. For ex- ample, if Diageo set the price of Sterling Sauvignon Blanc at a level that Peerless thinks will not sell well in New York, it could opt to not buy that brand and buy another brand of simi- lar wine from another supplier. One can assume, given a mar- ket economy free from governmental price controls, that the power of Peerless to substitute another supplier for a competing product must impose some limitation on Diageo’s theoretical power to set prices. 4 3 It also purchases wines from both domestic and foreign producers. 4 When setting prices, Diageo is required by New York State to post, on a monthly basis, the price of each of the items sold. (As a whole- saler, Peerless is also required to post its prices). This is not a matter of The negotiation of this agreement was described in very gen- eral terms by Antonio Magliocco, Peerless’ president. Signifi- cantly, he testified that during the negotiations there was no discussion about who was to be responsible for delivering the products from Diageo’s receiving locations to Peerless’ ware- house. Presumably as Peerless and Diageo had done quite a lot of business with each in the past, they were or should have been aware of the existing practice that Peerless and its employee- drivers would be the people who would be delivering the goods from the pier or rail yard to Peerless’ warehouse. It would be hard to imagine that these astute business people did not factor into the contract price, the cost of delivering the products from Diageo to Peerless. After the Peerless/Diageo contract was executed, the bar- gaining unit employees of Peerless continued their longstanding practice of delivering the products from Diageo to the Peerless warehouse. At that time, there is no question but that Peerless had the right to control the assignment of delivery driving work. In or about March 2003, Diageo announced a program called “Delivered Pricing.” It is claimed that under this program, someone in Diageo made the decision to have goods moved from its receiving point to Peerless’ warehouse by Diageo’s drivers rather than the bargaining unit drivers employed by Peerless. However, neither the General Counsel nor the Charging Party produced any witnesses to describe which individuals made this decision. Nor were there any witnesses produced (either from Diageo or Peerless) to tell me why this decision was made, when the decision was made, or what the economic ramifications to the parties were. I do not know who partici- pated in the making of the decision and I do not know who, if anyone, participated in any negotiations or discussions between Diageo and Peerless before the decision was made and imple- mented. In any event, the Union, not having been notified of this change, and discovering that the driving work, traditionally performed by Peerless bargaining unit employees was now being done by others, it filed a grievance under the cited sec- tions of its collective-bargaining agreement. On June 28, 2004, a hearing was held before arbitrator Rich- ard Adelman. During that hearing, Peerless contended that the decision to have the deliveries made by Diageo’s drivers was not within Peerless’ control and/or that the provisions that the Union were seeking to enforce were violative of Section 8(e) of the National Labor Relations Act. Adelman issued an award in favor of the Union on September 28, 2004. As to the 8(e) ar- gument, the arbitrator noted that the Company had not filed an 8(e) charge with the NLRB and that although he would have no hesitancy in ruling on that question if the Board had deferred its own proceedings to arbitration that was not the case here. He also stated: Moreover, assuming that the Company’s reading of the law regarding the meaning of the “right of control” test is correct, the State regulating the price of these goods, but rather to afford the public some transparency and to assure that no unfair discounts are given to some customers over others. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1068 the Company, by not submitting its agreement with Diageo into evidence, failed to establish that Diageo had control over the work at issue. In addition, as stated above, the Company was aware of the terms of the agreement with the Union at the time it contracted with Diageo, yet the Company did not no- tify the Union of the arrangement it was making with Diageo. In short, although the Arbitrator finds that the Company vio- lated the Agreement, it is not clear whether or not the Com- pany had the requisite control over the work, or whether or not other factors should be considered in determining if Sec- tion 8(e) has been violated, decisions that should be made by the NLRB. III. ANALYSIS The General Counsel asserted that she is not claiming that the clauses, taken separately or together, violated Section 8(e) of the Act on their face. That is, she concedes that the clauses could be interpreted, in the appropriate circumstances, as hav- ing a valid work preservation object. Her contention is that in the present circumstances, the Union asked the arbitrator to enforce the clause in an unlawful way because the work claimed (certain truck driving), was work “not within the con- trol” of Peerless and therefore was not work that could be “pre- served.” In typical cases involving Section 8(e), the gravaman of the complaint is that a union and a company employing individuals represented by the union, have entered into an agreement whereby the company has agreed not to do business with any other person with whom the union has a primary dispute. In those circumstances, if such an agreement, either on its face or in its specific application, is used to prevent an employer or person with whom the union has no primary dispute to cease doing business with another employer with whom the union does have a primary dispute, then the agreement is deemed to have a secondary objective and constitutes a violation of Sec- tion 8(e) of the Act. In such circumstances, the employer hav- ing the collective-bargaining agreement with the Union is de- scribed as being an “unoffending neutral.” As the agreement between the Union and Peerless was made more than 6 months prior to the filing of the charge, the Gen- eral Counsel must show that it was reaffirmed (otherwise de- fined as reentered), within the 10(b) statute of limitations pe- riod. Board cases have held that the General Counsel can meet this test by showing that the signatory union has filed a griev- ance and taken a case to arbitration to enforce the contractual provisions, not for a work preservation objective, but to compel the contracting employer to cease doing business with another employer or person. Elevator Constructors (Long Elevator), 289 NLRB 1095 (1988).5 5 I should note here that the Board in this case also held that an 8(e) finding based on the filing for arbitration would not be inconsistent with the holding of Bill Johnson’s Restaurant. The Board stated: Because we have concluded that the contract clause as con- strued by the Respondent would violate Section 8(e), we may properly find the pursuit of the grievance coercive, notwithstand- ing the Supreme Court’s decision in Bill Johnson’s Restaurant v. NLRB, 461 U.S. 731 (1983). Although holding that the Board could not enjoin, as an unfair labor practice, the lawsuit at issue in Faced with an 8(e) claim, a union often will argue that the at- tacked clause does not have a secondary objective and that it merely is designed to preserve the work of the bargaining unit employees covered by the collective-bargaining agreement within which the alleged offending clauses reside. In this case, the Union contends that it has a contract with Peerless that cov- ers the wages, hours, and working conditions of truck drivers who are employed by Peerless. It contends, and that facts clearly show that for many years, Peerless truckdrivers have uniformly had the assignment of picking up beverages from Diageo’s receiving locations and delivering them to Peerless’ warehouse in Greenpoint Brooklyn. The only exception to this practice has been when all of the Peerless drivers are otherwise busy and Peerless has no drivers available on any particular day to do the work. Therefore, the Union asserts that (a) this type of delivery work is clearly traditional bargaining unit work; (b) that the Union is merely seeking to preserve that work for the employees it represents; and (c) that it therefore has a “pri- mary” dispute with Peerless and not with Diageo. In seeking to enforce its contract with Peerless, the Union contends that it merely is trying to enforce the bargain it made with Peerless to preserve bargaining unit work. The General Counsel and the Charging Party respond by ar- guing that although the clauses in question may very well have a preservation of work objective, its enforcement in this par- ticular case had a secondary objective because in this case Diageo made the decision to have the deliveries reassigned from Peerless’ drivers to its own drivers. They therefore argue that when this happened in 2003, Peerless no longer had the “right to control” regarding the assignment of this work. Argu- ing that Peerless, having lost the right of control, they contend that the enforcement of the clauses cannot have a primary work preservation objective because Peerless no longer had the work to be preserved. That is, even if Peerless wanted to, it could not assign the work to its own drivers. The leading case dealing with the distinction between lawful work preservation clauses versus unlawful secondary hot cargo clauses is National Woodwork Mfrs. Assn. v. NLRB, 386 U.S. 612 (1967). See also Elevator Constructors Local 91 (Otis Elevator Co.), 345 NLRB 925 (2005). Since the clauses in question are legal on their face and con- cededly can have the primary objective of preserving bargain- ing unit work, the Union’s attempt to enforce them by arbitra- tion must be deemed legal unless the General Counsel and the Charging Party meet their burden of proof that Peerless did not have the “right of control.” In my opinion, the General Counsel and the Charging Party have failed to meet that burden. Neither the General Counsel nor the Charging Party pro- duced any witnesses to establish when, how or who made the decision to shift the work of delivering the goods from the em- that case, the Court expressly noted that it was not dealing with a “suit that has an objective that is illegal under federal law.” 461 U.S. at 737 fn 5. See also Teamsters Local 705 v. NLRB (Emery Air Freight), 820 F.2d 448 (D.C. Cir. 1987) (distinguishing be- tween having an unlawful motive in bringing a lawsuit and seek- ing to enforce an unlawful contract provision). TEAMSTERS LOCAL 917 (PEERLESS IMPORTERS) 1069 ployees of Peerless to the employees of Diageo. Essentially, they would have me accept a conclusory assertion, without any supporting witnesses, that Diageo made this decision and did so for some unknown reason. I simply do not know how or why this decision was made or by whom. On the face of it, and absent any other explanation, the eco- nomic beneficiary of the change was Peerless and not Diageo. Obviously, if Diageo assumed the cost of delivering the prod- ucts to the Peerless warehouse, then Peerless would reduce its costs without having to change a word or term of its contract with Diageo. For all I know, this decision was made after Peer- less complained that its costs were too high and instead of changing the contract terms with Diageo, the latter offered to lighten Peerless’ load by assuming the labor cost of having the goods delivered to Peerless’ warehouse. If that was the case, (and there is no evidence to show that it was not), then Peerless would have been the real beneficiary of this change and could not be considered an “unoffending neutral.” Painters District Council No. 20 (Uni-Coat Spray Painting Inc.), 185 NLRB 930 (1970). It is my opinion that with respect to the “right of control” is- sue, where the evidence resides within the exclusive knowledge of Peerless and Diageo, the General Counsel has the burden of proof. As union representatives did not participate in, or wit- ness any transactions between Peerless and Diageo, they could not have any knowledge of those facts. Since it is my opinion that the General Counsel has not met her burden of proof on this issue, I conclude that the Union legally enforced its con- tract to preserve bargaining unit work for the employees it represents. ORDER The Respondent, Tower Industries, Inc. d/b/a Allied Me- chanical, Inc., Ontario, California, its officers, agents, succes- sors, and assigns, shall 1. Cease and desist from (a) Conditioning the settlement of wage claims upon the re- quirement that employees not engage in activity protected by the Act. (b) Excluding employees from meetings attended by other employees because those employees engaged in activity pro- tected by the Act. (c) Coercively interrogating employees concerning their un- ion activity and the union activity of other employees. (d) In any other manner interfering with, restraining, or co- ercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to effec- tuate the policies of the Act. (a) Within 14 days from the date of this Order, individually notify each employee who signed a release for claims under United Steelworkers of America, et al., v. Tower Industries, Inc. d/b/a Allied Mechanical, et al., Case RCVRS081220, in writing, that the portion of the release obligating them “not to . . . assist, join, participate in, or actively cooperate in the pur- suit of any Wage Claims, including penalties, fees and costs, … brought . . . on behalf of any other employee” has been found to be unlawful by the Board, or the Court of Appeals as may be appropriate, and that Respondent will not seek to enforce that portion of the release. (b) Within 14 days after service by the Region, post at its fa- cility in Ontario, California, copies of the attached notice marked “Appendix.”38 Copies of the notice, on forms provided by the Regional Director for Region 31, after being signed by the Respondent’s authorized representative, shall be posted by the Respondent and maintained for 60 consecutive days in con- spicuous places including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. In the event that, during the pendency of these proceedings, the Respondent has gone out of business or closed the facility involved in these proceedings, the Respondent shall duplicate and mail, at its own expense, a copy of the notice to all current employees and former employ- ees employed by the Respondent at any time since October 7, 2004. (c) Within 21 days after service by the Region, file with the Regional Director a sworn certification of a responsible official on a form provided by the Region attesting to the steps that the Respondent has taken to comply. 38 If this Order is enforced by a judgment of a United States court of appeals, the words in the notice reading “Posted by Order of the Na- tional Labor Relations Board” shall read “Posted Pursuant to a Judg- ment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board.”