W. W. Grainger, Inc., Rentar Driver Services, Inc., Transport Drivers, Inc.

94 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD W. W. Grainger, Inc., Rentar Driver Services, Inc., Transport Drivers, Inc. and Local 710, High- way Drivers, Dockmen, Spotters, Rampmen, Meat Packing House and Allied Products Driv- ers and Helpers, Office Workers and Miscella- neous Employees Union , International Brother- hood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. Case 13-CA-20104 30 September 1987 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS JOHANSEN AND STEPHENS On 5 November 1981 Administrative Law Judge Phil W. Saunders issued the attached decision. The General Counsel and the Charging Party filed ex- ceptions and supporting briefs, and Respondents W. W. Grainger, Inc. and Transport Drivers, Inc. filed briefs in opposition to the General Counsel's exceptions. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has reviewed the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings, I and conclusions only to the extent consistent with this Decision and Order. The operative facts are fully set forth in the judge's decision. In relevant part, the record re- veals that Respondent W. W. Grainger, Inc. (Grainger) was engaged in the wholesale distribu- tion of electrical products and equipment. Grainger used various methods of distributing its products, including trucks that were leased by it and operat- ed by drivers leased to it by driver leasing compa- nies. These drivers, referred to as the "private fleet," were, during the period from 1974 to 28 June 1980, leased by Grainger from Respondent Rentar Driver Services, Inc. (Rentar). All such drivers were represented by the Charging Party, Teamsters Local 710 (the Union), and were cov- ered by a collective-bargaining agreement between 1 The General Counsel has excepted to some of the judge's credibility findings. The Board's established policy is not to overrule an administra- tive 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 re- versing the findings. In agreeing with the judge's finding that Ron Formento's remarks at his 14 June 1980 meeting with employees did not violate Sec 8(axl), we find it unnecessary to pass on the judge's reliance on Sec 8(c) We also do not find it necessary to pass on the judge's finding that Re- spondent W W Grainger and Respondent Transport Dnvers, Inc were not joint employers given our agreement with the judge that Transport Dnvers lawfully refused to hire the former Rentar drivers previously as- signed to the Grainger account the Union and Rentar. About 26 May Grainger in- formed Rentar of its decision to cancel their con- tract. Rentar then informed the Union and the drivers of Grainger's decision and that the drivers would be laid off as a result of that decision. The complaint alleged, in part, that Grainger violated Section 8(a)(5) and (1) of the Act by fail- ing and refusing to bargain with the Union over its decision to cancel its contract with Rentar and sub- stitute a different driver leasing company. As a predicate to that allegation, it was also alleged that Grainger had a duty to bargain with the Union on the ground that Rentar and Grainger were joint employers of the private fleet drivers. The judge found that no such joint employer relationship ex- isted and that, in any event, under First National Maintenance2 Grainger was not obligated to bar- gain about its decision. For the following reasons, we disagree with both of these findings. The relevant facts with respect to the joint em- ployer issue are largely uncontroverted. The provi- sions of the contract between Rentar and Grainger were, in material part, as follows: Drivers will be in the employ of Rentar who shall exercise sole power to fix their compen- sation. Rentar will pay the drivers' wages and provide any of the benefits required by any ap- plicable bargaining agreement . Rentar will pay all applicable federal and state taxes with re- spect to the employment of such drivers, in- cluding social security and unemployment compensation taxes . Rentar will maintain com- plete driver records, as well as payroll record and reports and carry Workmen's Compensa- tion Insurance on all drivers and will comply with all applicable laws and regulations of all government agencies relative to the employ- ment of such drivers. Rentar will furnish W. W. Grainger driver records required by W. W. Grainger to comply with the applica- ble regulations of the Interstate Commerce Commission, the Department of Transporta- tion, and with those of state or other govern- mental regulatory agencies in connection with the operation of vehicles used by W. W. Grainger. W. W. Grainger shall reserve the right to ap- prove the employment of each driver at the time of assignment to its service and thereafter have the right to require Rentar to remove any such driver and/or to substitute another driver or to transfer any driver to other work. 2 First National Maintenance Corp. Y NLRB, 452 U S 666 (1981) 286 NLRB No. 8 W. W. GRAINGER, INC. 95 W. W. Grainger shall control dispatch and direct the drivers and oversee the driver's day- by-day operations. W. W. Grainger shall specify the starting point and time, the destina- tion point, and the route to be traveled in re- spect to each trip. W. W. Grainger shall deter- mine when the drivers take their vacation peri- ods. Drivers will report to W. W. Grainger for detailed instructions with regard to the op- erations of the vehicles and submit daily trip reports, trip logs and accident reports. No driver shall be required to work beyond hours specified by the Motor Carriers Safety Regula- tions applicable to private carriers as set forth in Department of Transporation, Interstate Commerce or State Regulations . Rentar shall not be liable to W. W. Grainger for loss or damage to W. W. Grainger properly, nor shall it be liable to W. W. Grainger or to third per- sons for damage or injury to other persons or property. It is agreed that the amount paid by W. W. Grainger to Rentar shall be the actual cost in- curred by Rentar in the performance of its ob- ligations hereunder plus 7% of such cost to cover overhead. In addition to the contract provisions, the record reveals that Grainger exercised such extensive con- trol over the private fleet drivers that Grainger's involvement pervaded all the day-to-day activities of the drivers. Thus, Grainger exercised sole con- trol over the drivers' schedules; dispatched all driv- ers, instructing them where to pick up loads, where to deliver them, and the route to be followed. Grainger collected and verified each driver's log- book; required all drivers to report any accidents to it; required all drivers to complete and submit to it trip cost reports; instructed drivers where to pur- chase fuel while on the road; mandated that drivers report to it when delayed on the road by weather or mechanical difficulties; furnished drivers with advance money to cover all anticipated costs of scheduled runs; required that the drivers report for work at its facility on a daily basis and report any absence due to illness to its dispatcher for instruc- tions regarding backhauls; furnished drivers with uniforms bearing the Grainger logo; dispatched the drivers in trucks bearing Grainger's name; and gave the drivers daily instructions concerning the handling of their paperwork. Additionally, Grainger exercised great control over the actual terms and conditions of employ- ment of the private fleet drivers. In this regard, the record shows that Grainger formally evaluated the performance of drivers during their probationary period and forwarded those evaluations to Rentar for its consideration. Grainger assigned seniority to the private fleet drivers; determined when drivers took their vacations; requested that certain drivers be disciplined-requests that were acceded to by Rentar; referred individuals to Rentar for hire as private fleet drivers; requested from Rentar by name temporary replacement or extra coverage drivers-Rentar accommodated such requests; re- served the right to have Rentar remove or transfer individual drivers; and permitted at least some of the private fleet drivers to utilize Grainger's em- ployee cafeteria and to purchase merchandise from Grainger's operations at employee discount prices. Furthermore, Grainger exercised effective, albeit indirect, control over the total compensation re- ceived by the private fleet drivers through its review and approval of the drivers' trip cost re- ports. Drivers were compensated according to the number of miles they had driven and the amount of "bottom line time" that they had accumulated. This bottom line time was calculated at an hourly wage rate and represented all times when the drivers were on duty, but not accumulating mileage on their trucks. After Grainger had reviewed and ap- proved each driver's mileage and "bottom line time" for a pay period, it would submit the figures to Rentar. Grainger, however, sometimes disal- lowed portions of the "bottom line time" claimed by a driver, thereby affecting the compensation re- ceived by the driver for that pay period. The judge correctly set forth most of the forego- ing facts. However, in finding that Grainger and Rentar were not joint employers, the judge exhibit- ed some confusion concerning the correct legal test and at one point relied on an incorrect test-that for determining when two nominally separate em- ployers are a single employer of the employees in question. The judge, however, did go on to analyze the joint employer issue by specifically considering whether Grainger possessed sufficient indicia of control over the day-to-day work of the drivers supplied by Rentar, essentially concluding that Rentar was the sole employer of the drivers and that Grainger acted as nothing more than their dis- patcher. We disagree with the judge's findings on this issue and, of course, do not rely on his discus- sion of other factors that are relevant only for re- solving a single-employer issue. The Board will find joint-employer status when it can be shown that two or more employers "co- determine those matters governing essential terms and conditions of employment." NLRB v. Brown- ing-Ferris Industries, 691 F.2d 1117 (3d Cir. 1982). Applying the foregoing principle to the facts set forth above, it is clear that Grainger was a joint 96 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD employer of the private fleet drivers. Grainger ex- ercised complete and exclusive control over the employees' daily work activities.3 Further, Grainger's control over the drivers leased from Rentar extended beyond day -to-day direction and included such matters as effectively recommending discipline, evaluating the work performance of cer- tain drivers, and determining vacation time . It also retained the right to refuse to employ any driver referred by Rentar and to require the removal of any driver; and it exercised indirect but effective control over the drivers' compensation . According- ly, we find that Grainger and Rentar were joint employers of the private fleet drivers . See Pacific Mutual Door Co., 278 NLRB 854, 859 (1986); Pace- maker Driver Service, 269 NLRB 971 fn. 2 (1984), enfd. in pertinent part sub nom . Carrier Corp. Y. NLRB, 768 F.2d 778 (6th Cir. 1985); C. R. Adams Trucking Co., 262 NLRB 563, 566 (1982), enfd. 718 F.2d 869 (8th Cir. 1983); Sinclair & Valentine Co., 238 NLRB 754 (1978); Pomeroy's Inc., 232 NLRB 95, 97 (1977). Having found that Grainger and Rentar are joint employers of the private fleet drivers, we now turn to the complaint allegation that Grainger violated Section 8(a)(5) and (1) of the Act by failing to bar- gain with the Union concerning Grainger's deci- sion to cancel the contract with Rentar and substi- tute a different driver leasing company , Transport Drivers, Inc. (TDI). As the judge recognized, the record is clear that Grainger decided to cancel its contract with Rentar and notified Rentar of the de- cision without informing the Union of its decision and action. In dismissing the allegation that Grainger violated Section 8(a)(5) by failing to bar- gain over that decision, the judge found that Grainger had no duty to bargain with the Union, citing First National Maintenance. The judge sum- marized his conclusion by stating : "Under the cir- cumstances here . . . bargaining over management decisions in the instant case, was not required in that the burden surrounding the conduct of run- ning the business outweighs the collective bargain- ing process." He also found that Grainger's deci- sion to cancel the contract with Rentar was not discriminatorily motivated in violation of Section 8(a)(3) of the Act. We do not agree with the judge's finding of no 8(a)(5) violation.4 3 Indeed, Rentar's executive vice president and chief operating officer, Irwin Brown, admitted that the private fleet drivers were under the im- mediate control and supervision of Grainger 4 In agreeing with the judge that neither Grainger nor Rentar violated Sec 8(a)(3) concerning the cancellation of the lease contract , we note that although Grainger and Rentar were joint employers, each had an in- dependently meritorious defense to the allegation of discriminatory lay- offs As found by the judge, Grainger successfully met its burden under Wright Line, 251 NLRB 1083 (1980), and Rentar had a right under its For the reasons set forth below, we distinguish First National Maintenance and find that Grainger, as a joint employer of the private fleet drivers, was required to bargain with the Union concerning Grainger's decision to cancel its contract with Rentar. Grainger does not argue, and the record would not support a finding, that its decision to cancel the Rentar contract represented a significant "change in scope or direction of the enterprise." 452 U.S. at 677. In fact, the contract cancellation did not involve any change in the type or scope of operations engaged in by Grainger. Grainger's in- tention was simply to replace Rentar as soon as possible with another company (TDI) that would carry out the exact functions and fill the same role that Rentar had performed. Similarly, Grainger's decision did not involve a significant investment or withdrawal of capital that would affect the scope and ultimate direction of the enterprise. On the contrary, Grainger's decision involved no invest- ment or withdrawal of capital. There remains for consideration whether, in view of the reasons for Grainger's actions, the Union should have been notified and given a mean- ingful opportunity to bargain over the cancellation of the Rentar contract. The judge found that two basic reasons existed for Grainger's decision. The first of these, escalating costs due at least in part to a grievance panel's finding that the drivers were entitled to be paid for "branch time,"5 was found by the judge to involve economic matters "particu- larly suitable for resolution within the collective bargaining framework."6 The second reason was a general dissatisfaction with Rentar's management. Such dissatisfaction would not, as a rule, appear amenable to resolution through collective bargain- ing. However, in view of Grainger's concern re- garding escalating costs tied to employee compen- sation, we are unwilling to speculate that the issues giving rise to Grainger's dissatisfaction with Rentar could not be resolved through collective bargain- ing.7 In any event, the record is clear that collective-bargaining agreement with the Union to lay off drivers because of a lack of work See In 37 of the judge's decision and related text 5 "Branch time," also referred to as "waiting time" or "line 4 time," was time spent by the drivers at Grainger's branches while waiting for their trucks to be loaded or unloaded Since at least 1977, it was the policy of Rentar and Grainger that the private fleet drivers not be paid for any branch time, even though there was no written agreement to that effect with the Union. During the spring of 1980, one of the private fleet drivers filed a grievance contending that he was entitled to such pay- ments under the National Master Freight Agreement As noted, the grievance committee agreed It is uncontroverted that as a result of the grievance award and the pass-through of costs from Rentar to Grainger under their "cost plus" contract, Grainger's expenses rose substantially. 6 Fibreboard Paper Products Corp v NLRB, 379 U S. 203, 213-214 (1964), First National Maintenance, 452 U S at 679 ' It is manifest that certain of the managerial deficiencies Grainger found in Rentar resulted in increased costs relating to employee compen- Continued W. W GRAINGER, INC. 97 Grainger's general dissatisfaction with Rentar's management existed for many months before the time that the contract was canceled, but that only after it became apparent to Grainger's management that its costs would rise substantially because of the branch-time grievance, did Grainger reach its final decision to replace Rentar. Under these circum- stances, we find that the primary objective and overriding reason behind Grainger's decision to cancel Rentar's contract and replace it with a dif- ferent driver leasing company was a desire to reduce labor costs." Accordingly, we find that by failing and refusing to bargain over its decision to cancel Rentar's subcontract, Grainger, as the joint employer of the private fleet drivers leased from Rentar, violated Section 8(a)(5) and (1) of the Act.9 Clinton's Ditch Co., supra; Sunmaid Growers sation , and to that extent would involve mandatory subjects of bargain- ing. a This conclusion is further supported by Grainger's Meehan telling TDI President Formento about 27 May 1980, during a discussion about TDI's replacing Rentar, that cost was the primary consideration 9 The Board has most recently applied the principles set forth in First National Maintenance in Otis Elevator Co., 269 NLRB 891 (1984) We find that the Grainger decision was a mandatory subject of bargaining under any of the views expressed in Otis See University Health Care Center, 274 NLRB 764 (1985), Clinton's Ditch Co, 274 NLRB 728 (1985), enf denied on other grounds 778 F 2d 132 (2d Cir 1985). Further, we do not agree with the judge's finding that the Union waived its right to bargain over Grainger's decision by failing to request bargaining in a timely fashion . As pointed out by the General Counsel, the Union was not advised of Grainger 's decision until after that decision had been made and after Grainger had advised Rentar in writing that it was exercising its contractual right to terminate the subcontract on 30 days' notice By the time the Union was notified (by Rentar) of Grainger's decision, it was a fait accomph. Because of this we find that a request for bargaining by the Union would have been futile and was therefore unnecessary. B. F. Goodrich Co, 250 NLRB 1139, 1140 (1980) We do not agree with the Chairman that Grainger's notice to Renter on 27 May 1980 constituted merely notice of an "intent" to cancel the contract in 30 days and that therefore Grainger "remained free to rescind its decision and continue its contract with Rentar " The relevant lan- guage in the contract provided that "This agreement shall continue in force and effect for 6 months and monthly thereafter unless terminated by either party giving to the other no less than 30 days written notice " We read this clause as fixing the parties ' rights as of the date of notice but taking effect 30 days thereafter, on the 30th day, the contract would terminate Thus, although the contract remained in effect during the final month, Grainger's notice of termination represented a "completed deci- sion rather than a decision yet to be finalized." National Family Opinion, 246 NLRB 521, 530 (1979) The cases cited by the Chairman finding proper notice and subsequent waiver are distinguishable In NLRB v. Island Typographers, 705 F.2d 44 (2d Cir 1983), the direct notice to the union of an intention to introduce "cold type" machinery constituted sufficient notice of intent to phase out the "hot type" process The union informed the company that it had no objection to new machinery and thus also waived its right to bargain over the decision to lay off "hot type" employees In NLRB v. Spun-Jee Corp, 385 F 2d 379 (2d Cir. 1967), the Company told the union it was considering the possibility of subcontracting and moving and that it was willing to discuss the problems. In International Offset Corp., 210 NLRB 854 (1974), although notice of a decision to close the plant was not di- rectly given, the union knew of layoffs, transfers of machinery, and that assets were for sale. Further, as to the Chairman's claim of effective notice in Renter's telling the Union in February 1981) that it could "possi- bly lose" the Grainger account if the Union maintained its position on branch-time pay, we note that the Island Typographers court cited its de- cision in NLRB v Rapid Bindery, 293 F.2d 170, 176 (2d Cir 1961), to the effect that "conjecture or rumor is not an adequate substitute for an em- ployer's formal notice to a union of a vital change " of California, 239 NLRB 346, 353 ( 1978), enfd. 618 F.2d 56 (9th Cir. 1980); Ref-Chem Co., 169 NLRB 376 (1968), enf. denied on other grounds 418 F.2d 127 (5th Cir. 1969). REMEDY Having found that the Respondent Grainger has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act, we shall order that it cease and desist and take certain affirmative action designed to effectuate the policies of the Act. We shall order that Respondent Grainger bar- gain with the Union over Grainger's cancellation of its contract with Rentar. It is clear, however, that a bargaining order alone cannot fully remedy the unfair labor practices committed by Respond- ent Grainger because, as a result of Grainger's fail- ure to bargain over its decision to cancel its con- tract with Rentar, the Respondent's employees were denied an opportunity to bargain through their exclusive representative at a time when such bargaining would have been meaningful. Accord- ingly, in order to recreate as nearly as possible the situation that existed at the time Grainger should have bargained, and to make whole those employ- ees laid off as a result of Grainger's unlawful con- duct, we shall order Grainger to pay the private fleet drivers, who were in its and Rentar's joint employ on the effective date of its cancellation of the Rentar contract, their normal wages from that date until the earliest of the following conditions is met: (1) mutual agreement is reached with the Union relating to subjects about which Grainger is required to bargain; (2) good-faith bargaining re- sults in a bona fide impasse; (3) the failure of the Union to commence negotiations within 5 days of the receipt of Grainger's notice of its desire to bar- gain with the Union; or (4) the subsequent failure of the Union to bargain in good faith.10 Backpay shall be based on the earnings that these employees normally would have received during the applica- We note, however, that the Board has held that even when the Gener- al Counsel proves a prima facie case of fait accompli, the employer may still cure the violation by subsequent conduct In American President Lines, 229 NLRB 443, 453-454 (1977), the employer entered into a sub- contract and then informed the union that the subcontract would not be implemented unless the union dispute could not be resolved. It offered to bargain about the subcontract including a suggested compromise it was willing to offer Grainger, however, made no similar attempt to dispel the impression it created by its notice of termination However, we do agree with the judge that the Union "slept on its rights" thereafter by not requesting bargaining concerning Renter's subse- quent decision to lay off the private fleet drivers formerly dedicated to Renter's service, and by not requesting "effects bargaining" with either Grainger or Renter. We therefore adopt the judge's recommendation that the 8(a)(5) allegations relating to those issues be dismissed 10 See Gulf States Mfg, 261 NLRB 852 (1982), National Family Opin- ion, 246 NLRB 521 (1979) 98 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD ble period, less any net interim earnings, and shall be computed in the manner set forth in F. W. Woolworth Co., 90 NLRB 289 (1950), with interest to be computed in the manner prescribed in New Horizons for the Retarded.I I ORDER The National Labor Relations Board orders that the Respondent, W. W. Grainger, Inc., Bensen- ville, Illinois, its officers, agents, successors, and as- signs, shall 1. Cease and desist from (a) Refusing to bargain collectively and in good faith with Local 710, Highway Drivers, Dockmen, Spotters, Rampmen, Meat Packing House and Allied Products Drivers and Helpers, Office Work- ers and Miscellaneous Employees Union, Interna- tional Brotherhood of Teamsters, Chauffeurs, War- ehousemen and Helpers of America, as the exclu- sive representative of its employees in the appropri- ate unit set forth below, concerning the decision to cancel its contract for driver leasing services with Rentar Driver Services, Inc. The appropriate unit is: All over-the-road drivers, chauffeurs, and driver-helpers employed jointly by W. W. Grainger, Inc., and Rentar Driver Services, Inc., but excluding all other employees, guards, and supervisors, as defined in the Act. (b) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action neces- sary to effectuate the policies of the Act. (a) On request, bargain in good faith with the Union as the exclusive bargaining representative of all employees in the above-described appropriate unit with respect to the decision to cancel its con- tract with Rentar Driver Services, Inc., including any dispute concerning the effectuation of the remedy, set forth herein, and, if an understanding is reached, embody it in a signed agreement. (b) Pay the employees in the above-described ap- propriate unit who were laid off as a result of the unlawful cancellation of its contract with Rentar Driver Services, Inc., their normal wages in the manner and for the period set forth in the remedy section of this Decision and Order. I I In accordance with our decision in New Horizons for the Retarded, 283 NLRB 1173 (1987), interest on and after 1 January 1987 shall be computed at the "short-term Federal rate" for the underpayment of taxes as set out in the 1986 amendment to 26 US C § 6621 Interest on amounts accrued prior to I January 1987 (the effective date of the 1986 amendment to 26 U.S C § 6621 ) shall be computed in accordance with Florida Steel Corp, 231 NLRB 651 (1977) (c) Preserve and, on request, make available to the Board or its agents for examination and copy- ing, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. (d) Post at its facility in Bensenville, Illinois, copies of the attached notice marked "Appen- dix." 12 Copies of the notice, on forms provided by the Regional Director for Region 13, after being signed by the Respondent's authorized representa- tive, shall be posted by the Respondent immediate- ly upon receipt and maintained for 60 consecutive days in conspicuous 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. (e) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. CHAIRMAN DOTSON, dissenting. I dissent from my colleagues' finding that Re- spondent Grainger violated Section 8(a)(5) and (1) of the Act by refusing to bargain with the Union over its decision to cancel its subcontract with Re- spondent Rentar. I find that even if Grainger had a bargaining obligation to the Union,' the Union, by its conduct, waived its right to bargain with Grainger. In 1974 Grainger, which distributed electrical products and equipment, contracted with Rentar on a "cost-plus" basis to provide Grainger with drivers. The drivers were represented by the Union and covered by a collective- bargaining agreement between the Union and Rentar. The Union was not a party to the contract between Grainger and Rentar, and Grainger was not a party to the con- tract between Rentar and the Union. In early 1980 a dispute arose between the drivers and Rentar regarding Rentar's failure to pay the 12 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 Nation- al Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board " I My colleagues' finding that Grainger was obligated to bargain with the Union is premised on their finding, contrary to the judge, that Grainger and Rentar are joint employers In view of my finding that the Union waived any rights it had to bargain with Grainger, it is unneces- sary for me to reach the joint employer issue I do, however , have some reservations about my colleagues ' Joint employer finding, particularly in light of the Respondent 's contentions, with which the judge agreed, that Grainger's involvement with Rentar's employees was dictated in large part by Department of Transportation regulations and that the evidence relied on by the General Counsel to establish joint employer status pre- dated the 10(b) period W. W GRAINGER, INC 99 drivers for the time they spent waiting for their trucks to be loaded and unloaded . In discussions with the Union over this issue, Rentar's supervisor Gale Lau informed Union Business Agent Frank Wsol that it was Grainger's policy not to pay for waiting time and that Grainger would not honor the drivers' request for such payment. Wsol re- sponded that the Union did not have a collective- bargaining agreement with Grainger , but with Rentar, and Rentar would have to abide by the contract. In late February 1980 Lau informed Wsol that he was having tremendous problems with Grainger with regard to paying for waiting time and proposed that the drivers not be paid for the first 4 hours of waiting time. Lau told Wsol that Grainger was so opposed to paying for waiting time that Rentar could possibly lose its contract with Grainger if the drivers did not accept his pro- posal. The Union filed a grievance against Rentar in March 1980 for its failure to pay a driver for wait- ing time, and on 3 April 1980 the grievance panel awarded payment to the driver for waiting time. The Union thereafter requested from Rentar back- pay for all the drivers for waiting time. In May 1980 Rentar informed Grainger that Rentar would start paying drivers for waiting time and that the resulting costs to Grainger would be substantial. Because of these higher costs and its general dis- satisfaction with Rentar's management, Grainger, on 27 May 1980, gave Rentar 30-day notice of its intention to cancel its contract with Rentar. Within a few days Rentar informed the Union of Grainger's decision and that the drivers would be laid off. The Union thereupon entered negotiations for a collective-bargaining agreement with TDI, the company that was negotiating with Grainger to replace Rentar. At no time after receiving notifica- tion from Rentar that Grainger had decided to cancel Rentar's contract did the Union contact or in any way attempt to bargain with either Grainger or Rentar over Grainger's decision or its effects. On these facts the judge found, and I agree, that the Union waived whatever right it had to bargain over the cancellation of the Rentar-Grainger con- tract and the effects on the employees. My col- leagues agree that the Union waived its rights to bargain over the effects of the decision but not over the decision itself. According to my col- leagues, the Union was not informed of the deci- sion until after it was a "fait accompli." Therefore, my colleagues conclude, a request for bargaining by the Union would have been "futile" and was therefore unnecessary. My colleagues' conclusion is neither factually nor legally supportable. To establish that a union has waived its bargaining rights through inaction, an employer "must show that the union had clear notice of the employer's intent to institute the change sufficiently in advance of actual implemen- tation so as to allow a reasonable opportunity to bargain about the change . . . . Moreover, the em- ployer must demonstrate that the union failed to make a timely bargaining request before the change was implemented." (Footnotes omitted.) American Distributing Co. v. NLRB, 175 F.2d 446, 450 (9th Cir. 1983), cert. denied 466 U.S. 958 (1984). The Respondent has made such a showing here. Although my colleagues characterize Grainger's decision as a "fait accompli," the Union admittedly had knowledge of this decision 30 days prior to its implementation and chose not to seek bargaining with either Grainger or Rentar. In fact, the Union obviously made a conscious decision to work with TDI in an attempt to have TDI replace Rentar as the supplier of drivers to Grainger. Moreover, the Union had known since February 1980 that Rentar was in serious danger of losing its contract with Grainger, but it made no attempt to contact Grainger to avert this occurrence. My colleagues, ignoring the clear import of the Union's conduct, simply state, with no explanation, that any request by the Union would have been futile. Such a statement ignores the fact, however, that at all times prior to the layoff of the drivers on 28 June 1980, including the 30-day period after Grainger's notice to Rentar of its intent to cancel the contract, Grainger remained free to rescind its decision and continue its contract with Rentar. Under these circumstances, the Union "cannot simply ignore its responsibility to initiate bargain- ing over subjects of concern and thereafter accuse the employer of violating its statutory duty to bar- gain." NLRB v. Island Typographers, 705 F.2d 44, 51 (2d Cir. 1983). Accord: NLRB v. Spun-Jee Corp., 385 F.2d 379 (2d Cir. 1967). As the Board stated in International Offset Corp., 210 NLRB 854, 855 (1974): The failure of [the Unions] to seek bargain- ing over [the Employer's] decision and its ef- fects on employees forecloses a finding of an 8(a)(5) violation. As neither [of the Unions] re- quested bargaining, [the Employer's] willing- ness to bargain has never been tested, and, having never been tested, [the Employer's] conduct may not be found violative of the Act. [Footnote omitted.] There is further justification for finding waiver in this case. The Union had indicated, both explicit- ly and implicitly, by its conduct for the entire 6- year period that Rentar had a contract with 100 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Grainger and that it had no bargaining relationship with Grainger. Grainger was not a party to the contract between Rentar and the Union, nor did the Union ever indicate to Rentar or to Grainger that Grainger should become involved in Rentar- union negotiations. Further, when the issue arose in 1980 over the payment to drivers for waiting time, the Union at no time attempted to bargain with Grainger over the issue. Even after Rentar made it clear to the Union in February 1980 that the hin- derance to resolving the issue lay with Grainger, the Union took the position that it did not have a collective-bargaining agreement with Grainger and that the issue had to be resolved by Rentar, not Grainger. Given this stance of the Union, it would be illogical to now impose a bargaining relationship between the Union and Grainger where none ever existed. For these reasons, I find, in agreement with the judge, that the Union waived whatever bargaining rights it had over the cancellation of the Rentar- Grainger contract, and I would accordingly dismiss the complaint in its entirety. APPENDIX NOTICE To EMPLOYEES 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 the National Labor Relations Act and has ordered us to post and abide by this notice. WE WILL NOT refuse to bargain collectively in good faith with Local 710, Highway Drivers, Dockmen, Spotters, Rampmen, Meat Packing House and Allied Products Drivers and Helpers, Office Workers and Miscellaneous Employees Union, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of Amer- ica as the exclusive representative of our employees in the appropriate unit set forth below concerning our decision to cancel our contract for driver leas- ing services with Rentar Driver Services, Inc. The appropriate unit is: All over-the-road drivers, chauffeurs, and driver-helpers employed jointly by W. W. Grainger, Inc. and Rentar Driver Services, Inc., but excluding all other employees, guards, and supervisors as defined in the Act. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the rights guaranteed you by Section 7 of the Act. WE WILL, on request, bargain in good faith with the Union as the exclusive representative of all em- ployees in the above-described appropriate unit with respect to our decision to cancel our contract with Rentar Driver Services, Inc., including any disputes with respect to the effectuation of the remedy set forth in the Decision and Order of the National Labor Relations Board and, if an under- standing is reached, embody it in a signed agree- ment. WE WILL pay the employees in the above-de- scribed appropriate unit who were laid off as a result of our unlawful cancellation of our contract with Rentar Driver Services, Inc. their normal wages in the manner and for the period required by the Decision and Order of the National Labor Relations Board, with interest. W. W. GRAINGER, INC. Robert Samuel Bates, Esq., for the General Counsel. Edwin Thomas, Esq. and William 0 'Riley, Esq., for Re- spondent Grainger. Harry Sangerman, Esq., for Respondent Transport Driv- ers, Inc. Arnold Dratt, Esq., for Respondent Rentar Driver Serv- ices. Edwin Benn, Esq., for the Charging Party. Phillip W Makin, Esq., special appearances for driver witnesses. DECISION STATEMENT OF THE CASE PHIL W. SAUNDERS, Administrative Law Judge. Based on charges filed by Local 710, Highway Drivers, Dock- men, Spotters, Rampmen, Meat Packing House and Allied Products Drivers and Helpers, Office Workers and Miscellaneous Employees Union, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (the Union or Local 710), an amended complaint was issued on October 2, 1980, against Respondents W. W. Grainger, Rentar Driver Services, and Transport Drivers, Inc. (Grainger, Rentar, and TDI, or collectively Respondents), alleging violation of Section 8(a)(1), (3), and (5) of the Act. Respondents filed answers to the complaint denying they had engaged in the alleged matter. The parties also filed beefs in this matter. On the entire record in this case, and from my obser- vation of the witnesses and their demeanor, I make the following FINDINGS OF FACT 1. THE BUSINESS OF RESPONDENTS Grainger is an Illinois corporation, and at all times ma- terial has maintained offices and places of business at multiple locations in the surrounding area of Chicago, in- W. W. GRAINGER, INC. 101 cluding Bensenville, Illinois, the only location at issue in this case, and where it engaged in the wholesale distribu- tion of electrical products and equipment. During the past calendar year or fiscal year Grainger received at its Bensenville facility, directly from points located outside the State of Illinois, goods and materials valued in excess of $50,000. Rentar, at all times material, has maintained an office and place of business in Chicago, Illinois, where it has been engaged in the business of providing truckdriving services. During the past calendar or fiscal year, also a representative period, Rentar supplied services valued in excess of $50,000 to firms located in the State of Illinois, and such firms, including Respondent Grainger, during the same period, individually received at their Illinois fa- cilities goods and materials valued in excess of $50,000 directly from points located outside the State of Illinois. TDI is an Illinois corporation and has maintained an office and place of business in Chicago, Illinois, where it has been engaged in the business of providing truckdriv- ing services. During the past calendar or fiscal year, TDI supplied services valued in excess of $50,000 to firms lo- cated in the State of Illinois, and such firms, during the same period, individually received at their Illinois facili- ties goods and materials valued in excess of $50,000 di- rectly from points located outside the State of Illinois. Respondents are employers engaged in commerce within the meaning of the Act. II. THE LABOR ORGANIZATION INVOLVED The Union is a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES It is alleged that Rentar and Grainger and TDI and Grainger are joint employers within the meaning of the Act; that about February 3, 1980, Respondent Rentar and/or Respondent Grainger-Rentar, by its supervisor and/or agent Irwin Brown, restrained and coerced em- ployees by threatening that if they did not accept a change in their form of compensation, Grainger-Rentar would discontinue its driving operation and begin using common carriers; and that about June 14, 1980, Respond- ent TDI and/or Respondent Grainger-TDI, by its super- visor or agent Ron Formento, coerced its employees by threatening that if they did not accept an addendum (or rider) to the Union's collective-bargaining agreement, Grainger-TDI would discontinue its driving operation and begin using common carriers. It is further alleged that about June 28, 1980, Grainger ceased using the truckdriving services of Rentar, and that about the same date Grainger-Rentar laid off and/or discharged its employees, Anthony Panunzio, Raphael Lockwood, Charles Sites, Richard Pale;aewski, Richard Schremser, Edward Stozek, Ralph Pederson, Walt Bogart, John Chop, and Peter Marim, and has subse- quently failed and refused to reinstate them because these employees supported and assisted the Union and engaged in concerted activities for the purpose of collective bar- gaining or other mutual aid or protection.. It is also alleged that since about June 29, 1980, Grainger refused to honor its contract with, and use the truckdriving services of, TDI, and since then, and con- tinuing to date, TDI and/or Grainger-TDI, has failed and refused to employ the above-named employees and that TDI and/or Grainger-TDI engaged in such conduct because these employees supported the Union and en- gaged in concerted activities for the purpose of collec- tive bargaining or other mutual protection. Finally, it is alleged that Grainger and/or Rentar engaged in such acts and conduct without prior notice to the Union and without having afforded the Union an opportunity to ne- gotiate and bargain as the exclusive representative of the employees concerning the decision and/or the effects of such acts and conduct. I Grainger is a wholesale distributor of electrical equip- ment and related items and distributes its products to its branch facilities throughout the continental United States, and one means of distributing its freight or prod- ucts is by the use of drivers leased to it by driver leasing companies. Grainger has used the services of drivers leased to it by such companies for that purpose and those drivers have come to be known by the description "over-the-road private fleet" (or private fleet), and be- tween 1974 and June 28, 1980, Grainger's over-the-road private fleet was operated by drivers leased by Grainger from Rentar. As reflected in this record, the driver leasing industry has been in existence in the United States for a number of years and there are many companies engaged in this business nationwide. Driver leasing employers provide qualified drivers to companies or employers who wish to transport their own products in interstate commerce as "private carriers" under Federal Motor Carrier Safety Regulations. As also noted in this record, the interstate transportation of goods by motor carrier is a complex in- dustry heavily controlled by stringent Federal regula- tions, and such regulations apply equally to the driver, the leasing company, the private carrier, and the officers and employees involved. Moreover, it appears that the regulations are enforced through the imposition of mone- tary penalties and, in some cases, by criminal sanctions. A leasing company serves its clientele by: (1) selecting and hiring drivers who are qualified under state and Fed- eral law; (2) maintaining the continued qualifications of those drivers; (3) handling administrative details incident to payroll, taxes, social security, etc.; (4) bargaining col- lectively with unions representing the drivers; and (5) su- pervising generally the employment relationship. As also indicated, an important aspect of the relationship be- tween the leasing company and the customer is the flexi- bility afforded the customer by agreements to use only so much of the leasing company's services as it desires. The 30-day cancellation provision applicable in service contracts between the leasing company and the customer (Grainger) is also a significant part of the business rela- tionship. 1 This record is corrected in accordance with the motion to correct transcript as filed by the General Counsel on September 11, 1981, but re- jecting two corrections therein for the reasons as specified in the Grainger answer filed on October 13, 1981 102 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD A driver leasing company normally has a service agreement with each customer, and the agreement is tai- lored to the specific needs of the customer, and the leas- ing company also maintains a contractual relationship with the bargaining representative of the driver-employ- ees leased to the customer, and it appears that in situa- tions where the representative of the drivers is the Team- sters Union, the basic agreement is known as the Nation- al Master Freight Agreement, but this basic agreement is normally supplemented by an addendum to the main agreement known as a "rider." Riders are necessary in that the Master Freight Agreement is designed for point- to-point common carnage operations and is not adapted to the needs of the driver leasing business , but through the use of riders the leasing company can tailor the serv- ice between itself and its employees to meet the specific needs of the customer. For this reason there generally is a separate rider for each customer and the terms of the rider can vary widely from customer to customer. As pointed out, Rentar is a driver leasing company, and it has contracts with a number of unions, including Local 710. During the period in question, Rentar provid- ed drivers to a good many customers, including Grainger, and the drivers leased to Grainger by Rentar were members of Local 710. TDI is also a driver leasing company engaged in competition with Rentar, and is also a signatory to the Master Freight Agreement with Local 710.2 There is also testimony in this record to the effect that the trucking industry has undergone very substantial changes in recent years resulting from efforts to deregu- late the industry together with increased emphasis on en- forcing transportation laws relating to public safety, and because of these changes common and contract carrier costs have decreased to the extent that they now repre- sent very competitive alternatives to private carriage op- erations. It appears that up until 1974, Grainger transported its product by common carrier, but at this time became in- terested in developing a private fleet as the principal concern was escalating transportation costs. It was never contemplated however, that the private fleet would handle all of Grainger's transportation needs-rather the fleet would account for about 10 percent of total traffic. 2 Irwin J Brown was the executive vice president and chief operating officer of Rentar at times material ; Gale Lau was vice president of oper- ations for Rentar at all times material , and like Brown is an admitted su- pervisor, Frank Wsol is the business representative of Local 710; Raphael Lockwood, an employee of Rentar from 1976 through June 1980 and a 710 member, worked as an over-the-road driver who, as did the other private fleet drivers, made deliveries of Grainger's products to its various branches throughout the United States, Anthony D Panunzio, an em- ployee of Rentar from 1976 through June 1980, also worked as an over- the-road driver making deliveries of Grainger's products to its various branches William J. Meehan, transportation operations manager for Grainger at all times material, had overall responsibility of the operations of Grainger's private fleet, William Brander has been the central distribu- tion center traffic manager for Grainger since April 1979, and also a su- pervisor within the meaning of the Act, Chris Cutro, traffic manager, re- ported to Meehan, and Russell Kinnard, dispatcher, reported to Cutro, and both were agents of Grainger Ronald P Formento, who is em- ployed by Willett, Inc, is the president of TDI, a wholly owned subsidi- ary of Willett, Inc, Dennis Duffy, at all times material , has been the op- erations manager of TDI and also a supervisor within the meaning of Sec 2(11) of the Act Grainger then bought its own trailers for the fleet, but leased the tractors from Niedert National Lease (Nie- dert), and the drivers were leased from Rentar, as afore- stated. It further appears that Grainger chose to lease drivers rather than recruit its own staff because it lacked interna- tional expertise in this highly complex area and to this end a number of leasing companies were considered, but Rentar was finally chosen because Rentar had a rider with Local 710 that would result in lower labor costs than the competition could offer, and while Grainger was aware that Rentar was unionized, it did not consider itself to be a party to any collective-bargaining agree- ment. The service agreement entered into between Rentar and Grainger provided for a direct pass through to Grainger of Rentar's total costs, including labor charges. Rentar's profit came from the 7 percent override or sur- charge on direct costs incurred.3 William Brander, a Grainger supervisor, was in gener- al charge of the private fleet from its inception in 1974 until February 1980. Brander was a personal friend of both Lockwood and Panunzio, the two oldest Rentar drivers in terms of seniority, and he also socialized with the other drivers. It appears that because of Brander's somewhat relaxed approach, practices developed in the operation of the fleet that increased Grainger's costs (dif- ferent miles to the same locations) as well as Rentar's profits on the override. This situation would eventually change when William Meehan assumed overall direction of the fleet in 1978. As also reflected in this record, from 1974 until the fall of 1979, Matt Burger, a Rentar employee, was the pri- mary liaison between Grainger and Rentar. Grainger people appeared to have confidence in Burger and appar- ently a good relationship existed between the two com- panies until his retirement in October or November 1979. Gale Lau, also a Rentar supervisor, handled the day-to- day activities of the Grainger account along with others, and at a later time Irwin Brown, a vice president of Rentar, became involved with the Grainger account to some extent. Some years ago Rentar had entered into a rider agree- ment with Local 710 covering the drivers leased to Grainger (G.C. Exh. 5), and practice and custom under the rider revealed that drivers here in question were in- structed to go off duty at the branches while their trucks were being loaded or unloaded, and they were not paid for this off-duty time. There is no issue in this case about drivers not being paid for time on duty and while actual- ly working. Rentar's vice president and chief operations officer, Irwin Brown, testified that "branch time" was the time a While Grainger leased the drivers, they (the drivers) were hired, trained , and paid by Rentar, and this record shows that driver pay was determined by the miles they had driven and the amount of "bottom line time," which they had accumulated . Drivers also completed trip costs re- ports showing their actual mileage and bottom line time claimed, and then submitted those reports to Grainger Grainger then notified Rentar what the mileage and hourly pay of the drivers in question should be, and based on that representation , Rentar paid the drivers Under the terms of the Grainger-Rentar contract (G C Exh 2), Grainger compen- sated Rentar for all costs incurred by Rentar , including drivers' wages W. W. GRAINGER, INC. 103 that a driver would spend with his tractor-1 railer while on duty, but not driving, at a Grainger branch facility and that "branch time" was also referred to as "detention time, or waiting time, or bottom line time." It appears that the controversy here in question rela- tive to branch time concerned whether a driver should be paid for time on duty at a Grainger branch while waiting for his truck to be loaded or unloaded and, as also pointed out, it was the practice of Grainger and Rentar since 1974 not to pay the private fleet drivers for time spent on duty waiting at the Grainger branches, but throughout the years since 1974 drivers of Rentar haul- ing loads for Grainger would occasionally complain that they thought they should be paid for branch time, and Rentar's typical response to such complaints was that if they wanted to be paid for branch waiting time then they would have to work for a Rentar customer other than Grainger. Thus, Lockwood testified that Supervisor Brander cautioned hun "I would not suggest going to the Union concerning `being paid at branches," and ac- cording to Irwin Brown, the only private motor carrier customer of Rentar who did not pay drivers for branch waiting time was Grainger.4 In July 1978, William Meehan was hired by Grainger as an overall traffic manager, and his duties included re- sponsibility for the private fleet, and thereafter Brander reported to Meehan. Meehan had more than 20 years' ex- perience in transportation, and one of his objections was to upgrade and professionalize the traffic department at Grainger, and in accordance therewith he made several changes in the operation of the private fleet. Meehan took steps to reduce the number of hours a driver could cover in one day-this was an effort to gain observance by the drivers of the 55-mile-per-hour speed limit. Meehan also devised a plan to control violations by the drivers of legal hours of service limits, and tacographs were installed in the tractors for this purpose. Moreover, apart from safety and legal considerations, Meehan also took steps to control escalating costs, and to this end he introduced the trip cost report, which was designed to measure the profitability of a particular haul, and all routes handled by the private fleet were reviewed in this manner. Meehan, a reliable and credited witness, further testi- fied that in the summer of 1979 he also began to concen- trate on the problem of standardizing mileage on particu- lar hauls. The drivers here in question were paid by Rentar on the basis of miles actually driven as shown on the tractor's odometer or hubometer, but the reviews in- stituted by Meehan showed that the drivers of Rentar hauling for Grainger were filing vastly different mileage reports on identical runs-in other words, some drivers were getting paid for covering many more miles than other drivers on the same haul, and those discrepancies increased Grainger's fuel, equipment, and labor costs, but to the contrary, it appears that Rentar profited from these excess costs through its surcharge arrangement. In August 1979, Meehan met with Rentar's supervisors Matt Burger and Gale Lau concerning the mileage prob- lem. Meehan wanted to devise a method of standardizing mileage between designated points, and there were in ex- istence several recognized publications that provided standard road miles between given points-one of these was the household carriers' guide, and another was pub- lished by Triple A.5 Matt Burger then informed Meehan that the mileage standardization matter could be worked out and that a formula would be implemented by Janu- ary 1980. It was thought that the household carriers' guide would be adopted, and Meehan stated that it was important to Grainger that 1980 start off with a fixed mileage system, but in the fall of 1979 Burger retired from Rentar, as aforestated. Meehan credibly testified that in early December 1979 he learned that Rentar could not establish a standard miles system by the January 1980 deadline, and his initial response to this turn of events was to begin looking for a replacement for Rentar, and to this end he instructed Bill Brander to line up interviews with other leasing compa- nies. a About this time Irwin Brown, a Rentar vice presi- dent, became involved with the Grainger problem, and then, according to Meehan, Brown informed Meehan that he was unaware of the standard miles agreement or discussions with Matt Burger, doubted that such a system could be implemented by January, and wanted more time. Meehan also told Brown that Grainger was seriously considering terminating the contract with Rentar. In an effort to get agreement on the standard miles issue, Irwin Brown met with the drivers here in question about February 3, 1980. Although it may have been men- tioned, the question of branch time was not brought up by any of the drivers at this meeting, but Brown did advise the drivers of Grainger's concern about the mile- age issue, and he informed them that Rentar was in danger of losing the Grainger account over their dispari- ty in miles and, if this happened, he did not know what the fate of the drivers would be. A committee consisting of three drivers was then created to meet with Brown in efforts to develop a new rider or amendment covering drivers leased to Grainger. Brown testified that it was generally understood that whatever the drivers agreed to would be acceptable to the Union. Driver Raphael Lock- wood did not check with Frank Wsol regarding his au- thority to negotiate a rider prior to the February 3 meet- ing with Brown. As pointed out, the drivers were aware at this time that standardized mileage would reduce their pay and as a result they discussed ways to recoup that money else- where, and one method was to negotiate an increase in the per-mile rate of pay, and another way to get addi- 4 It appears that in the early years of the private fleet's operation, driv- ers were on occasions paid for branch waiting time so long as their total "line four" time did not exceed 15 hours per week However, this prac- tice stopped about 1977, and between then and up to the spring of 1980 it was the practice not to pay the private fleet drivers for any branch time whatsoever even though there was no agreement between Local 710 and Rentar limiting the right of drivers to be paid for branch time 6 The Triple A formula was at this time included in the Master Freight Agreement, but Meehan testified that he was unaware of this fact as he had not seen this basic labor agreement and no one at Rentar had so in- formed him , and that he found this out for the first time in early May 1980, at his initial meeting with Ron Formento of TDI. a See Grainger Exh 35 104 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD tional income was payment for off-duty time at the branches after a certain period of time had elapsed. Brown then brought up the question of branch time in this light as an attempt on his part to offer something to the drivers in exchange for a standard miles formula. It is clear that the drivers were not being asked to give up anything concerning branch time-by past practices they were actually being offered something they had not real- ized before. Several days after the initial meeting on February 3, 1980, the designated three-man committee met with Irwin Brown and Gale Lau of Rentar. The committee was agreeable to Brown's proposals regarding standard- ized miles (household goods), and payment to them for branch time after 4 hours had elapsed. A rider was then drawn up that incorporated these proposals. Lockwood felt that the rider was a fair compromise and on that basis he signed it. In fact, all 10 of the drivers involved in this litigation indicated their similar approval of the rider by signing it, but 2 of the 20 drivers then leased to Grainger by Rentar did not approve of the document, and lacking unanimous approval by the drivers, the rider failed.? However, Grainger continued its efforts to de- velop a standard miles system, and following discussions between Grainger, Rentar, Lockwood, and certain other drivers, a hybrid form of standard miles system was im- plemented by Rentar, but after this happened the branch time controversy emerged full blown. Business Agent Frank Wsol testified that in early Feb- ruary 1980 private fleet drivers Lockwood and Panunzio called his office, complained about Rentar's failure to pay drivers for branch waiting time at Grainger branches, and asked him to clarify for them whether they were entitled to pay for such time. Wsol assured them that they were entitled to be paid for branch wait- ing time, and he then called Gale Lau to make sure that Rentar was aware of their responsibilities in that regard. He informed Lau that the drivers should be paid for branch waiting time and that if they were not paid, Rentar would be in violation of their contract. Lau said he would get back to Wsol regarding that matter. Short- ly thereafter, Wsol called Lau again and told him that the drivers were going to formally grieve Rentar's fail- ure to comply with the contract by not paying them for branch waiting time. Wsol testified that Lau then re- sponded that Grainger was "very upset .. . with regard to branch time . . . and that they were not going to honor the drivers' request to be paid for it." Wsol also told Lau that Local 710 did not have a collective-bar- gaining agreement with Grainger-that his contract was with Rentar and "Rentar would have to abide by the language of the contract." Wsol further testified that somewhat later in February 1980 Gale Lau called his office and informed him that he was having "tremen- dous" problems with Grainger regarding branch waiting time, and that Lau asked if he could approach the driv- ers with a proposal that they not be paid for the first 4 hours of branch waiting time, but that they would be paid for branch waiting time after the 4 hours of free time. Wsol stated that he then told Lau to feel free to T See Grainger Exhs 46 and 61 submit his proposal to the drivers-that "if the drivers were in 100% agreement . . . I would agree with it, but if there was one objection he [Lau] would still have to abide by the Rentar Rider [G.C. Exh. 5]" and stated that Lau closed the conversation by telling him that Grainger was so opposed to paying wages for branch waiting time that Rentar could possibly lose the Grainger account if the drivers did not accept his proposal. It appears that in the late winter or early spring of 1980 the Rentar drivers for Grainger began to claim pay for branch time-they did this by writing in additional "bottom line" or "line four time" on the trip cost report, but Grainger reduced the line four time, and Rentar did not pay the drivers for this time as claimed. Rentar then formally responded to the claims by writing letters to the drivers pointing out that; (1) they were not entitled to this compensation, (2) they are supposed to and do in fact go off duty at the branches, (3) while off duty they have no responsibility at all for the equipment or the load, and (4) they were aware that this has been the practice with the Grainger account since its inception. On March 4, 1980, an individual named McClaughry, then a Rentar driver leased to Grainger, filed a grievance (G.C. Exhs. 6(a) and (b)), concerning Rentar's failure to pay him for branch waiting time spent at the Grainger branches pursuant to article 51 of the National Master Freight Agreement, and which reads in pertinent part: Article 51: Paid For Time Section 1: General All employees covered by this Agreement shall be paid for all time spent in the service of the Em- ployer. Rates of pay provided for by this Agree- ment shall be minimums . Time shall be computed from the time that the employee is ordered to report for work and registers in and until the time he is effectively released from duty. All time loss due to delays as a result of overloads or certificate violations involving federal, state or city regula- tions, which occur through no fault of the driver, shall be paid for. Such payments for driver's time when not driving shall be the hourly rate ... . Prior to McClaughry's grievance, it was Rentar's prac- tice not to pay its drivers leased to Grainger for branch waiting time, as aforestated, and nothing was done about this potential contract violation until McClaughry filed his grievance because none of the drivers had ever offi- cially complained about it.8 The McClaughry grievance was heard and decided by a Joint State Grievance Committee on April 3, 1980. Frank Wsol presented the case for the grievant and Gale Lau represented Rentar . Grainger was not involved in the grievance proceeding. 8 The McClaughry grievance was not filed as an et al grievance An et al grievance could affect the rights of other members in the unit, but an individual grievance, like McClaughry's, generally, does not affect the rights of anyone other than the grievant himself Employees , of course, under Sec 7 of the Act have the protected right to file and process grievance W W. GRAINGER, INC. In the grievance proceedings McClaughry told the grievance committee that on the date in question he was required to stay with the equipment and thus had not been relieved of duty-that he was on duty, and on this basis McClaughry's claim for time spent by him at Grainger branches on February 18, 19, and 21. 1980, was allowed.9 Lockwood testified that he also attended McClaughry's grievance hearing and that the grievance "was allowed." Likewise, Gale Lau testified that McClaughry won his grievance, after which drivers complained all the more that they were not being paid for branch time, and on receiving such complaints, Lau informed Meehan of Grainger that: .. . we had a grievance and the committee ruled that they would be paid for the time that McClaughry filed on and that branch time would be a compensated item. Supposedly, Meehan replied that Grainger "could not live with that." Still, it was generally understood by Rentar, the Union, and the drivers that, as a result of McClaughry's grievance, all private fleet drivers leased to Grainger by Rentar had to be paid branch waiting time. Lockwood testified that, within 2 or 3 days after McClaughry's grievance decision, he called Gale Lau of Rentar and requested backpay for all the private fleet drivers for branch waiting time, which should have been paid but had not been paid during the previous 30 days (i.e., from the time McClaughry filed until he won his grievance). Lau told Lockwood that he would make the requested adjustments, but asked Lockwood to submit to him copies of his and others' trips cost reports so that Rentar could calculate the appropriate amounts of back- pay for branch waiting time, which were due the respec- tive drivers. According to Lockwood, so great was the volume of branch waiting time claims that followed, that he developed a form to expedite Rentar's handling of branch waiting time claims. Lockwood further stated that subsequently he and other drivers still were not being paid for time spent waiting at the Grainger branches, and they complained to both Gale Lau of Rentar and Frank Wsol of Local 710. He stated that Lau indicated to him that one of the reasons the drivers were not being paid by Rentar for branch waiting time was that Grainger was failing to reimburse Rentar for those amounts that Rentar had already paid. 9 The six-man Joint State Grievance Committee, established under art 44 of the Master Freight Agreement, is the first level of the grievance machinery under the contract Robert Baker is presently chairman of the Joint State Grievance Committee, a position he has held for 14 years, and he testified that (1) no record is made of Joint State Grievance Commit- tee proceedings; (2) no explanation, opinion, or interpretation is ever given for the committee's decision on a particular grievance, (3) the com- mittee's decision is based on the particular facts before it, (4) the commit- tee is not empowered to render interpretations of the contract, (5) its de- cisions have no precedential value whatsoever, and (6) any attempt by others to claim rights based on the committee 's handling of an individual grievance would be improper Jack Bevan , an individual with many years' experience in the leasing industry , echoed Baker's testimony in this respect 105 Frank Wsol testified that in early May 1980, approxi- mately 1 month following the Illinois Joint State Griev- ance Committee award in the McClaughry grievance, he met with Lau and informed him that there would be no need for further grievances to be filed if Rentar would simply pay the drivers for all branch waiting time they had coming to them, and soon thereafter, Rentar did in fact begin to pay the drivers for branch waiting time in connection with their jobs in Grainger's private fleet. William Meehan testified that sometime in April 1980 he had a meeting with Henry Schousen, president of the Willett Company, concerning the transportation services performed by Willett for Grainger, and in the course of that conversation, he informed Schousen that Grainger was going to make a change in the driver leasing service that operated its private fleet. Schousen told Meehan that the Willett Company had a driver leasing entity (TDI), which he thought might be interested in obtaining the Grainger account. Based on that conversation, a meeting was scheduled for the first week in May at which Meehan was to meet Ron Formento, president of TDI. Formento credibly testified that he and Schousen met with Meehan sometime during the first week in May to discuss the Grainger private fleet operation, and that Meehan explained his unhappiness with Rentar, particu- larly the lack of control over excessive driver mileage and the inability of Rentar to provide Grainger with sat- isfactory answers to questions about their operation. For- mento stated that he then explained the concept of AAA mileage under the master agreement as being a resolution of the standardization problem. According'to Formento, Meehan also discussed with him the grievance concern- ing branch time, and Formento then indicated that he and Schousen would attempt to determine the nature of the grievance. Meehan stated that Grainger was still under contract with Rentar and that he was talking to several driver leasing services as potential replacements. Formento told Meehan that he thought he could get written work rules from the Union concerning the Grainger account. In mid-May 1980, Meehan learned from Rentar that henceforth all branch time would be paid and that Grainger could no longer put the drivers off duty at the branches, and the costs to Grainger of this change would have been substantial . He stated that as a result of his ex- periences with Rentar on the standard mileage issue, in- cluding late discovery of the availability of AAA, he had no confidence at all in Rentar's integrity Meehan further testified that he had decided before his first meeting with Schousen and Formento to replace Rentar, and, in fact, had reached this conclusion as far back as December 1979, and had based this decision on an accumulation of factors. Foremost among them was the lack of trust and the feeling that Rentar had lost control of its employees; excessive costs were also a factor, as was the inequity in- volved in the surcharge arrangement whereby Rentar profited from overcharges, and that the McClaughry grievance was not a factor in his decision. About May 27, 1980, Formento again met with Meehan, and was informed at this time that Grainger had "pretty much" decided to terminate the Rentar contract. 106 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD During the meeting Formento discussed with Meehan a number of ideas for cutting costs and operating efficient- ly, but Meehan made no commitment to Formento that TDI would be retained. Meehan testified that he noted that TDI worked on a straight-dollar amount per-driver per-week, rather than a percentage override such as Rentar had, and by this time he had also been informed by Gale Lau that because of the award in the McClaughry grievance, Rentar would be paying drivers for all time spent at branches, whether worked or not. Meehan felt that the cost of such an interpretation of the contract would be prohibitive. Formento, on the other hand, stated that TDI possibly could get a rider with Local 710, which would eliminate some of these cost problems. Meehan told Formento that as far as Grainger was concerned, cost was the primary consideration. The details of a rider were unimportant as long as cost was kept at a satisfactory level. At that point, Meehan told Formento to go out and see what he could do to back up his claim that TDI could do a better job than Rentar. Formento testified that Meehan stated at the meetings that he had no objection to TDI's hiring the Rentar driv- ers. Formento emphasized that although he had no com- mitment from Grainger, he felt he could obtain the Grainger acount if he were able to negotiate a satisfac- tory rider with Local 710. Around the first week in June, Meehan told Formento that he should feel free to contact the Union and attempt to make satisfactory arrangements in order to facilitate taking over the Grainger account. Formento then sent an unsigned "customer-driver lease agreement" to Meehan for his review. (See G.C. Exh. 15.) Meehan testified that when he received the proposed contract with TDI, it was blank. Meehan stated that he signed the lease agree- ment on June 27 and sent it back to TDI; however, he never saw the document as executed by Formento. About May 26, 1980, Grainger notified Rentar of its intention to exercise its right under their service agree- ment to cancel same on 30 days' notice, and on receipt of the cancellation notice Gale Lau informed Wsol of the fact and of the pending layoff of the drivers. 10 On June 10, 1980, Formento, Schousen, and Wsol met to discuss the potentiality of TDI obtaining the Grainger account and the type of rider that TDI felt was neces- sary to get the business. At the meeting Formento dis- cussed the existing Rentar rider as well as the proposed rider that most of the drivers signed in February, but 10 About mid-May 1980, Formento called Wsol and told him that TDI might be in a position to pick up the Rentar account from Grainger and asked for an opportunity to meet with to discuss the matter, and Wsol agreed to meet with him, but before that meeting occurred, Grainger in- formed Rentar that it was canceling the Rentar contract , as aforestated Subsequently, about very late May or very early June 1980, Lau called Wsol and informed him that due to Grainger's resistance to pay branch waiting time, Rentar was going to lose the Grainger account. In early June 1980, Lockwood called Lau, at which time Lockwood was in- formed that he and all the other private fleet drivers would be laid off "at the end of the month." About June 7, 1980, Russell Kinnard, the Grainger dispatcher, called Lockwood and directed him to contact Formento Pursuant to his in- structions, Lockwood did contact Formento, who informed him that TDI would soon be replacing Rentar on the Grainger private fleet ac- count and requested that Lockwood and the other drivers meet with him to discuss the transistion Lockwood agreed then rejected because two drivers did not sign it, as afor- estated. Formento also had prepared a rider that he pro- posed to use for the Grainger account. This proposed rider was similar to riders that Wsol had negotiated on behalf of Local 710 with other driver leasing services. One of those services was Trans/Personnel, a company for which Formento previously had worked. When For- mento told Wsol that he would like a rider similar to that which they had negotiated at Trans/Personnel, Wsol replied that he would agree to such a rider provid- ed all the employees agreed to it. 11 At this meeting Frank Wsol reminded Formento that TDI had no rider with Local 710 and that unlike Rentar, which had a rider when it proposed 4 hours of "free time" to the drivers, TDI's only contact with Local 710 was the National Master Freight Agreement. When For- mento asked Wsol about the possibility of TDI's obtain- ing a rider to the National Master Freight Agreement with Local 710, which would include provisions con- cerning branch time and other considerations, Wsol told Formento "that if they were going to get the account, they could not pay less than Rentar was paying," and Wsol added, as clarification, "If any agreement would be made it would have to be done by the drivers, and if the drivers agreed, to give up 4 hours of branch waiting, it would be all right with me." The record shows that Wsol told Formento: "[I]f you can go in and . . . get the drivers to agree, as far as I am concerned, we have an agreement . . ." The meeting concluded with For- mento stating that he was setting up a meeting with the drivers. On June 14, Formento and Duffy met with the 10 drivers as scheduled. Formento told the drivers that the Rentar services contract had been canceled by Grainger and that the drivers were facing a layoff on June 28, but Formento then stated he had an opportunity to obtain Grainger as a client if they could work out a rider agree- able to the drivers. Formento told them that if he could get the Grainger account, he would have jobs to give to the drivers, but that they would have to agree that they would not be paid for time spent at Grainger branches in order to work for TDI. Formento then went on to explain to the drivers that he had prepared a proposed rider for their review and discussion . He also informed the drivers that he had met with Frank Wsol and that Wsol was willing to go along with anything the drivers could work out with TDI. It should be noted that the rider, which Formento had pre- pared for the meeting, contained a provision that stated that time spent making deliveries at the Grainger branches would not be paid. (See G.C. Exh. 16(a).) The proposed rider was distributed to all drivers and then each item in the rider was discussed individually. Raphael Lockwood, who Formento had been advised was the union steward, participated in the discussion by helping interpret the rider and frequently calling for the vote of the drivers on each provision. When the parties 11 As concerns the number of drivers needed for unanimity, it is un- contradicted that 10 drivers would constitute the voting unit Such was the testimony of Wsol and Lockwood Gale Lau also testified that by June 1980 the seniority roster was comprised of 10 drivers W. W. GRAINGER, INC. reached the subject of branch waiting time, there was a great deal of discussion on this matter, t 2 but after vari- ous proposals were gone over, Formento and the drivers agreed that the drivers here in question would not be paid for the first 3 hours spent at the Grainger branches provided that they were not actually physically unload- ing or loading their trailer during the time-then after 3 hours had elapsed, the drivers would go "on duty" and would be paid at the hourly rate for all time spent at the branch thereafter regardless of whether they were actu- ally loading or unloading their trailers or were merely waiting to have their trailers loaded or unloaded by branch personnel. All 10 drivers verbally approved this compromise and it was also approved by a hand vote. By the end of the meeting, the parties had agreed to a rider in substance although several changes were neces- sary in the document, but an arrangement was worked out where all the drivers, except Lockwood, signed the last page of the rider-Lockwood would later come to Formento's office after the changes were made, and then complete the signing of the rider. It was understood that Lockwood had authority to accept on behalf of the driver any "non-radical" changes in the proposed rider.' 3 Shortly after the June 14 meeting, Formento met with Grainger personnel and displayed the signed rider. For- mento stated that he wanted to convince Grainger that he had a viable agreement. Meehan, however, objected to the 3-hour branch time provision and stated he wanted 4 hours of free time. Later, feeling that 4 hours was too much to ask the drivers, Formento took the rider back to his office and inserted a provision for 3-1/2 hours of free branch time.' 4 The General Counsel points out that the reason Meehan wanted the drivers to sacrifice pay for their first 4 hours spent at the branches is evident-it normally takes 4 hours to unload a trailer according to Grainger's own witnesses. Therefore, Meehan was really attempting to require the drivers to sacrifice pay for all time spent at the branches, i.e., the entire unloading time. On June 17, Lockwood came to Formento's office with fellow drivers Tony Panunzio and Charles Sites, and Formento showed Lockwood the change in the branch time provision from 3 to 3-1/2 hours, and then explained to Lockwood that Grainger desired a 4-hour provision, but that Formento felt that he could sell a 3- 1/2 hour provision to Grainger. Lockwood hesitated at first, but after confering with the other two drivers, he 12 The drivers felt that because they had won the McClaughry griev- ance, they had a right to be paid for all time spent at the branches. is After the drivers, excluding Lockwood, signed the rider, Formento distributed a job application to each of them, and the 10 drivers, who were still employed by Rentar, then completed the employment applica- tions to become TDI employees, and it was then Formento's intention to hire them as TDI employees to perform the same work as they had been performing as Rentar employees , i e., "drive a tractor and trailer, hauling Grainger's product " 14 It appears that TDI Exh 6 is the rider that Formento typed subse- quent to the June 14 meeting with Grainger . On p 4, he wrote in "1/2" after the number "3," and p 6 of that document shows the signatures of the drivers However, when Formento returned to his office after his meeting with Grainger, he again corrected p 4 of the rider to reflect his proposal for submission to Lockwood for signature That document is in evidence as TDI Exh. 7 107 signed his name on the line provided for the union stew- ard and Formento signed the document in the appropri- ate space for TDI.' 5 As pointed out, after Lockwood and Formento execut- ed the rider, Formento believed that they had a contract. Although he as yet had not hired the drivers, he contem- plated that they would begin working for TDI on June 29 pursuant to their agreement. However, while For- mento was on vacation, Lockwood returned to TDI on June 21 and told Duffy that the drivers were repudiating the entire agreement. Lockwood testified that on June 18, 1980, he called Frank Wsol and told him about the rider presented to them by TDI, and "that we all had accepted it," but after "thinking about it" decided it was the "wrong thing to do," and requested that Wsol not let it go through. Wsol told Lockwood not to worry about it-that the agreement had not yet been approved by Local 710 and, therefore, there was no agreement. Wsol also suggested that Lockwood contact Formento and let him know "his feelings" on the matter. About May 20, 1980, Lockwood informed Formento that "he would not agree to any part of the rider," and about this same date, Formento telephoned Wsol and told him he thought they had an agreement and he was "confused" to learn that now they did not. Wsol testified he then told Formento that as long as the drivers were not agreeing to his terms he would have to abide by the contract that he had with the Union. Formento then told Wsol he was going to meet with the drivers and try to get the problem resolved.' 6 Formento, in hopes of salvaging the situation, obtained permission from Wsol to have another meeting with the drivers here in question, and that meeting was held on June 29. Formento told the drivers that he was able to sell Grainger on the rider, which they had executed, and that he could not understand why they now were repu- diating it. The drivers responded with various gripes about the entire rider-that they wanted pay for all their time and miles-and then indicated that they would not 15 Lockwood essentially corroborated Formento's testimony as to signing a rider during the June 17 meeting However, Lockwood testified that he signed a rider that contained a provision for 3 hours of branch time, and the rider that he signed was the one in evidence as G C. Exh 16(b). Lockwood further testified that he could not remember any discus- sions about the 3-1/2 hour provision although he did acknowledge during his testimony that he was upset that day. Lockwood also testified that he took the copy that he signed with him , but at the hearing before me he was unable to produce that document Anthony Panunzio was called as a witness to corroborate Lockwood However, Panunzio could not remem- ber whether Formento discussed the 3-1/2-hour provision, but Panunzio did acknowledge that he saw Lockwood take a copy of the document that he signed, and that Lockwood had read the corrected document before he signed it. Dennis Duffy, assistant to Formento, was at the meet- ing and established that Lockwood had signed the document providing for a 3-1/2-hour free branch time Like Formento, Duffy testified that there was discussion about the 3-1/2-hour provision and that Panunzio commented that 3-1/2 hours would not make much difference over the original 3-hour provision. Duffy testified that nobody switched any signa- ture pages and that the drivers were fully aware of the 3-1/2-hour provi- sion. 16 Around June 21, 1980, each of the private fleet drivers received a letter from Gale Lau informing that as of June 28, 1980, they each would be "permanently laid off" due to Grainger's cancellation of the Rentar contract 108 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD accept any part of the rider and that they wanted to op- erate under the National Master Freight Agreement. Formento testified that the tone of the meeting was "total confusion" and entirely different from that of June 14 when all the drivers were in agreement with his pro- posals. Formento explained to the drivers that it was necessary for him to have the rider in order to obtain the contract with Grainger, and then finally asked the driv- ers to vote on the matter, and he and Duffy left the room while they did so. When they returned, Lockwood stated that the drivers would not accept the rider and would only accept the National Master Freight Agree- ment. 17 The June 29 meeting concluded with Lockwood asking Formento whether they were hired, and For- mento replied, "As far as I am concerned you are not now, nor have you ever been hired by Transport Driv- ers."18 In the meantime, Grainger was still operating under the belief that TDI had reached an agreement with the drivers and was ready to pull their loads, which were scheduled for dispatch the evening of June 29, and it ap- pears that Formento felt obligated to pull these sched- uled loads and, accordingly, assigned other TDI drivers to pull such loads. On July 30, 1980, on Wsol's request, Formento met with Wsol and the drivers at the Local 710 union hall. Formento informed Wsol and the drivers that Grainger and TDI were unwilling to employ and use the services of the drivers unless pursuant to the previously agreed rider, but Wsol told Formento: "That the rider was null and void as far as he and the drivers were concerned . ... Wsol then reminded Formento that the only agreement then in existence between TDI and Local 710 was the National Master Freight Agreement (in the record as G.C. Exh. 4). Wsol advised Formento that the drivers were ready to go to work for TDI under the terms of the National Master Freight Agreement. For- mento stressed the point that if he could not have the rider he made previously to the drivers, then he would not have a contract with Grainger. However, the drivers continued in their objections to the rider and several stated that "they didn't want to work for anything less than they [earned] as employees for Rentar." Formento then called Meehan and advised him that TDI could give no other rates other than those provided for in the National Master Freight Agreement (the black book). Meehan then informed Formento that this arrangement was unsatisfactory. 17 As pointed out, the duplicity of Lockwood at this meeting should be noted-throughout his relationship with Rentar and during the June 14 meeting, Lockwood asserted himself as union steward and as spokes- man for the drivers, but he took the opposite tack at the June 29 meeting. Lockwood testified that on this occasion he told Formento that the driv- ers had no right to negotiate riders or to do anything contrary to the master agreement, and thereby chose to disregard the authority given him by his position as union steward as well as by Wsol, who agreed that the drivers could negotiate their own rider la The record evidence shows that between June 14 and 24, 1980, drivers Walter E Bogart, John Chop, Raphael Lockwood , Pete Marini Jr, Richard E Palezewski, Anthony D Panunzio, Ralph D Pederson, Richard D Schremser, Charles T Sites, and Edward J Stozek had ap plied for jobs with TDI Each of the above-named drivers, with the ex- ception of Stozek , was subsequently hired by TDI on October 13, 1980 Sometime in July 1980, Formento called Wsol and set up a meeting between TDI, the Union, and the drivers for July 25, and on this date the drivers, Wsol, Ron For- mento, Schousen, Meehan, and Carol Formento met at the Holiday Inn in Elk Grove Village, Illinois. During the meeting, after Ron Formento had once again encour- aged the drivers to accept his rider, the drivers caucused with Wsol and determined that by giving up 3 or more hours of branch waiting time per dispatch-"they would be giving up a lot of money." Accordingly, the drivers advised Wsol to tell TDI that they would not accept his proposal, but they would agree to a rider similar to the one Local 710 had previously had with Rentar. Frank Wsol then informed Formento of the drivers' position and the meeting concluded. Final Conclusions I will first turn to the joint employer issue as between Grainger and Rentar. The General Counsel produced testimony through Rentar's vice president, Irwin Brown, to the effect that Grainger issued credit cards to drivers of Rentar leased to Grainger; maintained the logbooks; reported accidents to Rentar and then to Grainger; that when there was a need for certain casual drivers Grainger would inform Rentar how many drivers were needed; that Grainger had the authority to make changes in the driving schedules; that the drivers would report for work and leave from Grainger's facility or terminal; that Grainger may have provided advance money to the drivers; and that Grainger evaluated probationary em- ployees leased to it by Rentar and forwarded those eval- uations to Rentar. Rentar's vice president for operations, Gale Lau, testi- fied that Grainger scheduled and dispatched the drivers leased to it by Rentar-telling them where to pick up and where to take loads; provided uniforms to those drivers that bore the logo of Grainger; referred individ- uals to Rentar for hire; collected and verified the log- books used by drivers leased to it by Rentar; provided the drivers with advance money; required that the driv- ers report their traffic accidents; that on occasions Grainger recommended to Rentar that drivers be disci- plined; that Grainger had the authority to make changes in the schedules of drivers leased to it by Rentar; and that Grainger gave the drivers daily instructions on what to do with their paperwork. The General Counsel produced testimony through driver Raphael Lockwood to the effect that while he was employed by Rentar-Grainger required him to fill out trip cost reports, which he submitted to Grainger; that Grainger's name appeared on the tractor he drove along with Dayton Electric (a brand name); that Grainger's dispatcher scheduled his runs; that Grainger issued a uniform to him, which he wore while on the job; that Grainger issued certain keys to him, which he used on the job; that Grainger issued credit cards to him, which he used to purchase fuel while on the road and that he submitted the purchase receipts generated from his use of the card to Grainger with his trip cost reports; that he interviewed with Grainger to obtain his job with Rentar and that after interviewing with Grainger he was W. W. GRAINGER, INC. referred to Rentar; that he filled out log books and sub- mitted them to Grainger so that they could compute his miles and hours for pay purposes; that he received and submitted to Grainger bills of lading ; that he received advance money from Grainger to cover anticipated costs of scheduled runs; that he was instructed by Grainger to report mechanical difficulties with his tractor-trailer to Grainger and to Niedert Leasing; that he was instructed to call the Grainger dispatcher for instructions regarding "backhauls"; that he contacted Grainger if he experi- enced delays due to weather; that he called in sick to the Grainger dispatcher; that he received a card from Grainger for insurance purposes ; that he parked his car at Grainger on occasion when he drove to work; that he made purchases at discount prices at locations reserved for Grainger employees; that he used Grainger's cafeteria at their Niles facility; that Grainger required him to com- plete and submit to it traffic accident reports; that he was instructed by Grainger as to where he should and should not purchase fuel while on the road ; that Grainger sup- plied him with a toll free number to use in obtaining motel accommodations at discount rates while on the job; and also testified that he was personally aware of in- stances in which supervisors or agents of Grainger disci- plined or recommended discipline to or for Rentar em- ployees. William Meehan of Grainger testified that in and prior to 1980 Rentar called and held meetings concerning the operation of the private fleet with their employee drivers and that representatives of Grainger attended and partici- pated in those meetings, and that minutes of those meet- ings were compiled . Meehar also testified that Grainger's dispatcher, Kinnard, issued instructions to the private fleet drivers and that Dispatcher Chris Cutro may have also done so. The General Counsel points out and argues that many of the exhibits offered by Grainger, when viewed in the context of Lau's testimony, reveal the nature of the Grainger-Rentar joint-employer relationship-points out that Grainger also introduced into evidence documents that show they issued instructions to drivers that re- quired drivers to report traffic accidents to Grainger and to report violations of its rules and instructions; that Grainger assigned work to the drivers; requested Rentar to issue memoranda to the drivers and requested Rentar to issue warning letters to the drivers, which were then complied with by Rentar. Moreover, that the documen- tary evidence submitted by the General Counsel conclu- sively shows that Grainger and Rentar were a joint em- ployer-that General Counsel's Exhibits 7(a)-10(a) (trip cost reports) show that Grainger issued instructions to the drivers; that General Counsel's Exhibits 11 and 12 show that Rentar reprimanded its employees for failing to follow Grainger's instructions or otherwise directed its employee drivers to follow Grainger 's instructions; that General Counsel's Exhibits 13(a)-(b) and 14(a)-(b) show that the drivers were disciplined by Rentar at the request of Grainger; that General Counsel's Exhibits 22- 56 and 61 show that instructions of various kinds were issued to the private fleet drivers by Brander, Meehan, Cutro, and Kinnard (each a supervisor and/or agent of Grainger) between 1976 and 1980 covering a wide range 109 of subjects related to the operation of the private fleet on a day-to-day basis; that General Counsel's Exhibit 28, a memo from Brander to Driver Sites , shows that Grainger assigned seniority to its drivers leased from Rentar; that General Counsel's Exhibits 38 and 39 show that meetings were periodically held among Grainger, Rentar, and the drivers to discuss methods of improving operations' safety; that General Counsel's Exhibit 47 shows that Grainger held out the private fleet drivers to the public as its drivers; that General Counsel's Exhibit 59 shows that Grainger allowed the private fleet drivers to enjoy the benefits of Grainger employees; and that all the documents discussed above show that Grainger did in fact control "the day to day operational control and supervision of . . . Rentar's employees." In order to evaluate the contention that Grainger is a joint employer with Rentar, it is first necessary to state the applicable legal tests . The Board has long held that if two or more employers exert significant control over the same employees, they constitute "joint employers" under the Act. Holiday Inn of Benton v. NLRB, 617 F.2d 1264 (7th Cir. 1980). Certain specific factors have been men- tioned by the Board to measure this significant control. In Parklane Hosiery Co., 203 NLRB 597, 612 (1973), amended on other grounds 207 NLRB 991 (1973), the Board stated that its . . . so-called "single employer" or "joint employ- er" concept defined and codified, with judicial con- currence, within a significant number of cases nor- mally reflects a judgment that two or more nomi- nally separate business entities may properly be con- sidered sufficiently integrated to warrant their uni- tary treatment, for various statutory purposes. The principal factors which have normally been deemed relevant, when this Board must decide whether sufficient integration exists, have covered broadly certain demonstrable relationships between the several business entities concerned ; the Board considers whether their total relationship reveals: (1) some functional interrelation of operations, (2) centralized control of labor relations, (3) common management, and (4) common ownership or finan- cial control . While none of these factors, separately viewed, have been held controlling , stress has nor- mally been laid upon the first three factors which reveal functional integration with particular refer- ence to whether there is centralized control of labor relations. See also Radio Union Local 1264 v. Broadcast Service, 380 U.S. 255, 256 (1965); Southern California Stationers, 162 NLRB 1517 (1967); and Sakrete of Northern Califor- nia, 137 NLRB 1220, affd. 332 F.2d 902 (9th Cir. 1964), cert. denied 379 U.S. 961 (1965). Applying these tests to the relationship between Grainger and Rentar, I find that the evidence falls short of showing a joint employer relationship. It appears to me that Rentar was the sole employer of the drivers here in question, and that Grainger's responsibilities amounted to nothing more than a dispatching function, but with no 110 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD significant control of the drivers. The record shows a separate and distinct historical development of each com- pany over the years. No officers, owners, or executives of one are connected to the other. Thus, there is no common ownership or financial control and no common management or centralized control of labor relations. However, there were some operational relationships be- tween the two companies required by their service con- tract, and I will discuss this and other evidence as point- ed out below.19 First of all, the 1974 service contract between Grainger and Rentar was negotiated at arm's length.20 It called for payment to Rentar on a cost-plus basis, and, of course, the mere existence of a cost-plus arrangement does not amount to a joint-employer relationship. The contract gave either party the right to cancel the con- tract by giving 30 days' notice. It is clear from the record that Grainger and Rentar also had separate super- visors for their companies. As pointed out, the very nature of Rentar's business- driver leasing-requires a certain amount of interrelated- ness with its customers, and in the present case, Grainger informed Rentar's drivers when and where to deliver loads because Rentar would not have access to this infor- mation as Grainger's deliveries are determined by order received from its customers, but this kind of functional interrelationship under the circumstances here does not show joint-employer status.21 No interchange of employees or work took place be- tween Grainger employees and Rentar employees. Rentar was solely responsible for hiring , firing, disciplin- ing, testing, establishing wage rates, making wage deduc- tions for taxes, paying, and processing grievances for its employees assigned to Grainger.22 Each company estab- lished and maintained separate personnel policies, and the directions Grainger gave the Rentar drivers concern- ing deliveries were in many instances required by Feder- al law. In the final analysis, the General Counsel seeks to es- tablish joint-employer status based on responsibility "for the day to day operational control" of the Rentar driv- ers, but this approach falls short of Parklane's mandate that all four factors, as aforestated, are to be weighed in 19 In the truck delivery cases holding a joint-employer relationship, there have always been supporting findings that the distributor, by its su- pervisors, directly supervised and controlled the employees of his truck- ing contractor See John Breuner Co., 248 NLRB 983, 989 (1980). 20 Moreover, it appears that Rentar negotiated independently of Grainger with the Union for its rider to the National Motor Freight Agreement covering the drivers assigned to Grainger. Additionally, no representative of Grainger attended bargaining sessions between Rentar and the Union, and Grainger never signed, nor was ever asked to sign, a collective-bargaining agreement with the Union. 21 This interrelationship for dispatching purposes would necessarily also encompass arrangements when drivers were sick and instructions on telephone calls, fuel outlets, motel , and directions for backhaul 22 There were a few instances when Grainger did complain to Rentar about certain irregular work habits of their drivers , but Grainger did not discipline the drivers directly It appears that Rentar would fully evaluate the matter in question and then, independently , act on the complaints one way or another . On one or two occasions Grainger may have also re- ferred people to Rentar for hire, but it is obvious that such resulted from either a personal relationship or some other special circumstances, but there is no doubt whatsoever that Rentar did the actual hiring of the drivers. light of the overall relationship between the parties. However, even under the suspect single-factor approach, the General Counsel has failed to prove the existence of a joint-employer relationship between Grainger and Rentar. As indicated, the testimony adduced at trial makes evi- dent that the indicia of control relied on by the General Counsel is in many instances the result of compliance with Federal rules and regulations. As shown by the record, the trucking industry remains heavily regulated, and this is so despite the recent move towards govern- ment deregulation. The Department of Transportation and the Federal Highway Administration still promul- gate numerous and detailed rules and regulations cover- ing virtually every aspect of the trucking industry. In fact, the pervasiveness of the regulatory scheme, and the expertise required to operate within it, are the reasons Grainger chose not to enter this arena on its own, and Rentar's expertise with government regulations was one factor in Grainger's decision to hire them. Indeed, vari- ous aspects of the service contract (G.C. Exh. 2(a)) re- states the parties' respective duties in this regard.23 At the trial before me there was a considerable amount of testimony concerning drivers' daily logs of logbooks. The General Counsel wanted to know to whom the driv- ers turned these logbooks over to and also made inquiries as to accident procedures-that is, to whom did the driv- ers report accidents, and the answer in both cases was Grainger, but such circumstances show only that in so doing Grainger complied with applicable Federal regula- tions.24 It is not surprising then that Grainger dispatched the Rentar drivers, collected and verified their logbooks, and required them to report accidents to Grainger. To do otherwise would violate the law.25 Moreover, the trip cost reports utilized by Grainger had multiple purposes. The portion of the report filled out by the driver aided Grainger in tracking compliance with hour and speed regulations, and another use of the report was stated on the form: "This information is sent to your employer to figure your paycheck." The report was also used as a means of informing the drivers where to pick up and drop loads. After the report was returned, Grainger personnel would use the numbers to determine cost and profitability of the run. 23 The last portion of the third paragraph of this exhibit provides "Rentar will furnish W W. Grainger driver records required by W. W. Grainger to comply with the applicable regulations of the Interstate Commerce Commission , the Department of Transportation, and with those of state or other governmental regulatory agencies in connection with the operation of vehicles used by W W Grainger " 24 Federal regulations mandate that the motor carver require a driver's daily log be made by every driver as the logs are critical in reviewing compliance with hour and speed regulations Furthermore , failure to make logs, failure to make required entries, or failure to preserve logs shall make both the driver and the carrier liable to prosecution Similarly, the procedure to be followed after an accident is dictated by government regulations, and drivers must report all details of the accident as soon as practicable after its occurrence to the motor carrier (here Grainger) using his services 25 Niedert, as owners of the tractors, also required the drivers to report accidents directly to it and to the carrier This was a standard in- dustrywide practice W W. GRAINGER, INC Even when compliance with government regulations is considered as a factor in establishing control, it is but one factor to be weighed, and standing alone is insuffi- cient to establish joint employer status. The issue of com- pliance, as a factor establishing control, arises most often in determining whether a driver is an independent con- tractor or an employee, and in such cases the Board ap- plies the common law "right of control test." Under that test a driver is not an employee unless the carrier con- trols the manner and means by which the driver attains a given end. Daily Express, Inc., 211 NLRB 19 (1974). As further pointed out, in determining employee status, substantial precedent indicates that government regulations, standing alone, are insufficient to turn owners-operators into employees-they may be consid- ered in conjunction with other elements of the relation- ship in determining the status of an individual worker, but do not necessarily imply the existence of an employ- er-employee relationship. A. Duie Pyle, Inc., 606 F.2d 379, 385 (2d Cir. 1979). When an employer-employee re- lationship is found, it is because the carrier added an extra layer of regulations beyond that which was re- quired by government regulations. See Teamsters Local 814 (Santini Bros.), 223 NLRB 752 (1976). Therefore, in the instant case the General Counsel must prove that Grainger applied an extra layer of control over and above the control incidental to governmental regulations, and no such proof appears in the record. The bulk of the indicia of control relied on by the General Counsel to es- tablish this extra layer lays out the relevant time period. For instance, General Counsel's Exhibits 22-45 are docu- ments generated prior to 1980-in fact, most of them in 1977. Likewise, General Counsel's Exhibits 11-14 and 50-56 generally relate to a period some months prior to the events here in question. This pre-10(b) evidence may be used to establish background, but the General Counsel must prove that Grainger and Rentar were joint employ- ers at the time of the alleged violations, and it is not enough to show that Grainger and Rentar had certain contracts and arrangements at some prior time in their relationship. 26 In July 1978, William Meehan took over Grainger's traffic department with the understanding he was to bring it up to professional standards, as aforestated. It ap- pears that Meehan also undertook to disassociate Grainger from Rentar in labor matters unrelated to Fed- eral and state regulations. For instance, he eliminated the use of uniforms by the drivers-Meehan reasoned that because the drivers were not Grainger employees, an in- correct impression could result if Rentar's employees wore uniforms with Grainger's logo. Moreover, the evi- dence indicates that uniform requirements were rarely followed and never enforced. Only a few drivers had uniforms, and fewer still wore them. There is no evi- dence suggesting that any driver was disciplined for fail- 26 For the most part, G C Exhs 11-14 are letters or memos from Rentar to its drivers leased to Grainger setting forth certain shortcomings in their performance of duties, and with copies sent to Grainger G.C. Exhs 50-56 contain certain instructions to the drivers here in question from Grainger , but appear to be more or less routine in nature and the type of material and information within the normal scope of a dispatching agent (seals, insurance, calls, security, and fuel) 111 ure to appear in uniform.27 Meehan also made clear to the drivers that gripes and grievances should be directed to Rentar, their employer, and not Grainger, and when personnel of Grainger attended safety meetings, it was usually at the invitation of Rentar. The General Counsel offered certain exhibits purport- ing to show that Grainger effectively controlled disci- pline for the Rentar drivers. However, the witnesses called by the General Counsel to substantiate this charge failed to do so. Irwin Brown testified that no one at Grainger ever disciplined a driver leased to them by Rentar, and that Grainger was "expressly told" that they could not discipline drivers. William Brander testified that it was a rare occurrence or unusual for someone at Grainger to request a warning letter to issue. Specifical- ly, Brander was referring to a seal violation-a serious problem that could involve theft.28 The General Counsel further maintains, and there was some testimony presented, that Grainger: (1) issued credit cards to the drivers; (2) provided advance money; (3) allowed drivers to make discount purchases; (4) su- pervised recruitment, hiring, and termination; and (5) provided work rules. The testimony is clear that Rentar alone recruited, hired, and terminated drivers assigned to Grainger. Grainger never requested that specific drivers be as- signed or removed from its account, and Grainger had no authority to cause a driver's termination from Rentar. Even when the Rentar contract was canceled, Grainger made no effort to see that the drivers would be laid off. Furthermore, rules by the Department of Transportation requiring driver physicals, road tests, and the like were handled by Rentar, and this is exactly what Grainger had contracted for with Rentar. Testimony was heard concerning advance money pro- vided by Grainger. However, no documentary evidence was presented showing that this practice continued through the times relevant to this action. Moreover, the providing of advance money does not show either con- trol or supervision of the drivers in this situation. It is also apparent that Grainger never "allowed" Rentar drivers to make discount purchases at their branches. There were, however, two instances in which a Rentar driver made a purchase at a Grainger branch and received an employee discount. The first instance ap- parently occurred when Brander informed Lockwood that he could make purchases by "just going" to the branch and telling them that he was an employee of Grainger. The other incident involves Anthony Panun- zio's purchase of an antenna at Grainger's Des Moines branch, but just how Panunzio managed to get one is un- clear. However, the testimony revealed that the discount policy, and those eligible for it, suffered from lack of en- forcement at the branches. 27 William Brander testified that in 1979, and up until he left Grainger in early 1980, there were only four or five Rentar drivers who had uni- forms-"and they would wear them when they felt like it," and that in March or April 1980, the drivers here in question "ceased altogether" wearing Grainger uniforms 28 It appears that in late 1979, Brander of Grainger sent a memo to his subordinate, Russ Kinnard, asking Rentar to issue a warning letter rela- tive to a broken seal-see G.C Exh 61 112 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD The allegation and testimony as to the credit card situ- ation introduces Niedert's role in the Grainger oper- ations. Ted Kraus, operations manager at Niedert, testi- fied that Niedert handled the Grainger operation as it did Niedert's 40 other clients. Drivers for their clients, who domiciled trucks at Niedert, merely park their cars in the stalls next to the trucks, and stated that instructions as to fueling, idling time, and the like, are funneled through the customer to the drivers. Niedert had its own proce- dure that drivers were to follow after an accident, and also some paperwork was to be turned in to Niedert at the end of each run. Specifically referring to credit cards, Kraus stated that the cards are the property of Niedert, but the client's name appears on the card (here Grainger) for Niedert's billing purposes, and to ensure that the card is used for that one fleet alone. He testified that credit cards are given to the customer to dispense to the drivers, and if the card is forgotten-Niedert would issue a purchase order. In sum, Grainger did provide credit cards to Rentar drivers. However, those cards were not Grainger's. Grainger provided the cards per industry practice, but Grainger's mere dispensing of credit cards and their instructions on behalf of Niedert, in no way infers that Grainger was a joint employer of the Rentar drivers. I have reviewed the testimony discussed above togeth- er with other evidence described in the facts section of this opinion. All this evidence, evaluated in light of the entire record, fails to convince me that a joint-employer relationship exists in this case, and I find that Grainger has no day-to-day control over the drivers of Rentar except necessary directions through its routine dispatch- ing and accounting procedures, and in seeing to it that there is a full compliance with governmental transporta- tion statutes and regulations , and that Grainger was not a joint employer with Rentar during the pertinent time pe- riods involved. See John Breuner Co., supra; Hychem Construction, 169 NLRB 274 (1968); Oil Workers (Fire- stone Tire & Rubber), 173 NLRB 1244 (1968); and also Teamsters Local 5 (William Volker & Co.), 253 NLRB 632(1980) .29 It is also alleged that Grainger and TDI were joint employers. The General Counsel points out that on June 29 and 30, 1980, TDI performed services for Grainger, pursuant to General Counsel's Exhibit 15, by using drivers other than the 10 involved here who were laid off by Rentar when they rejected the proposal to amend the National Master Freight Agreement, and were not hired by TDI; that the drivers who pulled loads for Grainger and TDI on June 29 received instructions from Grainger; that Grainger had the authority to route them; and that the log books of those drivers were submitted to and re- tained by Grainger. 29 In several cases cited by the General Counsel-either an employer retained specific rights to control or had equal rights and responsibilities, or could request and train drivers, and therefore, such cases are readily distinguishable on factual circumstances In Troupe Leasing Co., 174 NLRB 200 (1969), Chemical Leaman could participate in the hinng of the drivers, and also conducted road checks for safety inspections- Grainger could perform neither one of these functions The General Counsel also points to the testimony of Ron Formento to the effect that since October 13, 1980, when 9 of the 10 drivers went to work for TDI, Grainger has collected and verified those drivers' log books; that Grainger required the drivers to report acci- dents to the Grainger dispatcher; that Grainger provided day-to-day work instructions to the drivers; and that Grainger had the authority to make schedule changes for those drivers. The General Counsel further introduced testimony through Lockwood to the effect that since he has been employed by TDI, Grainger has required him to complete trip cost reports, which he submitted to Grainger; that his tractor still bears the name of Grainger; that he still calls in to Grainger's dispatcher to schedule runs; that he was given a trailer lock and key by Grainger to use on his job with TDI; that he uses credit cards issued by Grainger to buy fuel while on the road and submits his purchase receipts to Grainger; that he is required by Grainger to complete and submit log books to them; that he receives and submits bills of lading to Grainger; that he is instructed by Grainger to report mechanical difficulties to them; that he receives instructions of other kinds from Grainger while on the road; that he has called in to Grainger to take time off; that the tractor he drives as a TDI employee is insured by Grainger; and that Grainger tells him where to fuel his tractor while on the road. The General Counsel argues that General Counsel's Exhibit 15, the Grainger-TDI service contract, was in effect during late June 1980, and that paragraph 9 of that exhibit states in general terms the extent to which Grainger controlled the day-to-day activities of TDI's employees in the private fleet: 9. [Grainger] will dispatch, direct the loading and unloading of vehicles, select routes, direct the driv- ers as to pick-ups, deliveries and other matters relat- ed to the day-to-day operations of the vehicles uti- lized by [Grainger]. The General Counsel maintains that the testimony of Lockwood shows in detail how the above clause was ac- tually implemented, and reveals how Grainger and TDI implemented General Counsel's Exhibit 15, and as such, shows that by virtue of General Counsel's Exhibit 15, they were a joint employer within the meaing of the Act at the times General Counsel's Exhibit 15 was in effect, and since the manner in which the contract was imple- mented in October 1980 may relate back to what the contract meant in June, and what the contract meant in June is relevant in determining joint-employer status, the manner in which the contract was implemented later is necessarily relevant in determining joint-employer status, and that there is no record evidence that clause 9 of General Counsel's Exhibit 15 meant something different in June than it did since October. Further, that if its im- plementation since October shows, as it does, that TDI and Grainger were a joint employer, they must have been so in June as well, and the contract itself shows, by its own terms, that Grainger and TDI were a joint em- ployer in June 1980 even without reference to events since October of that year. W. W. GRAINGER, INC. For reasons indicated, I find that there was no joint- employer relationship between Grainger and TDI. In essence, Lockwood and the drivers had negotiated a rider with TDI on June 14, and Lockwood finalized it on June 17, as aforestated. Basically, the nature of that agreement was that if TDI could secure the Grainger ac- count, the drivers here in question would work for TDI under the terms contained in the rider. At this point in time, no contractual relationship existed between Grainger and TDI as Meehan had not returned the serv- ice contract sent to him by TDI. Ron Formento of TDI did not receive notice of Grainger's acceptance until some time around June 25, 1980. However, by the time Grainger and TDI had entered into a service contract, Lockwood had decided not to honor the rider he and the drivers had signed, and refused to work for TDI. As indicated, they refused to work under the terms negotiat- ed and agreed on, and would only work under condi- tions they would dictate to TDI. Nevertheless, in late June 1980, Formento was willing to renegotiate with Lockwood and the drivers, but they would not do so, and the fact remains that Lockwood and the drivers re- fused to honor the rider they entered into with TDI (fur- ther details later), and refused to perform work for TDI. Hence, they could not have been controlled, supervised, or directed by Grainger. I am also in agreement that the post-October events and testimony fail to establish a joint-employer relation- ship. During the post-October period, TDI had sole re- sponsibility for hiring and terminating the drivers leased to Grainger. Similarly to Rentar-TDI paid the drivers' wages, withheld and paid state and local taxes and social security, and paid both benefit payments and workers' compensation premiums. TDI also established the dispatch procedures followed by Grainger, and Grainger's main function was to say what load goes where. The drivers report for work at Niedert, they carry credit cards issued by Niedert, and Grainger's name appears on the cards simply for Nie- dert's billing purposes. Since October, Grainger has gen- erally done little more in relation to the drivers than comply with Federal rules and regulations. By law, the private carrier must collect driver daily logs and retain them for a specific period. The drivers are required to report accidents to the carrier, and the carrier has a duty to see that the drivers comply, as detailed earlier. Fur- thermore, the private carrier must retain direction and control over the drivers it utilizes. Here, that means Grainger informs the driver that a given load is to be dropped at a given location. As indicated previously here, on June 29 and 30, TDI assigned a few of its available employees-not the 10 drivers involved in this case-to the Grainger account. When Ron Formento learned again on June 29 that Lockwood and the drivers had refused to honor their rider, he was forced to take emergency steps, and in so doing located some of his other drivers and assigned them to Grainger, but these drivers were not allowed to work for long because when they reported for work at Niedert, they found Lockwood and the other drivers in- volved waiting for them. The TDI drivers were then harassed to at least some extent, and some were followed 113 to the Grainger premises where the harassment contin. ued. On June 30, Formento was summoned to the union hall by Frank Wsol, and while there Formento again at- tempted to negotiate with the former Rentar drivers, but the 10 drivers simply reiterated their stance that they would not honor any part of their rider. Formento and Grainger would not accept these demands, and Frank Wsol, the Union's business agent, then told Formento that he had better not send any more trucks out of town, and as a result Formento advised Grainger to park the trucks. TDI was able to pull only nine loads for Grainger, and these loads were moved in a few hours be- ginning late June 29, and ending in the afternoon of June 30. Even accepting the events after October 13, 1980, and the basic contractual relationship between Grainger and TDI starting in late June 1980, there is no evidence that Grainger had any involvement in the selection or hiring of the drivers employed by TDI. In fact, the evidence is to the contrary. As noted, TDI recruited and hired the drivers without any input from Grainger. Similarly, Grainger was not involved in any discipline. Certainly on the dates of July 29 and 30, Grainger did not issue instructions. Grainger did not even handle dispatching. Ron Formento dispatched the drivers from a schedule developed on the assumption Lockwood and the other drivers would respect their agreement. The Grainger-TDI service contract generally reflects the carrier's and the contractor's respective duties under the Federal regulations . Moreover, the contract does not show that Grainger had authority over the manner and means TDI's employees used to perform under the con- tract, nor does it show that Grainger exercised any such authority. Grainger and TDI are distinct corporations that have developed independently of each other. They do not share common ownership, management, personnel, or control. Neither is a captive corporation of the other. Their relationship is based solely on contract. Moreover, Grainger and TDI have never exchanged or inter- changed employees. On occasion, Grainger's supervisors may direct drivers on routine matters, but they do not exercise supervisory authority over TDI's employees, and the direction Grainger does exercise is largely man- dated by Federal regulations. As pointed out, TDI is ex- clusively responsible for recruiting, hiring, disciplining, and firing its employees. Grainger and TDI have sepa- rate labor relation policies. The wages and conditions that apply to TDI's employees were established through negotiations between TDI and the Union, and there is no evidence that Grainger was involved in this process in any way. The Union never requested bargaining of Grainger, and Grainger is not a signatory of the union contract. As indicated, what little control Grainger did have over the TDI employees was implicit in the service relationship and insufficient to establish coemployer status. It is alleged that since about February 3, 1980, Re- spondent Rentar, by its supervisor and/or agent Irwin Brown, coerced employees by threatening them that if 114 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD they did not accept a change in their form of compensa- tion, Respondent Grainger-Rentar would discontinue its driving operation and begin using common carriers. About February 3, 1980, Brown, Lau, some of the Grainger people, and most, if not all, of the private fleet drivers leased to Grainger held a meeting in efforts to implement a system of "fixed mileage," using the House- hold Carriers Guide, to prevent driver abuse of the then current system of using odometer miles to determine mileage pay, and also at this meeting some mention was made of branch time, as aforestated. Lockwood testified that Supervisor Brown then told them: If we did not adhere to changing this that we would be out of a job because they would go to common carriers and contract carriers and use other means to transport their goods throughout the country and we would not have any employment there. . , ,3o Irwin Brown credibly testified that at his first meeting in early February 1980, he explained that Rentar was walking on "thin ice," and that there was "a likelihood" that Rentar might lose the Grainger account because of the disparity in miles and the lack of uniformity or stand- ardization and, in the event Rentar lost the account, then he "didn't know what the fate of the drivers would be." A few days later a second meeting was held in which branch time became a major topic, and Brown then pro- posed 4 hours of free time while waiting at the Grainger branches, as aforestated, and indicated that all of them, amongst themselves, should come up with a workable solution in order to maintain the Grainger account, and if not, Rentar would lose the account. The statement at- tributed to Brown by Lockwood on the occasions here in question-is not corroborated by other drivers, and in the final analysis, I have credited the testimony of Brown.31 Rentar was in danger of losing the Grainger account, and this was the reason Brown met with his employees- to see if together they could come up with a solution, and the credited evidence shows that Brown simply laid out the facts surrounding their difficulties. Rentar had the right to institute standard miles (AAA) under the Na- '° According to Gale Lau, it is possible that Brown did tell the drivers in early February 1980, that if they did not agree to a change in the exist- ing collective-bargaining agreements between Rentar and Local 710, that Grainger "would go common carver and they would have to be laid off" 31 It should be noted that all facts found here are based on the record as a whole, and on my observation of the witnesses. The credibility reso- lutions here have been derived from a review of the entire testimonial record and exhibits with due regard for the logic and probability, the de- meanor of the witnesses, and the teaching of NLRB v. Walton Mfg Co, 369 U S 404 ( 1962) As to those witnesses testifying in contradiction of the findings, their testimony has been discredited, either as having been in conflict with the testimony of reliable witnesses or because it was in and of itself incredible and unworthy of belief All testimony has been reviewed and weighed in the light of the entire record. Furthermore, it should be es- pecially noted that in several instances I have not credited the testimony and events as recalled by Lockwood in that his testimony in some areas revealed considerable discrepancies and was also inconsistent at times, and not as convincing and straightforward as witnesses (Meehan and For- mento) who testified otherwise A good deal of the General Counsel's case was introduced through Lockwood, as this record reflects tional Master Fright Agreement, and Brown did not need to threaten. In fact, Lockwood himself testified he believed the resultant rider to be fair. Moreover, it is also noted that once again it is Lockwood alone who testifies to some alleged violation, and his testimony should be contrasted with Brown's, a disinterested witness called by the General Counsel. Lockwood's story should also be viewed with some additional reservations given the fact that nine other drivers who, if Lockwood's story is true, would have witnessed the alleged threats, but were not called to testify as to the allegation, and although Panunzio testified, he was not asked a single question concerning the February meetings. It appears to me that Brown, in both meetings, negoti- ated with his employees in an open and honest fashion in an effort to reach a solution to a problem they all shared, and therefore, under the particular and overall circum- stances here, coupled with the extensive background of the two subject matters discussed, and of which the driv- ers were fully aware-Brown's remarks cannot be deemed violative of the Act. It is further alleged that Ron Formento threatened em- ployees at the June 14 meeting that if they did not accept an addendum to the Union's collective-bargaining agreement, Grainger would discontinue its private fleet and begin using common carriers. Formento admitted that as part of his proposal on June 14 he initially informed the drivers here in question that they would have to agree not to be paid for time at the Grainger branches in order to work for TDI.32 The General Counsel, of course, relies on the testimo- ny of Lockwood, and in conjunction therewith maintains that Formento interfered with the drivers' statutory rights-that the drivers' insistence on being paid for branch waiting time pursuant to McClaughry's grievance victory, as aforestated, was clearly protected activity. Moreover, that by informing employees they would have to give up collectively bargained rights or benefits and accept the employer's proffered terms and conditions of employment-or else suffer termination-violates Section 8(a)(1) of the Act. The General Counsel further argues that on this occasion Formento was putting the drivers on notice that they would have to sacrifice benefits, which they believed were theirs under the National Master Freight Agreement, or else they would not be employed, and such a statement reasonably tends to interfere with the free exercise of the drivers' right to adhere to their interpretation of article 51, and thereby insist on hourly compensation for all time spent at the Grainger branches. I have credited Formento's testimony as to what he told the drivers on the occasion here in question. The statements made by Formento must be viewed in the context of the situation faced by all the individuals at- tending this meeting. As pointed out, there is no question but that by June 14 the drivers had been notified that 22 Lockwood testified that on this occasion Formento told them if he did not get his amendment signed (the rider), that he would not get the account and they (Grainger) would use contract and common carriers, and other ways, to distribute their freight, and they would be out of a job W W. GRAINGER, INC. they were facing the loss of their jobs with Rentar, and obviously the drivers recognized they were being given an opportunity by TDI to become employed if a rider could be negotiated, which made it economically feasible for TDI to obtain the Grainger business. As further argued by TDI, the drivers had been aware for a number of months that Grainger was unhappy with the Rentar operation and the cost of driver services, and as experi- enced truckdrivers they could well appreciate the vari- ous transportation options available to Grainger. Lock- wood admitted in his testimony that with deregulation it might be cheaper to use common carriers than operate a private fleet. Furthermore, as also noted, Formento made it clear that he wanted to obtain the Grainger business and that he felt the rider, which he had proposed, would be beneficial to all parties concerned, and, of course, the drivers were well aware of the fact that negotiating riders to the National Master Freight Agreement was the rule rather than the exception in the driver leasing indus- try, and that companies such as TDI had to fashion their terms and conditions of employment so as to satisfy their customers. It further had to be clear to these professional drivers that TDI had little or no control over whether Grainger might, in the final analysis , use common carri- ers or its private fleet. TDI further points out that while the General Counsel appears to look at the June 14 meeting as if it were a captive audience speech in the midst of an antiunion campaign, the fact of the matter is that the meeting was a collective-bargaining session; that Local 710 had abdi- cated its responsibility to handle the bargaining for its members, and TDI was forced to deal directly with the drivers themselves, and in this context, and in the midst of reaching an agreement on a satisfactory rider, For- mento stated the obvious-that the drivers would have to agree not to be paid at the branches in order for them to work for him (he otherwise would not get the ac- count). The situation here was far different from a setting in which similar statements might be made during an orga- nizing campaign, and where such a statement, under those circumstances, might reasonably be said to have a tendency to interfere, but in the instant case we are deal- ing with real and actual financial practicalities that the drivers fully appreciated and understood. Section 8(c) of the Act provides that the expression of views, arguments, or opinions shall not constitute, or be evidence of, an unfair labor practice if such expression contains no threat or reprisal or promise of benefit, etc. Certainly, under the controlling circumstances here, For- mento's statement was the expression of a viewpoint or opinion rather than a threat. It is well settled that an em- ployer's opinion or predication of the possible adverse economic effects of being required to abide by a particu- lar union contract is permissible under Section 8(c) of the Act. It is alleged in the complaint that since about June 28, 1980, Grainger ceased using the truckdriving services of Rentar, and that about June 28, 1980, Respondent Grainger-Rentar laid off and/or discharged the 10 driv- ers here in question because these employees supported and assisted the Union and engaged in concerted activi- 115 ties for the purpose of collective bargaining or other mutual aid or protection. The General Counsel points out that the drivers, pur- suant to the McClaughry grievance victory and their in- terpretation of article 51 of the National Master Freight Agreement, and their refusal in February and June 1980 to agree to employer proposals designed to limit or eliminate their right to payment for branch waiting time, constitute union and/or protected concerted activity within the meaning of Board law, and that Grainger then canceled Rentar's contract, which resulted in Rentar's laying the drivers off for the statutorily prohibited reason that the drivers had engaged in the protected concerted activities as described above . Moreover, that Grainger would have canceled Rentar 's contract but for the branch waiting time controversy, and General Counsel's Exhibit 60, a memo from Meehan to Irv Palluth, shows that the motivating reason behind the decision to cancel the Rentar contract was the drivers ' pursuit for pay for branch waiting time, and then Rentar's compliance with the Joint Committee award in the McClaughry grievance matter. Moreover, that while counsel for Grainger argued throughout the hearing that the branch time con- troversy constituted an insignificant portion of Grainger's motivation in so acting , the record evidence shows otherwise, and Grainger was far more than insig- nificantly concerned with the branch waiting time con- troversy. The General Counsel points out that in For- mento's very first meeting with Meehan , considerable discussion resolved around branch time, and by Formen- to's second meeting with Meehan in May 1980, it ap- peared that Grainger's decision to seek a replacement for Rentar was based in large part, if not exclusively, on its desire to not have to pay the drivers for time spent at the branches, and this decision was not based on the pur- ported "mileage" issue inasmuch as the mileage issue was resolved on March 12 , 1980-prior to Meehan 's decision to cancel the Rentar contract and prior to his decision to replace Rentar with TDI. Moreover, the fact that Grainger, as of April 21, 1981, had still not yet reim- bursed Rentar for all of branch waiting time paid to pri- vate fleet drivers prior to June 28 , 1980, shows that the branch waiting time controversy was not a minor dispute at all, and indeed, the branch waiting matter was a major area of dispute that eventually resulted in the cancella- tion of the Rentar contract and the layoff of the 10 al- leged discriminatees here Furthermore, argues the Gen- eral Counsel, there can be no dispute but that Grainger was fully aware of the impact that McClaughry's griev- ance victory would have on it economically by virtue of the Rentar contract-that Grainger knew that Rentar would have to pay the private fleet drivers for branch waiting time, and that Grainger, pursuant to the Rentar contract, would have to reimburse Rentar for those new costs. This record shows that Grainger had become disen- chanted with Rentar several months before the branch time controversy flared . Moreover, a constant turnover of top Rentar personnel had caused problems at Grainger. By late 1979, Matt Burger was no longer ac- tively involved with the Grainger account, and this 116 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD record shows that the revolving door of top managers at Rentar resulted in very poor communications. True, Grainger had initially chosen Rentar primarily on the basis of cost, but as this record reflects, an ongoing busi- ness relationship requires more than low costs-it re- quires good service, trust, and confidence, and it is quite obvious that by 1980, Rentar had lost Grainger's confi- dence. In fact, as early as December 1979, Meehan began scouting around for a replacement for Rentar, several months before the branch time issue, and Meehan had asked Brander to line up interviews with other leasing companies, and in January 1980, those interviews were consummated,33 but during this period Irwin Brown of Rentar was working to patch things up with Grainger. As set forth, the mileage problem is a prime example- Grainger had been trying for many months to have Rentar do something to control the theft of miles on its runs as the exaggerated mileage claims boosted Grainger's costs, but the cost-plus nature of the service contract between Grainger and Rentar served as an in- centive for Rentar's lack of action. Therefore, as indicat- ed previously here, Rentar kept coming up with delays as to why standardized mileage could not be implement- ed. In fact, Meehan did not discover until the spring of 1980-from Formento and Schousen-that Rentar al- ready had the right to institute fixed miles under the Na- tional Master Freight Agreement, but Meehan did not learn this from Rentar. Moreover, Grainger was never able to get the type of standardization in miles that it wanted and a hybrid system was substituted. Meehan also believed that Rentar was a company in other trouble as he had heard of an FBI investigation and a large law- suit involving Rentar (G.C. Exh. 60). Meehan stated that the branch time controversy was just part of the reason for the cancellation of Rentar's contract. As this record shows, for many years Grainger had never paid for branch time-that is, time spent at a branch not working-this was the established practice generally recognized by Rentar and the drivers, and only on a rare occasion would a driver claim such time. Then to Grainger's surprise, Gale informed Grainger in the spring of 1980 that all time at the branches was to be paid. Lau informed Meehan that the drivers won this in a grievance, but Grainger was unable to obtain immedi- ate documentation on this grievance. Meantime, during May and June 1980, Meehan had found a replacement for Rentar at a lower cost. More- over, Grainger's new tentative contract with TDI dif- fered markedly from the Rentar contract-TDI added a $27-per-week per-employee service charge-and this flat fee arrangement avoided the cost-plus problems Grainger encountered with Rentar's 7-percent surcharge. TDI also favorably impressed Meehan as a professionally run busi- ness with established ties to Grainger through its parent corporation.34 There is no evidence in this record showing that Grainger canceled Rentar specifically because of the drivers themselves. On the contrary, Grainger took no action to see that Rentar laid off the drivers and, of 33 See Grainger Exh 35(a) 34 See again G C Exh 60 course, Grainger had no way of knowing whether Rentar would assign the drivers, here involved, to its other accounts. In fact, as pointed out, Grainger gave TDI its okay to negotiate with the very same drivers who had worked for Rentar. There was no persecution of the drivers by Grainger. In the final analysis, I am in agreement that Bill Meehan simply made a sound busi- ness decision based on escalating costs, poor perform- ance, and lack of trust and confidence in Rentar.35 It is, of course, well established that a discharge may be for good cause or bad cause, or no cause at all except that a discharge is unlawful when the real motivating purpose is contrary to the prohibitions of Section 8(a)(1) or (3) of the Act. The controlling Board decision on burden of proof in this proceeding is Wright Line, 251 NLRB 1083 (1980). In Wright Line, the Board estab- lished the following causation test in all cases alleging violations of Section 8(a)(3) or violations of Section 8(a)(1) turning on employer motivation. First, it requires that the General Counsel make a prima facie showing sufficient to support the inference that protected conduct was a "motivating factor" in the employer's decision. Once this is established, the burden will shift to the em- ployer to demonstrate that the same action would have taken place even in the absence of the protected con- duct. I am in accord that the General Counsel in the instant case made a prima facie showing sufficient to support the inference that the union activities (the branch time griev- ance) was a motivating factor in the decision by Grainger to change its driver leasing companies, but I have further found that Grainger had legitimate business reasons for its actions. Therefore, I must decide whether Grainger has proved that it would have taken those same actions even in the absence of the protected conduct,36 and I find, for all the reasons noted here, that Grainger has met its burden of proof, and I am satisfied that be- cause of the economic and other legitimate reasons for the cancellation of Rentar-Grainger would have taken these same actions even in the absence of the drivers' protected activities. Accordingly, I have found that the reasons for discharging the drivers were not pretextual, but served a legitimate business purpose, and while there was considerable concern by both Grainger and Rentar over the branch time issue, the terminations would have taken place even in the absence of this protected activity. Nor does the Union have a legitimate complaint against Rentar. The drivers' basic complaint was that they lost their jobs because of Grainger's decision to dis- continue its contract with Rentar, and Rentar did lay off the drivers as a result of Grainger's decision, but, under the collective-bargaining agreement, Rentar was entitled 35 Meehan testified that his decision to terminate the contract with Rentar stemmed from an accumulation of everything Their inability to control things, to get the standard miles into help us with our operation , just gener- ally, we thought they were not in a good position The dnvers made it open they did not like Rentar and that was quite known I don't think anyone, particularly, liked Rentar No one on my staff felt they had that much confidence in them or were pleased with their serv- ice The drivers didn't Just a poor situation 36 See Litton Systems, 258 NLRB 623 (1981) W. W. GRAINGER, INC. to lay off the drivers because of lack of work. It is not alleged that Rentar had work for the drivers and still laid them off, nor did the drivers point to any contrac- tual duty that Rentar may have breached by laying them off. On the contrary, the drivers were well aware of the industry practice of "barn seniority," and despite aware- ness of the practice, and being cognizant of its effects, no grievance was filed concerning this matter.37 It is further alleged that since about June 29, 1980, Grainger refused to honor its contract with and use the truckdriving services of TDI; that since the above date TDI and/or Grainger-TDI engaged in the conduct de- scribed above because the employees therein supported the Union, and engaged in concerted activities for the purpose of collective bargaining or other mutual and/or protection. The General Counsel maintains this record shows that the drivers here involved were supposed to have begun work for TDI on June 29, 1980, but they rejected For- mento's proposed rider that day and, for that reason at that time, he refused to hire them as TDI employees, and by refusing to hire the former Rentar employees for the prohibited motive shown in the record, TDI and Grainger violated Section 8(a)(3) of the Act. The General Counsel further points out and argues that no other conclusion can be reached especially inas- much as Formento admitted that he was trying to get the drivers to agree to amend the National Master Freight Agreement and that he did not hire them be- cause they refused to do so; nor can it be said that the drivers "reneged" on any agreement and that Formento therefore lawfully refused to hire them for so " reneg- ing"-that there was no agreement to "renege" on to begin with-and this is so for four reasons- (1) Riders are between the Union and the Employer, and when For- mento told Frank Wsol that he wanted to negotiate a rider to the National Master Freight Agreement, Wsol made it clear to Formento that TDI would have to pay the drivers no less than Rentar was paying them and that all drivers would have to agree to any proposal For- mento would offer. Moreover, argues the General Coun- sel, Formento offered the drivers less than Rentar was paying them because his initial offer was that they not be paid for any branch waiting time, and then later offered that they be paid for all but the first 3 hours of branch waiting time. Furthermore, not even Formento could claim that the Union approved the rider because there is no record evidence that it ever did and the evidence is wholly to the contrary-that under the terms of the Na- tional Master Freight Agreement amendments to that agreement must be approved by the Union (art. 2, sec. 5 and art. 40, sec. 4 of G.C. Exh. 4), and Formento's testi- mony shows that Local 710 did not agree to be bound by 37 Each "barn," that is, each customer or client of a driver leasing company (such as Grainger was to Rentar) maintained a separate seniori- ty list. Thus, the over-the-road fleet drivers whom Rentar leased to Grainger had seniority only with the Grainger "barn " They did not have seniority with Rentar as such and clearly had no seniority with Rentar's other customers or clients Therefore, those drivers had no standing in the event that they were laid off from the Grainger "barn," to "bump" a driver with less overall service time as a Rentar employee who may have been assigned to the "barn" of another customer or client of Rentar 117 the terms of TDI's proposed rider, and Wsol indicated to him that they had a problem with the rider and that the drivers were not agreeing, and he had better get it "straightened out"; that even the language of the rider itself (see G.C. Exh. 16(b) or TDI Exh. 7) shows that the Union was to execute the rider if it agreed to it and there is no record evidence whatsoever that the Union ever ex- ecuted a copy of the rider. (2) Lockwood, the alleged steward, did sign a copy of the rider (G.C. Exh. 16(b)), not TDI Exh. 7, but the fact does not bind the Union- that Lockwood, even if the union steward, had no au- thority to negotiate collective-bargaining agreements or amendments thereto nor did he have authority to bind the Union in regard to such matters-that article 4 of the National Master Freight Agreement clearly defines and expressly limits the role of the union steward, and no- where in that article is the steward empowered to agree to amend the agreement,38 and article 2, section 5 of the agreement sets forth a lengthy procedure for obtaining union approval of new riders to the agreement and no- where in that article is the "agreement" of the steward in lieu of union approval stated to be sufficient to constitute compliance with the provisions of that article. Moreover, after at first indicating that he would agree to Formen- to's proposal, one of the drivers, Lockwood, revoked his acceptance of that proposal, and nowhere in the record is it suggested that he had no right to do so, and since any rider would have to be approved by the Union, and Lockwood revoked his acceptance of the rider before it went to the Union for its approval, there is no reason in law, logic, or fairness that it need, should, or could be found that his revocation of his acceptance of the rider was of no effect. Consequently, not all of the drivers ac- cepted Formento's proposal. (3) If TDI Exhibit 7 is the "real" nder that was signed by the drivers on June 14 and Lockwood on June 17, then there is all the more reason to conclude that there was no agreement because Lockwood is the only driver who signed any agreement on June 17-that the agreement he signed on June 17 was not shown to, nor was it signed by, the other driv- ers-that the drivers on June 14 tentatively agreed to give up pay for the first 3 hours of time spent at the Grainger branches but Lockwood, without any authority to do so, supposedly signed TDI Exhibit 7, which pro- vides that the drivers give up pay for the first 3-1/2 hours of time spent at the Grainger branches. Thus, maintains the General Counsel, if Respondents here claim that TDI Exhibit 7 is the "real" nder, then only one driver, Lockwood, ever agreed to it, and he subse- quently revoked that acceptance. (4) Furthermore, argues the General Counsel, if the record evidence shows anything, it shows that on June 14, prior to the drivers' tentatively agreeing to Formento's 3-hour pro- posal, Formento unlawfully threatened the drivers in se wsol testified and the National Master Freight Agreement shows that Local 710 stewards are not elected by their coworkers, but instead are appointed by the Local 710 executive board The General Counsel maintains there is no record evidence that Lockwood was in fact appoint- ed by the Local 710 executive board to be the steward for the private fleet bargaining unit , but assuming that he was so appointed, the fact re- mains that as a steward he had no authority to negotiate collective-bar- gaining agreements or riders thereto 118 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD violation of Section 8(a)(1). Thus, if there was any agree- ment reached, it was pursuant to the coercion of an un- lawful threat. In his conclusion the General Counsel states that there was no agreement to "renege" on, and that consequently TDI did not refuse to hire the drivers because they "ren- eged" on any agreement-clearly, TDI refused to hire the drivers because the drivers refused to amend a col- lective-bargaining agreement, an act that drivers could lawfully refuse to perform, and which constitutes pro- tected, concerted, and union activity under Board law, and an act which under the existing agreement they could not have performed in any event. In sum, TDI un- lawfully refused to hire the drivers on June 29, 1980, as the amended complaint alleges. First of all, turning to the argument by the General Counsel that there was no agreement or rider for the drivers to "renege" on. When Formento learned that he had a good chance of getting the Grainger account, he arranged a meeting with Frank Wsol and that meeting occurred on June 10, 1980. Formento and Wsol discussed TDI's proposed rider and some of the problems Rentar had had at Grainger-then Wsol told Formento, "There has been some problems over there, if you can go in and straight- en it out and get the drivers to agree, as far as I'm con- cerned, we have an agreement." Formento testified that this statement was repeated during the course of their conversation. It is also noted that this was not the first occasion Wsol had assumed the posture that what was okay with the drivers was okay with him-he had taken this same stance with Gale Lau concerning Rentar's pro- posed rider back in late 1979, as aforestated. Moreover, this was not the first time Ron Formento had dealt with Wsol and the Union on matters of this kind, and Wsol's practice on occasions was to allow the drivers to decide for themselves on addenda or riders to the National Master Freight Agreement. Certainly, Wsol's actions and statements imbued Lockwood and the drivers with ap- parent authority to enter into the rider here in question, and it is a reasonable inference that his actions also con- veyed the same impression to Ron Formento. Moreover, Lockwood was no stranger to bargaining either. He had been elected union steward with the knowledge and ac- quiescence of Wso1,39 and as steward he was chairman of the committee that negotiated with Irwin Brown about the mileage problem when the routes and miles traveled with Grainger loads became an issue, and it was Lockwood who drew up routing instructions. Moreover, at the first meeting between TDI and the drivers, it was Lockwood who, as union steward, acted as spokesman. It is obvious that, from Ron Formento's standpoint, he knew that Wsol was allowing the drivers to negotiate the proposed rider, and that Lockwood was the steward and spokesman for the dnvers-neither Wsol nor Lock- wood told him otherwise, but on the contrary, Wsol's and Lockwood's actions could only serve to confirm that 99 Lockwood testified that back in February 1979, he was elected union steward with a vote of the other dnvers, and that Gale Lau so in- formed Frank Wsol Lockwood had authority to negotiate and sign a binding addendum. As previously indicated here, on June 14, TDI and the drivers engaged in lengthy point-by-point discussions over every aspect of the proposed rider (TDI Exh. 6), and eventually they were able to work out a basic agree- ment. However, certain changes remained to be made in the final agreement-it appears there were typographical errors in the proposal, one clause had to be added to the rider, and the branch time compromise needed to be in- corporated. As noted, the compromise provided that the drivers would receive pay at the branches after 3 hours of off-duty time, and the parties agreed that Formento would incorporate the changes into the final rider. All the drivers, with the exception of Lockwood, then signed the rider, but it was further agreed that Lock- wood would review the revised rider and sign it if he found the changes acceptable or if there were not radical changes-and this would complete the signature process. Formento then returned to his office, had the revised rider typed, and tried to sell it to Grainger, but as a com- promise to Grainger the branch time provision was ad- justed to 3-1/2 hours, and this was the rider presented to Lockwood. When Lockwood arrived at TDI's office on June 17, he was accompanied by drivers Panunzio and Sites, and they were met by Formento and Duffy. Lock- wood was shown the rider (TDI Exh. 7) and he re- viewed it. Some discussion then ensued concerning ques- tions Lockwood had come up with in the interim, but the change in the branch time provision was pointed out to Lockwood and discussed, and when Lockwood ini- tially balked at signing, the other drivers pointed out to Lockwood that he had been given authority, and then Panunzio added, "Well, what the heck, we have already agreed to the three hours, we might just as well agree to three and one-half hours. It won't make that much differ- ence." Lockwood then signed his name above the word "Steward" on page six of the rider. At the conclusion of this meeting, Formento and Duffy were not the only ones who believed an agreement had been reached. Pan- unzio testified: Q. Mr. Panunzio, when you left Mr. Formento's office, I gather you left with Mr. Lockwood and Mr. Sites? A. Yes, sir. Q. As far as you were concerned, the rider had been agreed to, at that point? A. Yes, sir. Lockwood, too, by his actions indicated that he believed he had entered into a contract on behalf of the Union. As suggested-one does not try to get out of a contract unless one has first entered into a contract. Lockwood testified that later he decided he did not like any part of the rider and called Wsol in an effort to escape from it. I am in agreement that his disclaimer came too late-the rider was fully negotiated and final- ized before Wsol and Lockwood suddenly discovered Lockwood's lack of authority. As noted, at no time during negotiations did the Union give TDI any notice that Lockwood's authority was limited. The Union had W. W. GRAINGER, INC clothed Lockwood with ostensible authority to act for it. Consequently, when agreement was reached on all the terms of a contract and Lockwood signed the draft, the Union had the duty to implement it. If an agent for one of the parties to bargaining negotiations has only limited authority to negotiate, this limitation must be disclosed to the other party before agreement is reached.40 Fur- thermore, the Board has held that a union is bound by the acts of its representatives when such representatives are held out to possess authority to negotiate or deal on behalf of the union. In Teamsters Local 85 (Tyler Bros. Drayage), 206 NLRB 500 (1973), the Board held that the union violated Section 8(b)(3) of the Act when it refused to reduce to writing an agreement that was reached orally between the employer and the union's business agent-there, Air Land decided to cease performing trucking services under permit from the Civil Aeronau- tics Board. Tyler, another trucking company, was awarded the contract to perform those services. Tyler and Air Land officials met with the union's business agent to determine the effects of the transaction on Air Land's seven drivers. The business agent stated that the business manager could not attend the meeting but that the agent would represent the union. The parties reached an agreement as to the hiring and seniority of the drivers in question. Thereafter, the drivers protested to the union their unhappiness with the agreement. The union then met with the employers and refused to execute the agree- ment, stating that the business agent did not have author- ity to negotiate such an agreement. The Board, in holding and agreeing that the union was required to execute the agreement, stated that Section 2(2) of the Act holds a labor organization responsible for the acts of its agents just as an employer is so responsi- ble. The Board further stated that Section 2(13) of the Act, in determining the agent's authority, provides "the question of whether the specific acts performed were ac- tually authorized or subsequently ratified shall not be controlling." In so holding, the Board, 206 NLRB at 507, paraphrased what the Ninth Circuit Court of Ap- peals stated in NLRB v. Industrial Wire Products Corp., 455 F.2d 673, 679 (1972), as follows: To hold otherwise, would be tantamount to raising to dignity the argument proffered by the union and thus sanction the investiture of ostensible authority without any consequences resulting therefrom. Nei- ther can negotiators charged with the ultimate re- sponsibility of approving or rejecting collective-bar- gaining agreements be permitted to remain mute in the presence of a negotiated accord and to later let them catch their tongues at a moment they deem most likely to frustrate the progress that has culmi- nated in agreement. For the same reasons, Local 710, in the instant case, cannot be permitted to stand aloof and repudiate an agreement about which its members later have second thoughts. 40 See Adams Iron Works, 221 NLRB 71, 78 (1975), and other cases cited therein 119 There is also argument and testimony in this record in an attempt to discredit the rider signed by Lockwood in implying that pages were exchanged after he signed the rider, but, as noted, it is difficult to believe that For- mento and Duffy, who I have found were reliable wit- nesses, could be engaged in a successful business oper- ation, regularly dealing with unions, if they went around altering collective-bargaining agreements . Furthermore, Lockwood, who was handed a rider by Formento and Duffy, could not produce his copy. The General Counsel further maintains that at their meeting in June, Wsol made it clear to Ron Formento that TDI would have to pay the drivers no less than Rentar was paying them (all branch waiting time on the basis of the McClaughry grievance). With this contention the General Counsel is actually attempting to establish that TDI was required to adopt the terms and conditions of employment existing at Rentar (the predecessor) prior to Rentar's loss of the Grainger contract. The Supreme Court held in NLRB v. Burns Security Services, 406 U.S. 272 (1972), that a successor employer is not required to observe the substantive terms of the predecessor's collective-bargaining agreement with a union. It further held that "a successor employer is ordi- narily free to set initial terms on which it will hire the employees of a predecessor .. ." because it is not usual- ly "evident . .. that the bargaining representative repre- sents a majority of the employees" until the purchaser "has hired his full complement of employees.. . ." 406 U.S. at 294-295. The evidence in the instant case shows that TDI could not take over the Rentar business under the same terms and conditions of employment existing at Rentar, and TDI had the right to attempt to obtain terms and condi- tions of employment that would permit it to secure the business. Moreover, in the instant case there is no allega- tion that TDI was a successor to Rentar, and certainly, as pointed out, if a successor under certain circumstances has no obligation to adopt the terms and conditions of employment of its predecessor, a competitor such as TDI cannot be held to have such an obligation, and the Board has so held in Triangle Maintenance Corp., 194 NLRB 486 (1971), a case quite similar to the instant case. In the above case, Triangle was the successful bidder for janito- rial services at the Kennedy Airport in New York, and which services had been performed previously by Allied, its competitor. The employees of Allied were represent- ed by TWU. Triangle had submitted its bid for the busi- ness in the belief that it would be able to apply its collec- tive-bargaining agreement with another union, and that contract contained lower wages and benefits than the TWU contract. But when Triangle took over the busi- ness, TWU demanded that Triangle hire the former em- ployees of Allied and conform to the TWU collective- bargaining agreement. Triangle responded that it would be willing to hire the former Allied employees, but that the wages would have to conform to its other collective- bargaining agreement . TWU then declined this offer, and Triangle hired a new crew of employees. The Board held and agreed that Triangle had no statutory obligation to hire the Allied employees and that its failure to hire 120 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD those employees was not discriminatory. The Board noted that Triangle, as is the case with TDI, was willing and ready at all times to hire the TDI employees, albeit at wage rates lower than those set in the TWU contract with Allied, and the Board stated, "This falls far short of establishing discriminatory refusal to hire, particularly as Triangle's bid for the contract was premised on its hy- pothesis that it would be paying wage rates based on its contract with Local 32-B." I am in agreement that in the instant case TDI was also willing and ready to hire the former Rentar drivers and actually negotiated a contract with those drivers as a prelude to their anticipated hire-and, as in the Triangle case, the failure to hire the employees was motivated solely by TDI's hypothesis that it could obtain the Grainger account only if it could operate under the rider such as it actually had negotiated with the drivers during their meeting in mid-June, and indeed TDI's hypothesis was accurate because Grainger declined to give TDI the account without a satisfactory rider (3-1/2 hours of free time at the branches). In the final analysis, TDI refused to hire the drivers here in question because they insisted on setting their own terms and conditions of employment and while TDI, because it was a party to the National Master Freight Agreement, could not unilaterally set its own terms and conditions of employment, it still had the right to attempt to negotiate terms and conditions that were satisfactory to its prospective customer, and failing to secure such terms, TDI would then have the right to de- cline the Grainger business. As it turned out, TDI did not have to refuse to accept Grainger's business because Grainger refused to give it to them. Moreover, the reason the drivers were not hired by TDI was that they had reneged on the rider each of them had signed, as aforestated. The TDI rider was arrived at through open and honest negotiations on the part of Ron Formento and the drivers, but later Lockwood, without even con- sulting the other drivers who had signed the rider, uni- laterally took steps to kill the agreement and thus sub- vert the bargaining process. Clearly, the drivers would have been hired if they had honored their cider with TDI, but even then, on June 29, Formento was willing to alter the terms of the rider if the parties could reach a common understanding, but the drivers flatly refused either to negotiate or to honor their agreement. As point- ed out, the drivers were aided in this undertaking by Frank Wsol who had sanctioned the whole process in the first place by advising Formento that whatever the drivers agreed to was fine with him. Obviously, it was Lockwood and the drivers who refused employment, and it was Frank Wsol's statement regarding movement of trucks that prevented Grainger and TDI from operat- ing under their contract. For the reasons given, I find that TDI and Grainger have rebutted the General Coun- sel's case by establishing valid reasons for not hiring the drivers. The General Counsel further alleges that Grainger- Rentar engaged in the acts and conduct described above without prior notice to the Union, and without having afforded the Union an opportunity to negotiate and bar- gain as the exclusive representative of Respondent em- ployees regarding the decision and/or the effects of such acts and conduct, and thereby violated Section 8(a)(5) and (1) of the Act. The General Counsel points out various Board and court decisions holding that when an employer partially goes out of business, he must bargain with the union about the decision to close the plant as well as the effects of the closing on the employees, and argues that in the instant case Grainger-Rentar partially closed its facility, and therefore was under a duty to bargain with the Union about its decision to do so as well as the effects of that closing on bargaining unit employees. Moreover, that Grainger's over-the-road private fleet operation with Rentar, which was only one of Grainger's operations, was closed as of June 28, 1980-that Rentar had ac- counts with other motor carriers and Grainger still shipped freight to its branches, but the Grainger-Rentar entity, which had employed Lockwood, Panunzio, and the other over-the-road private fleet drivers here in ques- tion, ceased to exist, and it was not until October 1980, that the over-the-road private fleet operation, then under the supervision and control of Grainger-TDI, was recon- stituted and back in business. The General Counsel maintains that two Supreme Court cases and one Board case form the basis for the 8(a)(5) violation shown by the record here-Fibreboard Corp. V. NLRB, 379 U.S. 203 (1964); Textile Workers v. Darlington Co., 380 U.S. 263 (1965); and Ozark Trailers, Inc., 161 NLRB 561 (1966), in which the Board held that an employer that failed to bargain over the decision to close part of its business operations violated Section 8(a)(5) of the Act despite evidence that the decision was for purely economic reasons. Finally, the General Counsel points out that Grainger canceled the Rentar contract, thereby closing the over- the-road private fleet operation, because of the drivers' having engaged in concerted and union activities, acced- ed to the drivers' and the Union's demands, and com- plied with their requests for payment of branch waiting time pursuant to article 51 of the National Master Freight Agreement and the McClaughry grievance vic- tory, and moreover, that Rentar never bargained as a separate entity independent of Grainger with Local 710 regarding the decision to lay off the drivers or the ef- fects of the layoff of the drivers; and that apart from considerations of motive-stands the duty of Grainger and Rentar to bargain with the Union over the decision and effect of the layoffs per se; that under Board law a respondent has a duty and obligation to notify, meet, and bargain with the collective-bargaining representative of its employees regarding a layoff of those employees, and when it fails to do so, violates Section 8(a)(5) and (1) of the Act. The Supreme Court has recently dealt with an em- ployer's duty to bargain in a related setting. First Nation- al Maintenance Corp. v. NLRB, 452 U.S. 666 (1981). In this case the Court held that when economic reasons compel an employer to decide whether to shut down a part of its business, the employer's need to operate freely outweighs any incremental benefit that might be gained through a union's participation in the decision making. W. W. GRAINGER, INC. 121 The Court assessed the relative needs of unions and em- ployers in such circumstances and found that the myriad factors an employer must consider and be prepared to re- spond to necessitate unencumbered freedom of operation. While recognizing that unions have legitimate concerns about job preservation, the Court concluded that eco- nomic exigencies faced by an employer, which may hinge on timing, secrecy, and flexibility of action, neces- sitate untrammeled authority to act. Thus, as the Court instructed at 686: We conclude that the harm likely to be done to an employer's need to operate freely in deciding whether to shut down part of its business purely for economic reasons outweighs, the incremental benefit that might be gained through the union's participa- tion in making the decision and we hold that the de- cision itself is not part of § 8(d)'s "terms and condi- tions . . . over which Congress has mandated bar- gaining. First National Maintenance Corp. was party to a contract with Greenpark Care Center, and under the contract First National provided maintenance services to Green- park, but a dispute arose concerning the size of the man- agement fee, and First National canceled the contract and then terminated its employees who had been as- signed to Greenpark. Moreover, First National refused to bargain with the employee's union over the decision to cancel the Greenpark contract. The Court at 676 began its analysis by noting that although the Act man- dates bargaining over wages, hours, and other terms and conditions of employment, "Congress had no expectation that the elected union representative would become an equal partner in the running of the business enterprise in which the union's members are employed." The Court continued: id. at 678. Management must be free from the constraints of the bargaining process to the extent essential for the running of a profitable business. It also must have some degree of certainty beforehand as to when it may proceed to reach decisions without fear of later evaluations labeling its conduct an unfair labor practice. Congress did not explicitly state what issues of mutual concern to union and management it intended to exclude from mandatory bargaining. Nonetheless, in view of an employer's need for un- encumbered decisionmaking, bargaining over man- agement decisions that have a substantial impact on the continued availability of employment should be required only if the benefit, for labor-management relations and the collective-bargaining process, out- weighs the burden placed on the conduct of the business. The General Counsel argues that First National Main- tenance Corp. is distinguishable on its face from the in- stant case inasmuch as here, when Grainger decided to terminate the Rentar contract, it had every intention of replacing Rentar and continuing its over-the-road private fleet operation as is shown by its then ongoing negotia- tions with TDI; that here, unlike in the cited case, Grainger's "sole purpose" was not to reduce its "eco- nomic loss," and the record here shows that Grainger re- sisted all drivers' attempts to obtain payment for service, which they reasonably believed they were entitled to be compensated for, and that this was Grainger's "sole pur- pose" in canceling the Rentar contract; that here, unlike the cited case, the Union could exercise some "control" over the economic issues by bargaining with Rentar and Grainger concerning revisions of article 51 of the Na- tional Master Freight Agreement-more than advice and concessions-Local 710 could have offered a bona fide solution to the branch time controversy. Moreover, as further argued by the General Counsel, nothing in this record suggests that Local 710 would have been reluc- tant to engage in discussions , but to the contrary, this record shows that Local 710 was denied the opportunity to partake in meaningful discussions at the time when such discussions might have made a difference, and that in view of the foregoing, the applicability of First Na- tional Maintenance Corp. to the instant case is, at best, doubtful, even if it be concluded that the cancellation of the Rentar contract was economically motivated. Fur- thermore, in view of the record evidence of Grainger's hostility toward the drivers for their having engaged in the protected act of insisting on pay for branch waiting time, First National Maintenance Corp., becomes wholly irrelevant to this matter as the Court itself observed, 452 U.S. at 682: ... the union's legitimate interest in fair dealing is protected by § 8(a)(3), which prohibits partial clos- ings motivated by antiunion animus, when done to gain an unfair advantage. Textile Workers v. Darling- ton Co., 380 U.S. 263 (1965). Under § 8(a)(3) the Board may inquire into the motivations behind a partial closing. An employer may not simply shut down part of its business and mask its desire to weaken and circumvent the union by labeling its de- cision "purely economic." Thus, although the union has a natural concern that a partial closing decision not be hastily or un- necessarily entered into, it has some control over the effects of the decision and indirectly may ensure that the decision itself is deliberately considered. It also has direct protection against a partial closing decision that it motivated by an intent to harm a union. Therefore, First National did not violate the Act when it refused to bargain with the union over its economically motivated decision to cancel the Greenpark contract. I am in agreement that this decision recognized the futility of involving the union in a bargaining process that cannot affect management's decisions. In the instant case, Grainger, out of legitimate business considerations, made a decision to cancel its contract with Rentar. As noted previously here, it is uncontradict- ed that Grainger's business was in decline, and particu- larly in the midwest where the private fleet here in ques- tion operated. In such a situation, an employer clearly 122 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD has the right to take steps to cut economic losses. J. N. Ceazan Co., 246 NLRB 637 (1979). Moreover, not only was business declining, but Grainger found that the cost of doing business with Rentar was escalating, and Ren- tar's service was also in decline with constant manage- ment turnover, which caused further problems for Grainger-on occasions when Rentar made a manage- ment change-Grainger would then have to start again in its efforts to have problems resolved. As more fully set forth in the brief submitted by Grainger-it would have been pointless for Grainger to have initiated bargaining with Local 710-even if the Union had dropped its demands for branch time pay- Grainger's basic problems with Rentar would have per- sisted, and indeed, Grainger's disaffection with Rentar (mileage) predated the emergence of the branch time issue, as aforestated, and the Union could not resolve Rentar's revolving-door style of management, nor could it facilitate lines of communications between Rentar and Grainger. Most importantly, bargaining with Local 710 could not restore the trust and confidence Meehan and Grainger had irrevocably lost in Rentar's ability to do their job. I am in agreement that the problems and conflicts Grainger had with Rentar were beyond the control of the Union, and they were matters unique to the Grainger-Rentar business relationship. The Union could change neither Rentar' s management style nor the way Grainger felt about it. Bargaining with the Union would only be an exercise in futility, and the Act does not re- quire futile gestures.4 i Furthermore, as also indicated, Grainger had never been involved in the internal man- agement of Rentar. The drivers were Rentar employees, covered by a collective-bargaining agreement signed by Rentar, and only Rentar could reassign the drivers. Grainger had no jobs for truckdrivers and had neither the desire nor the expertise to run a trucking operation. Again, it would have been futile for Grainger to engage in bargaining with the Union. In essence, I have conclud- ed under the circumstances here, that bargaining over management decisions in the instant case was not re- quired in that the burden surrounding the conduct of running the business outweighs the collective-bargaining process, and, for the reasons set forth, the business deci- sion by Grainger was not masked as "purely economic," nor was it a subterfuge in order to weaken and circum- vent the Union. First National Maintenance Corp., supra. See also U.S. Contractors, 257 NLRB 1180 (1981). The General Counsel argues that the Union was denied the right of meaningful discussions, but I have re- jected this contention as it is well established that it is incumbent on a union, that has notice of an employer's proposed change in terms and conditions of employment to timely request bargaining in order to preserve its right to bargain on that subject. The union cannot be content with merely protesting the action or filing an unfair labor practice charge over the matter. 41 Unlike First National Maintenance, the termination of the drivers was not an inexorable occurrence . Grainger was aware that Rentar had numerous other clients , and Grainger did not take any action to see that the drivers would not be reassigned In fact, Grainger was willing to have TDI employ the same drivers for its Grainger operation In Medicenter, Mid-South Hospital, 221 NLRB 670, 678-679 (1975), the judge, whose decision was affirmed by the Board, noted that "[w]hen an employer notifies a union of proposed changes in terms and conditions of employment, it is incumbent upon the union to act with due diligence in requesting bargaining." In American Bus- lines, 164 NLRB 1055 (1967), the Board held that a union that receives timely notice of a change in condi- tions of employment must take advantage of that notice if it is to preserve its bargaining rights, and not be con- tent in merely protesting an employer's contemplated action. Such lack of diligence by a union amounts to a waiver of its right to bargain .4 2 In the instant case, Frank Wsol received word from Gale Lau as early as February 1980 that Rentar was in danger of losing the Grainger account and at this time Wsol gave permission to submit the 4-hour branch time proposal to the drivers. Lau testified that he called Wsol and informed him of Grainger's cancellation of their con- tract as soon as Lau learned of it in late May. This record also shows that Wsol received a carbon copy of Lockwood's layoff notice by certified mail (G C. Exh. 21)-the layoff notice is dated June 19, effective June 28. Therefore, the Union had ample time to request bargain- ing, and once the Union had notice, it was incumbent on it to request bargaining. In fact, no one from Local 710 had requested that Grainger bargain. For approximately 6 years Local 710 members had worked for Rentar as- signed to Grainger, and it is clear that not once during that period did the Union look to Grainger for bargain- ing-in fact, Wsol had informed Gale Lau that he did not care what Grainger did as the Union's contract was with Rentar, and Bill Meehan had no contact with the Union until Frank Wsol appeared at the trial. Further- more, the Union has not requested bargaining from Grainger to date, and the same holds true for Rentar- Local 710 never requested that Rentar bargain. As point- ed out, established Board precedent requires a union that has notice of an employer's change in a term or condi- tion of employment to timely request bargaining in order to preserve its right to bargain on that subject. There- fore, in accordance with Board precedent, Local 710 waived whatever right it may have had to bargain. The General Counsel argues that while the decision to lay off the drivers may not-on Rentar's part-have been solely or primarily discriminatory, nevertheless the layoffs were conducted without prior notice to or bar- gaining with Local 710 regarding the decision or the ef- fects of the layoffs, and that the possible absence of an unlawful motive on the part of Rentar alone for laying off the drivers does not matter because Grainger's un- lawfully motivated cancellations of the Rentar contract had the foreseeable consequence of the subsequent Rentar layoffs and "the conduct and knowledge of one (of two) . . . joint bargaining entities . . . is imputed to the other. . .." B. F. Goodrich Co., 250 NLRB 1139, 1140 fn. 11 (1980). 42 See also Clarkwood Corp, 233 NLRB 1172 (1977), Austen-Berryhell, Inc, 246 NLRB 1139 (1979), and City Hospital of East Liverpool, 234 NLRB 58 (1978) W. W. GRAINGER, INC. 123 % As detailed earlier here-I have found that Rentar and Grainger were not joint employers. In the final analysis, Local 710 received several notices that Grainger was canceling its contract with Rentar- those were: (1) when Lau informed Wsol in February that Rentar was in danger of losing Grainger; (2) when Lau called Wsol in late May and told him Grainger had canceled; (3) when Lockwood received his layoff notice with a carbon copy sent to Wsol by certified mail; (4) when Ron Formento met with Wsol and received Wsol's permission to negotiate with the drivers; and finally, (5) when Ron Formento and Dennis Duffy negotiated with Lockwood and the drivers on June 14 and 17. Yet, the Union never requested that Grainger or Rentar bargain, but to the contrary, gave assurances that whatever all the drivers agreed to would be all right. As indicated, I am in agreement that Wsol had ample notice and oppor- tunity to enter into discussions with Grainger or Rentar, but despite the opportunities presented to it, Local 710 never requested bargaining, and by its failure, the Union waived whatever right it had to bargain over the cancel- lation of the Rentar-Grainger contract and the effects on the employees. Therefore, neither Rentar nor Grainger violated the Act, and the alleged 8(aX5) violations will also be dismissed.43 CONCLUSIONS OF LAW 1. Respondents are employers engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. Respondents have not engaged in any of the unfair labor practices alleged in the complaint. [Recommended Order omitted from publication.] *' One aspect of the defense offered by Grainger throughout the hear- ing, was that one or more of the drivers involved allegedly made a tape recording (inaudible to me) of the June 29 meeting without the knowl- edge of Ron Formento in violation of a certain Illinois State Statute. Counsel for the General Counsel stipulated that a tape was made, but when asked questions by counsel for Grainger concerning the circum- stances surrounding the making of the tape, all driver witnesses, including Lockwood, invoked their Fifth Amendment privilege and refused to answer such questions. This record adequately sets forth the positions of the parties in this respect and my rulings in the matter