Freda Redmond and Sir James, Inc.

National Labor Relations Board - Board Decisions

Jun 29, 1964

147 N.L.R.B. 1025 (N.L.R.B. 1964)

FREDA REDMOND AND SIR JAMES,-INC. 1025
Freda Redmond and Sir James , Inc. and Los Angeles Dress and
Sportswear Joint Board , International Ladies' Garment Work-
ers Union , AFL-CIO. Case No. 21-CA-5195. June 29, 1964
DECISION AND ORDER REMANDING CASE TO
THE TRIAL EXAMINER
On March 5, 1964, Trial Examiner Wallace E. Royster issued his
Decision in the above-entitled proceeding recommending that the
complaint be dismissed in its entirety for the reasons that the Re-
spondents were not the joint employers of the individuals on Freda
Redmond's payroll and that Freda Redmond was an independent con-
tractor not engaged in commerce within the meaning of the Act, as
set forth in the attached Trial Examiner's Decision.' Thereafter, the
General Counsel filed exceptions to the Trial Examiner's Decision, and
a brief in support thereof.
Pursuant to Section 3(b) of the Act, the Board has delegated its
powers in connection with this case to a three-member panel [Chair-
man McCulloch and Members Fanning and Brown].
The Board has reviewed the rulings of the Trial Examiner made at
the hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. The Board has considered the Trial Ex-
aminer's Decision, the exceptions and brief, and the entire record in
the case, and finds merit in the General Counsel's exceptions.
The record reveals the following facts. Sir James, Inc., is a corpo-
ration engaged in the manufacture and sale at wholesale of women's
apparel. It maintains showrooms and production and shipping facil-
ities on one floor of a building in Los Angeles, California, from which
it carries on its business under the direction of its president, James
Horowitz. Customarily, Sir James produces its own "originals."
These are the first fashion samples, made entirely by Sir James' em-
ployees under the direct supervision of the house designer. Sir James
also purchases and cuts to pattern specifications the goods from which
duplicates, that is, copies of original styles used in sales promotion,
and items of regular production are made. However, as a jobber in
'the garment industry, Sir James relies upon outside contractors to
provide such sewing and pressiiig services as are utilized in the finish-
ing of those garments constituting the duplicate and regular produc-
tion items. The firm may engage between 5 and 20 contractors at any
one time to perform these services, depending upon the season of the
year and upon the demand for its fashions. .
e
1 The Trial Examiner's Decision makes no finding with respect to the unfair labor prac-
tices alleged in the complaint herein.
147 NLRB No. 109.
756-236-65-vol. 147-66
1026 DECISIONS -OF NATIONAL LABOR RELATIONS BOARD
The record further shows that on October 1, 1962, Sir James leased
some of its floor space to Freda Redmond. Under the agreement,
which contains no provision for termination, Sir James also furnished
Redmond utilities, thread, janitorial services, and the use of certain
of its machines.' With the space and equipment thus acquired, and
after having recruited several workers for the purpose,3 Redmond
commenced sewing and pressing operations. It was understood at the
time that Redmond would employ her own bookkeeper and would ob-
tain the license and insurance required in connection with her activi-
ties. She agreed to be responsible for her own payroll records and
to make wage payments and deductions incidental thereto. Further,
she agreed to furnish her own sewing needles and to maintain or re-
pair the machines she used. Otherwise, Sir James provided Redmond
with every item of a material nature necessary to her. undertaking.
Horowitz assured Redmond that he would provide her with enough
work to keep her busy full time, and the record evidence shows that
from October through January 1963, when she ceased operations, Red-
mond performed services exclusively for Sir James.', Moreover, at
no time during Redmond's occupancy of the premises here involved,
did she advertise her services as a contractor in the industry, nor did
she have a telephone with which to solicit and accept business.
As Redmond had no-capital of her own with which to begin opera-
tions, Sir James advanced the amount necessary to meet her first pay-
roll. Her 'ability to meet each succeeding payroll depended entirely
upon receiving, each payday, the amount owed by Sir James for the
services' she rendered, for which she charged on a piece-rate basis.
These rates were sometimes adjusted upward by Sir James at the re-
quest of Redmond when the latter received complaints from her work-
ers regarding the piece rates they were, in turn, to receive.
The space used by Redmond was not defined in the lease nor was
it partitioned off from the rest of the floor occupied by Sir James.
Access thereto was gained by means of a common entrance under the
control of Sir James. Redmond had no key to the premises. The
timeclock and cardrack located near the entrance were used by the
employees of Sir James and Redmond alike. The record discloses.
that Redmond's presser had unlimited access to Sir James' shipping
area for the purpose of obtaining clothes hangers and that Redmond
herself sometimes used an ironing table "reserved" by Sir James.
The record also shows that, in addition to the usual contractor serv-
ices she performed for Sir James, Redmond was often called upon to
2 The rental involved approximately 20 single needle machines and "all the specials
needed" for the Sir James operation.
3 There is evidence, however, that at least on one occasion, Redmond offered employment
to an individual laid off by Sir James, solely on the basis of Horowitz' recommendation.
4 We note , however, that Redmond had the right to turn down particular work and, in
fact, did so on occasion.
FREDA REDMOND AND SIR JAMES, INC. 1027
make minor corrections, changes, and repairs on the garments pro-
duced by other contractors. Moreover, Redmond's presser frequently
re-pressed garments when specifically requested to do so by the general
manager of Sir James' production department. The manager also
established the piece rate in such instances. Another employee on
Redmond's payroll was placed under the direct supervision of a Sir
James designer when engaged in the production of duplicates. On
those occasions, the employee's wages were computed on an hourly
rate basis whereas at all other times she was paid a piece rate. Red-
mond paid this employee for the work involved, but was reimbursed
by Sir James for the wage payments thus made.
ANThether Sir James possessed a sufficient degree of control over the
work of Redmond's employees to qualify as a joint employer is essen-
tially a question of fact to be resolved in each instance upon considera-
tion of the record as a whole. In finding the requisite degree of
control present in the instant case,5 we rely upon more than just Red-
mond's complete economic dependence upon Sir James for the con-
tinuation of her operations. W re find, in addition, a high degree of
physical and functional integration, as evidenced, among other things,
by the joint occupancy of the premises and to a lesser extent by the
joint use of personnel and equipment for a common purpose. This is
inconsistent with the concept that the jobber and the contractor here
involved were engaged in the operation of separate and independent
enterprises. We find that the Respondents were engaged in a common
enterprise 6 having a unity of interest -which placed Sir James in a
position to influence the labor relations policies affecting all workers
employed on the premises.'
Accordingly, we find that both. Sir James and Redmond are the
joint employers of the employees involved in the instant case and
that, for the purposes of this proceeding, they constitute a single em-
ployer within the meaning of the Act."
As Sir James annually ships from Los Angeles to points outside the
State of California goods valued at more than $50,000, and annually
receives at its place of business at Los Angeles from points outside
California, goods valued at more than that amount, we find, for the
purposes of this proceeding, that the Respondents herein are engaged
in commerce within the meaning of the Act,9 and that it would ef-
fectuate the policies of the Act to assert jurisdiction. Accordingly, we
shall remand the case to resolve the substantive issues raised by the
complaint.
5 We therefore find it unnecessary to consider the application of a different test to the
garment industry as urged alternatively by the General Counsel.
d Checker Cab Company , 141 NLRB 583.
7 Spartan Department Stores, 140 NLRB 608.
8 Panther Coal Company, Inc., 128 NLRB 409 ; N.L.R.B. v . Dayton Coal and Iron Corp.,
208 F. 2d 394 (C.A. 6)
9 Siemons Mailing Seraice, 122 NLRB 81.
1028 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ORDER
IT IS HEREBY ORDERED that the above-entitled proceeding be, and it
hereby is, remanded to the Trial Examiner for the preparation and
issuance of a Supplemental Decision, setting forth his findings of facts,
conclusions of law, and recommendations with respect to the unfair
labor practices alleged in the complaint herein.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
Upon charges filed February 12 and May 22, 1963, by Los Angles Dress and
Sportswear Joint Board, International Ladies' Garment Workers Union, AFL-CIO,
herein called the Union ,' the General Counsel of the National Labor Relations Board
issued a complaint dated May 27 alleging that Freda Redmond and Sir James, Inc.,
herein called the Respondents , had engaged in unfair labor practices within the
meaning of Section 8(a)(1) and ( 3) of the National Labor Relations Act, as
amended , herein called the Act.
A hearing on the complaint was held before Trial Examiner Wallace E. Royster
in Los Angeles , California , on September 12 and 13, 1963 .2 Upon consideration of
the briefs submitted , the entire record in the case , and from my observation of the
witnesses , I make the following:
FINDINGS OF FACT
THE BUSINESS OF THE RESPONDENTS
Sir James , Inc., herein sometimes called Sir James, is a corporation with a place
of business in Los Angeles , California , where it is engaged in the manufacture and
wholesaling of women's apparel . It annually ships from Los Angeles to points
outside the State of California goods valued at more than $50,000, and annually
receives at its place of business , at Los Angeles from points outside California,
goods valued at more than that amount . Freda Redmond is an individual who for
a period of time has performed certain manufacturing services for Sir James on
premises leased from the latter . The complaint alleges that Sir James , Inc., and
Redmond operated as a joint employer and as a single employer engaged in com-
merce and in a business affecting commerce within the meaning of Section 2(6)
and (7) of the Act. The complaint further alleges that Redmond at all times
material has been an agent of Sir James and a supervisor.
The relationship between Sir James and Redmond is crucial to a disposition of
the case and I will now proceed to examine it. For more than 20 years, Sir James
has been in the' women's apparel business in the Los Angeles area . It maintains a
showroom where such apparel is displayed and employs designers who create styles.
After styles have been decided upon , samples are made by employees of Sir James
and production plans formulated . Sir James purchases the material to make the
number of garments desired and has the material cut in preparation for sewing.
At this point Sir James seeks a contractor who will undertake to perform the sewing
and pressing operations and to deliver back completed garments . Contractors in this
business are often individuals with limited capital who rent both space and machines
upon which these operations may be performed. Typically the contractor tells the
manufacturer what he will charge to assemble the material into finished garments.
The manufacturer 3 may accept the price or bargain for a lower one or go to an-
other contractor. In any event, once a price for this service has been agreed upon,
it is up to the contractor to hire sufficient employees to perform the sewing and
II find that the Union is a labor organization within the meaning of Section 2(5) of
the Act.
2 The subsequent unopposed motion of counsel for the General Counsel td correct the
transcript in certain particulars is hereby granted.
3 An historic distinction between a "manufacturer " and a "jobber" in women 's apparel has
become blurred. Once a manufacturer was one who designed a garment, purchased and
cut the material, and then sewed and pressed the dress, blouse, or whatever, In his own
shop using his own employees. A jobber was one who functioned in the same manner
except that he .employed a contractor to do the sewing, pressing and, sometimes, the
cutting. Using the more precise definition, Sir James is a "jobber ." I have used the terms
interchangeably.
FREDA REDMOND AND SIR JAMES, INC . 1029
pressing operations and to keep his labor costs at a figure that will enable him to
pay his overhead and to derive a profit. It appears to be the fact that in the manu-
facture of women's apparel manufacturers or jobbers are in a dominant position.
They can shop around among contractors to obtain the most advantageous price for
the work they desire to have performed and often, seemingly, are able to persuade
a contractor to do work at a price which leaves little or nothing in the way of profit.
It is the firm belief of the Union and of others knowledgeable in the field that the
proliferation of the contracting system results from the desire of the manufacturer
to avoid meeting wages, piece rates, and other working conditions that may be
required of him by the Union should he himself employ persons to perform the
sewing and pressing operations. For many years the Union has worked assiduously
to discourage the contracting system or at least in some fashion to bring about an
arrangement whereby the manufacturer or.jobber would see to it that the contractors'
employees enjoy better wages and working conditions. The Union argues that the
jobber and the contractor constitute an economic unit and that it is only by the
integration of their functions that the industry produces anything. This is obviously
true. The Act itself in Section 8(e) recognizes the integration of the jobber
and contractor by exempting them from the prohibitions of that section.
In the fall of 1962, Sir James had unused space in his premises and a number of
idle sewing machines. About October 1 he entered into an agreement with Redmond
reading as follows:
THIS AGREEMENT MADE this 1st day of October, 1962, between SIR
JAMES, INC. and FREDA REDMOND in Los Angeles, California.
SIR JAMES, INC. agrees to rent to FREDA REDMOND, space in its plant
at Los Angeles, California for the sum of Two Hundred ($200.00) Dollars for
the month of October, 1962, and Four Hundred ($400.00) Dollars per month
thereafter payable the first day of each and every month at 910 So. Los Angeles
Street, Los Angeles, California, after October 1, 1962.
SIR JAMES, INC. agrees to provide utilities, thread, janitorial services and
use of certain machines as agreed upon between the parties hereto. FREDA
REDMOND agrees to maintain and repair the machines once she has accepted
them from SIR JAMES, INC.
Each of the parties agree to pay to the other reasonable attorney fees which
may be incurred in the enforcement of any provision of this agreement.
Just prior to entering into this arrangement with Sir James, Redmond had been a
floorlady for another contractor. Before that she had for a number of years been a
machine operator in the garment trade. Redmond assembled a crew of sewers and
a presser and began to do work for Sir James. Redmond managed to pay the rent
through the month of December but early in January she learned from her account-
ant that she was losing money. She decided then, she testified, to terminate her
arrangement with Sir James. James Horowitz, the president of Sir James, testified
that Redmond told him of this intention in early January but that he urged her to
stay on until she could finish the work that had been given to her. Redmond did
finish the month of January and near the end of that month had about 18 workers
on her payroll. In about the third week of the month she received a statement from
her accountant revealing that she had lost about $1,600 through the end of December.
At the end of January, Redmond discharged her crew, and the contract between her
and Sir James was terminated.
The Respondents deny that they are joint employers or that they constitute a single
employer or that Redmond was at any time an agent of Sir James. The essence of
the position of Respondents in this particular is that Redmond was an independent
contractor and in no sense an employee. In determining whether an individual is an
independent contractor rather than an employee, the Board has consistently applied
the "right-of-control" test. This test is based on whether a person for whom the
individual performs services has retained control not only over the result to be
achieved but also over the manner in which the work is to be performed. Applying
this criterion, Redmond seems clearly to be an independent contractor. She selected
her own employees and supervised them. She determined, after consulting with
the employees affected, the piece rate that she would pay for each operation per-
formed, maintained her own payroll records, issued her own payroll checks, and
made the usual tax deductions. It'is true that she depended upon payment from Sir
James for work done in order to meet her payroll, but this seems to me not to be a
material circumstance. Redmond attempted to secure for each operation she per-
formed for Sir James a payment that would enable her to pay her employees, take
care of her overhead, and leave some profit. She was unsuccessful in accomplishing
this but I think that this result proves no more than that she was in a weak bargain-
1030 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ing position . There is in the record testimony concerning a few incidents which may
arguably cause one to conclude that Sir James exercised at times a certain control
over the manner in which employees of Redmond performed their work . I consider
these instances , however, to be trivial and of minimal importance . Sir James paid
for a service and Redmond supplied it. I think it to be amply clear that Sir James
did not in measurable degree exercise any control over the means by which Redmond
performed her contract. I conclude therefore that Redmond, in her relation to Sir
James , was an independent contractor and that a joint-employer arrangement is not
established by the evidence.
There is no contention that Sir James, independently of Redmond, committed any
sort of unfair labor practice. It is the theory of the complaint that Redmond
violated the Act and that Sir James because Redmond was his agent or because they
were joint employers must answer . Having found that Redmond was an independent
contractor and that she and Sir James were not jointly the employers of those who
worked for Redmond, the complaint against Sir James must be dismissed.
The record shows the value of the services rendered to Sir James by Redmond for
the 3-month period from October 1 through December 31, to have been about
$8,000. Projecting this 3-month experience, it is obvious that Redmond supplied
services to Sir James at the rate of $32,000 a year. The Board will assert jurisdic-
tion over a nonretail enterprise such as that engaged in by Redmond if Redmond
supplied services to Sir James having a value of $50,000 a year. The evidence
establishes no such sum, and, in consequence, I find that it will not effectuate the
policies of the Act to assert jurisdiction over the operations of Redmond .4 I will
not, therefore , review the evidence relating to the commission of unfair labor prac-
tices 5 and will recommend that the complaint be dismissed in its entirety.
CONCLUSIONS OF LAW
1. Sir James, Inc., is an employer within the meaning of Section 2(2) of the Act
engaged in commerce or in an activity affecting commerce within the meaning of
Section 2(6) and (7) of the Act.
2. Freda Redmond is an independent contractor and an employer within the
meaning of Section 2 (2) of the Act.
3. The Union is a labor organization within the meaning of Section 2 ( 5) of the
Act.
4. Sir James, Inc., and Freda Redmond are not joint employers and do not con-
stitute a single employer.
5. Sir James, Inc., has not engaged in the commission of unfair labor practices.
6. It will not effectuate the policies of the Act to assert jurisdiction over the ac-
tivities of Freda Redmond.
RECOMMENDED ORDER
Upon the considerations set forth above, it is hereby recommended that the com-
plaint be dismissed.
4 See Sienwns Mailing Service , 122 NLRB 81.
5 In respect to unfair labor practices evidence was adduced tending to establish that one
of the reasons for the termination of the business relation between Sir James and Redmond
and the consequent discharge of Redmond's employees was the filing of a representation
petition by the Union. Neither the General Counsel nor the Union desires that any remedial
order requiring that the discharged employees be made whole for any loss of earnings be
directed against Redmond alone.
Federal Envelope Company, Omaha, Nebraska , a Division of
Nationwide Papers Incorporated and The International Print-
ing Pressmen and Assistants ' Union of North America, Local
412, AFL-CIO. Cases Nos. 17-CA-2204 and 17-RC--4165. June
29, 1964
DECISION, ORDER, AND DIRECTION OF
SECOND ELECTION
On March 17, 1964, Trial Examiner Stanley N. Ohlbaum issued
his Decision and Report on Objections to Election in the above-
147 NLRB No. 111.