A. Paladini, Inc.

National Labor Relations Board - Board Decisions

Dec 19, 1967

168 N.L.R.B. 952 (N.L.R.B. 1967)

952 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
A. Paladini, Inc., and Fishermen& Allied Maritime
Workers Division of National Maritime Union of
America, AFL-CIO, Petitioner.) Case
20-RC-7713
December 19, 1967
DECISION AND DIRECTION OF ELECTION
BY CHAIRMAN MCCULLOCH AND MEMBERS
BROWN AND JENKINS
Upon a petition duly filed under Section 9(c) of
the National Labor Relations Act, as amended, a
hearing was held before David J. Salniker, Hearing
Officer. Following the hearing and pursuant to Sec-
tion 102.67 of the National Labor Relations Board
Rules and Regulations and Statements of
Procedure, Series 8, as amended, by direction of the
Regional Director for Region 20, this case was
transferred to the National Labor Relations Board
for decision. Briefs have been filed by the Employer
and the Petitioner.
Pursuant to the provisions of Section 3(b) of the
Act, the Board has delegated its powers in connec-
tion with this case to a three-member panel.
The Board has reviewed the Hearing Officer's
rulings made at the hearing and finds that they are
free from prejudicial error. They are hereby af-
firmed.
Upon the entire record in this case, including the
briefs filed by the parties, -the Board finds:
1. The Employer is engaged in commerce within
the meaning of the Act and it will effectuate the pur-
poses of the Act to assert jurisdiction herein.
2. The labor organization involved claims to
represent certain employees of the Employer.
3. The Petitioner seeks to represent in a single
unit the crewmembers of three of the Employer's
drag fishing boats which operate out of the San
Francisco area. The Company urges dismissal of
the petition on either of the following two grounds:
(a) it argues that the crewmembers sought are not
its employees, but the employees of the captains of
the boats, who are alleged to be independent con-
tractors; and (b) it contends that, even if the Board
views the crewmembers as its employees, Peti-
tioner is ineligible to represent them since Peti-
tioner's recent affiliation with the San Francisco
Crab Boat Owners Association (herein referred to
as CBOA) has created a material conflict of in-
terest.
A. The Employer predicates its contention that
it has no employment relationship with the
crewmembers upon the Board's earlier decision in
Frank Alioto Fish Co. and Boat Seaworthy, 2 a
1960 case which included the same Employer, and
Hereinafter referred to as NMU or the Union.
s 129 NLRB 27.
S F. H Snow Canning Co, 156 NLRB 1075, 1078; Eureka
Newspapers, Inc., 154 NLRB 1181, 1184
in which, on similar facts, the Board concluded that
the captains were independent contractors and the
sole employers of the crewmembers.
Except as indicated, the present facts do not
differ materially from those considered in Alioto.
And, we are here concerned with the similar issue
of whether the crewmembers employed on vessels
owned and maintained by the Employer, but
operated by the captains under an oral agreement
with the Employer, are employed by the Employer.
In Alioto, the Board examined the relationship
between the Employer and the boat captains, and
although it viewed many elements thereof to be in-
dicative of an employment relationship, it regarded
certain other factors as negating any basis for find-
ing that the captains were supervisors, and the
crewmembers employees of the Company. In
reaching this result, the Board relied on the cap-
tains' substantial independence of control concern-
ing the seaborne operations of the vessels.
The Board has frequently held that, when per-
sons are alleged to be independent contractors, the
determination requires the application of the "right
of control" test. Where the person for whom the
services are performed retains the right to control
the manner and means by which the result is to be
accomplished, the relationship is one of employ-
ment. On the other hand, where control is reserved
only as to the result sought, the relationship is that
of an independent contractor. The resolution of this
determination depends on the facts of each case,
and no one factor is dispositive.3
As was observed in Alioto, when such an issue
presents itself, there usually are many factors which
will support a finding of independent contractor or
of employment. However, more recent decisions
caution against resolution of this issue through
mechanical application of the right-of-control test.
Rather, it has been necessary to apply the control
test in light of the economic realities of the particu-
lar situation.4 In this connection, one of the factors
considered by the Board in deciding whether an in-
dividual is an independent contractor or an em-
ployee is his opportunity to make decisions which
will affect his profits and loss.5 Since the record
herein shows that the captains have little opportuni-
ty to make business decisions materially affecting
their opportunity for gain, as well as other factors
indicative of the extensive control retained by the
Employer over operation of the boats, it is our
opinion, upon reconsideration, that an employment
relationship, rather than one of independent con-
tractor, exists between the Employer' and the cap-
tains.
Thus, considering the economic realities, we are
satisfied that the Company retains sufficient control
} Deaton Truck Lines , Inc, 143 NLRB 1372, 1377
William P . Riggin & Son , Inc., 153 NLRB 1358, fn. 4, and cases cited
therein
168 NLRB No. 132
A. PALADINI, INC. 953
not only over the end result, but also as to the
manner and means by which it is accomplished. As
a source of fish, the boats are engaged in an integral
part of the Employer's overall operations as a
processor and distributor of seafood products. The
captains invest little more than their services in the
fishing venture. The Company owns the ships, and
places them in the charge of the captains without
lease or other formal arrangement. It retains
responsibility for maintenance and repair of the ves-
surance in connection with the fishing operations,
responsibility for maintenance and repair of the ves-
sels, and carries both property and liability in-
surance in connection with the fishing operations.
All costs of voyages for such matters as food, ice,
and fuel are covered by charges to the Company,
and paid for by the latter out of the proceeds of the
catch.6 The Company pays the crews weekly by
check and is responsible for withholding income
taxes, social security taxes, and unemployment
compensation (maintenance and cure). It is thus ap-
parent that the captains have not interest in the
boats, make no financial outlays in connection with
fishing trips, and assume no signficant responsibili-
ty for the administrative matters entailed in operat-
ing the vessels or marketing the catch.
Added to the Company's assumption of all
entrepreneurial risks in connection with the fishing
venture is the fact that the oral agreement with the
captains is terminable at will. The agreement
requires the captains to furnish their entire catch to
the Company, and they cannot sell elsewhere.7 The
Company sets the limit on the amount of fish to be
caught and purchased by it at previously negotiated
prices.8 The excess must, subject to the exception
noted above, be sold to the Company at prices
negotiated with the captain on a daily basis.
Against this background, any finding that the cap-
tains are independent contractors must be made on
the strength of the following: (1) the captains select
their own crews and with the crewmembers deter-
mine the proceed shares of each member; (2) the
captains select the place where they fish; (3) the
Company negotiates the price to be paid for the fish
with the captains; and (4) the captain is responsible
for internal discipline and labor relations aboard the
vessel. In our opinion these factors, when con-
sidered separately or in combination, do not, in the
circumstances of this case, warrant an independent
contractor finding. The captains' control over hir-
ing, firing, and internal discipline accords with the
role of a master of a seaborne vessel under maritime
tradition and would obtain whether an employment
or independent contractor relationship existed. Nor
do we find significance in the captains' role in
negotiating prices and selecting fishing sites. For, in
our opinion, the Employer's economic strength and
contribution to the fishing venture, in relation to the
services provided by the captains, establish to our
satisfaction that the Company's role in such
negotiations is not markedly different from that of
employers in dealing with acknowledged em-
ployees; the strength of the captain's negotiating
position will invariably depend upon the value
placed upon his personal services by the Company.
The captain's authority to select fishing sites is also
affected by the economic strength of the Company,
since his judgment must be exercised in a manner
which produces a catch sufficient to insure that the
Company will continue his services.
In sum, as we view the facts, the captains bear lit-
tle resemblance to the independent business man,
who through exercise of judgment and investment
of capital can materially affect personal opportuni-
ties for profit. They are engaged in a venture, in
which they assume no- financial risks but provide
their services only, while dependent upon the Com-
pany to provide all financial advances, equipment,
and administrative services. The Company controls
the manner in which the captains perform their ser-
vices, not only by the actual limitations regularly
imposed on the amount of the catch and the places
where the fish can be marketed, but also by virtue
of the control retained through the terminable na-
ture of the relationship9 and the captain's depen-
dence on the Company's economic contribution to
the venture.10
Accordingly, we conclude, on all the facts, that
the Employer has reserved, and actually exercises,
control over the manner and means, as well as the
result, of the captains' work, and that the captains
are not independent contractors but supervisors of
the crewmembers, who are employees of the Em-
ployer. Upon reconsideration, the Board's Decision
in Frank Alioto Fish Co. and Boat Seaworthy,
supra, is hereby overruled to the extent that it is in-
consistent herewith.
B. The Company further contends that, even if
the crewmembers are found to be its employees, the
Petitioner, by virtue of its affiliation with CBOA, is
barred by a conflict of interest from representing
the crewmembers. In this connection, the record
shows that CBOA is composed of most operators
of independently owned crab boats in the San Fran-
6 The wages of captains and crew consist of the shares of the boat's por-
tion of the income The total gross income of the boat has subtracted from
it the cost of fuel and supplies. Then, after the Company deducts its 40
percent share, the remainder is divided among the captain and crew in ac-
cordance with their agreement, with the captain getting a share slightly
higher than each crewmember.
9 A fourth boat owned by the Company and not subject to this petition,
the Achille Paladins, operates out of Fort Bragg and may sell its excess
fish to an animal feed processor at Fort Bragg.
" Twice a year the Company and captains negotiate the price the Com-
pany is to pay per pound That price remains in effect throughout the
season.
0 Eureka Newspapers, Inc., 154 NLRB 1181.
10 "The test for determining whether the employer-employee relation-
ship exists is the right to control, not the actual exercise of control."
N.L.R.B v. Nu-Car Carriers, Inc., 189 F 2d, 759 (C A 3), enfg. 88
NLRB 75.
954 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
cisoco area. In addition to crabs, the crab boat
operators also catch salmon. Members of CBOA
make their sales to restaurants and fish dealers in
the San Francisco area.
In March 1967, the CBOA, by execution of an
affiliation agreement, became an autonomous divi-
sion of Petitioner. This agreement amounted to an
implementation of a resolution adopted by Peti-
tioner at its recent annual convention designed to
assist all fishermen in the United States in improv-
ing conditions in the fishing industry. Through its
affiliation CBOA is to receive NMU's assistance in
lobbying for beneficial legislation for the entire in-
dustry, including tax relief. The affiliation agree-
ment calls for CBOA's separate and autonomous
existence and, pursuant thereto, CBOA's individual
members are assessed $1.50 per person monthly.
The Company contends that, since it purchases
crabs from CBOA members and sells crabs in com-
petition with CBOA members, the affiliation agree-
ment with CBOA would require Petitioner, if bar-
gaining agent for the employees in question, not to
take any position with respect to them likely to af-
fect crab boat owners adversely. Thus, the Com-
pany argues, any action the Union takes regarding
the Company would have to give consideration to
that possibility and would therefore be subject to
considerations other than those relevant to
representation of the employees. In its brief, the
Company further argues the possibility of the
Union's making intemperate bargaining demands
which would be likely to cause a strike among its
employees and thereby eliminate the Company as
a competitor of crab boat owners in the crab busi-
ness. It also points to the possibility of the Union
seeking and obtaining passage of legislation which
would benefit crab fishermen by limiting the
amount of crabs which could be caught by drag
boats or preventing the fishing for crabs by drag
boat fishermen altogether. The Union contends that
its affiliation agreement with CBOA will in no way
interfere with its representation of the Company's
employees.
On this record we find no merit on the Em-
ployer's position- There appears to be no likelihood
that the affiliation agreement will affect collective
bargaining if the Union is chosen by the employees
as their representative. Upon examination of the
nature and purpose of the affiliation arrangement,
it is our opinion that the events contemplated by the
Company are neither a natural, probable, nor logi-
cal consequence of the relationship between NMU
and CBOA, but are mere matters of conjecture
bearing no real relationship to the facts established.
We note, additionally, that we are not here con-
cerned with a labor organization that has embarked
upon a business enterprise, and now seeks to or-
ganize employees of a competing employer.11 Nor
is this a case where a union has made a loan or
otherwise committed itself financially to competi-
tors of the Employer of the employees petitioned
for.12 Here, the only financial linkage between
CBOA members and the Petitioner is the dues
requirement of $1.50 monthly per member. This
factor is no more suggestive of a conflict of interest
than would exist if the Employer had competitiors
whose employees were dues-paying members of
Petitioner and within bargaining units represented
by that Union.
Accordingly, as the evidence in the record fails to
disclose or suggest that Petitioner is likely to recog-
nize the interests of CBOA in areas other than
those beneficial to the fishing industry in general, of
that Petitioner's role as collective-bargaining
representative might be limited in any way by its
relationship with CBOA, we find, contrary to the
Employer, that NMU is not barred from participat-
ing as Petitioner in this proceeding. We therefore
find that a question affecting commerce exists con-
cerning the representation of certain employees of
the Employer within the meaning of Sections
9(c)(1) and 2(6) and (7) of the Act.
4. In accordance with the agreement of the
parties, we find that the following employees of the
Employer constitute a unit appropriate for collec-
tive bargaining with the meaning of Section 9(b) of
the Act:
All crewmembers employed by the Employer
on the Henrietta Paladini, the Catherine
Paladini, and the Alex Paladini, but excluding
all other employees, guards, and supervisors as
defined by the Act.
[Direction of Election 13 omitted from publica-
tion.]
11 Baush & Lomb Optical Co, 108 NLRB 1555, 1558.
12 N.L R.B v David Buttrick Co., 361 F 2d 300 (C A.1). But see
DavidButtrick Co, 167 NLRB No 58
13 An election eligibility list, containing the names and addresses of all
the eligible voters, must be filed by the Employer with the Regional
Director for Region 20 within 7 days after the date of this Decision and
Direction of Election. The Regional Director shall make the list available
to all parties to the election. No extension of time to file this list shall be
granted by the Regional Director except in extraordinary circumstances.
Failure to comply with this requirement shall be grounds for setting aside
the election whenever proper objections are filed. Excelsior Underwear
Inc, 156 NLRB 1236.