Adams Dairy Co.

National Labor Relations Board - Board Decisions

Jun 30, 1964

147 N.L.R.B. 1410 (N.L.R.B. 1964)

1410 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
WE WILL NOT in any other manner interfere with , restrain , or coerce our
employees in the exercise of their right to self -organization , to form , join, or
assist said Teamsters Local 327, or United Steelworkers of America, AFL-CIO,
or any other labor organization , to bargain collectively through representatives
of their own choosing , or to engage in other concerted activities for the purpose
of collective bargaining or other mutual aid or protection , or to refrain from
any or all such activities.
WE WILL offer to James Powell , Fred Ward, Charles I. Mason , and Charles N.
Lee immediate and full reinstatement to their former or substantially equivalent
positions , without prejudice to their seniority or other rights and privileges,
and make each of them whole in the manner provided in the Trial Examiner's
Decision for any loss • of pay they may have suffered as a result of our dis-
crimination against them.
All our employees ' are free to become; remain , or to refrain from becoming or
remaining members of the above named or any other labor organizations.
ALADDIN INDUSTRIES, INC.,
Employer.
Dated------------------- By---------- --------------------------------
(Representative ) ( Title)
NOTE.-We will notify any of the above-named employees if presently serving in
the Armed Forces of the United States of their right to full reinstatement upon ap-
plication in accordance with the Selective Service Act and the Universal Military
Training and Service Act of 1948 , as amended, after discharge from the Armed
Forces.
This notice must remain posted for 60 consecutive days from the date of posting,
and must not be altered , defaced , or covered by any other material.
Employees may communicate directly with the Board's Regional Office, Seventh
Floor, Falls Building , 22 North Front Street , Memphis, Tennessee , Telephone No.
527-5451, if•they have any question concerning this notice or compliance with its
provisions.
Cloverleaf Division of Adams Dairy Co.' and Bakery and General
Sales Drivers and Employees Local Union No . 28, affiliated
with the International Brotherhood of Teamsters, Chauffeurs,
Warehousemen & Helpers of America . Case No. 17-CA-2027.
June 30, 1964
DECISION AND ORDER
On April 1, 1963, Trial Examiner C. W. Whittemore issued his In-
termediate Report in the above-entitled proceeding recommending
that the complaint be dismissed.in its entirety, as set forth in the at-
tached Intermediate Report. Thereafter, all parties filed exceptions to
the Intermediate Report and supporting briefs. Pursuant to an order
of the Board remanding the proceeding for further hearing, the Trial
Examiner issued his Supplemental Intermediate Report on Septem-
ber 27,1963, recommending that the complaint be dismissed in its en-
tirety, as set forth in the attached Supplemental Intermediate Report.
'Respondent's name appears as corrected by stipulation of the parties at the hearing.
147 NLRB No. 133.
CLOVERLEAF DIVISION OF ADAMS DAIRY CO. 1411
All parties filed exceptions to the Supplemental Intermediate Report
and supporting briefs.2
The Board has reviewed the rulings made by the Trial Examiner
at the hearings and finds that no prejudicial error was committed.
The rulings are hereby affirmed. The Board has considered the In-
termediate Report, the Supplemental Intermediate Report, the excep-
tions and briefs, and the entire record in the case, and hereby adopts
the Trial Examiner's findings , conclusions , and recommendations only
to the extent that they are consistent herewith.
Respondent recognized the Union as the exclusive collective-
bargaining representative of its employees , including driver -salesmen,
with a contract effective from September 1, 1961, to August 31, 1963.
This case concerns unilateral action by . the Respondent , affecting terms
and conditions of employment of five driver -salesmen. Each serviced
a wholesale route composed of one large customer-a "Consumer
Market," providing about 40 percent of his commissions-and a num-
ber of smaller accounts.3
On March 21 , 1962, without notifying or consulting , with the,Union,
Respondent told driver -salesmen . McSwain , and Dowler ' , that.. the
small customers of a driver who had . resigned would be divided be-,
tween them and that their "Consumer. Market" customers would be
given to Alden Jaynes , an independent distributor . When Union
Business Agent Duelen learned of this action , he protested the lack
of notice and also claimed that Respondent 's action violated article
XVII( 6) of the collective -bargaining contract ,' but was told by Re-
spondent 's vice president , Frye, that nothing could be done about it
because Respondent had already made a contract with Jaynes.' The
2 Respondent supports the dismissal recommendation in the Supplemental Intermediate
Report , but excepts to certain other portions of the Supplemental Intermediate Report
p id to rulings made by the Trial Examiner at the hearing.
Respondent objects to testimony concerning the 1959 contract negotiations on the
ground , inter alia, that it would be irrelevant to the issues because Respondent Adams
had not yet purchased Cloverleaf , Inasmuch as Adams , after purchasing Cloverleaf,
assumed the contract between Cloverleaf and the Union , the bargaining history is clearly
relevant. Moreover , ' we' note that at the hearing , Respondent attempted to introduce' the
testimony to which it now objects , and which the Board 's Order reopening the hearing
directed to be received.
3 Respondent operated nine wholesale routes.
4 This name incorrectly appears as ."Bowler" in the Intermediate Report.
5Article xVII ( 6) provides: -
Salesman shall receive the regular rate of commission for all merchandise delivered
or sold on his route , and shall be furnished an invoice to that effect on load sheet.
All institutions shall be served except that no commission will be paid on sales to
governmental agencies where such business is awarded on the basis of competitive
bidding and where such bids as submitted are opened publicly - at a specified time,
place , and date.
6 Respondent 's contract with . Jaynes was entered into on January 9, 1962,
1412 DECISIONS 'OF NATIONAL LABOR'IRELATIONS BOARD
Union asserted that Respondent was under an obligation to bargain
about the change, but Respondent disputed that it had any obligation
to bargain on that particular point under the contract. Thereafter,
on August 17, 1962, the Union filed its initial 8(a) (5) charge in
this case.
On August 31, 1962, again without notifying or consulting with the
Union, Respondent took the "Consumer Market" customers from
driver-salesmen Melton, Tuckness, and McCroskey, gave them to
Jaynes, and replaced each lost "Consumer Market" customer with six
to eight schools. Respondent was unable to tell the drivers what pro-
visions would be made to replace the lost "Consumer Market" ac-
counts when the school year ended in June and the contracts to serve
them, which it had just acquired, expired.
At a meeting with Respondent on September 4, 1962, the Union pro-
tested that this action violated both its contract and Section 8(a) (5)
of the Act. No bargaining took place at this meeting. In January
1963, the Union again requested bargaining on the changes, but Re-
spondent said discussions would be futile because Respondent wished
to honor its agreement with independent distributor Jaynes.
It is clear from the record that the actions taken by Respondent on
March 21 and August 31, 1962, amounted to a substantial change in
the working conditions of the five driver-salesmen immediately af-
fected. The subcontracting of a significant portion of the work done
by the employees of the unit, even if replaced by another type of work,
which is either more arduous or of less certain duration, is a matter
of legitimate concern to the exclusive bargaining representative of the
employees and a matter on which the employer must bargain in good
faith.' -
However, Respondent argues that the Union waived its right to bar-
gain over changes such as were instituted in the instant case. Re-
spondent's position is without merit. Although a statutory right such
as is involved here may be waived by collective bargaining, a waiver,
if it is to be found, must be clearly and unmistakably established and
is not lightly to be inferred. (The Timken Roller Bearing Co., 138
NLRB 15, enfd. 325 F. 2d'746 (C.A. 6) ; Perkins Machine Company,
141 NLRB 98, enfd. 326 F. 2d 488 (C.A. 1).) The evidence upon
which Respondent relies falls short of that requisite standard of proof
and is insufficient in our opinion to establish union acquiescence in
Respondent's assertion of a contractual right to undertake the dis-
puted unilateral action.
7 The testimony indicates that the work which replaced the "Consumer Market" stops
was more arduous and in some instances required longer hours, but that the driver-
salesmen generally received higher wages , except for the 2-week school vacation period
which sharply reduced the earnings of Melton, Tuckness , and McCroskey. It is im-
material , however, -whether the changes resulted in pay increases to the driver-salesmen
if Respondent 's failure to notify or consult with the Union was otherwise such as to vio-
late Section 8(a) (5).
CLOVERLEAF DIVISION OF ADAMS DAIRY CO. 1413
Respondent would support a finding of waiver largely on the basis'
of the negotiations culminating in the 1959 and 1961 contracts re-
spectively. During negotiations for the 1959 contract, the Union
proposed that a "change in operations" provision be added to the
new contract. The Union's proposal would have required, inter alia,
that prior to making changes in operations affecting employees, the
Respondent should notify the Union in writing, discuss the proposed
changes with the Union, and withhold all changes until they are
"mutually agreed upon." This proposal was made at the first bargain-
ing session for the 1959 contract. The chairman of the multiemployer
negotiating committee, with the concurrence of Cloverleaf's repre-
sentatives, told the Union that the "change in operations" provision
was not needed because article XVII (6) of the contract fully pro-
tected the driver-salesmen in respect to all products processed in the
Springfield plant. We find that Respondent thereby assured the
Union that it would continue to pay a driver-salesman his normal
commission even if it transferred part of his route to someone else.
The subject was not discussed further during the 1959 negotiations.
The same proposal was advanced during the 1961 contract negotia-
tions, but was not pressed by the Union.'
The fact that the Union attempted unsuccessfully to include in its
contracts a statement of its statutory right to bargain about changes
in working conditions, coupled with a provision giving it a veto over
institution of any such changes, is not evidence that the Union waived
its statutory right to advance notice and opportunity to bargain about
such changes.' All that can be inferred from the negotiating history
is that the Union has failed to achieve a contractual veto over sub-
contracting changes. Any other reading of the negotiating history
would place the Union in the anomalous position of losing its statutory
right it would otherwise have to bargain over specific. subcontracting
changes as they might arise simply because it had sought unsuccess-
fully to achieve a specific contractual provision to regulate and govern
all such future situations. To hold that more failure under such cir-
cumstances operates as a forfeiture of a statutory right would have the
effect of restricting a Union's freedom in a legitimate area of collec-
tive bargaining. It would greatly lessen the possibility that a union
would bring up matters of this sort in the hope and expectation that
good- faith exploration of the issues might result in agreements which
would eliminate- future disputes, save in situations where a union was
sure it could achieve its demands or where it was willing to strike to
8 In view of the assurance of protection made by a company negotiator, failure to insist
on this provision in 1961 cannot be considered a waiver. We note that the arbitration
decision revealing the lack of protection contained in article XVII( G) was not issued
until after the 1961 contract was signed . Therefore there could have been no conscious
acquiescence in Respondent 's present claim of a reserved prerogative to engage in uni-
lateral subcontracting . Proctor Manufacturing Corporation, 131 NLRB 1166, 1171.
e Cf. The Timken Roller Bearing Co ., supra.
1414 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
force employer concurrence. This would be "disruptive rather than
fostering in its effect upon collective bargaining," 10 and hence con-
trary to the broad policy directives of the Act.
Nor do we find in the fact that the Union may have acquiesced in
certain other changes in methods of operations-such as equalizing
the volume of business on routes, or adding a new customer to a
route-proof that it waived its right to bargain either about subcon-
tracting work done by unit employees to an independent contractor
or about changes which alter the wages or other working conditions
of employees in a substantial or unaccustomed way." Respondent
would also rely on the Union's unsuccessful prosecution of a grievance
over a similar transaction in 1961 as an indication of waiver. But
that grievance, if relevant on this issue at all, only serves as an indi=
cation that at least in 1961 the Union did not acquiesce in Respondent's
action.12
Considering all these factors, we find, as did the Trial Examiner,,
that the Union. neither acquiesced in nor clearly and unmistakably
waived its statutory right to bargain on proposed changes in the terms
and conditions of employment, such as took place here by unilateral
actions of Respondent.i3
The Trial Examiner found that although Respondent might have
violated Section 8(a) (5) by changing the working conditions of some
of its drivers without notifying or consulting with the Union in ad-
vance, the complaint should be dismissed because the Union had not
resorted 'to the arbitration provisions of the existing contract.14 We
do not agree.
to N.L.R.B. v. J. H. Allison & Company, 165 F. 2d 766 (C.A. 6).,
11 We note that the Respondent does not ' argue'that certain dockside sales to inde'
pendent distributors prior to January 20, 1961, when Adams acquired an interest in
Cloverleaf, and prior to the dealings which resulted in the 1961 arbitration proceeding,
amount to a waiver of the Union 's statutory rights in the instant dispute. Those deal=
ings were considered by the Union to be valid under the contract , and there is no evidence
that they were entered into in secrecy „ without notification or consultation with the
Union, as was the case with both the dealings which resulted in the 1961 arbitration
and those which resulted in'the instant unfair labor practice charges. We do not con-
sider that such dealings amount to a waiver of the statutory rights at issue herein, but
in any event, any waiver which might have been implied therefrom was rescinded by the
Union's 1961 grievance and its no-subcontracting demand in the 1961 contract negotia-:
tions . Beacon Piece Dyeing and Finishing Co., Inc ., 121 NLRB 953 , 956-957.
12 We consider that grievance more fully in footnote 17, below.
13 Beacon Piece Dyeing and Finishing Co., Inc., supra; Perkins Machine Company,
supra; Hekman Furniture Company, 101 NLRB 631, enfd . 207 F. 2d 561 (C.A. 6).
14 Concerning arbitration , the contract provided in article XXI :
In the event of dispute, difference , or disagreement between the Employer and the
Union concerning the interpretation or application of the terms of this Agreement,
representatives of the Employer and the Union shall make an honest and sincere
effort to adjust the same in an amicable manner. In the event, however, of the
inability of the Employer and the Union to reach an agreement on the issue or issues
in dispute, the question may, at the option of either party, be submitted for arbitra-
tion, in the following manner. . . .
CLOVERLEAF DIVISION OF ADAMS DAIRY CO. 1415
The contract subjects to its arbitration procedures only such disputes
as concern "the interpretation or application of the terms of this
Agreement." But in the instant case, the precise union claim, which
is the subject of the complaint before us, does not relate to the mean-
ing of any established term or condition of the contract, or to any
asserted misapplication thereof by Respondent. It is directed instead
at Respondent's denial to it of a statutory right guaranteed by Section
8(d) of the Act, namely, the right to be notified and consulted in
advance, and to be given an opportunity to bargain, about substantial
changes in the working conditions of unit employees in respects not
covered by the contract. As the particular dispute between the Union
and Respondent now before us thus involves basically a disagreement
over statutory rather than contractual obligations, the disposition of
the controversy is quite clearly within the competency of the Board,:
and not of an arbitrator who would be without authority to grant the
Union the particular redress it seeks and for which we provide below
in our remedial order. (The Timken Roller Bearing Co., supra.)
We are not unmindful of the fact that the resolution of the unfair
labor practice issue in this case has required our consideration, as a
subsidiary issue, of Respondent's claim that it was impliedly author-
ized under the contract to take unilateral action on the matters com-
plained of-a claim we have rejected as without merit. We may
assume that this claim gave rise to a difference over the meaning of
contractual provisions that might have been submitted for considera-
tion under the contract's arbitration procedures. Nevertheless, we do
not consider that reason enough for us to refuse either to entertain the
instant unfair labor practice proceeding, or to provide the necessary
redress for the violation found. It is quite clear that the Board is not
precluded from resolving an unfair labor practice issue, which may
call for appropriate relief under the Act, simply because as an incident
to such violation it may be necessary to construe the scope of a con=
tract which an arbitrator is also empowered to construe. Section
10 (a) of the Act expressly provides with respect to the Board's power
to prevent unfair labor practices that "[t]his power shall not be af-
fected by any other means of adjustment or prevention that has been
or may be established by agreement, law, or otherwise."
Nor in our view is the situation presented by this case such as to
move us in the exercise of our discretion to withhold our own remedial
processes in deference to the arbitration processes the parties have
agreed upon for the settlement of contract disputes. None of the con-
siderations that have impelled us to do so in other cases is present here.
In the instant case, it does not appear that there is already in existence
an arbitration award passing on matters that bear on the ultimate
1416 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
issue we must decide, and to which we are asked to give weight or ef-
fect. Indeed, it affirmatively appears that neither party has even so
much as sought to invoke arbitration.15 Nor is this a case involving an
-alleged unfair labor practice, the existence of which turns primarily
on an interpretation of specific contractual provisions, unquestionably
encompassed by the contract's arbitration provisions, and coming to us
in a context that makes it reasonably probable that arbitration settle-
ment of the contract dispute would also put at rest the unfair labor
practice controversy in a manner sufficient to effectuate the policies of
theAct.18 On the contrary, it is highly conjectural that arbitration in
this case, even if resorted to by the Union, could have effectively dis-
posed of the basic issue in this case-whether Respondent acted law-
fully in engaging in the unilateral actions to Which the instant com-
plaint is addressed .17 Under all the circumstances, therefore, we are
unable to agree with the conclusion of the Trial Examiner that even
though Respondent's unilateral action provides a statutory basis for
doing so, the Board ought not in this case exercise its power to remedy
Respondent's unfair labor practice. Rather, we believe that for us to
dismiss this complaint on the ground he states would be an unwar-
ranted abuse of our statutory responsibilities.
5 Cf. Spielberg Manufacturing Company, 112 NLRB 1080; International Harvester
Company ( Indianapolis Works ), 138 NLRB 923, enfd . sub nom . Thomas D . Ramsey v.
N.L.R.B ., 827 F. 2d 784 ( CA. 7) ; Raley's Inc. d/b/a Raley's Supermarkets , _ 143 NLRB
256; Insulation & Specialties, Inc., 144 NLRB 1540.
le It is in such circumstances , clearly not present here , that deferral of Board action
pending arbitration , referred to by Member Brown in his concurring views, might most
appropriately be considered . Cf. Crown Zellerbach Corporation, 95 NLRB 753; Con-
solidated Aircraft Corporation, 47 NLRB 694.
37 This is apparent from the arbitration history of the dispute which arose in 1961 and
which"Respondent claims is "precisely the same" as the one now in litigation. In 1981,
the parties submitted to arbitration the question of whether article XVII ( 6) required
Respondent to pay its driver -salesmen a commission on certain dockside sales to an inde-
pendent contractor for resale in the driver -salesmen 's routes. The arbitrator found, con-
trary to Respondent 's interpretation as advanced to the Union in the 1959 negotiations,
that the contract did not apply to such transactions, but that "at most the Union presented
a pe39uasive complaint against unwise , if not forthrightless tactics" be concluded that
"unfortunately the agreement fails to provide a remedy for such conduct." If we are to
accept Respondent 's premise that the 1961 dispute and the instant one are "precisely
the. same," it would follow that resort to arbitration would have been futile on the issue
of Respondent's right to act unilaterally . For, as interpreted by the arbitrator , the con-
tract neither covers this type of dispute nor provides any remedy for it. ( This, of course,
also bears on Respondent's waiver argument , since, If the contract does not cover the
dispute, it cannot be said to authorize Respondent 's unilateral action .) Further, the
record reveals that at the 1961 arbitration hearing, Respondent contested the arbitrator's
jurisdiction , and agreed to participate in a hearing on the merits only on the condition
that its rights on the jurisdictional question would be preserved . As the arbitrator de-
cided for Respondent on the merits , he found it "unnecessary to consider " his own juris-
diction . We note , however , that Respondent has neither repudiated the position It took
on the 1961 grievance with respect to the arbitrator ' s want of jurisdiction , nor offered to
submit to tEe jurisdiction of an arbitrator with respect to the instant dispute. We thus
find Respondent in the contradictory position of arguing before the Board that the Union
must submit its grievance to an arbitrator who, according to It, nevertheless lacks juris-
diction to hear the dispute.
CLOVERLEAF DIVISION OF ADAMS DAIRY CO. 1417
Accordingly, on the entire record in this case , we find , contrary to
the Trial Examiner , that Respondent , by taking the "Consumer
Market" accounts from five driver -salesmen on March 21 and Au-
gust 31, 1962 , and giving them to an independent contractor, and
otherwise changing working conditions , without first giving an op-
portunity of bargaining to the Union, violated Section 8(a) (5) and
(1) of the Act."'
Upon the basis of the foregoing findings of fact, and on the record
as a whole , we make the following :
CONCLUSIONS OF LAW
1. Respondent is engaged in commerce within the meaning of Sec-
tion 2 ( 6) and (7) of the Act.
2. The Union is a labor organization within the meaning of Section
2 (5) of the Act.
3. All truckdrivers, driver-salesmen , inside dairy employees, and
driver-salesmen helpers employed by Respondent, but excluding office
clerical employees, laboratory technicians, salesmen who do not handle
or work on dairy products, mechanics, engineers , and supervisors with-
in the meaning of the Act, constitute a unit appropriate for the pur-
poses of collective bargaining within the meaning of Section 9(b) of
the Act.
4. At all times material herein, the Union has been the exclusive
bargaining representative of the employees in the aforesaid unit
within the meaning of Section 9(a) of the Act.
5. By changing the rates of pay and the conditions of employment
of its driver-salesmen and by engaging an independent distributor to
take over a substantial portion of the work previously performed by
employees in the aforesaid unit, all without prior notice to, or consulta-
is Central Illinois Public Service Company , 139 NLRB 1407 , enfd. 324 F. 2d 916
C.A. 7) ; Fibreboard Paper Products Corp., 138 NLRB 550 , enfd . sub nom. East Bay
Union of Machinists, Local 1304, etc. V. N .L.R.B., 322 F. 2d 411 (C.A.D.C.),. cert. granted
in part 375 U.S. 963; Adams Dairy, Inc., 137 NLRB 815, enforcement denied in part
322 F. 2d 553 ( C.A. 8) ; Town & Country Manufacturing Company, Inc., et at., 136
NLRB 1022 , enfd. 316 F. 2d 846 ( C.A. 5) ; Beacon Piece Dyeing and Finishing Co., Inc.,
121 NLRB 953 ; The Press Company, Incorporated, 121 NLRB 976; General Motors
Corporation , 81 NLRB 779, enfd. 179 F . 2d 221 ( ,C.A. 2) ; Inland Steel Company, 77
NLRB 1, enfd . 170 F. 2d 247 ( C.A. 7).
The Court of Appeals for the Eighth Circuit denied enforcement in part in Adams
Dairy, Inc ., supra, rejecting the Board 's Fibreboard doctrine which also underlies this
case . The Supreme Court has granted certiorari in Fibreboard and the Board has peti-
tioned for certiorari in Adams Dairy, 32 LW 3255 . We respectfully adhere to the Board's
position in Fibreboard and Adams Dairy until the issue is resolved by the Supreme Court.
We note, however , that the instant case is distinguishable from Adams Dairy in that
after the Respondent 's unilateral action there were employees left in the bargaining unit,
and even under the Eighth Circuit's Adams Dairy decision , the Respondent is obligated
to bargain with their representative with respect to wages , hours, and other terms and
conditions of employment.
1418 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
,tion or bargaining with, the Union, Respondent has engaged in and
is engaging in unfair labor practices within the meaning of Section
8(a) (5) and (1) of the Act.
6. The aforesaid unfair labor practices are unfair labor practices
affecting commerce within the meaning of Section. 2(6) and (7) of
the Act.
THE REMEDY
We have found that Respondent, by unilaterally changing the terms
and conditions of employment of its driver-salesmen, acted in deroga-
tion of the statutory status of the Union as their exclusive bargaining
representative. . In order for any remedy to be meaningful in this
situation we shall order the Respondent, upon request of the Union
as the collective-bargaining representative of the employees in the ap-
:propriate unit, to restore the status quo ante, in addition to ordering it
to cease and desist from refusing to bargain with the Union. We shall
also order Respondent to make whole Harold McSwain, David Dowler,
Jack W. Melton, Albert Tuckness, and Manford C. McCroskey, for
any loss of.wages they may have suffered as a result of Respondent's
unlawful action in bypassing their bargaining agent. Backpay shall
be the difference, if any, between the wages the employees would have
earned had the unilateral changes not been made, and the wages the
employees actually earned from the date of the change until the date
the Respondent offers to reestablish the preexisting routes. A.P.W.
Products Co., Inc., 137 NLRB 25. Backpay shall be computed in the
manner set forth in F. W. Woolworth Company, 90 NLRB 289;
N.L.R.B. v. Seven-Up Bottling Company of Miami, Inc., 344 U.S.
344, with interest added thereto in the amount and in the manner set
-forth in Isis Plumbing & Heating Co., 138 NLRB 716.
ORDER
Pursuant to Section 10(c) of the National Labor Relations Act, as
'amended, the National Labor Relations Board hereby orders that the
Respondent, Cloverleaf Division of Adams Dairy Co., Springfield,
Missouri, its officers, agents, successors, and assigns, shall:
1. Cease and desist from :
(a) Refusing to bargain collectively with Bakery and General Sales
Drivers and Employees Local Union No. 28, affiliated with the Inter-
national Brotherhood of Teamsters; Chauffeurs, Warehousemen &
Helpers of America, as the exclusive bargaining representative of a
unit composed of all truckdrivers, driver-salesmen, inside dairy em-
ployees, and driver-salesmen helpers employed by Respondent, but
excluding office clerical employees, laboratory technicians, salesmen
who do not handle or work on dairy products, mechanics, engineers,
and supervisors within the meaning of the Act, with respect to wages,
CLOVERLEAF DIVISION OF ADAMS DAIRY CO. 1419
hours, and other terms and conditions of employment, by unilaterally
subcontracting unit work or otherwise unilaterally changing the
wages, hours, and other terms and conditions of employment of unit.
employees without first affording the above-named Union an oppor-
tunity to bargain about the proposed changes.
(b) Interfering in any other manner with the efforts of:the above-
named Union to negotiate for, or to represent, the employees in the
aforesaid bargaining unit as their exclusive bargaining agent.
(c) In any like or related manner interfering with, restraining, or
coercing its employees in the exercise of the right to self-organization,
to form labor organizations, to join or assist the above-named Union,
or any other labor organization, to bargain collectively through rep-
resentatives of their own choosing, and to engage in concerted activi-
ties for the purpose of mutual aid or protection as guaranteed in
Section 7 of the Act, or to refrain from any and all such activities,
except to the extent that such right may be affected by an agreement
requiring membership in a labor organization as a condition of em-
ployment as authorized in Section 8(a) (3) of the Act, as modified
-by the Labor-Management Reporting and Disclosure Act of 19.59.
2. Take the following affirmative action. which the Board finds :will
.effectuate the policies of the Act:
,(a) Bargain, upon request, with Bakery and-General Sales Drivers
.and Employees Local Union No. 28, affiliated with the International
.Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of
America, concerning the subcontracting out of unit work, including
service to any customers which since January 1, 1962, have been or are
being serviced by its driver-salesmen.
(b) Upon request of the above-named Union offer to driver-
salesmen Harold McSwain and David Dowler the reestablishment of
the same or substantially equivalent routes which they serviced prior
to the unilateral changes made on or about March 21, 1962, and in
addition make them whole for any loss of pay they may have suffered
because of the unilateral change, in the manner set forth in the section
above entitled "The Remedy."
(c) Upon request of the above-named Union offer to driver-
salesmen Jack W. Melton, Albert Tuckness, and Manford C. Mc-
Croskey the reestablishment of the same or substantially equivalent
routes which they serviced prior to the unilateral changes made on or
about August 31, 1962, 'and in addition make them whole for any loss
of pay they may have suffered because of the unilateral change, in
the manner set forth in the section above entitled "The Remedy."
(d) Preserve and, upon request, make available to the Board or its
agents, all payroll records and other records in the Respondent's pos-
session necessary for the computation of lost earnings due hereunder.
1420 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(e) Post at its plant in Springfield, Missouri, copies of the attached
notice marked "Appendix A.719 Copies of said notice, to be furnished
by the Regional Director for the Seventeenth Region, shall, after being
duly signed by Respondent, be posted immediately upon receipt thereof
and be maintained by it for 60 consecutive days thereafter in conspicu-
ous places where notices to employees are customarily posted. Re-
spondent shall take reasonable steps to insure that such notices are
not altered, defaced, or covered by any other material.
(f) Notify the said Regional Director for the Seventeenth Region,
in writing, within 10 days from the date of this Order, what steps
Respondent has taken to comply herewith.
MEMBER LEEDoM , concurring in part :
In accord with my views as expressed in Town c6 Country Manufac-
turing Company, Inc., et al., 136 NLRB 1022, I cannot agree that the
Respondent was under any obligation to bargain concerning its eco-
nomic decision to subcontract. It was, however, under an obligation
to bargain concerning the effects of that decision upon its drivers; and
the bare existence of a contractual grievance and arbitration provision
does not either satisfy that obligation or preclude this Board from
considering whether that obligation has been breached. As the arbi-
tration provisions of the contract have not been invoked with respect
to this dispute, as the Union has clearly not waived its rights to bar-
gain concerning the effects of the decision to subcontract, and as the
Respondent has clearly failed to satisfy its bargaining obligation, I
agree that the Respondent has violated Section 8 (a) (5) and concur in
so much of the Order as requires it to bargain concerning the effects of
its decision upon its drivers.
MEMBER BROWN , concurring :
I agree that Respondent violated Section 8(a) (5) and (1) of the
Act by unilaterally taking the "Consumer Market" accounts from its
own employees and subcontracting the work to an independent con-
tractor. In my opinion, however, my colleagues have not provided a
wholly adequate reason for rejection of Respondent's claim , and the
Trial Examiner's finding, that we should dismiss the complaint be-
cause the Union could have under the collective-bargaining agreement
arbitrated its dispute with Respondent. A significant number of
recent cases have dealt with the Board's function under the Act where,
a dispute arises which may be both a violation of the Act and an
arguable breach of the collective-bargaining agreement subject to arbi-
tration. The attempted accommodation of the statutory policy re-
19 In the event that this Order Is enforced by a decree of a United States Court of
Appeals, the notice shall be amended by substituting for the words "a Decision and
Order" the words "a Decree of the United States Court of Appeals , Enforcing an Order."
CLOVERLEAF DIVISION OF ADAMS DAIRY CO. 1421
quiring that full play be given to the arbitral process; and the statu-
tory policy conferring upon the Board exclusive jurisdiction to
prevent unfair labor practices, has created uncertainty as to when the
Board should treat with the unfair labor practice and when it should
relegate the parties to their contract remedies.
I believe that we must implement the philosophy which underlies the
Supreme Court's decisions in Textile Workers Union of America v.
Lincoln Mills of Alabamaa 20 and the Steelworkers 21 trilogy of strength-
ening collective bargaining by giving full play to private adjustment
machinery established by the parties. However, this is not to say that
the Board lacks jurisdiction to decide all such disputes involving un-
fair labor practices; for Section 10(a) of the Act clearly vests the
Board with jurisdiction over conduct which constitutes a violation of
the provisions of Section 8 notwithstanding the existence of methods
of "adjustment or prevention that may be established by agreement
...." 22 Indeed, until as recently as the Supreme Court's decision in
Smith v. The Evening News Association,= there was some doubt that
a court could entertain a suit on the contract, or compel arbitration or
affirm an award , where the alleged breach of contract also arguably
constituted an unfair labor practice. While the Supreme Court held
in that case that the doctrine of preemption did not go so far as to
preclude contract actions with respect to grievances which arguably
were unfair labor practices, the Court did not hold that the private
agreement of the parties somehow preempted the Board's jurisdiction
over unfair labor practices. And, more recently, in Carey, etc. v.
Westinghouse Electric Corp., 375 U.S. 261, the Court stated that not-
withstanding the availability of arbitration, "[t]he superior authority
of the Board may be invoked at any time," and the Board may "dis-
agree with the arbiter" in which event the "Board's ruling would, of
course, take precedence . . ." 24
Our problem, therefore, is to determine the situations in which the
cause of industrial peace through collective bargaining will be better
served by deferring to the arbitral process and requiring the parties
to resolve their differences by means of the machinery of their agree-
ment. There is no facile formula for making an election between these
alternatives. Each case stands on its own facts. However, an ex-
20353 U . S. 448.
21 United Steelworkers v. American Mfg. Co ., 363 U . S. 564 ; United Steelworkers v.
Warrior and Gulf, 363 U.S. 574; United Steelworkers v. Enterprise Wheel and Car,_ 363
U.S. 593.
22 To the extent that the Court of Appeals for the Fifth. Circuit in Sinclair Refining
Company v. N.L.R .B., 306 F. 2d 569 , and the Court of Appeals for the Ninth Circuit in
Square D Co. v. N.L.R.B., 332 F. 2d 360 , may be suggesting that the Board lacks juris-
diction over cases where the conduct involved constitutes both a possible violation of the
.Act and a breach of contract, I must respectfully note my disagreement.
23 371 U . S. 195.
375 U . S. at 272.
1422 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
amination of the different functions served by the Board and the
arbitrator indicates that some guidelines,can be established which may
produce a coherent Board policy toward arbitration.
In the United States, the function of the arbitrator rarely exceeds
interpretation and application of a particular provision of an exist-
ing agreement to a particular dispute. The arbitrator is limited to
the enforcement of existing rights, and where the parties have not yet
reached agreement the arbitrator ordinarily has no power to act.
Thus, we may characterize arbitration as retrospective in nature, that
is, concerned with interpreting existing agreements.
This interpretation of operative contracts is to be distinguished
from that phase of collective bargaining concerned with the creation
of new rights or the modification of existing rights. Thus, in ad-
ministering Section 8(a) (5), the Board's function is quite different
from the arbitrator's since the Board's concern is that terms and con-
ditions of employment are established as a result of agreement reached
through collective bargaining, and not with the interpretation or ap-
plication of agreements already achieved.
Cases coming before the Board, where the Board is urged to defer.
to arbitration, may be divided into two broad classes: those where.an,
award has already been rendered and those where arbitration either
has not been invoked or has been invoked but no award has yet been
rendered. In the former class of cases the Board has long given hos-
pitable acceptance to the arbitral process by refusing to second-guess,
the arbitrator, but limiting the scope of the Board's inquiry to deter-:
mining whether the procedures were fair and the results not repugnant
to the Act 25 Our deferral to arbitration within these limits has been.
noted with approval by the Supreme Court'21 and in my opinion has,
satisfactorily protected rights guaranteed by the Act while giving full,
play to the arbitral process.
In those cases where there is no award but where, as here, it is con-
tended that the Board should refuse to process an unfair labor practice}
complaint but should require the parties to settle their dispute under
the provisions of the collective-bargaining agreement, the problem is
much more difficult. I agree with Professor Sovern that the statutory
policy favoring arbitration can be frustrated by resourceful litigants.
who may readily "exploit the possibilities of fabricating unfair labor
practices to defeat or delay contract actions." 27 But it is equally true
25 Spielberg Manufacturing Company, 112 NLRB 1080 ; International Harvester Com-
pany, 13 18 NLRB 923 , 925-926, enfd . sub nom. Thomas D. Ramsey v . N.L.R.B., 327 F. 2d
784 (C.A. 7). .
20 Carey v. Westinghouse, supra.
21 M: I. Sovern , " Section 301 and the Primary Jurisdiction of the NLRB," 76 Harv..
L.R. 509 , 552 (1963 ). 1 ^ . -
CLOVERLEAF DIVISION OF ADAMS DAIRY CO. 1423
that resourceful respondents in unfair labor practice cases may fabri-
cate contract actions to defeat the exercise of rights guaranteed by
the Act.
While it is possible that a party may concurrently pursue both the
arbitration and the unfair labor practice routes,28 I believe that it is in-
consistent with the statutory policy favoring arbitration for the Board
to resolve disputes which, while cast as unfair labor practices, essen-
tially involve a dispute with respect to the interpretation or applica-
tion of the collective-bargaining agreement.
'But, as Justice Frankfurter observed in Universal Camera Corpora-
tion v. N.L.R.B.,29 the "[e]nforcement of ...:broad standards implies
subtlety of mind and solidity of judgment." We should not, in my
opinion, automatically dismiss a case merely because the dispute is
arguably subject to arbitration. Such action would be contrary to
the principles of Spielberg, which although limiting the scope of Board
inquiry, nevertheless establishes the principle that the Board has the
duty where a statutory right is involved to examine the fairness of
the arbitration proceedings and determine whether the results are
repugnant to the Act. Since we cannot predict whether a yet to be
held arbitration proceeding will comply with Spielberg standards we
should withhold our action pending the arbitrator's award.30 If after
an award has been rendered there is a request for Board action, our
consideration of the case would be controlled by Spielberg. Where-
ever the record establishes that the parties to be dispute as part of
their collective-bargaining relationship, consciously, by contract,
bargaining history, or past practice have ' waived statutory rights,
bargained such rights away, or bargained' to agreement with respect
to the subject matter of the dispute I believe we should leave to the
arbitrator the question of the nature of their bargain and the respec-
tive rights and obligations of each party.
Where, however, the parties have not by practice, bargaining history,'
or contract resolved their respective rights and obligations with respect
to the subject matter of the dispute, we should not defer action on'
the unfair labor practice case even though the dispute may be gen-
erally subject to the arbitration provisions of the collective-bargaining
agreement. Since an arbitrator can only enforce the provisions of the
contract, to defer to arbitration in such cases would in effect imply a
waiver of statutory rights where the only evidence that a waiver was
intended would be the silence of the agreement. The existence of an
arbitration clause alone might result in the denial or delay in the
exercise of all statutory rights not guaranteed by the contract. Such
N.L.R.B. v. Central Illinois Public Service Company, 324 F. 2d 916, 918 (C.A.•7).
3° 340 U.S. 474, 487.
30 See Dubo Manufacturing Company, 142 NLRB 431.
1424 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
a result would clearly be contrary to the policies of the Act as it
would tend to increase the likelihood of industrial strife by reducing
the number of disputes which could be peacefully resolved through
either arbitration or an unfair labor practice proceeding. Moreover,
such a result may have an adverse effect on the use of arbitration
itself since the attractiveness of arbitration clauses may be seriously
diminished if they have the effect of cutting off all statutory rights
which are arguably comprehended within the meaning of an arbitrable
dispute but are neither waived nor guaranteed by the contract.
While it is true that an interpretation of the contractual relation-
ship of the parties is inescapable in order to resolve cases of the kind
under consideration here, such contract interpretation is necessarily
encompassed within the Board's function. Otherwise, we would have
no rational predicate for deciding whether to defer to arbitration or
to process the unfair labor practice case. This would leave us with
an arbitrary choice between refusing to process any case where the
contract contained an arbitration clause, or completely disregarding
the availability of arbitration and asserting our statutory jurisdiction
in every case. I do not believe that the policies of the Act would be
effectuated by our resort to that kind of mechanical approach to this
problem.
Section 1 of the Act states that it "is the purpose and policy of this
Act . . . to provide orderly and peaceful procedures" for settling in-
dustrial disputes. In Sections 10 and 301 Congress has established
such procedures. The cases have shown that there is a certain degree
of overlap of function between the Board acting under Section 10 and
arbitrators acting pursuant to Section 301. The Act, however, is
designed to avoid "a rigid scheme of remedies." 31 In exercising its
discretion to reject or defer to arbitration, the Board will materially
influence the degree to which parties adhere to their agreements to
arbitrate, since, as the Supreme Court pointed out in Carey v. West-
inghouse, supra, the Board's authority is "superior" to the arbitrator's
and "may be invoked at any time." Thus, it is the Board by requir-
ing adherence to contractually agreed-upon methods for settling dis-
putes which has the obligation to "promote a higher degree of
responsibility upon the parties to such agreements, and . . . thereby
promote industrial peace." Textile Workers Union of America v.
Lincoln Mills of Alabama, supra, 353 U.S. 448 at 454.
I realize, of course, that our duty to protect the public interest may
in special cases require that we not defer to private agreements to
arbitrate, even where arbitration is available and where the subject
matter of the dispute appears to be regulated by the terms of the
31 Republic Aviation Corporation v. N.L.R.B., 324 U . S. 793, 798.
CLOVERLEAF DIVISION OF ADAMS DAIRY CO. 1425
agreement:32 - However, the fact that such cases may arise does not
in my opinion detract from the desirability of formulating guidelines
fora coherent Board policy toward arbitration, leaving to "the process
of litigating elucidation" 33 the development of legal principles to be
applied to special problems. S
In the instant case, I find nothing in the record which would estab-
lish that the parties'either by agreement, practice, or bargaining his-
tory have `established their mutual rights and obligations with respect
to the subject of subcontracting. I agree, therefore, that the presence
of an arbitration clause alone in the contract is no basis for our dis-
missing the complaint.
MEMBER JENKINS took no part in the consideration of the above
Decision';arid Order.
s? Special . problems are foreseeable in cases where , for example , an individual employee
covered by a contract with provisions relating to discharge for "cause" files an 8(a)(3)
charge; or where for some reason the complaining party has become barred from pursuing
a remedy under the contract ; or where the respondent is resisting arbitration ; or where
the respondent ' s conduct while constituting a breach of contract is of such a nature as
to indicate a flagrant repudiation of statutory obligations.
3 International Association of Machinists, et al. v. Marcos Gonzales , 356 US. , 617, 619.
APPENDIX A,
NOTICE TO ALL EMPLOYEES
Pursuant to a Decision and Order of the National Labor Relations
Board, and in order to effectuate the policies of the National Labor
Relations Act, we hereby notify our employees 'that :
WE WILL bargain collectively, upon request, with Bakery and
General Sales -Drivers and Employees Local Union No. 28,
affiliated ,with the International Brotherhood of Teamsters,
Chauffeurs, Warehousemen & Helpers of America, concerning sub=
contracting service to any customers which since January 1, 1962,
have been or are being serviced by our driver-salesmen.
WE WILL, upon request of said Local 28, offer to driver-salesmen
Harold McSwain, David Dowler, Jack W. Melton, Albert Tuck-
ness, and Manford C. McCroskey the reestablishment of the same
or substantially equivalent routes which they serviced prior to
our unilateral changes of these routes on March 21, 1962, and
August 31,1962, and we will make them whole for any loss of pay
they may have suffered as a result of these unilateral changes.
WE WILL NOT unilaterally subcontract work performed by our
driver-salesmen or otherwise unilaterally change the wages, hours,
and other terms and conditions of employment of employees in an
appropriate unit without prior bargaining with their collective-
bargaining representative.
756-236-65-vol. 147-91
1426 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
WE WILL NOT in any like or related manner interfere with, re-
strain, or coerce employees in the exercise of their right to self-
organization, to join or assist said Local 28 or any other labor
organization, to bargain collectively through representatives of
their own choosing, and to engage in concerted activities for the
purpose of mutual,aid or protection as guaranteed in Section 7
of the Act, or to refrain from any and all such activities, except
to the extent that such right may be affected by an agreement
requiring membership in a labor organization as a condition of
employment as authorized in Section 8(a) (3) of the Act, as
modified by the Labor-Management Reporting and Disclosure
Act of 1959.
CLOVERLEAF DIVISION or ADAMS. DAIRY CO.,
Employer.
Dated---------------- By------=------------------=-----------
(Representative) (Title)
This notice must remain posted for 60 consecutive days from the date
of posting, and must not be altered, defaced, or covered by any other
material:
Employees may communicate directly with the Board's Regional
Office, 1200 Rialto Building, 906 Grand Avenue, Kansas City, Mis-
souri, Telephone No. Baltimore 1-7000, Extension .731, if they have
any'question concerning this notice or compliance with its provisions.
INTERMEDIATE REPORT AND RECOMMENDED ORDER
STATEMENT OF THE CASE
A charge and an amended charge in the above-entitled case were respectively
filed by the above-named labor organization on August 17 and September 6, 1962.
On December 7, 1962, the General Counsel of the National Labor Relations Board
issued his complaint and notice of hearing thereon. Thereafter the Respondent
filed its answer, dated December 27, 1962. The complaint alleges and the answer
denies that the Respondent, Cloverleaf Division of Adams Dairy Co.,' has engaged
in'ahd-is engaging in unfair labor practices in violation of Section 8(a)(1) and (5)
of the National Labor Relations Act, as amended. Pursuant to notice, a hearing
was held in Springfield, Missouri, on February 13 and 14, 1963, before Trial Ex-
aminer C. W. Whittemore.
At the hearing all parties were represented by counsel and were afforded full op-
portunity to present evidence pertinent to the issues, to argue orally, and to file briefs.
Briefs have been received from all parties.
Since the close of the hearing the Trial Examiner has received a stipulation
signed by General Counsel and counsel for the Respondent to correct certain typo-
graphical errors in the transcript. The stipulation is hereby made a part.-of the
record and the corrections may be made.
Upon the record thus made, and from his observation of the witnesses,'the Trial
Examiner makes the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT
The Respondent is a Missouri corporation with its principal office and place of
business at Springfield, Missouri, where it is engaged in the processing, packaging,
1 By stipulation of the parties and a motion to correct the title, the name of the Em-
ployer has been changed from "Cloverleaf Dairy Co." as it appeared in the complaint as
Issued.
CLOVERLEAF DIVISION OF ADAMS DAIRY CO: 1427
and sales of milk and dairy products . It annually purchases products valued at
more than $50,000,from sources outside the State of Missouri.
The complaint alleges, the answer admits , and it is here found that the Respond-
ent is engaged in commerce within the meaning of the Act.
H. THE CHARGING UNION
Bakery and General Sales Drivers and Employees Local Union No. 28, affiliated
with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen &
Helpers of America is a labor organization admitting to membership employees of
the Respondent.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Setting and major issues
A written stipulation of facts, signed by all parties and a part of the record in
this case, establishes the following:
(1) In January 1962, the Cloverleaf Dairy Co. became a sales division of the
Adams Dairy Co.
(2) In September 1961, Cloverleaf Dairy and the Charging Union entered into
a collective-bargaining contract due to expire in August 1963. All terms and pro-
visions of this contract have continued in force and effect since 1961, both before
and after Cloverleaf became a division of Adams Dairy.
(3) Since January 1962, at all times the Union has been the exclusive bargaining
representative of all the Respondent's employees in an appropriate unit, and during
the same period the Respondent has recognized the Union as such.
The complaint does not allege nor does the record reveal any history of Clover-
leaf's hostility toward the Union. On the contrary, the testimony of Business Agent
Deulen indicates that over a period of years route changes among driver-salesmen,
the group herein concerned, have been made by management without dissatisfac-
tion on the part-of the Union or the drivers-with one exception in, 1961,,when.a
certain dispute was submitted to arbitration in accordance with the contract
provisions.
The single issue raised by the complaint, denied by the answer, is to the effect that
in March and September 1962, management put into operation certain route changes
affecting five drivers without notifying or consulting with the Union in advance.
B. Relevant facts
In summary, the issue arises from the following events, as to which the testimony
is chiefly in accord:
(1) On or about March 21 Don Walker, wholesale route supervisor and a member
of Local No. 28, called driver-salesmen Harold McSwain and, David Bowler to the
company office and informed them that because another driver had resigned his cus-
tomers were being divided among them. They were also informed that neither .
would continue to serve a "Consumer Market" as had been the practice until then.
Each of the two drivers, before this date, had served one "Consumer Market," de-
liveries to which had comprised about 40 percent of their commissions. Present at
this meeting, besides the drivers and Walker, were General Supervisor Art Frye and
General Manager Gratton Francis.
(2) The route changes were effected. While it appears that because of the loss
of the "Consumer Market" deliveries each of the two drivers put in somewhat more
time during the day, their weekly pay or commissions were increased.
(3) Business Agent Deulen learned of the changes and arranged a meeting with,
management on March 23. At this meeting Deulen protested the loss of the "Con-
sumer Market" deliveries. 'Frye explained that the Company had previously entered
into a'contract with an independent distributor, Jaynes, who had "taken over" these
markets. Deulen accused Frye of "violating the contract." Frye denied this, and
stated that had he believed this to be the case he would not have "done it."
(4) According to Deulen, ". . . we let it ride for a little while until we filed the
unfair labor practice [charge] on it and didn't do any more about it because they
didn't refuse to bargain. They just said it was out of their hands. . They just
couldn't do anything about it, they already had their contract."
(5) The Union's original charge was filed on August 17.
(6) Again on August 31, 1962, management made certain. changes in the route
of. drivers, local school contracts having been received. Drivers Jack Melton, Albert
Tuckness, and Manford McCroskey were affected. Each lost a "Consumer Market"
1428 DECISIONS OF-NATIONAL LABOR RELATIONS BOARD
but was given various school routes. As with the two drivers earlier concerned, each
of these three-with the possible exception of McCroskey for a brief period-re,
ceived increased earnings as a result of the changes.
(7) The Union requested a meeting and one was held on September 4, the earliest,
it appears, that the parties could get together. Counsel for the Union told manage-
ment, "Your action violates our contract and the LMRA." Frye again said$hat had
he -thought he was violating the contract he would not have authorized' the route
changes.
(8) The Union thereupon filed amended charges covering the September changes,
and a complaint was issued.
C. Conclusions
Management does not dispute the fact that notification or consultation with the
Union did not precede the above-described route changes. Since the changes did
affect, to a degree, the earnings and working conditions of the employees involved,
under some circumstances and absent others it might well be held that the Re-
spondent violated Section 8(a) (5) of the Act.
The Trial Examiner, however, is not persuaded that the circumstances established
by the record warrant this finding and a remedial order. As noted above, it is the
Union's claim that management's action violated the existing contract as well as
the Act... Yet the Union failed, so far as the record shows, to submit the inter-
pretation of the contract on this matter to arbitration , as was provided by the agree-
ment. There is neither claim by General Counsel nor evidence to support a finding
that any employee was unlawfully discriminated against by management action.
The contract with the independent distributor is not alleged to have been entered
into or maintained in violation of any section of the Act. And as noted earlier, the
parties stipulated that at all times since January 1962, the employer has recognized
the Union as the exclusive bargaining representative of all employees in an appro-
priate unit.
It appears to the Trial Examiner that there is merit in the Respondent's position.
argued in its brief, to the effect that the Board decision in Crown Zellerbach Cor-
poration, 95 . NLRB 753, should govern the recommendation here. Therein the
Board (at p. 754) said:
In view of this background of a peaceful and what appears to be a wholly
salutary employer-employee relationship, we are reluctant to issue a remedial
collective bargaining order as a result of the Respondent's isolated unilateral
action . Particularly is this so since the parties have failed to utilize the con-
tractual procedures established for bargaining concerning the interpretation and
administration of their contract, and where there is apparently no serious obstacle
to an amicable settlement of the issue through bargaining within the framework
provided in that contract. Indeed, the Board has frequently stated that the
stability of labor relations which the statute seeks to accomplish through the
encouragement of the collective bargaining process ultimately depends upon the
channelization of the collective bargaining relationship within the procedures
of a collective bargaining agreement. By encouraging the utilization of such
procedures in this case, we believe that statutory policy will best be effectuated.
Affirmative Board action would on the other hand put the Board in the position
of policing collective bargaining agreements, a role we are unwilling.togassume.
Accordingly, we shall dismiss the complaint without determining whether the
Respondent 's conduct would , under other circumstances , warrant the issuance of
a remedial order.
RECOMMENDATION
Upon the foregoing findings of fact, upon the entire record in the case, and in
accordance with Board policy quoted above, the Trial Examiner recommends that
the complaint be dismissed in its entirety.
SUPPLEMENTAL INTERMEDIATE REPORT
STATEMENT OF THE CASE
On April 1, 1963, Trial Examiner C. W. Whittemore issued his Intermediate
Report in the above-entitled proceeding, recommending that the complaint be dis-
missed in its entirety.
On July 30, 1963, the Board issued an order reopening the record, remanding the
proceeding to the Regional Director for the Seventeenth Region for further hearing,
CLOVERLEAF DIVISION OF ADAMS DAIRY CO. 1429
and directing ' the Trial Examiner, upon conclusion of such further hearing, to
prepare and serve upon the parties a Supplemental Intermediate Report containing
findings of fact , conclusions of law, and recommendations.
Pursuant to the Board 's Order and a notice issued by the Regional Director, the
hearing was reopened on August 19, 1963, at Springfield , Missouri , before the Trial
Examiner.
All parties were represented and were afforded full opportunity to present evidence
pertinent to the provisions of the Board Order, to argue orally, and to file briefs.
Briefs have been received from all parties . Accompanying General Counsel's
brief was a motion, submitted jointly by him and by counsel for the Respondent, to
correct certain typographical errors in the transcript of the reopened hearing. The
motion shows on its face service upon counsel for the Charging Union. No objec-
tions having been received , said motion is hereby granted and is made a part of the
record.
Upon the record thus made, and from his observation of the witnesses , the Trial
Examiner makes the following:
FINDINGS OF FACT
A. The issues
The Board Order directed the Trial Examiner to receive further evidence rele-
vant to:
(1) The 1961 arbitration award under section XVII ( 6) of the collective-bargaining
contract;
(2) matters relating to the subject of subcontracting discussed at precontract
negotiations;
(3)- the scope of articles I,11, and XXI of the contract: and
(4) any other pertinent provisions of the contract to the extent that such evidence
is relevant to determination of whether the Union has:
a. waived its right to bargain about the action taken by the Respondent in this
case, or
b. agreed to submit such action to arbitration.
B. Relevant facts
As to point ( 1): The award itself is now in evidence as Respondent 's Exhibit No. 4.
Although the current contract was not in force at the time of the award , there is no
dispute that the contract provisions involved in the instant proceeding are identical
with those involved in the 1961 arbitration.
Section XVII ( 6) of the contract reads:
Salesmen shall receive the regular rate of commission for all merchandise de-
livered or sold on his route, and shall be furnished an invoice to that effect on
load sheet . All institutions shall be served except that no commisison will be
paid on sales to governmental agencies where such business is awarded on the
basis of competitive bidding and where such bids as submitted are opened
publicly at a specified time, place and date.
In his award the arbitrator thus summarized the chief issue before him:
The case presents , for the first time in the experience of these contracting parties,
an issue involving the Company 's dealings with independent distributors of its
products . The primary question is whether the Company violated the Agree-
ment when it failed and refused to pay wholesale driver-salesmen the regular
rate of commission ' for all merchandise the Company sold or delivered in the
territorial jurisdiction of this Union , specifically the Cloverleaf merchandise
sold and delivered at the Company 's dock and at four Safeway Stores in Spring-
field, Missouri , and, if so , are such commissions due and payable to affected
driver-salesmen.
This issue arose, it appears, from the fact that about the same time that Adams
Dairy Company acquired ownership in Cloverleaf 's operations a former driver-
salesman of the Company withdrew his union membership and became an independ-
ent distributor of certain dairy products to Safeway Stores, which were within the
geographical boundaries of routes covered by the contract. No deliveries were taken
from company driver-salesmen and given to this individual who, the arbitrator found,
had become an "independent contractor ." He further found that "Nicholson 's opera-
tion as an independent contractor . .. has not adversely affected any driver-
salesman's job or his earnings.",
1430 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The arbitrator dismissed the grievance. In substance he found that the contract,
or the parties thereto, had failed to "establish" certain "distinctions" between various
types of independent contractors, and that he was "powerless to correct the
omission."
He summed up his position:
At the very most, the Union presented a persuasive complaint against unwise,
if not forthrightless, tactics employed in transforming an employee into an
independent distributor. Unfortunately, the Agreement fails to provide a
remedy for such conduct.
While the question before the arbitrator, in brief, was whether the Company was
bound under the contract to pay commissions to its employee driver-salesmen on
products delivered to Safeway by the independent contractor, the question raised by
the complaint in these proceedings is clearly different, even if the contract clause
referred to is the same.
As noted in the intermediate Report, the changes in operation made in March
and August 1962 did affect both working conditions and pay of employees in the
unit . The employees lost the deliveries to certain markets. While other deliveries
or routes were assigned to them and, as previously noted, the drivers' commissions
were actually increased, there can be small question but that working conditions were
altered, without consultation or bargaining with the Union before being inaugurated.
The Trial Examiner is in agreement with General Counsel that the arbitration
award is not dispositive of the issues in this proceeding. The disputes involved are
distinguishable.
As to point (2): It appears that at negotiations leading both to the 1959 contract
(under which the arbitration dispute arose) and to the 1961 contract (involved in
these proceedings) the Union strove to have written into the agreements provisions
which, in effect, would have prohibited the employer from making any change in
working conditions, or even using "new types of equipment," unless the Union ap-
proved. The Union further proposed provisions which would have barred the em-
ployer from subcontracting any of its retail or wholesale routes "without the written
consent of the union." 1
Both in. 1959 and 1961 the Respondent "flatly" refused to yield to the Union's de-
mand in the above respects. There is no evidence of any extensive "discussion" of
the proposal, not that the Union modified its demand for outright control of manage-
ment's decision-making or that the Respondent offered any counterproposal.
There is some evidence that at least in the 1959 negotiations the employer spokes-
man countered the union proposal by stating that such provisions were unnecessary,
the Union being fully protected by article XVII(6), quoted above.
As to point (3): No party offered evidence' bearing directly upon the "scope of
Articles I, II and XXI of the contract.',' The contract itself was introduced into
evidence at the original hearing, and is before the Board. No good purpose would
be served, in the opinion of the Trial Examiner, in quoting fully the language of each
of said articles here.
As to point (4) a and b: No additional evidence at the reopened hearing was
adduced except, perhaps, testimony of a negative nature from a union spokesman
who said that at neither the 1959 nor the 1961 negotiations did the Union "concede
that the employer had the authority to subcontract out work."
C. Conclusions
The Trial Examiner agrees with General Counsel's assertion that: (1) the Union
has not waived its right to request bargaining concerning the issues raised herein and
has not "acquiesced in the action taken by the Respondent in this case"; (2) the
Union has not agreed to "submit such issues to arbitration"; 2 and (3) the Board
has the power, under Section 10(a) of the Act, despite the arbitration clause, to
prevent unfair labor practices.
1 This latter proposal does indicate that with the Union's consent the employer "may"
subcontract to one "who is a party to this collective bargaining agreement." Had the
parties entered into such an agreement, it seems to the Trial Examiner that both would
have violated Section 8(e) of the Act.
2 Article XXI of the contract, in evidence at the original hearing, provides that ques-
tions concerning the interpretation or application of the contract "may, at the option of
either party, be submitted to arbitration."
LEROY MACHINE CO., INC. 1431
Nevertheless the Trial Examiner is not persuaded that a "remedial collective bar -
gaining order" should be recommended here,, fothe reasons set out in the Inter-
mediate Report , which quoted from Crown Zellerbach Corporation , 95 NLRB 753.
If the Board wishes to reverse its clearly stated policy in the cited case of not
"policing collective -bargaining agreements ," where "the parties have failed to utilize
the contractual procedures established for bargaining concerning the interpretation
and administration of their contract ," and where there is a "background of peaceful
and what appears to be a wholly salutary employer-employee relationship," then
such reversal is within the province of the Board, not of the Trial Examiner.
RECOMMENDATION
Upon the foregoing findings of fact, upon the entire record in the case, and in
.accordance with Board policy quoted above, the Trial Examiner again recommends
that the complaint be dismissed in its entirety.
LeRoy Machine Co ., Inc. and Local 481, International Union,
United Automobile , Aerospace and Agricultural Implement
Workers of America , AFL-CIO. Case No. 3-CA-2077. June 30,
1964
DECISION AND ORDER
On December 4, 1963, Trial Examiner Joseph I. Nachman issued
his Decision in the above-entitled proceeding, finding that the Re-
spondent had engaged in and was engaging in certain unfair labor
practices, and recommending that it cease and desist therefrom and
take certain affirmative action, as set forth in the attached Trial Ex-
aminer's Decision. Thereafter, the Respondent filed exceptions to the
Trial Examiner's Decision and a brief 1 in support thereof.
The Board has reviewed the rulings of the Trial Examiner made
at the hearing and finds that no prejudicial error was committed.
The rulings are hereby affirmed. The Board has considered the Trial
Examiner's Decision, the Respondent's exceptions and brief, and the
entire record in this case, and hereby adopts the Trial Examiner's
findings , conclusions , and recommendations with the following addi-
tions and modifications.
1. We find, in agreement with the Trial Examiner, for the reasons
set forth in his Decision, that the Respondent violated Section 8(a)
(5) of the Act by its refusal to bargain with the Union with respect to
rates of pay for new jobs, a mandatory subject, of collective
bargaining.2
1 The Respondent ' s request for oral argument is hereby denied, as the record , including
the Respondent 's exceptions and brief , adequately presents the issues and the positions of
the parties.
2In its brief , the Respondent contends that the subject of rates of pay for new jobs
involves a matter of contract interpretation which should be deferred to an arbitration
in accord with the arbitration provisions in the contract. The Respondent , however, re-
fused on three separate occasions to process grievances protesting its unilateral fixing of
the rate on a new job. Apart from any other considerations , therefore , we find that
where, as here , the Respondent has itself frustrated the arbitral process , it has no stand-
ing to urge that the Board should defer the issues to arbitration . See California Port-
land Cement Company, 101 NLRB 1436, 1440.
147 NLRB No. 140.