Am-Del-Co., Inc.

National Labor Relations Board - Board Decisions

Jul 20, 1976

225 N.L.R.B. 698 (N.L.R.B. 1976)

698 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Am-Del-Co, Inc . and Compton Service Company, 3. Substitute the attached notice for that of the
Jointly and William Keaton and Teamsters Local Administrative Law Judge.
Union No . 688, affiliated with International Broth-
erhood of Teamsters , Chauffeurs, Warehousemen
and Helpers of America and William Lee Kilzer.
Cases 14-CA-8739, 14-CA-8746, and 14-CA-
8838
July 20, 1976
DECISION AND ORDER
BY CHAIRMAN MURPHY AND MEMBERS FANNING
AND PENELLO
On March 16, 1976, Administrative Law Judge
Robert W. Leiner issued the attached Decision in
this proceeding. Thereafter, Respondent filed excep-
tions and a supporting brief, and the General Coun-
sel filed exceptions and a supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and briefs
and has decided to affirm the rulings, findings, and
conclusions of the Administrative Law Judge and to
adopt his recommended Order, as modified herein.'
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board adopts as its Order the recommended
Order of the Administrative Law Judge, as modified
below, and hereby orders that the Respondent, Am-
Del-Co, Inc. and Compton Service Company, St.
Louis, Missouri, its officers, agents, successors, and
assigns, shall take the action set forth in the said rec-
ommended Order, as so modified:
1. Delete paragraph 1(d) and insert the following
as paragraphs 1(d) and (e) and reletter the remaining
paragraphs accordingly:
"(d) Threatening employees with the loss of union
representation.
"(e) Discouraging membership in the Union or
any other labor organization by changing the status
of its employees to that of `independent contractors'
or by laying them off in order to disparage or under-
mine the Union or because they engage in union or
other protected concerted activities."
2. Insert the phrase "as well as those made inde-
pendent contractors" after the words "following em-
ployees" in paragraph 2(d).
1 The General Counsel excepts to the failure of the Administrative Law
Judge to find that Supervisor Claude White violated the Act when, in re-
sponse to a question concerning nonunion wages, he told warehouseman
William Kilzer , in the presence of other employees , that Respondent would
never be happy until it was a nonunion shop We find ment in this excep-
tion White 's statement impliedly threatens that Respondent would take
steps to eliminate union representation and, as such , constitutes a violation
of Sec 8 (a)(1) of the Act We will modify the recommended Order and
notice to employees accordingly
The Administrative Law Judge found that Respondent in attempting,
with some success , to change the status of several employees to make them
"independent contractors" did not violate Sec 8 (a)(3) We disagree Rather,
we find that its attempt to convert its employees to independent contractor
status was part of its attempt to eliminate the Union and discourage mem-
bership in and activities on behalf of it Accordingly , we find this conduct
violative of Sec 8(a)(3) and ( 1) of the Act
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT refuse to bargain collectively
with Teamsters Local Union No. 688, affiliated
with International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of
America, herein called the Union, as the exclu-
sive representative of all of our driver and helper
employees, regarding wages, hours, and working
conditions, including the effects of the decision
to change to the owner-operator method of de-
livery.
WE WILL NOT give effect to the owner-operator
agreements entered into with our employees in
the appropriate unit.
WE WILL NOT deal individually with drivers
and helpers concerning their terms and condi-
tions of employment in derogation of their bar-
gaining representative.
WE WILL NOT unilaterally change the wages,
hours, and terms and conditions of employment
of our drivers.
WE WILL NOT modify the terms of our collec-
tive-bargaining agreement with the Union in vi-
olation of Section 8(d) of the Act.
WE WILL NOT threaten employees with the loss
of union representation.
WE WILL NOT discourage membership in the
Union, or any other labor organization, by
changing the status of our employees to that of
"independent contractors" or by laying them off
in order to disparage or undermine the Union or
because they engaged in union or other protect-
ed concerted activities.
225 NLRB No. 93
AM-DEL-CO, INC AND COMPTON SERVICE CO. 699
WE WILL NOT threaten employees that there
will be no further union contracts or threaten
employees with late recall from layoff if they at-
tempt to enforce their rights under the collec-
tive-bargaining agreements with the Union or
threaten employees with discharge if they file
grievances.
WE WILL NOT in any other manner interfere
with, restrain, or coerce our employees in the
exercise of their rights guaranteed by Section 7
of the Act.
WE WILL bargain collectively with the Union,
as the exclusive representative of all of our driv-
er and helper employees, regarding wages,
hours, and working conditions, including the ef-
fects of the decision to change to the owner-op-
erator method of delivery.
WE WILL enforce the collective-bargaining
agreement with the Union covering our drivers
and helpers effective for the period of Novem-
ber 1, 1973, through October 31, 1976.
WE WILL reinstate Howard Brown, John Hol-
leran, Ron Hale, Robert Temme, Steve Rell, Or-
lan Mauldin, Jerry Neal, William Chandler,
Charles Muschamp, Leo Bierman, Larry Caul-
ley, Gerald Webb, William Keaton, Elmer Mc-
Whorten, Harry Drozd, Lloyd Reid, Leroy
Glazebrook, Walter Schaller, Lester Gruene-
wald, and Sylvester Klemschmidt to the same
positions in which they would be employed had
they not been discriminated against or, if these
positions no longer exist, to substantially equiva-
lent positions, without prejudice to seniority or
other rights and privileges, and WE WILL make
them whole for any loss of earnings suffered by
reason of our unlawful actions against them.
WE WILL make whole William L. Kilzer for
any loss of earnings he may have suffered by
reason of his being laid off October 3 through
November 10, 1975.
All our employees are free to become or remain, or
refrain from becoming or remaining, members of the
above-named Union, or any other labor organiza-
tion.
AM-DEL-CO, INC. AND COMPTON SERVICE
COMPANY, JOINTLY
DECISION
STATEMENT OF THE CASE
ROBERT W. LEINER, Administrative Law Judge: This pro-
ceeding under Section 10(b) of the National Labor Rela-
tions Act, as amended, herein called the Act, was heard
before me pursuant to due notice on December 3 and 4,
1975, in St. Louis, Missouri.
On August 21, 1975, William Keaton, an individual,
filed a charge alleging violation of Section 8(a)(1) and (3)
against Compton Service Co, Inc., herein called Compton
Service.' On August 22, 1975, Teamsters Local Union No.
688, International Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America, herein called the
Union, filed a charge against Compton Service alleging vi-
olations of Section 8(a)(1), (3), and (5), and on September
25, 1975, the Union filed an amended charge against both
Compton Service and Am-Del-Co, Inc., herein called Am-
Del-Co. Am-Del-Co and Compton Service herein referred
to as Respondent. The amended charge repeated the sub-
stance of the original charge but named these two corpora-
tions "jointly." On September 6, 1975, William Keaton
similarly amended his 8(a)(1) and (3) charge, above, by
naming Am-Del-Co and Compton Service "jointly." On
October 10, 1975, William L. Kilzer, an individual, filed a
charge alleging violation of Section 8(a)(1) and (3) against
Am-Del-Co and Compton Service jointly. The above
charges were duly served.
On November 7, 1975, an order consolidating cases,
complaint,' and notice of hearing was issued and duly
served on the above-named Respondent. On November
14, 1975, Respondent Compton Service and Respondent
Am-Del-Co filed separate answers.3
All parties were afforded full opportunity to participate 4
in the proceeding, to examine and cross-examine witnesses,
i Prior to the opening of the hearing, Terry L Peebles, Esq , an attorney
representing former employees of Compton Service who had become "own-
er-operators" and allegedly independent contractors for Respondent Am-
Del-Co, Inc and who had individual contracts with Am-Del-Co to render
services to that corporation, sought, by motion filed and served prior to
opening of the hearing, to intervene in the proceedings and to present evi-
dence therein (G C Exh 1(z)) The motion was referred to me for decision
at the opening of the hearing I denied the motion to intervene, because the
interests of the alleged independent contractors appeared to me to be deriv-
ative and would be fully protected by the position taken by the Respondent
Am-Del-Co and Compton Service that Am-Del-Co's use of and contracts
with the independent contractors were lawful The lawfulness of the con-
tracts would be neither enhanced nor diminished by additional participa-
tion of the intervenors
Z An earlier consolidated complaint and notice of hearing was issued on
September 30, 1975 Its allegation of violations of Sec 8(a)(1), (3), and (5)
were, with additions, incorporated into the above-consolidated complaint
Both Respondent corporations filed timely answers and Am-Del-Co filed a
motion to dismiss as to it
3 At the hearing, Respondent Compton Service moved for a particulariza-
tion of the complaint with regard to the names of employees to whom
alleged threats by Respondent's agents were made and the names of em-
ployees who were witnesses to such threats I denied the motion for the bill
of particulars on the grounds that the complaint sufficiently specified the
allegations to which Respondent must answer and the request for names
was merely evidentiary. I granted so much of the motion for particulariza-
tion, however, insofar as it did not cause General Counsel to reveal the
names of prospective witnesses who were employees of Respondent In ad-
dition, I denied Respondent's motion for disclosure of names of all persons
whom General Counsel intended to call as witnesses as well as copies of all
written statements furnished to the Board whether or not the person fur-
nishing same would be called as a witness The Board's Rules and Regula-
tions do not provide for an essentially prehearing discovery procedure,
N L R B v Interboro Contractors, Inc, 432 F 2d 854 (C.A. 2, 1970), cert
denied 402 U S. 915 (1971)
On October 9, 1975, and on November 14, 1975, prior to opening of the
hearing, Respondent Am-Del-Co moved to dismiss the complaint as to it on
Continued
700 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and to argue on the record. Briefs were filed by the Gener-
al Counsel, Compton Service, Am-Del-Co, and the Union.
The briefs herein, particularly from General Counsel, were
substantial, helpful, and have been considered.
The instant amended complaint, dated November 7,
1975, alleges, inter alta, violation of Section 8(a)(1) of the
Act because of various independent acts of interference,
threats, and coercion against employees of the Respon-
dent; alleges unlawful layoffs and discharges of named
driver, helper, and warehouse employees and an unlawful
attempt to convert driver employees into independent con-
tractors all in violation of Section 8(a)(3) of the Act; and
alleges various acts constituting unlawful refusals to bar-
gain in violation of Section 8(a)(5) of the Act: unlawful
direct bargaining with employees, unilateral conversion to
an independent contractor system of delivery, and refusal
to bargain concerning the effects of such conversion on
unit employees. The complaint also alleges that Compton
Service and Am-Del-Co are affiliated business, engaged in
a common enterprise, with common officers, ownership,
directors, and operations, constituting a "single integrated
enterprise," each corporation being the "alter ego" of the
other.
The complaint alleges, and Respondent Compton Ser-
vice admits, that all furniture and appliance truckdrivers
and helpers employed by Compton Service, excluding office
clericals, professionals, guards, and supervisors, constitute
an appropriate unit and that at all times material herein the
Union was and is the representative of such unit employees
for collective-bargaining purposes under Section 9(a) of the
Act. The complaint alleges and Compton Service also ad-
mits that a unit of warehouse employees employed by
Compton Service is an appropriate unit and at all material
times the Union has been the statutory representative for
collective-bargaining purposes of such unit.
Upon the entire record of the case, including the briefs,
and from my observation of the witnesses, I hereby make
the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE EMPLOYER 5
Del-Co are corporations duly organized under the laws of
the State of Missouri.
Compton Service admits that it and Am-Del-Co are cor-
porations duly authorized to do business under the laws of
the State of Missouri, but denies that it and Am-Del-Co
are affiliated businesses engaged in a common enterprise,
with common officers, ownership, directors, and opera-
tions, constituting a single integrated enterprise, with such
directors and officers formulating and administering a
common labor policy for both companies and that each
corporation is the alter ego of the other. The record shows
that Compton Service was organized in 1967 and has main-
tained its principal office and place of business at 1218
South Vandeventer, St. Louis, Missouri, where it was and is
engaged in the business of providing furniture and appli-
ance warehousing and delivery services for retail stores.
Compton Service also admits that in the year ending De-
cember 31, 1974, a period representative of its operations
generally, in the course and conduct of its business, it re-
ceived gross revenues in excess of $50,000 at its St. Louis,
Missouri, place of business for services furnished to enter-
prises in St. Louis, Missouri, each of which had annual
gross retail sales in excess of $500,000, which enterprises
annually purchased goods and materials , shipped directly
to their respective metropolitan St. Louis stores, from
points and States other than the State of Missouri in excess
of $50,000. Compton Service admits that it is an employer
engaged in commerce within the meaning of Section 2(2),
(6), and (7) of the Act.
B. The Business of Am-Del-Co
Am-Del-Co admits, and the record shows, that it is a
corporation organized in November 1973 and duly author-
ized to do business under the laws of the State of Missouri,
but denies the status as a single integrated enterprise with,
and alter ego of, Compton Service; denies that it main-
tained its principal office and place of business at 1218
South Vandeventer, St. Louis, Missouri; denies that it has
rendered services in the above-named amounts to the
above-named retail stores in St. Louis; and denies that it is
an employer engaged in commerce within the meaning of
Section 2(2), (6), and (7) of the Act.
A. The Business of Compton Service
The complaint alleges that Compton Service and Am-
the grounds (1) that Am-Del-Co had never been a signatory to any contract
with the Union, and (2) that Am-Del-Co had never been an employer of
any of the employees, including the individual Charging Parties, named in
the complaint General Counsel filed oppositions to both Am-Del-Co mo-
tions to dismiss Am-Del-Co's motion of October 9, 1975, was referred to
and denied by Administrative Law Judge Leff on October 22, 1975 The
disposition of Am-Del-Co's renewed motion to dismiss dated November 14,
1975, will be made herein
5 Am-Del-Co denies the filing and service of the charges as to it and also
denies all elements of allegations relating to the existence of a single inte-
grated enterprise In view of my disposition, infra, of the allegations of
"single integrated enterprise" and "alter ego," the denial of the filing and
service of the charges and Am-Del-Co's other denials relating to its relation-
ship to Compton Service are not dispositive on the question of the lawful-
ness of the service of process on Am-Del-Co and its participation in the
proceeding.
C. The Relationship of Compton Service and Am-Del-Co
On July 26, 1974, the Board issued its Decision and
Order in Compton Service Company, Inc., 212 NLRB 557
(1974), wherein it dismissed allegations of violation of Sec-
tion 8(a)(5) in a complaint issued on charges filed by
Teamsters Local Union No. 688, International Brother-
hood of Teamsters, but inter aha, found that Compton Ser-
vice, Am-Del-Co, and Compton Leasing 6 constituted a
single integrated employer. In that case, it was found that
Compton Service, employing drivers, helpers, and ware-
housemen, was engaged in the warehouse delivery business
for various enterprises in the St. Louis area, employing 30
6 Compton Leasing is a corporation owned and controlled by the princi-
pals herein, Hollis Garrett and Billy J Hunt Another corporation, Comco,
Inc , engaged in the servicing of appliances, is also owned and controlled by
Hunt and Garrett
AM-DEL-CO, INC. AND COMPTON SERVICE CO. 701
to 35 employees in the project . It was noted, inter alia, that
its customers included the J. C. Penney Company and that
Compton Service was authorized to operate a delivery ser-
vice in Missouri and Illinois. Half of the stock in Compton
Service was owned by Billy J. Hunt, then, as now, Comp-
ton Service's and Am-Del-Co's president, and by members
of his family; the other half of Compton Service stock was
owned by Hollis Garrett, vice president and secretary of
both companies,' and his family.
The Board's Decision, adopting the Administrative Law
Judge's Decision in its entirety on this point, disclosed that
Am-Del-Co, incorporated in November 1973, was engaged
in the business of providing, "somewhat as a broker, own-
er-operators to any enterprise with whom it could make a
contract." It was noted that Hunt was president of Am-
Del-Co and Garrett was vice president. Hunt and Garrett
and their families at that time split the stock of Am-Del-Co
in the same proportions as they did that of Compton Ser-
vice.
In the instant proceeding, Billy J. Hunt testified that he
was the general manager of Compton Service and presi-
dent of Am-Del-Co. He stated that Am-Del-Co maintains
a warehouse and office at 1218 Vandeventer which is the
principal office, warehouse, and place of business of
Compton Service and Am-Del-Co. He testified that the of-
ficers of Am-Del-Co were himself as president and treasur-
er, Garrett as vice president, and the office clerical Helen
Erby, as secretary of the corporation. He also testified that
at present, and since January 1975, the directors of Am-
Del-Co were no longer only Hunt and Garrett but were
Hunt, Garrett, and their accountant, Max Biernbaum, as
well as the attorney appearing for Compton Service, Whit-
ney Harris, Esq. Hunt also testified that Am-Del-Co main-
tains an office at 4030 Chouteau, St. Louis, the address of
Am-Del-Co for corporate legal purposes. Only occasional-
ly are any Am-Del-Co employees there. The warehouse,
officers, clerical staff, and business activities are centered
in 1218 South Vandeventer.
Hunt also testified that since January 1975 there were six
stockholders of Am-Del-Co, each with equal shares, rather
than the Hunt-Garrett family ownership: Hunt; Garrett;
the aforesaid accountant for Am-Del-Co and Compton
Service, Max Biernbaum; Alex Lieberger, an insurance
agent who writes the health insurance for management em-
ployees of Compton Service; the office clerical for both
Compton Service and Am-Del-Co Helen Erby; and one
Dan Miller, an employee of Comco, a corporation in which
Hunt and Garrett are co-partners. Hunt testified that the
above-stated are directors and stockholder ownership had
thus changed since the prior Board case.8
Hunt also testified that, with regard to Compton Service
in the period January 1975 through October 1975, i.e.,
commencing 6 months after the Board's Decision, above,
which are the dates material to the decision in the instant
case, the officers of Compton Service were Hunt and Gar-
7 From time to time, Whitney R Harris, Esq, counsel to Compton Ser-
vice herein , served as corporate secretary to Am-Del-Co
8 The changes in the officers and directors of Am-Del-Co since the prior
Board Decision necessarily eliminates application of the doctrine of res,judt-
cara to the issue of the integration of the several companies
rett; the directors were Hunt, Garrett, and Attorney Whit-
ney Hams; and the shareholders were Hunt, Garrett, and
their families. These factors had not changed since the
Board Decision.
Hunt testified that Garrett and he are the day-to-day
managers of the business of Am-Del-Co with Hunt doing
the day-to-day operations and Garrett the administration.
The roles are reversed with regard to Compton Service,
Garrett being in charge of the day-to-day operations with
Hunt playing the major role in administration and some
role in day-to-day operations. The building and warehouse
at 1218 South Vandeventer at the time of the hearing was
being purchased by Compton Properties of which Hunt
and Garrett are shareholders. Compton Service pays rent
on the building with Am-Del-Co, in turn, paying rent to
Compton Service.
Hunt testified that one Ralph DeRouch was, and is, the
employee of Compton Service who establishes the routes
for and still dispatches the Compton drivers to make their
deliveries. At the present time , he also establishes the
routes for the owner-operators driving for Am-Del-Co and
recalls owner-operators to drive for Compton under the
collective-bargaining agreement , as employees of Compton
Service.
In spite of the changes of ownership of the stock of Am-
Del-Co and changes in the board of directors, and in spite
of the fact that Am-Del-Co had an office (but apparently
not a regular place of business) not shared by Compton
Service, I nevertheless find that the evidence shows no
change of control of a substantial character from that ad-
duced at the hearing before the Administrative Law Judge
in the prior Compton Service Co. case, supra. Thus, I con-
clude that merely because two-thirds of Am-Del-Co's stock
is owned by Hunt's and Garrett's accountant, office cleri-
cal, insurance agent , and employee (Dan Miller) of a cor-
poration of which they control and own, does not divest
Hunt and Garrett of control of Am-Del-Co. All of the "ma-
jority" stockholders, on this record, are directly or indirect-
ly subject to the economic power of Hunt and Garrett,
much the same as are the children of Hunt and Garrett. In
cases relating to the problem of "single integrated employ-
er," economic actuality, rather than potential, is determi-
native. Control rather than mere ownership is the core
problem. Miami Newspaper Printing Pressmen's Local No.
46 [Knight Newspaper, Inc.] v. N L R.B., 322 F.2d 405
(C.A.D.C., 1963)
Compton Service, according to the evidence of record,
employs warehousemen, furniture-finishers, and truckdriv-
ers and helpers, all of whom are represented for collec-
tive-bargaining purposes by the Charging Party herein in
separate contractual units. These employees are all em-
ployed and work at the same address: 1218 South Vande-
venter. These separate collective-bargaining agreements
presently have common initiation and expiration dates:
November 1, 1973, to October 31, 1976. Successive collec-
tive-bargaining agreements between Compton Service and
the Union, covering units of warehousemen and drivers
and helpers, have been maintained since 1967. The unit of
furniture-finishers, not involved herein, was added later.
The labor relations policy and the daily adjustment of
grievances of Compton Service are performed by Hunt and
702 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Garrett. Am-Del-Co, according to the testimony of Hunt
and Garrett, employs no drivers or helpers, warehousemen
or furniture-finishers. Nevertheless, the Am-Del-Co policy
governing relations with the alleged independent contrac-
tors many of whom, according to Hunt and Garrett, re-
main employees of Compton Service when recalled to its
service and when not acting as owner-operators for Am-
Del-Co are directed by Hunt and Garrett. Thus, Hunt and
Garrett laid off the Compton Service drivers and thereafter
interviewed and executed owner-operator contracts with
the same drivers, establishing the priority (i.e., seniority) in
which they would be awarded work (on a first-come basis).
Notwithstanding that there is a claim that Am-Del-Co has
no employees, I nevertheless find, as will hereafter be not-
ed, that the owner-operators working through Am-Del-Co
and delivering for J. C. Penney are employees, (Carnation
Company, 172 NLRB 1882 (1968), enforcement denied, 429
F.2d 1130 C.A. 9, 1970)) of Am-Del-Co and Compton Ser-
vice, are subject to the same labor relations policies en-
forced by the same persons, and are subject to the same
supervision in the work, which is principally the delivery of
furniture to J. C. Penney stores.
Lastly, I find, as will hereafter be further explored, that
Am-Del-Co and Compton Service, as alleged, are alter egos
of each for the purpose of this case.9 It is clear on this
record that Am-Del-Co and Compton Service had and
have substantially the same operating personnel officers,
directors, and shareholders (or that Hunt and Garrett,
through economic power, effectively control the sharehold-
ers and directors of the two corporations). It is also unde-
nied that Compton Service and Am-Del-Co occupied and
currently occupy the same premises, have the same office
clerical and the same dispatcher. As will be seen, infra, they
interchange employees as well.10 In the light of these facts
it seems to me that the two corporations are so interrelated,
in their function, management, ownership, operations, and
centralized control of labor relations, that they constitute a
single integrated employer within Board precedent, Radio
and Television Broadcasting Technicians, Local Union 264 v.
Broadcast Service of Mobil Inc., 380 U.S. 255 (1965); Park-
lane Hosiery Co., Inc., 203 NLRB 597, 618 (1973); R. L.
Sweet Lumber Company, 207 NLRB 529 (1973), enfd. 512
F.2d 785 (C.A. 10, 1975); Cowles Communications, Inc., 170
NLRB 1596, 1599 (1968); Sakrete of Northern California v.
N.L.R.B., 332 F.2d 902 (C.A. 9, 1964).
II. THE LABOR ORGANIZATION INVOLVED
The complaint alleges, Am-Del-Co and Compton Ser-
vice admit , and I find that Teamsters Local Union No.
9 Thus, I recognize Am-Del-Co's corporate existence and its ability to
function, under other circumstances, as an organization devoted to sup-
plying independent contractor "owner-operator" drivers to employers,
much as Compton Leasing supplied temporary employees to employers
Under the facts of this case relating to J C Penney, the record prevents
such a conclusion Thus, although Am-Del-Co was not created as a device
to engage in subversion of employees' Sec 7 rights (Rushton & Mercier
Woodworking Co, Inc, 203 NLRB 123 (1973) ), it was used as such a device
in the present situation
10 The dispatcher recalls owner-operators and dispatches them as "em-
ployees "
688, International Brotherhood of Teamsters, is, and has
been at all times material herein, a labor organization with-
in the meaning of Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background
The evidence shows that shortly after the Korean War,
Hunt and Garrett formed a partnership for the sale and
thereafter the delivery of used furniture. As their business
progressed they changed the function of Compton Service
and made it principally a public warehouse and delivery
company whose principal customer was the J. C. Penney
Company, for whom it did furniture and appliance ware-
housing and for whom it made deliveries. By 1973 it also
did warehousing for Speed Queen, the McGraw-Edison
chain of stores,' 7 and the Spielberg Furniture Company.
In early 1974, Compton Service and Compton Leasing
(also having collective-bargaining agreements with the
Union) employed more than 50 drivers and helpers servic-
ing its several accounts. At that time, about 40 of the
Compton Leasing's drivers and helpers serviced the Fa-
mous-Barr Department store in St. Louis. These employees
servicing Famous-Barr were employees of Compton Ser-
vice and Compton Leasing covered by collective-bargain-
ing agreements and drove trucks owned by Compton Ser-
vice or Compton Leasing. Compton Service and Compton
Leasing did not have an exclusive contract for delivery ser-
vice with Famous-Barr but would furnish employees and
trucks to perform deliveries to Famous-Barr when Fa-
mous-Barr called upon them to do so. By early 1974, Fa-
mous-Barr commenced using independent contractors
(owner-operators of trucks) for their furniture and appli-
ance deliveries. As Famous-Barr progressively failed, in
successive months, to call upon Compton Service and
Compton Leasing to perform delivery service, Hunt and
Garrett went to Famous-Barr to discover what they could
do to hold on to the business. Famous-Barr told them that
Compton Service's operation, including prices, were not
competitive. Compton Service then went to the Union to
modify the collective-bargaining agreement's hourly wage
pattern for its employees and to initiate an owner-operator
contract to meet the competition. The Union refused to do
so. Later in 1974, Famous-Barr ceased giving the Compton
companies any of its business and, as a result, Compton
Leasing terminated the employment of several dozen driv-
ers and helpers.
At about the same time, Compton Service, through
Compton Leasing, had employees working at an employer
known as Carafiol, a chain of furniture stores. In addition,
Am-Del-Co supplied an owner-operator at Carafiol. Cara-
fiol requested Compton Service to furnish an additional
truck with an owner-operator and Am-Del-Co furnished
11 Hunt and Garrett, through Compton Leasing organized 1971, also fur-
nished leased trucks and drivers to other employers in the St Louis area for
the distribution and delivery of furniture and appliances. Compton Leasing
was found by the Board in the prior Compton Service Co matter to be part
of the single integrated unit with Compton Service and Am-Del-Co Re-
spondent does not presently argue that Compton Leasing and Compton
Service are not part of a single integrated enterprise
AM-DEL-CO, INC. AND COMPTON SERVICE CO. 703
the truck and driver. This gave rise to the prior NLRB
litigation and Compton Service withdrew from the Carafiol
account. Thereafter, Compton Service's principal customer
was the J. C. Penney Company which often required the
services of Compton Service's remaining 25 drivers and
helpers.
Sometime before 1973, therefore, Hunt and Garrett,
through Compton Service, performed warehousing and de-
livery services, including furniture-finishing services for
J. C Penney, and also delivery services for Famous-Barr,
Spielberg, and other employers.
In the early 1970's, some of the nationwide furniture re-
tailers, Levitt, Crossroads, and Wickes, came into St. Louis
area using owner-operator companies, so called indepen-
dent-contractors, to make deliveries. In order to meet this
competition, Hunt and Garrett organized Am-Del-Co in
1973. Am-Del-Co was organized, according to Hunt and
Garrett, in order to permit them to meet the desires of
customers who for economy and dependability wanted
their delivery services performed by owner-operators rath-
er than by employees of delivery companies. The owner-
operators are paid on a "per-stop" or "incentive" basis
rather than an hourly basis. This allegedly led to greater
accountability, flexibility, and less expense.
B. Business Status in 1975
On June 20, 1975, two representatives of J. C. Penney,
Soots and Barnes, came to the South Vendeventer office
with a list of complaints regarding J. C. Penney's furniture
which was damaged in Compton Service's warehouse.
Soots and Barnes also wanted to know how Compton Ser-
vice was going to improve their performance, i.e., cut the
price of its Penney deliveries. The Penney representatives
told Hunt that Penney had been approached by owner-
operator contractors; that Penney was looking at bids; and
that Penney was seriously considering using owner-opera-
tors to make deliveries rather than to continue with deliv-
ery companies. Barnes and Soots then asked Hunt if there
was any way that he could improve on the contract price
between Compton Service and Penney. Hunt told them
that there was no way there could be an improvement and
that, in fact, by November 1975 Compton Service would
have to increase its prices because the collective-bargaining
agreement provided for such increased wages and health
and welfare payments, that perhaps as much as a 10-per-
cent increase would be necessary. Hunt said that Barnes
then inquired if Am-Del-Co 12 would submit a bid to Pen-
ney on a per-stop basis. Penney was no longer interested in
a per piece method of delivery. Hunt testified that this was
the first time that Am-Del-Co was ever discussed by Pen-
ney and that Am-Del-Co had never made any bid for the
Penney work prior to this time . From the conversation at
this June 20 meeti,ig, Hunt knew that Penney would cancel
the delivery contract with Compton Service.
On July 8, 1975,13 Am-Del-Co submitted such a bid to
12
Barnes testified that while he solicited an owner-operator bid from
Hunt through Am-Del-Co, he did not restrict the bid to one from Am-Del-
Co, but rather told Hunt he wanted to bid on a "per-stop" basis
13 Hunt testified that on June 25, 1975, he called a meeting of his drivers
and helpers with no union agent present or consulted and told them not
J. C. Penney on a per-stop basis. In fact, a Penney official
told Hunt on June 27 that if Hunt intended to remain com-
petitive in the St. Louis market, he would have to have
about a 25- to 30-percent decrease in cost. Penney repre-
sentatives stated that there was no way they could afford
the present rate much less an increase.
The evidence shows that on July 18, Penney accepted
the Am-Del-Co bid and on July 22, 1975, Garrett tele-
phoned Barnes and received notification of the award to
Am-Del-Co for delivery service beginning September 1.14
On July 24, 1975, Penney notified Hunt that pursuant to
the terms of the Penney-Compton Service agreement by
which Compton Service hourly paid drivers and helpers
made delivery for Penney, it was canceling that agreement
with the necessary 30-day notice.15 Hunt on July 28 then
called a meeting of all the drivers and helpers, the ware-
housemen and the furniture-finishers, and read them the
Penney letter canceling the delivery contract as of the end
of August 1975. He assured the warehouse employees that
they, unlike the drivers and helpers, had nothing to fear.
No union agent was present or invited.
Three days later, on July 31, 1975, Hunt called a further
meeting of the drivers and helpers with no union represen-
tative invited or present and told them that Am-Del-Co
had been awarded a contract to deliver for Penney. He told
only of the necessity to improve their services but of the fact that outside
owner-operator companies were bidding against Compton Service for the
Penney account Charging Party Kdzer , a warehouseman, testified that at a
meeting of warehousemen and finishers called by Hunt , Hunt told of
Penney's dissatisfaction with damages and the desire for a 25-percent cut in
costs Hunt testified he never mentioned any figures in the June 25 meeting
Hunt said he got a 20- to 30-percent figure in a June 27 conversation with a
Penney official in Chicago Other employees (Holleran and Gruenewald)
corroborated the June 25 date
14 The agreement provides, inter aka
I Am-Del-Co will route all deliveries according to the most practical
schedule
2 The warehouse will stage all merchandise in designated loading areas
3 All merchandise will be inspected, properly protected (blanket wrap-
ped, etc) and loaded by Am-Del-Co
4 Responsibility for all merchandise loaded will be assumed by Am-Del-
Co
5 Trucks will be kept clean and in good mechanical condition
6 Drivers and helpers will wear uniforms
7 Am-Del-Co will, at all times, be courteous and cooperative with J C
Penney customers
8 Charges for the delivery services provided will be per the rates quoted
herein
9 The Delivery agreement will be for a period of one year, automatically
renewable from year to year thereafter, with 90 days cancellation clause
10 For the purpose of this contract a "stop" is defined as
13 A Am-Del-Co Supervisor will be available to assist in all situations
that may arise He will also closely supervise the activity and performance
of all drivers and helpers
14 We propose that J C Penney and Am-Del-Co work out a delivery
schedule that will level the amount of deliveries over a period of a week
15 We propose to handle the transfer operation with one man, a tractor
and six (6) 20' to 30' trailers The trailers are to be spotted one at each store
and two at the warehouse at all times The driver to take a loaded trailer
from the warehouse to a store, spot it at the docks and pick up a loaded
trailer of deliveries or merchandise and return to warehouse This to be
repeated for each store as many days as necessary to get the job done
15 The Penney cancellation letter (Resp Exh 1) is dated July 24, 1975
704 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
them that Am-Del-Co would give the Compton Service
driver and helper employees first opportunity to become
owner-operators under the auspices of Am-Del-Co. He
told them that Am-Del-Co was interested in "companies"
and not in "individuals," and if they wanted to form a
partnership or corporation, Am-Del-Co would sign a con-
tract with them to perform delivery services for the Penney
account. When one of the drivers inquired whether there
would be a union or not, Hunt told them that with regard
to the owner-operators, themselves, it was a matter of in-
difference to Am-Del-Co whether the owner-operators
signed contracts with the Union covering themselves or
any employees of theirs. Am-Del-Co thereafter signed con-
tracts with nine owner-operators. Five of the nine were
former Compton Service employees, the remaining four
not being previously associated with Compton Service.
However, as General Counsel notes eight former Compton
Service employees (Brown, Drozd, Reis, Glazebrook,
Gruenewald, Kleinschmidt, Hale, and Holleran) actually
performed delivery work for Penney. In addition, 14 other
Compton drivers and helpers were offered owner-operator
contracts.
Meanwhile, on or about July 26, Compton Service re-
ceived written notice of the cancellation of the Penney con-
tract (Resp. Exh. 1, dated July 24, 1975) and Compton
Service notified the Union, on July 30, 1975, of the cancel-
lation (G.C. Exh. 7, dated July 30, 1975). This was the first
notification to the Union of the cancellation. 16
On the basis of McDermott's credited testimony, he con-
tacted Garrett by telephone on the next business day (Au-
gust 4) after receiving Compton Service's notice of the Pen-
ney termination and asked him to set up the meeting to
discuss the effect of the cancellation on the drivers and
helpers. They set up a meeting for the following day, Au-
gust 5, 1975, at 2 p.m. The meeting was held in Compton
Service's offices at 1218 South Vandeventer. At the meet-
ing Hunt told the union agents (McDermott and Carroll)
of the cancellation of the delivery contract and of Penney's
dissatisfaction with the service they were getting from
Compton. McDermott asked to bargain on severance pay.
Hunt described how the owner-operator companies were
attempting to take over the Penney account and he stated
that Am-Del-Co had put in a bid. At this point McDermott
offered to bargain on the question of a new method of
161 do not credit that notification of the cancellation to the Union took
place as early as July 15, as Hunt's and Garrett's testimony sometimes
indicates , for Hunt clearly testified that the Union was notified of the Pen-
ney cancellation "after we received the official cancellation of the contract
from Penney's, within a matter of a few days " Since Penney's letter is dated
July 24, notification to the Union was not as early as July 15 McDermott of
the Union testified , and I credit him, that the first notification that he re-
ceived of the cancellation was by a letter delivered in the mail on July 31
Barnes' testimony does not at all support Garrett's testimony that on July 22
Barnes told Garrett that "Compton is finished " Barnes said that the con-
tract had been awarded to Am-Del-Co on July 22 It is highly improbable
that Hunt or Garrett would tell the Union that Penney had canceled the
contract even before Am-Del-Co (which had submitted the bid on July 8)
was awarded the contract and before official notice of the Penney cancella-
tion Moreover, Garrett testified that he notified Union Agent McDermott
on July 22 (the same afternoon of the morning he spoke with Barnes)
However , Garrett also testified that McDermott was not to be in St Louis
until July 24 . In any event , I do not regard the matter of when the Union
was first notified of cancellation to be dispositive of any right or obligation
compensation of unit employees and to discuss "per stop"
compensation rather than the contract's hourly wage. Mc-
Dermott and Hunt agree that Hunt, in view of the Union's
prior position regarding the Famous-Barr account, was
pleased with the Union's willingness to discuss changing
the method of compensation to a per-stop basis. The par-
ties agreed to meet again on August 8, 1975, to further
discuss the matter. But on the next day August 6, 1975,
Garrett telephoned McDermott and told him that Am-Del-
Co had been awarded the contract to deliver Penney furni-
ture and "therefore there would [be] no need to get into
further discussion on the 8th and therefore the meeting
would be cancelled." On the afternoon of August 15, 1975,
McDermott sent a telegram to Hollis Garrett, care of
Compton Service, requesting immediate negotiation of the
effects of the closing of Compton Service on the affected
employees. Garrett telephoned McDermott on August 19
and said he was willing to discuss the matter. They set up a
meeting for August 25.
At the meeting of August 25, 1975, Garrett says that he
told McDermott that he wanted to make it "crystal clear to
the Union" that Compton Service was not going out of
business and still had a 3-year contract for warehousing
with J. C. Penney Company and 3-year collective-bargain-
ing agreements covering the drivers and helpers, the ware-
house employees, and the furniture-finishers. He told Mc-
Dermott that Compton Service lost the delivery business
with Penney, 17 that he was not refusing to negotiate and
would like to work out an incentive contract for Compton
Service in order to become a competitive and even try to
get back the Famous-Barr account. Garrett said that Mc-
Dermott refused and said that he was interested only in the
Penney business and would not bargain on anything else.
McDermott remembers that at the meeting he requested
severance pay for the individuals who would no longer be
working for Compton Service since he believed that Comp-
ton Service was going out of business. Hunt responded that
there would be no severance pay, that the drivers and help-
ers would remain on Compton's seniority list for 12 months
according to the collective-bargaining agreement.
McDermott testified that he still wanted to negotiate
production incentives and modify the collective- bargaining
agreement to keep the employees employed. He told Hunt
that it did not make any difference to the Union what the
name of the delivery company doing the Penney deliveries
was, but that the delivery of goods for J. C. Penney was
work that belonged to members of the unit and that unit
employees should be doing the work. He told Hunt that
Respondent had an obligation to bargain over the matter.
Hunt answered that there was no obligation for Compton
17 Barnes , Penney's representative , previously told Garrett of the award of
the contract to Am-Del-Co When Garrett told Barnes that the Union was
willing to negotiate a new contract, Barnes answered that "the decision had
been made on the corporate had [sic] that we were going to go owner-
operator in the St Louis metro district and that if Am-Del-Co could not
fulfill the terms of that contract , then we would probably [give it] to Mer-
chants [Home Delivery] " In view of Barnes' total testimony , and particular-
ly his testimony regarding J C Penney ' s desire to switch from a "per-
piece" to "per stop" compensation, I do not regard "owner-operator" to be
synonymous with "per stop " There is no inconsistency in paying an "em-
ployee" on a "per stop" basis In any event, Barnes told Hunt that he
wanted "a contract based on a per stop basis"
AM-DEL-CO, INC. AND COMPTON SERVICE CO 705
Service to negotiate or give severance pay since it was not
out of business, and certainly Am-Del-Co was not involved
and was under no obligation to negotiate since it had no
employees and no contract with the Union. McDermott
testified that the meeting resulted in nothing further and he
prepared and submitted a grievance alleging a violation of
the collective-bargaining agreement's recognition clause 11
because the Company was at that time bargaining individ-
ually with driver-helper unit employees without consulting
the Union.
On August 28, Garrett telephoned McDermott and told
him that he had answered the grievance. Compton
Service's position was that there had been no contract vio-
lation. In response to a further union grievance that there
was a contract violation regarding transfer of unit work,19
Compton Service took the same position that there was no
contract violation.
On August 30, McDermott visited Compton Service's
premises and found them closed. There was only one per-
son present and he was changing the name on Compton
Service's trucks to Am-Del-Co.
The next business day, September 2, was the first day
that Am-Del-Co was performing the delivery of Penney
goods from the Compton warehouse. McDermott visited
the warehouse and found Hunt on the dock supervising the
movement of goods. McDermott asked Hunt to bargain
with the Union and negotiate either a contract or severance
pay. Hunt told him that he did not intend to negotiate and
was not interested in talking any further. He told McDer-
mott that he intended to do business with the owner-opera-
tors and that was "the end of it."
C. The Layoff of Employees of Compton Service;
September 2, 1975
On September 2, 1975, Compton Service laid off 20 driv-
ers and helpers, comprising the employees named in para-
graph 6(a) and (b) of the amended complaint.20
Hunt testified that he gave each of these drivers and
helpers an opportunity to become owner-operators driving
as independent contractors for Am-Del-Co. After they
were laid off by Compton Service, they, or at least some of
them, have been recalled from time to time pursuant to
contract seniority to work for Compton Service in perform-
ing intermittent delivery services for the Spielberg Furni-
ture account. When working for Compton Service they use
the three remaining Compton Service trucks not sold or
leased to owner-operators. In fact Compton began to recall
some of them as early as the first week of September 1975
19 The current (November 1, 1973-October 31, 1976) collective-bargain-
ing agreement (G C Exh 8), art I, sec 2 "The Employer will [not] negoti-
ate [with] any of its employees in the Bargaining Unit covered hereby unless
it be though duly authorized representative of the Union "
19 Art XIV requires any transferee of bargaining unit work, inter aha, to
either employ all unit employees, with all contract seniority, wages, and
fringe benefits or pay them severance pay
2 The laid-off employees were Harry Drozd, Lloyd Reid, Leroy Glaze-
brook, Walter Schaller, Lester Gruenewald, Syvester Klemschmidt, Howard
Brown , John Holleran, Ron Hale, Robert Temme, Steve Rell, Orlan Maul-
din, Jerry Neal, William Chandler, Charles Muschamp, Leo Bierman, Larry
Caulley, Gerald Webb, William Keaton, and Elmer McWhorten
Of the 20 named Compton Service employees who were
laid off on September 2, 1975, as above noted, 5 signed
contracts to become owner-operator drivers for Am-Del-
C0.21 Several other former Compton drivers and helpers,
nonsigners, also worked on these owner-operator trucks as
drivers or helpers. These five used the same trucks that
they formerly used as employees of Compton Service to
deliver goods for J. C. Penney. The laid-off employees had
been notified that they were going to be laid off on the last
workday of August 1975.
Hunt testified that there are between 8 and 12 former
Compton Service trucks of a total of 14 being driven by
owner-operators for Am-Del-Co. These trucks are leased
by Compton Service to the owner-operators. The owner-
operators' contract and the leases were drafted by Hunt,
Garrett, and their attorney, Whitney Harris.22 In addition,
Hunt testified that Compton Service aside from leasing the
21 The "owner-operator" contract provides, in substance
WHEREAS , Am-Del-Co is engaged in the business of delivering furniture and
appliances through owner-operators in the greater St Louis metroplitan
area, and
WHEREAS, operator is an owner-operator desirous of contracting for deliver-
ies of furniture and appliances for Am-Del-Co as an independent contractor
in said area
NOW, THEREFORE , IT IS MUTUALLY AGREED AS FOLLOWS
I Operator agrees to deliver such furniture and appliances as Am-Del-
Co may request of Operator from time to time in the greater St Louis
metroplitan area
2 Operator will provide its own delivery truck, blankets, dollies, equip-
ment and personnel and will carry public liability insurance on the
truck, naming Am-Del-Co a co-insured
3 Operator will collect C O D payments from customers and remit the
same daily to Am-Del-Co
4 Operator will be responsible for loss and will carry cargo insur-
ance
5 Operator will be responsible for bodily injury or property damage to
third parties and will carry public liability insurance naming Am-
Del-Co a co-insured
6 Operator will be responsible for hiring and discharging any employees
which Operator utilizes
7 For the service rendered, Operator will be paid the amount per stop set
out in the attached Rate Schedule
8 Operator will obtain any licenses , permits, or certificates required by
public authority,
9 In all things under this contract Operator is, and shall be an indepen-
dent contractor, solely responsible for the employment of personnel used in
the performance of the contract and for the manner in which its obligations
hereunder are performed
10 This contract shall be for an indefinite period and shall continue in
effect until terminated by either party on thirty days' notice to the other
I C PENNEY DELIVERIES
SCHEDULE OF DELIVERY RATES
$8 00 Per Stop
900 Per Stop
ADDITIONAL CHARGES
A Pick-ups from customers to be returned
B Special Deliveries-Deliveries requiring special equipment, such as
block and tackle, or additional manpower, will be considered as "Special "
The regular delivery crew will make every effort to complete all deliveries
with normal crew and equipment if unable to do so, the driver will call the
office for instructions prior to taking any further action
C Time deliveries-Whenever it is necessary to make a delivery at or
near a specific time, every effort will be made
D Wrong and/or incomplete addresses and not-at -home -Every effort will
be made to locate the customer and complete the delivery
22 It reads
That Lessor does hereby lease unto Lessee for use in the operation of
Lessee's business one
Continued
706 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
8 to 12 trucks to owner-operators who drive as independent
contractors for Am-Del-Co also sold two trucks outright to
drivers who had been employees of Compton Service be-
fore the layoff of September 1975. Of the 8 to 12 Compton
Leasing and Compton Service trucks that were leased to
former drivers for Compton Service, 4 to 6 of these trucks
are used on the Penney account
Hunt admitted that the principal customer of Compton
Service before September 1975 was J. C. Penney and the
primary customer of Am-Del-Co commencing September
1975 was J. C. Penney. He also stated that the owner-oper-
ators and the laid-off Compton drivers hired by the owner-
operators who are driving trucks for Penney deliveries are
driving the same trucks that they drove for Compton Ser-
vice or Compton Leasing prior to September 1975 in mak-
ing Penney deliveries.
In sum, the work of the owner-operators is distributed
according to the priority in which the former Compton
Service drivers signed the contracts with Am-Del-Co. As
above noted, Ralph DeRouch, the Compton Service dis-
patcher, dispatches for Am-Del-Co. In his absence, Hunt
or Garrett plan the routes. DeRouch also dispatches the
recalled owner-operators as employees of Compton Ser-
vice. The owner-operators may not refuse Am-Del-Co's or-
der for delivery and, when delivering on an account for
Penney, may not have goods other than Penney's aboard.
The owner-operator agreement, as General Counsel notes,
sets forth the exact compensation the owner-operators are
to receive per stop, for non-delivering, etc.; requires clear-
ance from Am-Del-Co in the use of special devices for
delivering and is terminable on 30-day notice; directs that
C.O.D. payments are to be remitted daily; most important,
Am-Del-Co, under this agreement with Penney, is obligat-
ed to Penney to provide a supervisor who will "closely su-
pervise the activity and performance of all drivers and
helpers." Barnes testified that Penney looks to Am-Del-Co
for performance and not to the owner-operators.
The owner-operators who drive leased (former Compton
Service or Leasing) trucks furnish gas, oil lubricants, and
tires. Am-Del-Co maintains the liability insurance, license
tags. The lease is for renewable periods of 1 year. Major
I Lessor agrees at its own expense to furnish all necessary State and
City License tags, except carrier permits
2 Lessee agrees to furnish at its own expense all fuel, oil and other
lubricants required to operate the vehicle
3 Lessee agrees to provide at its own expense tires and tubes for
operation of the vehicle
4 Lessee will provide at its own expense regular washing and clean-
ing of the vehicles, to maintain the interior and exterior thereof in a
clean condition and to provide all signs or lettering
5 Lessor agrees to maintain in full force on all vehicles during the
continuous [sic] of this agreement automobile public liability insurance
repairs are the responsibility of Am-Del-Co less $100 de-
ductible.
It thus appears from the foregoing that Am-Del-Co, un-
der the Penney contract, the vehicle lease , and the owner-
operator agreement , has the obligation to closely supervise
the work of the owner-operators; has effectively estab-
lished the pay per stop and their seniority system; does the
routing; obliges them to carry certain (Penney) freight and
proscribes inclusion of other items in a load when so en-
gaged; does the heavy truck repairs, maintains insurance
on the trucks; and may cancel the owner-operator agree-
ment on 30-day notice.
From these facts, counsel for the General Counsel ar-
gues that two results follow: (1) that Am-Del-Co is merely
the alter ego of Compton Service, apart from being a single
integrated company with it; and (2) that "owner-opera-
tors" who worked for Am-Del-Co are actually Am-Del-Co
"employees" and therefore since they are employees of an
alter ego remain employees of Compton Service.
With regard to alter ego, the General Counsel asserts
that the above facts support his conclusion that Am-Del-
Co and Compton Service in substance have the same di-
rectors, daily management, office ownership, and an effec-
tive interchange of employees, common supervision, com-
mon customers, and common property and location. These
factors, present in abundance in this case, indicate that
under the Board criteria, Compton Service and Am-Del-
Co not only constitute a single integrated enterprise, but in
their relation to Penney, are mere reflections or alter egos
of each other 23 That two owner-operators own former
Compton trucks and, when not on the Penney service, do
some other deliveries does not affect this conclusion.
I find and conclude in agreement with General Counsel
that Am-Del-Co is the alter ego of Compton Service insofar
as it is a device to continue the same delivery service to
J. C. Penney and not withstanding that it is not a corpo-
rate device invented, from the first, to avoid dealing with
the Union. Cf. Rushton & Mercier, supra. It is the absolute
dominion and an interchangeability of the corporations in
the Penney matter which Hunt and Garrett exercise which
is evident. See Parklane Hosiery Co, supra at 614.
With regard to the further assertion that the "owner-
operators" of Am-Del-Co are actually its employees and
thus the employees of Compton Service , the General
Counsel asserts that the evidence establishes that Am-Del-
Co "has the right to control" both the end and the means of
the work of the owner-operators of Am-Del-Co. This com-
mon law concept, adopted by the Board, distinguishes be-
tween "employees" and "independent contractors," Carna-
tion Company, 172 NLRB 1882 (1968); Parklane Hosiery
Co., supra. In support of this conclusion, the General
Counsel asserts that the evidence shows that the owner-
operators have no control over (1) scheduling the use of the
trucks; (2) determining the persons for whom they will de-
8 This lease shall remain in force and effect as to each vehicle cov-
ered hereunder for a period of one (I) year from year to year but
not to exceed a total of four (4) such renewals Either party hereto shall
have the right to cancel and terminate this lease as to any such vehicle
at any anniversary of its date in service, by giving written notice as to
his desire to purchase any one of the vehicles
9 This contract is understood by both parties to be a contract of
leasing only
23 Southport Petroleum Company, 8 NLRB 792, 315 U S 100 (1941),
N L R B v Deena Artware, Inc, 361 U S 398 (1960), N L R B v Hopwood
Rennning Co, Inc, 98 F 2d 97 (C A 2, 1938), Parklane Hosiery Co, Inc,
supra, Royal Typewriter, A Division of Litton Business Systems, inc, 209
NLRB 1006 (1974), American Needle & Novelty Company, 206 NLRB 534
(1973), Rushton & Mercier Woodworking Co, Inc, 203 NLRB 123 (1973),
Borden , Inc, 192 NLRB 31 (1971), 181 NLRB 109 (1970)
AM-DEL-CO, INC AND COMPTON SERVICE CO 707
liver, if they are delivering Penney work, i.e., working for
Am-Del-Co; (3) the delivery routes; (4) they are supervised
under the Am-Del-Co Penney agreement by the same su-
pervisors (Hunt, Garrett, Ralph DeRouch) who supervised
them when they were working for Compton Service; (6) the
compensation received for their work; (7) the responsibility
for the major maintenance of the vehicle equipment; and
(8) the terms of the agreements under which they work
including the seniority rules under which they obtain jobs
from Am-Del-Co. Further, their status is terminable on 30-
day notice. I agree with counsel for the General Counsel
that 24 the evidence establishes, therefore, that the means
and end results of work remains in the control of Am-Del-
Co rather than with the owner-operators. The Board, with
court approval, has found persons who would otherwise be
operating as independent contractors to be "employees"
under such circumstances especially in view of Am-Del-
Co's failure to relinquish control over the ability of the
drivers to profit, to choose customers, to vary their routes,
etc. Deaton, Inc., 187 NLRB 780 (1971); Ace Doran Haul-
ing & Rigging Co., 214 NLRB 507 (1974); Borden, Inc.,
supra; N.L R B. v. United Insurance of America, 390 U.S.
254 (1968); Carnation Company, supra, enforcement denied
429 F.2d 1130 (C.A. 9); and Johnson's Industrial Caterers,
Inc., 197 NLRB 352 (1972), affd. 478 F.2d 1208 (C.A. 6,
1973).
D. Violations of Section 8(a)(3); Independent Violations of
Section 8(a)(1)
The Layoffs of Gerald Gaugh, Steven Reis, and William
Kilzer
The complaint not only alleges the discharge of 14
named truckdrivers and helpers on September 2,25 when
Respondent Compton Service admits only that it laid them
off, but it also alleges that on September 8, 1975, Respon-
dent laid off Gerald Gaugh; on September 12, 1975, Re-
spondent laid off Steve Reis; and on or about October 3,
1975, Respondent laid off William Kilzer, in each case, in
violation of Section 8(a)(1) and (3) of the Act because of
the Respondent's attempt to discourage employee member-
ship in and activities on behalf of the Union. The three are
warehousemen.
24 Aside from Am-Del-Co and Compton's mandatory duty to supervise
the "owner operator," i e , "right to control" them in the way they do their
jobs , and aside from Barnes' unrefuted testimony that Penney looks only to
Am-Del-Co for performance by the owner-operators, Am-Del-Co's control
over them is manifested by the 30-day termination clause in the agreement
Similarly , if the routes and compensation are predetermined , and if there is
a prohibition against carting goods other than Penney goods when working
under the Am-Del-Co/Penney contract, the area in which this allegedly
independent enterprise can operate seems to be rather limited Two owner-
operators , Holleran and Gruenewald, failed to indicate , in their testimony,
either the time available for non-Penney work or whether they performed
such work
25 With the 6 drivers and helpers who became owner-operators, there were
20 drivers and helpers laid off No explanation was made why the newly
hired owner-operators, who were laid-off Compton employees, were not
included among those allegedly discharged
a. Gerald Gaugh
Gerald Gaugh testified that he was first employed by
Compton Service in June 1974 and worked in that capacity
up to September 8, 1975, when he was laid off. The record
shows that he was the warehouseman with least seniority
and, from time to time, was laid off during the 14 months
of his employment.
In mid-June 1975, he had a conversation with his super-
visor, Claude White 26 On that day, Gaugh was not work-
ing, having been previously laid off. He had observed a
nonunion, nonunit employee working on a Compton Ser-
vice truck for 2 days. He went into Claude White's office
and told him that there was a person working on the truck
in violation of the contract and that he was going to file a
grievance about it. White told him that he would be "better
off not to file a grievance"; and that "Mr. Bill Hunt would
possibly work me longer if I did not file a grievancc." 27
Gaugh did not file the grievance and worked for a
month and a half thereafter as a warehouseman. He testi-
fied that in the prior year during the period of June and
July he had worked but, as "last man on the totem pole,"
he was laid off from time to time.
As above noted, Gaugh was laid off from his job as a
warehouseman working for Compton Service on Septem-
ber 8, 1975, Respondent alleges it laid him off due to lack
of work. On October 16, 1975, while in layoff status, he was
working as a helper to a driver of one of the Am-Del-Co
trucks. While working on the dock at Compton Service, he
had a conversation with Supervisor White. White asked
him if he had been getting any work since he had been laid
off and Gaugh told him that he had not been getting any
work. White then said to him:
If they don't give up this deal on the Union and the
labor doesn't give up this deal suit against Am-Del-Co
that the Company would fold up and J. C. Penney
would take their deliveries and take it to Merchant
Company because they had given a lower bid than
Am-Del-Co.
The complaint alleges that the conversation between
Gaugh and White violated Section 8(a)(1) of the Act and
that Gaugh's layoff on September 8 was discriminatorily
motivated and in violation of Section 8(a)(3) of the Act.
Supervisor Claude White did not testify at the hearing.
Furthermore, neither Hunt nor Garrett contradicted in any
way Gaugh's testimony nor was there any other testimony
26 Respondent Compton Service admits in its answer that warehouseman
Claude White, President Billy H Hunt, and Vice President Hollis Garrett
are supervisors within the meaning of Section 2(11) of the Act and agents of
Compton Service In its answer , Am-Del-Co admits only that Hunt is the
president and Garrett is the vice president of Am-Del-Co On all the facts
and circumstances above , including their power to manage the day-to-day
business affairs of Am-Del-Co as the chief operating officers thereof, I find
and conclude that Hunt and Garrett are supervisors of Compton Service
and Am-Del-Co within the meaning of Section 2(11) of the Act and agents
thereof
27 Art XXXIII, Work Stablization, in the agreement covering the ware-
house unit , effective November 1, 1973, through October 31, 1976, provides,
in substance , that if there is insufficient work for a warehouseman, and all
drivers and helpers are employed, the Company must offer the work to the
senior employee as a driver or helper if he is qualified to handle the equip-
ment and to perform the work (G C Exh 9) It is under this provision that
Gaugh testified that he intended to file the grievance
708 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
adduced to contradict Gaugh. From the above, with White
being an admitted supervisor, it seems to me that Supervi-
sor White was promising Gaugh extra work beyond that to
which he was entitled as the least senior warehouse em-
ployee if he would refrain from filing a grievance. I find
that this promise of a benefit if he refrained from exercis-
ing his contractual right was tantamount to a promise of a
benefit if he would refrain from protected concerted activi-
ty. I conclude that such a promise or suggestion was un-
lawful within in the meaning of Section 8(a)(1) of the Act.
Kendrick Cartage Co., 188 NLRB 534 (1971); Beech Air-
craft Corp., 196 NLRB 68, 72 (1972); General Stencils, Inc,
178 NLRB 108 (1969), enforcement denied 472 F.2d 107
(C.A. 2, 1972). The fact that White suggested that it was
not he, but President Hunt, who would confer the benefit
on Gaugh if he would refrain from initiating the grievance
does not limit Respondent's violation of the Act. J W.
Mays, Inc., 147 NLRB 942, 964 (1964), enfd. as modified
356 F.2d 693 (C.A. 2, 1966); Layton Oil Company, 128
NLRB 252, 253, 271 (1960).
While it is true that the complaint further alleges only
that on October 16, 1975, White threatened an employee
with discharge because employees filed charges with the
National Labor Relations Board, wherein Gaugh testified
that White, in fact, stated that Am-Del-Co would "fold up"
if "labor" didn't give up the suit against Am-Del-Co, I
conclude the matter was fully litigated, undenied, and that
it was a prediction to go out of business if the employees
and the Union did not refrain from pressing their unfair
labor practice charges against Am-Del-Co. This threat, by
White, further violates Section 8(a)(1) of the Act.
Notwithstanding my findings of violations of Section
8(a)(1) because of the above unlawful threat and promise
made directly to warehouseman Gaugh, I am unable to
conclude that there is any testimony or other evidence of
record which would indicate that Gaugh was discriminato-
nly laid off, as alleged, on or about September 8, 1975, or
at any other time. On the contrary, Gaugh, with least se-
niority in the warehouse unit, admitted, on cross-examina-
tion, that, when he was in layoff status and had discovered
that a nonunion employee was working as a helper on a
Compton Service truck, Compton Service attempted to and
did reach him by telephone seeking to have him return to
work. Under these circumstances, I do not find any dis-
criminatory element in the selection and laying off of
Gaugh, especially in view of the fact that he was last in
seniority. I shall therefore recommend that paragraph 6(c),
insofar as it alleges the discriminatory and unlawful layoff
of Gaugh in violation of Section 8(a)(1) and (3) of the Act,
be dismissed. When Gaugh was laid off he was replaced by
Steve Reis, a warehouseman next higher in seniority.
b. Steve D. Reis
Ronald E. Kennon, a Compton Service warehouseman
and the warehouse shop steward at that time, and Steve
Reis, a warehouseman, testified that in mid-August 1975
they entered Hunt's office complaining that there had been
a contract violation because an employee lower on the se-
niority list, Gaugh, had been recalled rather than Reis
Reis told Hunt that he intended to file a grievance. Reis
said that he wanted to be paid in conformity with the terms
of the contract for the time that Gaugh had been working
and that failing that he would file a grievance. Hunt an-
swered: "Do what you have to do but if you file that griev-
ance I probably won't be able to use you for a while but if
you don't use it you get to work tomorrow." Reis did not
file the grievance and was recalled to work in the next 2 or
3 days. Such a promise and assurance by Hunt is similar to
that made by White to Gaugh and represents an unlawful
promise of a benefit if the employee, Reis, would refrain
from filing a grievance, a right permitted and guaranteed
under the collective-bargaining agreement. This violates
Section 8(a)(1) of the Act. Even if the conversation might
otherwise be construed as a rough adjustment of a griev-
ance in view of the presence of the shop steward, there is
also a threat not to use him "for a while" if he filed a
grievance. Such a threat, coupled with the promise, more
clearly violates Section 8(a)(1) of the Act as a threat of late
recall if Reis pressed his rights under the contract within
the grievance procedure.
Hunt testified that it was his recollection that Reis' testi-
mony concerning the conversation in Hunt's office in the
presence of Shop Steward Kennon was "basically right."
Hunt testified that in view of Reis' absence and the
Company's continuous unsuccessful attempts to contact
him, he believed that Reis had quit the Company. Hunt
testified that Supervisor White had on numerous occasions
tried to contact Reis but had been unsuccessful in doing so.
Reis did not deny this. He testified that he had spoken to
White on many occasions and had agreed to come back to
work except that the limited offers of work were not ac-
ceptable to Reis under the terms of the collective-bargain-
ing agreement. Hunt testified that he told Reis that he did
not believe that Reis had a legitimate claim and that if Reis
wanted to file a grievance, the shop steward was present
and would write it for him. Hunt testified that he would
honor the grievance and take it through the grievance pro-
cedure. Hunt said, however, that he told Reis and Kennon
"if we would settle it in the office, then, if Reis was avail-
able for work, Hunt would put him to work."
Thus, the testimony of Kennon and Reis show that Hunt
threatened not to use Reis if he filed the grievance, but that
if he didn't file the grievance he would be used for work the
next day. Hunt, on the other hand, testified that he was
attempting to settle the matter in the presence of a shop
steward before Reis filed an actual grievance.
I do not credit Hunt's testimony that he made the avail-
ability of work conditional on the work itself becoming
available for Reis. I view this conversation as part of a
pattern wherein the Respondent's supervisors, Hunt and
White, seek to avoid unit employees filing grievances and
attempt to give them rewards for their refraining from and
engaging in activities which are protected under the Act
and permitted under the contract. When such rewards are
conditioned upon such refraining, the recipient of such re-
ward naturally is placed at an advantage over all other
employees in the unit and is encouraged to refrain from
engaging in activities protected by the Act. While this may
seem unduly technical in that it resulted in a benefit to the
employees rather than a detriment, the experience and ra-
tionale developed over the years by the Board, with court
AM-DEL-CO, INC. AND COMPTON SERVICE CO. 709
approval , dictates that such conduct by the employer
amounts to interference , restraint , and coercion . N.L.R B.
v. Exchange Parts Company, 375 U.S. 405 ( 1964).
Moreover , here Hunt was not merely attempting to in-
formally adjust the grievance (in the presence of the shop
steward) by promising a benefit . He was coupling it with a
threat . Such a statement raises the conversation out of the
merely technical . As alleged , I find it violates Section
8(a)(1) of the Act.
Thereafter , around September 8 and 9 , Reis twice pro-
tested to Claude White the practice of Am-Del-Co employ-
ees doing warehousemen 's work . White answered on both
occasions that he would take care of it. Reis was laid off, in
seniority , 2 days later.
I perceive no evidence indicating that Reis , because of
the above conduct or other activities , was unlawfully se-
lected for layoff. Reis was only one step senior to Gaugh
on the warehouse seniority list and he was laid off in se-
niority 4 days later . Lastly, no pretextual or other device is
suggested by the evidence , notwithstanding that the layoff
may have occurred immediately following his protest. The
timing here raises no prima facie suspicion.
c. The testimony of William L. Kilzer,• violation of Section
8(a)(3)
Kilzer, third from the bottom in seniority, and above
Gaugh and Reis, testified that he worked for Compton Ser-
vice as a general warehouseman commencing August 1973.
He testified that he worked from August 19, 1973, through
the end of 1974 as a warehouseman and was laid off. In
April 1975, he was recalled as a driver-helper. He did not
return to work at the warehouse until May 21, 1975, and
worked as a warehouseman until his layoff on October 3,
1975. He was recalled on November 11, 1975, and was laid
off on November 19, 1975, until his recall on December 1,
1975. At the time of the hearing he was employed as a
warehouseman.
Kilzer testified that on the afternoon of May 21, 1975, he
was present at a conversation between Hunt, White, and
the warehousemen and furniture-finishers. The conversa-
tion took place immediately after the last break. Hunt told
the assembled employees that J. C. Penney was very upset
about the condition of the warehouse and that there would
probably be no more union contracts with the employees
at the warehouse unless they got it straightened out and
kept it straightened out. Kilzer stated that Hunt told them
that he wanted the work of straightening out the warehouse
to be done by Compton Service employees. Hunt said that
if they didn't do it, then they would be replaced by "people
who probably would be taking our jobs." During this testi-
mony, counsel for Am-Del-Co objected on the ground that
the witnesses' testimony was conclusionary and did not re-
flect the actual statement of Hunt. Kilzer reiterated that
Hunt said that there would "never be another union con-
tract in the warehouse unless we got the warehouse straight
and kept it straight." 28 There is no testimony from Re-
spondent refuting the alleged conversation, although Hunt
denied other similar statements made allegedly to Keaton
and Kilzer. It appears to me that, as alleged in paragraph
5(d) of the complaint, Respondent's President Hunt made
the above statement which is clearly coercive within the
meaning of Section 8(a)(1) of the Act. The fact that Presi-
dent Hunt was using the threat that there never would be
another union contract as a lever to cause the employees to
maintain the warehouse in better condition is no justifica-
tion of this threat. The statement that there would never be
another union contract for the warehouse employees, made
May 21, 1975, violates Section 8(a)(1) of the Act whether
viewed as a threat to withdraw union recognition or to
adversely affect working conditions in the future.
Kilzer also testified that on June 16, 1975, Hunt called a
meeting of the warehousemen and furniture- finishers in
front of the freight elevators. Beside Hunt, Supervisor
Claude White was at the meeting. Hunt said that J. C.
Penney was demanding a 25-percent across-the-board cut
among the warehousemen and driver-helpers in the cost of
drivers and helpers, and that there would never be another
union contract with the warehousemen or with the drivers
and helpers unless those units would make a reduction in
cost. In that same conversation, Kilzer said that Hunt said
that unless the employees cease damaging the furniture,
"nonunion help would take our jobs from us and that we
would be working for less money."
Hunt testified that he recalled that there were a series of
meetings held in or about the middle of June 1975, and
that he believed that the conversation that Kilzer was testi-
fying about occurred on or about June 29, 1975. Hunt testi-
fied that there were several meetings with warehousemen,
furniture-finishers, and the driver-helpers because of the
sloppy condition and poor production in the warehouse
and among the drivers. Hunt, however, particularly denied
that he said anything about J. C. Penney demanding a 25-
percent cut in cost. He said that these meetings were an
attempt at "jacking up the people to get them to perform a
little better." Hunt also denied, as Kilzer alleged, saying
that there would be no damage problem once Am-Del-Co
took over the delivery service. While Hunt admitted saying
that he would issue warning letters where there had been a
failure to make proper reports of damage or where there
was continued damaging of furniture, he denied saying
that unless this was done, nonunion employees would take
the present employees' Jobs.
On this record, I credit Kilzer and discredit Hunt's deni-
als insofar as they are not in accordance with Kilzer's ver-
sion of the event. I conclude that what actually occurred
was that Hunt, indeed, was attempting to cause the em-
ployees to perform better and that the threat of no further
union contract, as it occurred in other instances of Hunt's
conversations with employees, including Keaton and Mus-
champ, and Supervisor White's conversation with employ-
ees, came into the conversation. I find that such statements
are a violation of Section 8(a)(1) of the Act as unlawful
threats.
Kilzer testified that the day after he was at this meeting
with Hunt and White (Kilzer places this at June 17, 1975),
28 Respondent's suggestion that there was a confusion between the
Union's contract and Penney's contract with Respondent is not supported
by this testimony
710 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
he had a conversation with Supervisor Claude White. With
six other warehousemen and furniture-helpers present, Kil-
zer asked Supervisor White what was going to happen next
and "what our rate of pay would be if we were working
nonunion." White answered: "Bill Hunt and Hollis Garrett
would not be happy until we were working for $2.50 or $3
an hour." White added that Hunt would never be happy
until it was a nonunion shop. In view of the fact that Kilzer
asked this question, I do not regard White's answer (and
White did not testify at the hearing) to have constituted an
unlawful threat that the shop was indeed going nonunion.
What White said was that Hunt would never be happy
until the shop was nonunion and that if it were nonunion
they would be working for $2 an hour. I find this to be an
opinion of White's in an area in which he had no control
and it is not a threat nor did it restrain Kilzer or the other
employees especially since it was an answer to Kilzer's
question.
Kilzer also testified that around July 17, 1975, Hunt, in a
meeting of warehousemen and furniture-finishers, told the
assembled employees that J. , C. Penney was demanding a
25-percent cut; that Compton Service was going to have to
do away with the delivery service; and that Am-Del-Co
would do the delivery service and it would be nonunion.
Kilzer also said that Hunt said that there was a great possi-
bility that the warehouse would not be union because Am-
Del-Co was submitting a bid to do their warehouse work
for J. C. Penney.
Hunt denies, in substance, that he said that there would
never be another union contract with reference to this
meeting . Hunt explained that there may well have been a
misunderstanding in regard to the two contracts involved:
one being the contract between Compton Service and the
Union which was never canceled and the second being the
contract between Compton Service and J. C. Penney
which indeed was canceled. In particular, Hunt denies say-
ing anything about a 25-percent cut. The General Counsel
argues that this testimony 29 is supportive of paragraph 5(g)
of the complaint. The complaint alleges that on or about
July 23, 1975, Hunt told employees, in an attempt to un-
dermine their support of the Union, that Respondent was
being pressured by its customers to go nonunion. Assum-
ing arguendo that such an allegation, indeed, constitutes a
violation of Section 8(a)(1) of the Act, I do not find that it
is supported by the credible evidence. I shall therefore rec-
ommend that it be dismissed. However, I find from the
credible testimony of Kilzer, contrary to Hunt's denial,
that he did mention a 25-percent cut and did state that
Am-Del-Co would be a nonunion employer taking over the
delivery business. While I do not credit Kilter's recollec-
tion that Hunt said that there was a great possibility that
the warehouse would become nonunion because Am-Del-
Co was submitting such a bid to J. C. Penney, I find that
the prediction regarding Am-Del-Co as a nonunion em-
ployer constitutes a clear statement that Compton Service
and Am-Del-Co were becoming nonunion and that the em-
29 General Counsel also points to the testimony of employee Muschamp
where Muschamp testified that Hutt told the driver-helpers that he was
"receiving pressure" from customers to cut the cost and that nonunion com-
panies were getting the work
ployees would no longer have the benefit of union repre-
sentatives. I discredit Hunt because such a remark is con-
sistent with mutually corroborated testimony of Keaton,
Muschamp, and other employees and with the relations
between Penney and Respondent.
The complaint alleges that Kilzer was unlawfully laid off
on October 3. The General Counsel points to the fact that
Gaugh protested the employment of an employee out of
seniority and was laid off; and that Reis protested Am-
Del-Co employees coming into the warehouse and doing
warehouse work and within 2 days of his protest was laid
off. I found no violation of the Act therein.
Kilzer, protesting on September 10, 12, and 30 the con-
tinued violation of contract by Respondent in that Am-
Del-Co employees were invading the warehouse and were
doing warehousemen's work, was met at first only by Su-
pervisor White's admonition to go along with the program
or else they would not be working. On October 1, 1975,
however, White told Kilzer that if he didn't go along with
the "program" of having Am-Del-Co employees come into
the warehouse, "I am just going to have to lay you off."
Kilzer answered that he was not going to go along with the
program and that Respondent would just have to lay him
off. White then said to Kilzer: "Why don't you get hold of
your union?" and White laughed. Kilzer told him that he
would get the Union. Kilzer telephoned McDermott that
(Wednesday, October 1, 1975) night and McDermott said
he would be there on Friday, October 3, 1975. That Friday
morning, October 3, Union Agent McDermott called a
meeting of warehousemen and furniture-finishers in the
warehouse lunchroom on breaktime. Kilzer said that Su-
pervisor White was standing in the doorway at the time of
the meeting. I infer, in the absence of contradiction, that he
observed the occurrences. McDermott said that they were
going to file a grievance under the contract. All the ware-
housemen signed the filed grievance. On the morning of
October 3, 1975, at about 10 o'clock, Kilzer signed the
grievance and he was notified that afternoon at 2:45 p.m.
that he was laid off.
Although Respondent denied discriminatory motivation
in the laying off of Kilzer, I believe that the record evi-
dence herein shows that Kilzer's treatment was quite dif-
ferent from that accorded to warehousemen Gaugh and
Reis. Although it is true that Kilzer was next in line for
layoff, he was the subject of a clear, direct threat of layoff
because of protesting working conditions and contract vio-
lations whereas Gaugh and Reis were not. Whereas Gaugh
and Reis were persuaded not to file grievances, Kilzer
brought in the union agent and caused the whole ware-
house unit to join in the grievance. And most important,
whereas Gaugh and Reis could expect the remedy of some
money from Compton Service, to recompense their partic-
ular grievance, Kilzer was setting in motion interference
with Respondent's ability to salvage the entire Penney
business through the use of the Am-Del-Co device. Gaugh
and Reis were nuisances; Kilzer was causing serious trou-
ble. I believe that the evidence with regard to the threat of
layoff by White, the timing of the layoff immediately after
the filing of the grievance, with White an observer of the
union meeting, and the above-enumerated reasons, consti-
tuted a prima facie case for the discriminatory layoff of
AM-DEL-CO, INC. AND COMPTON SERVICE CO 711
Kilzer as opposed to warehousemen Gaugh and Reis. In
view of the prima facie case, it was incumbent upon Re-
spondent to come forward with an explanation both rebut-
ting the prima facie case and showing the reason for the
layoff. It did neither. In view of this, I shall recommend
that the Board find as I do that Kilzer was laid off in the
period of October 3, 1975, through November 10, 1975, in
violation of Section 8(a)(1) and (3) of the Act. I add that
Respondent's recalls of Kilzer after laying him off do not
substantially alter my conclusion. The layoff, according to
this record, was to underline the necessity of "going along"
with the use of Am-Del-Co employees performing tasks
otherwise performed by Compton Service warehouse em-
ployees. Had Kilzer not been recalled it would have been
obvious that his discipline was that of discharge. There is
no evidence that Kilzer continued to protest.
On the basis of all the evidence of the record, I shall
therefore recommend that paragraph 6(c) of the complaint,
alleging the unlawful layoffs of warehousemen Gaugh,
Reis, and Kilzer be dismissed as to Gaugh and Reis be-
cause of a failure of proof; and that the layoff of Kilzer, in
the period of October 3, 1975, through November 10, 1975,
be found a violation of Section 8(a)(1) and (3).
The consolidated amended complaint also alleges that,
in violation of Section 8(a)(1) and (3) of the Act (paragraph
6(a) of the complaint), Respondent attempted to convert
Harry Drozd, Lloyd Reid, Leroy Glazebrook, Walter
Schaller, Lester Gruenewald, and Syvester Kleinschmidt
from employees into independent contractors; and that
such attempt was based upon a desire by Respondent to
discourage employee membership in and activities on be-
half of the Union. While it is true, as hereinafter noted,
that Respondent did attempt and did successfully attempt
to change the status of these employees to "independent
contractors," there is no evidence of record that this was
done in an attempt to discourage their membership in the
Union, to interfere in their concerted activities on behalf of
the Union or otherwise, or to undermine or disparage the
Union. All drivers were treated the same. I shall therefore
recommend to the Board that section 6(a) of the consoli-
dated amended complaint be dismissed for lack of evi-
dence of discriminatory motive 30 in Respondent's attempt-
ing to change the status of the above-named employees
and that of other employees into independent contractors
This does not mean, as noted below, that such a change did
not carry with it other violations of the Act.
There exist, as noted below, various instances of Re-
spondent engaging in acts of interference, restraint, and
coercion, in violation of Section 8(a)(1) of the Act, and an
unlawful layoff of warehouse employee Kilzer in violation
of Section 8(a)(1) and (3). I am persuaded from the entire
record herein that Respondent's action in this case seeking
other means of preserving its business with its largest cus-
tomer, J. C. Penney, while perhaps not motivated by an
intent to discriminate against its employees on the basis of
their union membership was motivated by design to rid
70 While an effect of conversion to owner-operator status is that the em-
ployees may leave the Union, that is not necessarily true or the intended
result
itself of the union contract. Town & Country Manufacturing
Company, Inc., 136 NLRB 1022 (1962), enfd. 316 F.2d 846
(C.A. 5, 1963); Clevenger Logging, Inc., 220 NLRB 768
(1975). I am persuaded that notwithstanding the economic
exigencies it faced with the impending loss of the Penney
contract, Respondent embarked on a campaign of threat-
ening employees, disparaging the Union, sought to avoid
paying the wages and benefits of the existing Compton Ser-
vice contract, and chose, without notification to the Union
or an opportunity to bargain, to abandon the Union and
the contract in favor of going over to an owner-operator
situation. Pay'n Save Corporation, 210 NLRB 311 (1974).
The fact that part of the Compton Service driver-helper
unit of employees survives is not determinative. Pay'n Save
Corporation, at 321, In. 19.
E. Violation of Section 8(a)(5) and 8(d) of the Act
The complaint alleges the existence and appropriatness
of a truckdriver and helper unit and a separate warehouse
employee unit. Compton Service admits the allegation and
Am-Del-Co denies it. Having found that Am-Del-Co and
Compton constitute a single integrated employer, I con-
clude that Am-Del-Co's denial does not raise a material
issue with regard to the appropriateness of these units. Sim-
ilarly, where Compton Service admits and Am-Del-Co de-
nies that the Union was the majority representative in
those units, Am-Del-Co's denial does not raise a material
issue . The complaint also alleges the existence of a collec-
tive-bargaining agreement covering each of those units ef-
fective November 1, 1973, through October 31, 1976. Am-
Del-Co's denial of the existence of the collective-bargain-
ing agreements covering both units similarly does not raise
a material issue . Some recapitulation is in order.
The evidence of record therefore shows that on July 8,
1975, Respondent submitted a bid to J. C. Penney under
the Am-Del-Co name to perform a delivery service thereto-
fore fulfilled by Compton Service drivers.
This July 8 bid followed a June 20 meeting with J. C.
Penney wherein Respondent Compton knew that Penney
had been approached by owner-driver companies, that
Penney wanted a bid submitted whereby deliveries on a
per-stop basis would be made, and that Penney would can-
cel the Compton Service contract.
The evidence shows that on July 18, 1975, Penney ac-
cepted the Am-Del-Co bid and that pursuant to a July 22,
1975, telephone call from Garrett to Barnes at Penney,
Garrett knew that Am-Del-Co was the successful bidder.
On July 24, 1975, Penney sent a letter to Compton
(Resp. Exh. 1) terminating the 3-year delivery agreement
between Penney and Compton effective August 30, 1975.
On July 30, 1975, Compton Service notified (G.C. Exh. 7)
the Union that the Penney contract had been terminated,
the effective date being August 31, 1975. Noting that the
termination of the Penney contract affected only the driv-
ers and helpers, Hunt wrote to the Union that he would
notify the drivers and helpers on July 31, 1975, of the ter-
minations. This was the first notification, as above noted,
712 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
that Respondent gave the Union with regard to the cancel-
lation of the Penney contract.31
McDermott received Compton Service's July 30 letter on
July 31, contacted Respondent, and arranged a meeting for
August 5. It was at this August 5 meeting that Hunt told
McDermott that Am-Del-Co was submitting a bid for the
work. According to McDermott's credited testimony, Mc-
Dermott asked Hunt and Garrett at this August 5 meeting
to negotiate some sort of "per-stop" contract covering the
drivers and helpers. Hunt and Garrett agreed to a meeting
of August 8. On August 6, however, Garrett telephoned
McDermott and told him that the Am-Del-Co contract
had been accepted by Penney and that there was no need
for further discussion.32 In any case, on August 15, 1975,
McDermott sent a mailgram to Compton requesting
Compton to bargain over the effects of the closing of
Compton Service on the drivers and helpers in the unit. At
a meeting of August 25, 1975, McDermott requested sever-
ance pay for the drivers and helpers who would be termi-
nated. Hunt refused to discuss severance pay and noted
that Compton was not going out of business. Nevertheless,
McDermott asked Hunt and Garrett to negotiate severance
pay for the drivers and helpers who would be laid off. It
was at this August 25 meeting that McDermott told Hunt
and Garrett that it made no difference to him what compa-
ny under Respondent's control actually performed the
Penney deliveries. McDermott stated that unit employees
should be doing the job and should be doing it under a
labor contract which the Union was willing to modify.
Hunt answered that there was no need for Compton Ser-
vice to negotiate and that Am-Del-Co was not covered by
any agreement with the Union. Hunt reiterated that Comp-
ton was not going out of business. It was as a result of this
August 25 meeting that the Union filed a grievance alleg-
ing breach of the contract because of violation of the rec-
ognition clause in that Respondent was bargaining individ-
ually with union employees and a further grievance
relating to the transfer-of-work clause.
On September 2, McDermott again visited the
Respondent's warehouse and asked Hunt to negotiate
either a new contract or severance pay. Hunt again stated
that he did not intend to negotiate and was not interested
in talking any further. Hunt stated that Respondent would
do business with the owner-operators and "that is the end
of it."
Analysis and Conclusions
Section 8 (d) of the Act 33 requires , in substance , that the
collective -bargaining agreements cannot be altered without
the consent of the parties except by following the statutory
31 McDermott admitted hearing rumors before July 31 of a change in
Penney's method of operation-as early as April 1975
32 i am unable to see what consequences would flow even if I accepted
Hunt 's and Garrett 's version of the facts whereby they notified McDermott
of the Union that there had been notification of Penney 's cancellation of the
Compton contract as early as July 15, 1975
33 In pertinent part Sec 8 (d) provides that
. where there is in effect a collective -bargaining contract covering
employees the duty to bargain collectively shall also mean that no
party to such contract shall terminate or modify such contract, unless
the party desiring such termination or modification-
provisions relating to such changes . Oak Cliff-Golman Bak-
ing Company, 202 NLRB 614 , 616 (1973 ); Osage Manufac-
turing Company, 173 NLRB 458 , 461-462 ( 1968). There is
no question in this case that Respondent , faced with what
it regarded as economic problems of the first magnitude
(loss of the Penney business), sought to continue its busi-
ness with J . C. Penney by resort to owner-operators oper-
ating on a per -stop basis as Penney specified . In order to
meet the problem posed by Penney 's undoubted demand
(that Penney delivery work be accomplished on a per-stop
basis) Respondent , through Am-Del-Co, submitted a suc-
cessful bid to Penney covering the delivery operation.
Knowing as early as June 20, 1975, that Penney would
cancel the Compton contract and having submitted the
Am-Del-Co bid on July 8, and having been awarded the
Am-Del-Co contract on July 22, in mid-term of
Respondent 's contract (covering the drivers and helpers)
between the Union and Compton Service , Respondent
switched to an owner -operator method of delivery without
consulting the Union and without notifying the Union 34
until August 5 of its intent to do so on September 1. In
addition it did not follow the statutory scheme for chang-
ing the wages, hours, and other terms and conditions of
employment of the unit drivers and helpers who signed
contracts with new terms of employment as "owner opera-
tors." No further discussion is necessary to show that the
mid-term unilateral changes in the contract terms by
Compton Service , laying off its drivers and helpers and
soliciting all of them and hiring some of them as owner-
operators and changing their terms and conditions of em-
ployment with individual contracts violated Section 8(d) of
the Act and also independently violated Compton Service's
and Am-Del-Co's obligation to bargain collectively with
the Union within the meaning of Section 8(a)(5). Carnation
Company, 172 NLRB 1882 ( 1968), enforcement denied 429
F.2d 1130 (C.A. 9); Oak Cliff- Golman Baking Co., supra;
Borden, Inc, supra; N. L. R. B . v. Huttig Sash and Door Com-
pany, 337 F.2d 964 , 967 (C.A . 8, 1966).
The crux of this case, as it appears to me , is that Respon-
dent Compton Service undoubtedly felt itself under severe
economic pressure by Penney . However , Penney did not
direct or require that the work , done on a per-stop basis, be
performed under a contract by Am-Del-Co or by indepen-
dent contractors. What the evidence showed that Penney
required was the ability to pay "per stop" for its delivery
(1) serves a written notice upon the other party to the contract of the
proposed termination or modification sixty days prior to the expiration
date thereof
(2) offers to meet and confer with the other party for the purpose of
negotiating a new contract or a contract containing the proposed modi-
fications,
(3) notifies the Federal Mediation and Conciliation Service within
thirty days after such notice of the existence of a dispute
(4) continues in full force and effect all the terms and condi-
tions of the existing contract for a period of sixty days after such notice
is given or until the expiration date of such contract , whichever occurs
later
34 The case does not present the issue of whether Respondent must bar-
gain on the decision to change from employees to independent contractors
even though Respondent sold or leased most of its trucks Compare Adams
Dairy, Inc, 350 F 2d 108 (C A 8 , 1965) with Royal Typewriter Company, A
Division of Litton Business Systems, Inc, 209 NLRB 1006, 1012 ( 1974) Here,
Respondent insists Compton Service is fully in business as an employer of
employees (on layoff status for much of the time )
AM-DEL-CO, INC. AND COMPTON SERVICE CO 713
service.35 Up through August 5, 1975, all that had occurred
was that Respondent submitted a bid based on a per-stop
method of delivery for J. C. Penney under the Am-Del-Co
corporate name.
On August 5, the Union was willing to negotiate a per-
stop method of delivery. With the Union at this time will-
ing to bargain on a change in the contract, Respondent, on
August 6, decided not to bargain with the Union but to
take the position that Am-Del-Co, not covered by any
union collective-bargaining agreement, was free to negoti-
ate and contract with Penney free of any collective-bar-
gaining agreement with the Union. While the reasons for
such a position are not entirely clear on this record, the
testimony of Penney's distribution center manager in the
St. Louis area, John J. Barnes, was significant. Barnes testi-
fied that, with regard to the use of owner-operator delivery
services, Penney would have accepted a bid from Compton
Service just as it accepted the bid from Am-Del-Co. Barnes
testified that Penney did not demand that Hunt submit a
bid under the Am-Del-Co name: he said that he wanted an
owner-operator "concept" in delivery. This means a "per
stop" plan. Penney had no concern for the relationship of
the drivers to Am-Del-Co. While it is true that Barnes testi-
fied that he asked Hunt if Hunt was interested in submit-
ting a bid through the Am-Del-Co corporation, he was un-
willing to swear to the fact that he restricted the bid to
Am-Del-Co. Similarly, McDermott cautioned Respondent
that he didn't care under what name Respondent bid for
the Penney work; it belonged to unit employees. However,
in the view I take of the case, it was immaterial in this case
if Barnes had restricted it to Am-Del-Co. For Respondent,
whether through Am-Del-Co or any other corporate de-
vice, was not free to deal with Penney outside the scope of
its obligation to the Union. Since Am-Del-Co and Comp-
ton Service constituted a single integrated employer, and
for the purpose of the relation to Penney, alter egos of each
other, Respondent was under an obligation to deal with the
Union notwithstanding it used the Am-Del-Co device in
submitting the bid to Penney The inference I feel com-
pelled to draw, under the facts of this case, is that Comp-
ton saw an opportunity to escape its obligation to the
Union with regard to salvaging a major segment of its busi-
ness by taking the position that Am-Del-Co, a nonsignato-
ry to any union agreement was free to deal with Penney
outside Compton Service's obligation to the Union with
regard to the drivers and helpers In addition, Re-
spondent's initiation of a new method of operation with
Penney was undertaken unilaterally and without notice to
or bargaining with the Union until the events amounted to
a fait accompli or, indeed, were set in motion. When the
Union moreover, requested bargaining on the effects of the
conversion of the operation from hourly employees to an
35 Barnes of J C Penney on cross-examination by counsel for the Gener-
al Counsel (Miller)
Q Did Mr Hunt indicate to you under which company he was
going to submit a bid?
A No
Q What did you tell him?
A I told him we wanted a contract based on a per stop basis
owner-operator plan, Respondent refused to bargain. This
unilateral action and refusing to bargain on the effects
thereof constitute violations of Section 8(a)(5) of the Act.
Royal Typewriter Company, 209 NLRB 1006, 1012 (1974).36
The violation in refusing to bargain on "effects" would be
perfected even assuming that the unilateral action was eco-
nomically motivated and the owner-operators were no lon-
ger unit employees but independent contractors and the
action was viewed as a partial liquidation. Johnson's Indus-
trial Caterer's, Inc., 197 NLRB 352, 356 (1972), citing
N.LR.B. v. Adams Diary, Inc., supra.
The General Counsel also argues that even if Am-Del-
Co and Compton Service are not a single integrated enter-
prise and alter egos of each other, Am-Del-Co nevertheless
continued to have an obligation to bargain with the Union
as the successor of Compton Service. General Counsel ar-
gues that Am-Del-Co, having the same customers, identical
equipment, many of the same employees, the same loca-
tion, and the same function as the predecessor and having
commercial operations without a hiatus of service, neces-
sarily is the "successor" of Compton Service under the
Board law. N.L.R.B. v. Burns International Security Service
Inc, 406 U.S. 272 (1972). In my view of the case, it is not
necessary to reach or analyze the question of Am-Del-Co
as the successor of Compton Service, having found that it
constitutes a single integrated enterprise with Compton
Service and its alter ego for purposes of entertaining J. C.
Penney business.
Defenses
1 In its persuasive brief demonstrating the economic
straits enveloping Respondent, Compton Service and Am-
Del-Co note that notwithstanding the above facts, on Janu-
ary 9, 1976, Penney terminated its contract with Am-Del-
Co effective January 14, 1976 According to Respondent,
the basic issue in the case therefore has become moot and
the only issue to be decided is whether there should be
backpay for the Compton Service employees who were laid
off (on the theory that they would have had the work if
Am-Del-Co had not performed the Penney work) in the
period September 2, 1975 (the date on which Am-Del-Co
commenced the Penney's deliveries) to January 14, 1976
(the date on which, according to Respondent, the employ-
ees regardless of working for Am-Del-Co or otherwise
would necessarily have been laid off in view of the loss by
Am-Del-Co of the Penney contract). This matter is not
properly before me and should be left to a backpay pro-
ceeding.
In its brief, Respondent also admits that the Union sug-
gested the possibility of modifying the collective-bargain-
ing contract so as to provide for compensation on a incen-
tive basis (i.e., per stop) rather than on an hourly basis.
Respondent, however, states that Penney thereafter ad-
vised Respondent that it had accepted the Am-Del-Co pro-
posal and that it was not interested in any further contract
with Compton. In this assertion, I believe that Respondent
goes too far. For, as I have found, Barnes was interested in
a per stop basis for Penney delivery and not interested
36
General Counsel did not suggest that Respondent was obligated to
bargain on the "decision" to convert to "owner-operator "
714 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
particularly in who performed such deliveries and the tech-
nical legal relationship of the drivers to Am -Del-Co. With-
out supporting material, Respondent further argues that-
"Compton could not possibly compete with owner -opera-
tor companies , even if its union contract obligations were
converted to a per stop equivalent " 37 The problem with
Respondent 's position is that it never gave the Union an
opportunity to bargain on the question on how far the
Union might be willing to withdraw from its otherwise ob-
durate position taken in the Famous-Barr case. Thus, when
the Respondent cut off McDermott on August 6 from bar-
gaining on August 8 with regard to changing the terms and
conditions of the contract , Respondent never could discov-
er dust how far the Union was willing to go in changing,
i.e., lessening , the wages and other terms and conditions of
employment , so that Compton or Am -Del-Co could meet
the competition imposed by the other owner -operator com-
panies beyond the existing contract "converted to a per stop
equivalent."
2. To the extent that Respondent defends on the ground
the simple economic survival was the cause of and excuse
for its actions , the courts and Board have held to the con-
trary. East Bay Union of Machinists, Local 1304, United
Steelworkers of America, AFL-CIO [Fibreboard Paper
Products Corp] v. N.L. R.B, 379 U.S. 203 ( 1964); Carnation
Company, supra; Oak Cliff- Golman Baking Co., supra.
3. Respondent also relies on the Board ' s holding in
Compton Service Company, Inc., 212 NLRB 557 (1974).
That decision , issued July 26, 1974 , found that Compton
Service, Compton Leasing , and Am-Del-Co constituted a
single integrated employer but also dismissed allegation of
violations of Section 8(a)(5) with regard to an official of
the single integrated employer suggesting to three employ-
ees of Compton Leasing that they become owner-operators
for Am -Del-Co in delivering merchandise for an employer
by the name of Carafiol . The general manager of Am-Del-
Co at the time , Murry Hines, asked three employees of
Compton Leasing to consider the matter of driving as own-
er-operators for Am-Del-Co in delivering appliances for
Carafiol . Subsequently , each of the Compton Leasing em-
ployees declined to enter into the relationship . The facts
showed that the Famous -Barr enterprise , for whom the
Compton Leasing drivers drove, was progressively discon-
tinuing the use of Compton Leasing employees and going
to the use of owner -operators . The three employees, drivers
for Famous -Barr , were very low on the Compton Leasing
seniority list, and in view of Famous-Barr going to the
owner-operator method of delivery, could not expect em-
ployment . The fact also appeared that the three men to
whom Hines spoke were told that they could both drive as
owner-operators for Am-Del-Co on the Carafiol account
and continue to work for Famous-Barr whenever they were
reached on the seniority list to drive for Famous -Barr un-
der the union contract 's terms and conditions.
The complaint in that case alleged violations of Section
8(a)(5) in that respondent engaged in direct bargaining
37 Emphasis supplied
38 The alleged unlawfullness was unlawful direct bargaining and unlawful
subcontracting without bargaining
with employees in violation of the union's status as the
statutory collective-bargaining representative of the em-
ployees; and in addition, that respondent had already uni-
laterally subcontracted unit work to owner-operators with-
out notice to the union. With regard to the allegation of
violation due to direct dealing, the Board held, in affirming
the Administrative Law Judge, that the three employees
contacted by Am-Del-Co were not offered "employment"
and no change in their working conditions as employees of
Compton Service. It was held that the terms and conditions
which Am-Del-Co was soliciting the employees about were
outside the employment relationship of the employees with
Compton Leasing and were not inconsistent with it. With
regard to the second allegation of the complaint, that re-
spondent had a duty to bargain with the union concerning
the subcontracting of the delivery service at Carafiol, the
Board again, affirming the conclusion of the Administra-
tive Law Judge, found that no bargaining duty arose in the
situation. In particular, it found that the decision to use an
owner-operator at Carafiol rather than to expand the use
of employees of Compton Leasing at the Carafiol unit was
a decision solely of Carafiol and not of respondent. When
Carafiol declined to request additional employees for
Compton Leasing but instead requested an owner-opera-
tor, Am-Del-Co came forward with an owner-operator
plan to meet Carafiol request
The case at bar is readily distinguishable, it seems to me,
from the prior Compton Service case. In the first place, the
erstwhile employees of Compton Service who were driving
for J. C. Penney in the present case were in fact being
induced to drive for J. C. Penney as owner-operators. In
the prior Compton Service case, the employees were not laid
off from Famous-Barr and then asked to drive as owner-
operators for Famous-Barr There was no chance for them
to work at Famous-Barr which was switching to owner-
operators and they were then being asked to go to Carafiol,
as a separate place of employment, as owner-operators.
The second ground of distinction, as I see it, is that in the
prior case there was no solicitation by the customer for
bids on "per stop" basis. There was merely a request by
Carafiol to be supplied with owner-operators. In the case at
bar, however, J. C. Penney desired bids on a "per stop"
basis. As I have found above, contrary to Respondent,
Penney did not say it would reject a Compton Service bid
and insist that Am-Del-Co submit a bid. As Barnes testi-
fied, he was willing to accept bids and would have re-
viewed bids from any company including Comtpon Ser-
vice. The fact is that Hunt and Garrett refused to engage in
any bargaining with the Union with regard to a per stop
basis contract for J. C. Penney, which the Union was will-
ing to bargain about on August 5, which necessarily caused
the Am-Del-Co bid to be accepted as such. Although
Respondent's actions, on this record, in spite of antiunion
disparagment do not necessarily reflect a scheme to rid
itself of the Union when it first submitted the bid to J. C.
Penney, by the time it dealt with the Union in early August
1975 it was clear that, through reliance on the fact that
Am-Del-Co had no collective-bargaining agreement with
the Union, Respondent was motivated, with regard to sal-
vaging the J. C. Penney business, by a desire to abandon
AM-DEL-CO, INC. AND COMPTON SERVICE CO. 715
the Union's expensive contract with employees and to go
on the nonunion basis with owner-operators.
In view of this conclusion, I am constrained to find that
the employees named in subparagraph 6(b) were terminat-
ed because of Respondent's failure or refusal to bargain in
good faith with the Union and because it had determined
that Am-Del-Co, a nonsignatory to any union contract,
would be the vehicle through with Respondent could con-
tinue in business on a nonunion basis. Thus I find that the
layoff of the 14 employees named in paragraph 6(b) violat-
ed Section 8(a)(3) of the Act.
F. Other Independent Violations of Section 8(a)(1) of the
Act
The complaint alleges violation of Section 8(a)(1) of the
Act in that commencing in or about the last week of Feb-
ruary, Respondent, by Hunt and Garrett, threatened the
employees that there would be no further union contract
after its expiration. While I was suspicious of the credibility
of certain testimony of employee-witnesses called by Gen-
eral Counsel, particularly Keaton, Muschamp, and Caulley
(because of Muschamp's and Caulley's desire to testify
with regard to their estimations and conclusions of what
the Respondent's officers said rather than what they actu-
ally said; and with regard to Keaton, because of what I
observed as an evident animus against the employer), I
nevertheless noted a similarity of testimony with regard to
Hunt and Garrett telling employees, in various contexts,
that there would be no further union contract. Thus, in
finding independent violations of Section 8(a)(1), I find
that Hunt told Caulley in or about the last week of Febru-
ary that he need not worry about the next contract because
there would be no contract when this was in response to
Caulley's assertion that certain working conditions be
changed. I also find that Hunt said the same thing to Kea-
ton on or about March 1 when Keaton told Hunt that he
wanted the bid system for daily job assignments made
more definite in the next contract. I further find that Gar-
rett told Muschamp and Keaton on or about April 1 that:
"There aren't going to be any more contracts around this
place, you can take that for what its worth " in response to
Muschamp and Keaton complaining about the difficulty in
loading a tractor into their truck.
I also find, as discussed above, a violation of Section
8(a)(1) in Hunt's promise in the middle of June 1975 to
Gerald Gaugh that he would probably work Gaugh longer
if Gaugh did not file a grievance.
I do not find a violation of the Act with Hunt telling
Kilzer and other employees that J. C. Penney was putting
pressure on Respondent to cut costs and that nonunion
companies were attempting to get the work. Insofar as the
complaint alleges, in paragraph 5(g), that on or about July
23, 1975, Hunt told the drivers and helpers that Respon-
dent was being pressured by its customers to go nonunion
thus attempting to undermine employee support for the
Union, this was not substantiated by any testimony. Rath-
er, what Hunt told the employees was that it was being
pressured by J. C. Penney to have a cut in cost and that
nonunion operators were seeking to get the business away
from Respondent. I do not regard this statement as a viola-
tion of the Act. I shall, and do, therefore recommend that
the complaint be dismissed insofar as this statement was
made.
It is also alleged that, in violation of Section 8(a)(1), on
or about August 4, 1975, Hunt told employees that he
would disregard union seniority for those employees who
agreed to work for Am-Del-Co. I credit Muschamp 's testi-
mony that at a meeting called by Hunt on July 31 to per-
suade driver and helper employees of Compton Service to
become owner-operators delivering for Penney under the
auspices of Am-Del-Co, Hunt told them that the employ-
ees who first sign their employment contract as owner-op-
erators with Am-Del-Co would get first crack at doing the
job for Penney. In so doing, Respondent was soliciting its
employees, during the term of the lawful collective-bar-
gaining agreement and in the face of an obligation to bar-
gain only with their statutory representative, to change
their wages , hours, and other terms and conditions of em-
ployment in violation of Section 8(a)(5). I find this to be a
violation of Section 8(a)(1) as well. I also find that it was,
indeed, an attempt to unilaterally change their seniority
status as delineated in the contract.
As above noted, I have found Hunt's conversation with
Kennon and Reis during the second week of August 1975
to be a violation of Section 8(a)(1) in that there was both a
threat not to employ Reis and a promise to give him em-
ployment if he should decline to file a grievance. I find this
to be a violation of Section 8(a)(1) of the Act, based upon
the unlawful threat and the unlawful promise of a benefit
where Reis merely attempted to voice his rights under the
collective -bargaining agreement.
Supervisor Claude White did not testify at the hearing. I
find that when he told Kilzer on or about September 12,
1975, that if Kilzer did not go along with the program of
permitting Am-Del-Co's owner drivers into the warehouse,
he would have to lay off Kilzer. Kilzer at this point was
merely attempting to enforce his rights as he saw them
under the collective-bargaining agreement because the
Am-Del-Co owner-operators and their employees were
taking away work normally performed by warehouse em-
ployees. The threat by White to lay off Kilzer if Kilzer did
not cease attempting to enforce his contract rights was a
violation of Section 8(a)(1) of the Act as an unlawful
threat.
To the extent that Hunt or Garrett denied the above
statements, that Am-Del-Co was nonunion and that there
would not be another contract, I find their denials to be
unconvincing. The statements quoted by the above em-
ployees were obviously widespread and were consistent
with Respondent's erroneous conclusion that Am-Del-Co,
having undergone some changes of ownership, was no lon-
ger a single integrated employer as found by the Board and
was not bound by the union contract.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON
COMMERCE
The activities of Respondent set forth above, in connec-
tion with the operations of the Respondent, have a close,
716 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
intimate, and substantial relationship to trade, traffic, and
commerce among the several States and tend to lead to
labor disputes burdening and obstructing commerce and
the free flow of commerce.
in the compliance stage of this case to limit the monetary
loss if any occasioned by this order.
Upon the basis of the foregoing findings of fact, and
upon the entire record in this case , I make the following:
V. THE REMEDY
Having found that the Respondent is engaged in certain
unfair labor practices, I shall recommend that it cease and
desist therefrom and take certain affirmative action de-
signed to effectuate the policies of the Act.
Having found that Respondent unlawfully changed the
wages, hours, and conditions of employment of its drivers
and helpers; having found that Respondent unlawfully laid
off a warehouseman because of his engaging in union ac-
tivities and unlawfully laid off certain drivers and helpers
by virtue and consequence of, and following its desire to
escape from, recognizing the Union as representative of
dnvers delivering for J. C. Penney and its refusal to bar-
gain with the Union concerning modifying the existing col-
lective-bargaining agreement; and having found that Re-
spondent refused to bargain on the effects of such
terminations, I shall recommend that all the drivers and
helpers, including those who became owner-operators be
restored to their former or substantially equivalent posi-
tions, without prejudice to their seniority or other rights
and privileges, and that Respondent make each of them
and warehouseman William L. Kilzer whole for any loss of
pay, including loss of fringe benefits, they may have suf-
fered by reason of such changes in the terms of their em-
ployment. I shall also recommend that Respondent restore
and maintain in effect all collective-bargaining terms relat-
ing to wages, hours, and conditions of employment of the
drivers and helpers. Backpay shall be computed in the
manner set forth in F. W Woolworth Company, 90 NLRB
289 (1950), plus interest at 6 percent per annum as de-
scribed in Isis Plumbing & Heating Co., 138 NLRB 716
(1962). I shall also cause the cancellation of the owner-
operator contracts, Parklane Hosiery Co., supra, and shall
recommend the posting of an appropriate notice.
I have considered and rejected a more limited backpay
order, N.L.R.B. v. Transmanne Navigation Corporation, 380
F.2d 933 (C.A. 9, 1967), which is often recommended in
unlawful partial shutdowns unaccompanied by discrimina-
tory motiviation. Royal Plating and Polishing Co, Inc., 148
NLRB 545, 548 (1964). See Interstate Tool Co, Inc., 177
NLRB 686, 687 (1969); Johnson's Industrial Caterers Inc.,
supra, Bordens, Inc., supra.
The significant fact is that Compton Service remains in
business with its warehousemen furniture-finishers and,
from time to time, its drivers and helpers still functioning.
Thus a return to the status quo ante is not unreasonable.
Stone & Thomas, 221 NLRB 573 (1975); Parklane Hosiery
Co, supra.
The remedial order in this case, it seems to me, will not
place Respondent in an unfair position nor will it place an
unfair burden upon Respondent in view of the fact that
any loss of business, especially loss of the J. C. Penney
contract by Compton Service in July, 1975, as well as any
loss of the Penney contract by Am-Del-Co in January
1976, and the effects thereof on employees may be shown
CONCLUSIONS OF LAW
1. Respondent, Am-Del-Co and Compton Service, cor-
porations authorized to do business under the laws of the
State of Missouri, referred to jointly as Respondent, jointly
are, and each of them is, an employer engaged in com-
merce within the meaning of Section 2(6) and (7) of the
Act
2. Teamsters Local Union No. 688, affiliated with Inter-
national Brotherhood of Teamsters, Chauffeurs, Ware-
housemen and Helpers of America, is a labor organization
within the meaning of Section 2(5) of the Act.
3. The following constitute units appropriate for purpos-
es of collective bargaining within the meaning of Section
9(b) of the Act:
(a) All furniture and appliance truckdrivers and
helpers employed by Respondent, excluding office
clerical employees, professional employees, guards, su-
pervisors, and all other employees as defined in the
Act.
(b) All warehouse employees employed by Respon-
dent, excluding office clerical employees, professional
employees, guards, supervisors, and all other employ-
ees as defined in the Act.
4. At all times material herein the Union has been the
exclusive bargaining representative of the employees in the
aforesaid units within the meaning of Section 9(a) of the
Act.
5. At all times material herein , Am-Del-Co and Comp-
ton Service have maintained such interrelation of opera-
tions, management, ownership, centralized control of labor
relations , interchange of employees, common supervision,
similarity of customers, common utilization of property
and equipment, and common location, as to constitute a
single integrated enterprise and alter egos of each other.
6. At all material times herein, the persons who, prior to
September 1, 1975, were employees included in the unit
specified above in paragraph 3(a) as drivers and helpers for
Compton Service and who thereafter became "owner-oper-
ators" for Am-Del-Co nevertheless remained subject to
Respondent's direction and control with regard to the ends
and means of their work and remained employees of Re-
spondent within the meaning of the Act.
7. Commencing in February 1975, and continuing there-
after, Respondent, by its agents Hunt, Garrett, and White
interfered with, restrained, and coerced its employees by
threatening employees in the unit in paragraph 3 that Re-
spondent would never sign another contract with the
Union; threatening that there would no longer be a union
representing said employees and that there would never be
contracts covering the warehousemen or the drivers and
helpers; threatening employees with late recall to employ-
ment if they filed grievances; and threatening employees
with layoff if they did not cease attempting to enforce their
rights under collective-bargaining agreements, all in viola-
tion of Section 8(a)(1) of the Act.
AM-DEL-CO, INC. AND COMPTON SERVICE CO. 717
8. In the period October 3 through November 10, 1975,
Respondent laid off its warehouseman, William L. Kilzer,
in violation of Section 8(a)(1) and (3) of the Act.
9. On August 31, 1975, Respondent laid off Howard
Brown, John Holleran, Ron Hale, Robert Temme, Steve
Rell, Orlan Mauldin, Jerry Neal, William Chandler,
Charles Muschamp, Leo Bierman, Larry Caulley, Gerald
Webb, William Keaton, and Elmer McWhorten 39 as a
consequence of Respondent's refusal to bargain with the
Union and desire to disparage and undermine the Union.
10. Commencing about August 6, 1975, and at all mate-
rial times thereafter, Respondent, in violation of Section
8(a)(5) of the Act, has refused to bargain collectively with
the Union, by inviting, soliciting, and inducing its driver
and helper employees to enter into individual contracts of
employment with Respondent in derogation of their bar-
gaining representative; by entering into individual con-
tracts with its driver employees, thereby modifying the ex-
isting collective agreement without complying with the
requirements of Section 8(d)(1), (2), (3), and (4) of the Act;
and by refusing to bargain with the Union regarding the
effects of the decision to change its method of delivery to
owner-operators 40
Upon the foregoing findings of fact, conclusions of law,
and upon the entire record, and pursuant to Section 10(c)
of the Act, I hereby issue the following recommended:
ORDER41
Respondent Am-Del-Co, Inc., and Compton Service
Company, jointly, its officers, agents, successors, and as-
signs, shall:
1. Cease and desist from-
(a) Failing and refusing to bargain collectively with
Teamsters Local Union No. 688, affiliated with Interna-
tional Brotherhood of Teamsters, Chauffeurs, Warehouse-
men and Helpers of America, as the exclusive representa-
tive of all its employees in the following appropriate unit
regarding the effect of the decision to change the method
of delivery to owner-operators:
All furniture and appliance truckdrivers and helpers
employed by Respondent, excluding office clerical
employees, professional employees, guards, supervi-
sors, and all other employees as defined in the Act.
(b) Continuing to give effect to any owner-operator
agreement with its employees in the previously described
appropriate unit of drivers and helpers.
(c) Inviting, soliciting, or inducing any of the driver or
39 Six other drivers and helpers who may have been induced to become
owner-operators were not named as discriminatees in the complaint I make
no conclusion as to them
40 Respondent's sale and lease of its trucks to the owner-operators deliver-
ing for Am-Del-Co to J C Penney did not divest Respondent of control
over the trucks and over the drivers
41 In the event no exceptions are filed as provided by Sec 102 46 of the
Rules and Regulations of the National Labor Relations Board, the findings,
conclusions , and recommended Order herein shall, as provided in Sec
102 48 of the Rules and Regulations, be adopted by the Board and become
its findings, conclusions, and Order, and all objections thereto shall be
deemed waived for all purposes
helper employees to enter into individual contracts of em-
ployment or dealing individually with any of its employees
in the previously described appropriate unit of drivers and
helpers in derogation of their bargaining representative, or
unilaterally changing their terms and conditions of em-
ployment, or modifying the collective-bargaining agree-
ment with the Union without complying with the provi-
sions of Section 8(d) of the Act.
(d) Discouraging membership in the Union or any other
labor organization by laying off employees because they
engage in union activities or engage in other protected con-
certed activities or because of an attempt by Respondent to
disparage or undermine the Union.
(e) Threatening employees that there would be no fur-
ther union contracts covering either of the appropriate
units of employees described above in paragraph 3 or
threatening them with late recall from layoff if they at-
tempted to enforce their rights under the collective-bar-
gaining agreements with the Union or threatening them
with loss of employment if they file grievances pursuant to
the terms of said collective-bargaining units.
(f) In any other manner interfereing with, restraining, or
coercing its employees in the exercise of their rights guar-
anteed in Section 7 of the Act.
2. Take the following affirmative action required to ef-
fectuate the policies of the Act:
(a) Upon request, bargain in good faith with the Union
concerning the above unit of drivers and helpers found to
be appropriate with respect to wages, hours, and other
terms and conditions of employment and the effects of said
employees of the decision to change to the owner-operator
method of delivery.
(b) Honor and enforce the terms of the collective-bar-
gaining agreement with the Union in the drivers and help-
ers unit effective from November 1, 1973, to October 31,
1976.
(c) Notify individually, and by the posting of the at-
tached notice, all employees in the appropriate unit above
with whom Respondent has made individual agreements or
arrangements as owner-operators or has attempted to do so
that it will no longer offer, solicit, enter into, continue, or
enforce such agreements or arrangements, without preju-
dice to the assertion of the employees affected to any legal
rights they may have acquired under such agreements or
arrangements.
(d) Offer to reinstate the following employees 42 to the
same positions in which they would have been employed
had they not been discriminated against or, if these posi-
tions no longer exist, to substantially equivalent positions,
without prejudice to seniority or other rights and privileges,
and make them whole for any loss of earnings suffered by
reason of the unlawful refusal to continue them in employ-
ment, in the manner set forth in the section herein entitled
"The Remedy."
(e) Preserve and, upon request, make available to the
Board and its agents, for examination and copying, all pay-
roll records, social security payment records, timecards,
42 Howard Brown, John Holleran, Ron Hale, Robert Temme , Steve Rell,
Orlan Mauldin, Jerry Neal, William Chandler, Charles Muschamp, Leo Bi-
erman, Larry Caulley, Gerald Webb, William Keaton, and Elmer McWhor-
ten
718 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
personnel records and reports, and all other records neces-
sary to determine the amount of backpay due hereunder.
(g) Post at its place of business on South Vandeventer,
St Louis, Missouri , copies of the attached notice marked
"Appendix." 43 Copies of said notice, on forms provided by
the Regional Director for Region 14, after being duly
signed by Respondent's representative, shall be posted by
it immediately upon receipt thereof and be maintained by
43 In the event that the Board ' s Order is enforced by a Judgment of a
United States Court of Appeals, the words in the notice reading "Posted by
Order of the National 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"
it for 60 consecutive days thereafter in conspicuous places,
including all places where notices to employees are cus-
tomarily posted . Reasonable steps shall be taken by Re-
spondent to insure that said notices are not altered, de-
faced , or covered by any other material.
(h) Notify the Regional Director for Region 14, in writ-
ing, within 20 days from the date of this Order , what steps
the Respondent has taken to comply herewith.
(i) Make whole William L . Kilter for any loss of pay he
may have suffered by reason of Respondent 's action in
laying him off in the period October 3 , 1975, through No-
vember 10 , 1975, in the manner set forth in the section of
this Decision entitled "The Remedy."