General Teamsters Local 386

National Labor Relations Board - Board Decisions

Aug 24, 1972

198 N.L.R.B. 1038 (N.L.R.B. 1972)

1038 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
General Teamsters Local 386, International Brother-
hood of Teamsters, Chauffeurs, Warehousemen
and Helpers of America and Construction Materi-
als Trucking, Inc. Case 20-CE-78
August 24, 1972
DECISION AND ORDER -
On November 3, 1971, Trial Examiner Herman
Corenman issued the attached Decision in this
proceeding. Thereafter, the General Counsel filed
exceptions and a supporting brief.
The Board has considered the record and the Trial
Examiner's Decision in light of the exceptions and
brief and has decided to affirm the Trial Examiner's
rulings, findings, and conclusions and to adopt his
recommended Order dismissing the complaint.
In agreement with the Trial Examiner's conclusion,
we find that the Respondent, Teamsters Local 386,
did not violate Section 8(e) of the Act by entering
into its contract with Flintkote, the general contrac-
tor herein,' who had subcontracted certain work to
Construction Materials Trucking, Inc., called CMT
herein. However, we reach this conclusion because
we believe that the contract provisions involved are
unambigous and lawful on their face.2
A union has a legitimate interest in preventing the
undermining of the work opportunities and stand-
ards of employees in a contractual bargaining unit by
subcontractors who do not meet the prevailing wage
scales and employee benefits covered by the con-
tract. Thus, its contract with an employer may
require the employer, if it subcontracts, to subcon-
tract to another employer who agrees to observe "the
equivalent of union wages, hours, and the like"
provided for in the bargaining agreement.3 Such a
provision, generally referred to as a union standards
clause, does not violate Section 8(e) because it has a
primary object: to aid the employees in the work
unit. Where, however, the object is not to protect or
preserve the working standards of employees in the
unit , but to control the employment practices of
firms which seek to do business with the employer
and to aid and assist union members generally, such
object is secondary and unlawful.4 In the words of
the U.S. Court of Appeals for the District of
Columbia, "To conclude that a contract falling
within the letter of Section 8(e) properly falls within
its prohibition, there must be either a finding that
both parties understood and acquiesced in a second-
ary object for the term, or a finding that secondary,
consequences within Section 8(e)'s intendment would
probably flow from the clause, in view of the
economic history and circumstances of the industry,
the locality, and the parties."5
Section 30(C) provides that an employer party to
the AGC contract may subcontract offsite work,
involved herein, only to another employer who
agrees that his employees will work "in accordance
with the schedule of hours and will receive not less
than the wages and economic benefits" provided for
in the contract, "including holidays, vacations,
premiums, overtime, health and welfare and pension
contributions or benefits or their equivalent and any
other programs or contributions required by this
Agreement" ant who further agrees to submit any
grievance or disputes concerning his performance or
compliance with such undertaking to the grievance
procedures set forth in . . . this Agreement."
(Emphasis supplied.) Section 30(D) provides further
means for assuring compliance with the provisions of
section 30(C), which is the critical provision before
us.
The issue which has been raised with respect to
section 30(C) is whether it requires the subcontractor
only to agree that its employees will receive the
economic benefits of the contract, which would serve
the lawful purpose of protecting the interests of the
employees in the contract unit, or whether it also
requires him to adhere to the noneconomic terms of
the contract, which would be unrelated to this lawful
purpose. In our view, the subcontractor's obligation
under the contract is concerned solely with the
economic features thereof. Thus, the initial obliga-
tion required of him by section 30(C) is that he agree
that his employees will receive not less than the
wages and economic benefits of the contract, which
are then specified to include holidays, vacations, etc.,
"and any other programs" provided for by the
agreement. This is what the contract says and we do
not read it as imposing any other obligation upon the
subcontractor than that he simply agree that his
employees will receive all wages and economic
benefits of the contract.
Our dissenting colleagues would agree with us had
the phrase "and any other programs" read "or any
other programs." As written, however, they believe
that the list of specified economic benefits is an
i Teamsters Local 386 and Flmtkote are parties to this contract by virtue
of their respective membership in the Heavy, Highway, Building and
Construction Teamster Committee for Northern California, and the
Northern and Central California Chapter, the Associated General Contrac-
tors of America, Inc This so -called AGC master agreement was for the
period May 1, 1968, to June 15, 1971, and its term was extended until a new
agreement was reached
2 The pertinent contract provisions , sec. 30(C) and (D), are set forth in
section 111 , A, of the Trial Examiner's Decision.
3 Truck Drivers Union Local 413 (Brown Transport Corp, Patton
Warehouse, Inc), 334 F 2d 539 548 (C.A.D.C )
4 Meat and Highway Drivers, Dockmen, Helpers and Miscellaneous Truck
Terminal Employees, Local Union No 710 ( Wilson & Co) v N L.R B, 335
F2d709,716(CAD.C)
5 Id I
198 NLRB No. 129
GENERAL TEAMSTERS LOCAL 386 1039
exhaustive one and that "and any other programs"
must refer to something altogether different, namely,
all the noneconomic provisions of the contract, such
as union security, the hiring hall, and the grievance
procedure; and thus exceeds the bounds of a lawful
union standards clause.,But we are unable to attach
such significance to the omission of "or." Perhaps
even more plainly without it, the portion of section
30(C) under discussion speaks to us of "wages and
economic benefits" to be "received" by a subcontrac-
tor's employees, "including" the benefits to be
derived from certain specified programs "and any
other programs." The latter phrase is obviously
intended to embrace all the economic benefits of the
contract not specified. Obviously, it is a reference to
something to be' "received" by employees and it is
difficult for u\to perceive how, accepting the view of
the dissent, this could incorporate such matters as
union security and hiring halls. Had the contracting
parties intended that the subcontractor be bound to
all the provisions of the contract they would have
said just that, as they knew how to state it in the
immediately preceding paragraph of section 30(B)
where, with respect to jobsite work, the subcontrac-
tor is required to agree "to comply with all the terms
and conditions of this Agreement." 6 Furthermore, if
"any other programs" is read to refer to all
noneconomic provisions, the language which follows
on its heels expressly requiring submission to the
grievance procedure would hardly have been neces-
sary.
But this is not to imply that the requirement for
submitting grievances concerning compliance with
the economic obligations imposed by section 30(C) is
without a lawful primary purpose. As found by the
Trial Examiner, "the grievance procedure language is
ancillary to the legitimate primary job protection
purpose of section 30(C) and is designed to effectuate
this same lawful primary purpose. The grievance
procedure substitutes peaceful procedures in lieu of
strike or other economic action as a means of
resolving disputes as to whether the wages and
economic benefits of the AGC contract are being
observed by the subcontractor."
Accordingly, as recommended by the Trial Exam-
iner , we shall dismiss the complaint.7
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
6 This is the provision which is "strikingly similar" to the section of the
contract in Local 437, International Brotherhood of Electrical Workers
(Dimeo Construction Co), 180 NLRB 420, relied on in the dissent, which
required 'compliance "with the terms of this Agreement" But all this
language is patently distmgutshable from that of section 30(C) which is
before us
Relations Board adopts as its Order the recommend-
ed Order of the Trial Examiner and hereby orders
that the complaint herein be, and it hereby is,
dismissed in its entirety.
CHAIRMAN MILLER and MEMBER KENNEDY, dissent-
ing:
Because we would find that subsections (C) and
(D) of section 30 of the Construction Master
Agreement are, on their face, unlawful union -signato-
ry clauses proscribed by Section 8(e) of the Act, we
must dissent to our colleagues' affirmance of the
Trial Examiner's contrary conclusion.
Section 30(C) provides that a signatory employer
may subcontract "off site work" only to a subcon-
tractor who agrees that his employees will work in
accordance with the hours, wage and economic
benefits of the agreement, "including holidays, vaca-
tions, premiums, overtime, health and welfare and
pension contributions or benefits or their equivalent and
any other programs or contributions required by this
Agreement" (emphasis supplied), and agrees further
that he will "submit any grievances or disputes
concerning his performance" (emphasis supplied) to
the terms of the grievance procedure provided for in
section 15 of the agreement. Thus, section 30(C)
plainly requires not only that the subcontractor pay
"wages and economic benefits provided" for in the
agreement but also that he conform with "any other
programs" of the contract; further, it imposes the
obligation on the subcontractor to submit disputes
arising from the subcontractor's performance under
the contract to the grievance procedure "set forth in
Section 15 of this Agreement."
In our view, the requirement that the subcontractor
pay to or provide for the benefit of the persons
performing the subcontracted work "any other
programs or contributions required by this Agree-
ment," and that he submit to the contract's grievance
procedure, requires the subcontractor, in effect, to
recognize the union and to adopt the agreement in its
totality, which goes far beyond the legitimate right of
a union to preserve unit work by making subcon-
tracting of such work economically unattractive to
the primary, contracting employer. In our opinion,
such noneconomic benefits as union security, hiring
halls, prejob conferences, etc., are programs highly
beneficial to Respondent's members and are intend-
ed to be included within the coverage of section
30(C). The thrust of the agreement plainly appears to
be to force the subcontractor to abide by all of the
provisions of the Construction Master Agreement,
7 In Building Material & Construction Teamsters Union Local No 216
(Bigge Drayage Company), 198 NLRB No 130, issued this date , a majority
of the Board finds a violation on the ground that the subcontracting
provisions were made applicable to certain nonunit work , which is not an
issue that was raised or litigated in the instant case
1040 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
particularly when we consider that the phrase "and
any other programs" follows a rather exhaustive list
of specified economic benefits. Had the parties
sought to limit the phrase in a lawful manner they
could have used the words "or any other economic
benefits." That such limitation was not their intent is
made abundantly clear when it is considered that all
disputes must be submitted to the grievance proce-
dure set forth in the agreement.
In the instant case, only Respondent and Flintkote,
the general contractor, are contractually bound, and
would normally be the only parties to any grievance
procedure which may be instituted under the
contract. However, by its terms, any violation of the
agreement by any subcontractor of Flintkote gives
rise to a dispute between Respondent and such
subcontractor which must be processed under the
agreement's grievance procedure. We submit that, in
practical effect, this constitutes the subcontractor a
signatory to the agreement. We fail to understand
how the subcontractor's obligation to submit to the
grievance procedure of the agreement preserves the
legitimate interests of the general contractor's em-
ployees represented by Respondent. It appears to us
that by virture of this provision, Respondent is
attempting to influence the labor relations of the
subcontractor, rather than to protect the work
standards of its members. Here, to require CMT, the
subcontractor of Flintkote, to submit to a grievance
procedure with Respondent, a labor organization
which does not represent any of CMT's employees,
can in no sense be deemed to protect the work
standards of Respondent's members. On the contra-
ry, it would clearly be an intrusion into the labor
relations policies of CMT, vis-a-vis its own employ-
ees. If the clause were lawful, and merely called for
the payment of certain sums or the providing of
certain benefits to the employees of the subcontrac-
tor, there would be no need to bring the subcontrac-
tor himself into the grievance procedure because he
would have no obligations under the agreement.
Only the primary employer would be required to
observe the terms of the agreement and could be held
responsible for the subcontractor's breach thereof.
But, as shown above, the clause requires the
subcontractor to agree to all the programs contained
in the agreement, such as The prejob conference, the
union-security clause, the hiring hall, etc., therefore
necessitating the envelopment of the subcontractor
himself into the grievance machinery of the
agreement.8
As we see it, this case is strikingly similar to Local
437, International Brotherhood of Electrical Workers
8 For an interpretation of the identical agreement here involved by
another Teamsters local signatory thereto in the northern California area, as
obligating a subcontractor to abide by more than just the economic benefits
(Dimeo Construction Co.) 180 NLRB 420. There, the
respondent union entered into a collective-bargain-
ing agreement with respondent association of em-
ployers containing the following clause:
Article II, Section 11
Local Union 437 is a part of the International
Brotherhood of Electrical Workers, and any
violation or annulment of working rules or
agreement of any other Local Union of the IBEW
or the subletting assigning or transfer of any work
in connection with electrical work to any person,
firm or corporation not complying with the terms
of this Agreement by the employer, will be
sufficient cause for cancellation of this Agree-
ment after the facts have been determined by the
International Office of the Union.
The parties stipulated that the above provision was
found only in contracts "applicable to work ordinari-
ly performed by employees covered by the IBEW
contract on job sites in the construction industry"
and that the provision "as interpreted by the parties,
allows subcontracting to any subcontractor who
abides by the union standards of wages, hours and
working conditions."
The complaint alleged, and the Trial Examiner
found, that the above-quoted provision violated
Section 8(e) of the Act. The Board agreed, stating
that:
The clause when considered alone is unlawful
because in effect it permits subcontracting only to
employers who recognize the Union. The phrase
"complying with the terms of this Agreement"
covers union recognition as well as other terms of
the agreement between the Unions and Respon-
dent Association. It is thus an unlawful secondary
union-signatory subcontracting clause.
With respect to Respondent's argument in Dimeo
that the contract clause, as interpreted by the parties,
allowed subcontracting to any subcontractor who
abides by the union standards of wages, hours, and
working conditions, and thus made the clause a
lawful, primary union standards clause, the Board
stated:
[A] union standards subcontracting clause is
primary only if it is limited to requiring that
subcontractors observe "the equivalent of union
wages, hours, and the like." The legitimacy of a
union standards clause is determined by the
union's interest in preventing the undermining of
the work opportunities for the standards of,
employees in the appropriate unit by contractors
who do not meet prevailing wage scales and
of the agreement, see Building Material & Construction Teamsters Union
'Local No 216 (Bigge Drayage Company), 198 NLRB No. 130 (opinion of
Chairman Miller and Member Kennedy ), issued this date.
GENERAL TEAMSTERS LOCAL 386 1041
employee benefits. When the subcontracting clause,
contains limitations not required to protect the
interests of the employees in the unit, it exceeds the
bounds of a lawful primary clause and becomes
secondary and unlawful. Thus if a subcontracting
clause should require the subcontractor to adhere
not only to the contract wage and hour terms, but
also to such contract working conditions as seniority
and grievance procedure, it would be an unlawful
secondary clause. [Footnotes omitted; emphasis
supplied.]
Here, as in Dimeo, section 30(C) contains limitations
not required to protect the interests of the unit
employees, and exceeds the bounds of a lawful
primary clause. See also Sheet Metal Workers, Local
Union No. 223, AFL-CIO (Continental Air Filters
Co.), 196 NLRB No. 12.
As we view it, section 30(D) is inextricably tied to
section 30(C) and is designed to implement the
unlawful provisions of section 30(C). It requires the
contracting employer to undertake certain actions to
enforce compliance by his subcontractor with the
provisions of section 30(C). On receipt of written
notice from the union that his subcontractor has
become delinquent in the payment or meeting of
obligations set forth in section 30(C), the contracting
employer is required to withhold the amount claimed
to be delinquent out of any sums owing by the said
employer to the subcontractor. In addition, section
30(D), like section 30(C), provides that any dispute
will be settled by resort to the grievance procedure of
the Construction Master Agreement. Thus, inasmuch
as section 30(D) is tied to section 30(C), and is
designed to implement the unlawful provisions
thereof, section 30(D) is also violative of Section 8(e)
of the Act.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
HERMAN CORENMAN, Trial Examiner: Upon a charge
filed by Construction Materials Trucking, Inc., herein
called CMT, on December 14, 1970, against General
Teamsters Local 386, International Brotherhood of Team-
sters , Chauffeurs, Warehousemen and Helpers of America,
herein called Respondent, a complaint issued on February
24, 1971, on behalf of the General Counsel of the National
Labor Relations Board, alleging that the Respondent
violated Section 8(e) of the National Labor Relations Act,
as amended, herein called the Act.
Pursuant to notice, a hearing was held at San Francisco,
California, on September 14 and 15, 1971, before the Trial
Examiner. All parties appeared and participated in the
hearing by counsel and were afforded full opportunity to
be heard, to produce evidence, examine and cross-examine
witnesses, and to argue orally on the record. Briefs
submitted by counsel for the General Counsel and for
Respondent have been carefully considered.
Upon the entire record in the case and from my
observation of the witnesses , I make the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE EMPLOYERS
The pleadings establish, and I find, that The Flintkote
Company, Concrete Materials Division , herein called
Flintkote , a Massachusetts corporation with a place of,
business at Modesto, California , is a general contractor's
engaged in the building and construction industry, and'
during the past year, preceding issuance of complaint, inl
the course and conduct of its business operations,)
purchased and received goods and materials valued in,
excess of $50,000 directly from suppliers located outside
the State of California.
CMT, a California corporation with its principal office)
and place of business at Fremont , California, is engaged as,'
a common carrier in intrastate hauling by motor truck, and
during the past year, preceding issuance of complaint, in
the course of conduct of its business operations, provided
services to Flintkote valued in excess of $50 ,000, consisting
of the hauling of sand and gravel to various Flintkote
construction sites.
The complaint alleges, the answer admits , and I find that
at all times material to this matter , Flintkote and CMT,
and each of them, have been and are employers engaged in
commerce and in operations affecting commerce within
the meaning of Section 2(6) and (7) of the Act.
It. THE LABOR ORGANIZATIONS INVOLVED
The pleadings establish , and I find, that the Respondent
Local 386 and Construction and Building Materials
Teamsters , Local 291, International Brotherhood of Team-
sters , Chauffeurs, Warehousemen and Helpers of America,
herein called Teamsters Local 291, have been and are labor
organizations within the meaning of Section 2(5) of the
Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Contract Provision Alleged To Be in
Violation of Section 8(e) of the Act
Flintkote and the Respondent were parties to a collec-
tive-bargaining agreement designated Master Agreement,
Building Heavy Highway and Engineering Construction,
herein called AGC master agreement , negotiated on behalf
of Flintkote and other employers by the Associated
General Contractors of America, herein called AGC, and
on behalf of the Respondent and other Teamsters locals by
Construction Teamsters Committee. The AGC master
agreement in question was for the contract term May 1,
1968, through June 15, 1971.
The General Counsel contends that subsections (C) and
(D) of section 30 of the AGC master agreement violate
Section 8(e) of the Act . The pertinent sections are herein
set forth.
C. The Employer further agrees that when subcon-
tracting work covered by this Agreement which is to be
performed within the geographical area covered by this
Agreement but which is not to be performed at the site
of the construction , alteration , painting or repair of the
building, road or other work, he will subcontract such
work only to an Employer or person who agrees that
1042 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the persons performing such work will work in
accordance with the schedule of hours and will receive
not less than the wages and economic benefits provided
in this Agreement including holidays, vacations, premi-
ums, overtime, health and welfare and pension contrib-
utions or benefits or their equivalent and any other
programs or contributions required by this Agreement
and who further agrees to submit any grievance or
disputes concerning his performance or compliance
with such undertaking to the procedures set forth in
Section 15 of this Agreement.
As to any Employer who has always subcontracted
work involving certain equipment, this paragraph shall
not become applicable with respect to work involving
such equipment if its validity is challenged by charges
filed by the National Labor Relations Board until
determination by the National Labor Relations Board
or if not by the National Labor Relations Board, by a
Court of competent jurisdiction that the provisions are
not in violation of the National Labor Relations Act.
D. The Employer will give written notice to the
Union of any subcontract involving the performance of
work covered by this Agreement within five (5) days of
entering into such subcontract and shall specify the
name and address of the subcontractor. Any Employer
who gives such notice anjl requires the subcontractor to
agree to comply with and observe the provisions of
Subsection B hereof with respect to job site work and
Subsection C hereof with respect to work performed
other than at the job site shall not be liable for any
delinquency by such subcontractor in the payment of
any wages, fringes, benefits or contributions provided
herein except as provided hereinafter.
If thereafter any subcontractor shall become delin-
quent in the payment or meeting of the obligations set
forth above, the Union shall promptly give written
notice thereof to the Employer and Subcontractor
specifying the nature and amount of such delinquency.
More than one such notice may be given with respect
to delinquencies. If such notice is given, the Employer
shall withhold the amount claimed to be delinquent out
of any sums due and owing by the Employer to such
Subcontractor and shall pay and satisfy therefrom the
amount of such delinquency by such Subcontractor as
follows:
If such Subcontractor does not dispute the existence
or amount of such delinquency, the Employer shall
forthwith pay the amount of such delinquencies to the
person or fund entitled thereto. Any dispute as to the
existence or amount of such delinquency shall be
settled by the Union and Subcontractor as provided in
Section 15 hereof and the Employer shall pay to the
person of Funds entitled thereto the amount of such
delinquency as so determined and costs incurred.
The Employer shall not be liable for any such
delinquency occumng more t7ian sixty (60) days prior
to the receipt of such written notice from the Union.
B. The Subcontract From Flintkote to CMT
CMT, the Charging Party in this matter, is a motor
carrier engaged in the transportation of rock, sand, and
gravel. It is a member of the California Trucking
Association, herein called CTA, and through its member-
ship in CTA was signatory to and bound by the Teamsters
Union Materials Hauling Agreement which expired June
26, 1970. Since the expiration of this agreement, there have
been negotiations for a renewal agreement and during this
period CMT has continued to pay the wage rates provided
for in the Materials Hauling Agreement which expired
June 26, 1970. CMT's regular truckdriver employees are
represented by Teamsters Local 291.
Flintkote has contracted to pave the roads in three
residential subdivisions being built by the Boise-Cascade
Corporation. To supplement its own manpower and
equipment necessary to fulfill its contract on the Boise-
Cascade projects, Flintkote in about July 1970 subcon-
tracted to CMT some of the hauling of crushed rock and
blacktop from its portable crushing plant at Merced Falls,
California, to the Boise-Cascade projects which were
located approximately 13 to 15 miles from the portable
crushing plant. Thus, CMT's employees, four of whom
were truckdrivers, and about 25 of whom were owner-
operators, would load up with the crushed rock or blacktop
at the portable crushing plant at Merced Falls and
transport the paving material to the Boise-Cascade
building projects, where the paving material would be
dumped on the road bed. Having dumped the truckload,
the truckdnver would then return to the portable crushing
plant for another load.
Flintkote paid its own truckdnvers who hauled paving
materials from the portable crusher to the Boise-Cascade
project sites the wage rates provided by the AGC master
agreement, whereas CMT, to whom Flintkote had subcon-
tracted some of its truck hauling, paid its truckdnvers the
rates provided for in the Teamster Union Materials
Hauling Agreement negotiated on behalf of the motor
carriers by CTA. The AGC construction rates and fringe
benefits paid by Flintkote to its truckdrivers were more
generous than the Materials Hauling rates and fringe
benefits paid by CMT to its truckdrivers. For example, the
AGC construction rate paid by Flintkote was $6.25 per
hour, whereas the rate paid by CMT to its truckdriver
employees was $4.30 per hour.
C. The Respondent's Reaffirmance and Enforcement
of Section 30(C) and (D) of the AGC Contract
In July and August 1970, Wendel Kiser, Respondent's
secretary-treasurer, phoned Flintkote's general manager,
John Kenealy, several times to complain that CMT was
paying its truckdrivers the lesser wages provided for in the
Teamster Materials Hauling Agreement rather than the
more generous wage rates provided for in the AGC master
agreement. Kiser told Kenealy that since Flintkote was the
prime contractor on the job, he was looking to Flintkote
for payment. Kiser demanded that Fhntkote require CMT
to pay the AGC construction rate, or he would pull the
men off the job. Kenealy on each occasion that Kiser
called, told him that he would contact Mr. Fabry,
president of CMT. Kenealy told Kiser that since Flintkote
was paying the proscribed AGC construction rate, "This
was really a problem between Kiser and CMT." Kenealy,
on each occasion that Kiser called, in turn phoned Mr.
GENERAL TEAMSTERS LOCAL 386
Fabry of CMT and told him to get in touch with Mr. Kiser
and resolve the problem.
In late August or early September 1970, Mr. Norbert F.
Miller, Respondent's president, phoned Mr. Fabry, presi-
dent of CMT, to prevail upon CMT to pay the rates
provided by the AGC master agreement , which Flintkote
was paying to its truckdrivers who were performing the
same work as the CMT drivers. Fabry refused to pay the
AGC master agreement rate to his truckdrivers, pointing
out to Miller that,CMT was not performing onsite work
and was merely a supplementary carrier whereas Flintkote
was the prime contractor on the job. Miller held fast to his
position that CMT should be paying the AGC rate because
CMT's equipment was working alongside Flintkote's
equipment. Approximately I month later, Mr. Fabry
phoned Respondent's secretary-treasurer, Kiser, and dis-
cussed with him the problem, but nothing was resolved.
On September 15, 1970, Fabry received a telegram dated
September 4 from Mr. Kiser demanding that all drivers
working for CMT and hauling for Flintkote in the
Respondent's jurisdiction should be paid the AGC con-
tract rates and benefits retroactive to their start of
employment. The telegram further requested that the
retroactive adjustments should be in the Respondent's
office at Modesto, California, not later than the close of
business on Wednesday, September 9, 1970; otherwise the
Respondent "will take such action as we feel necessary to
resolve the matter."
Under dates of October 7 and 13, 1970, the Respondent
filed grievances under the AGC contract based on CMT's
"not paying the proper scale" provided for in the AGC
contract. Backpay was claimed for drivers Victor Burn-
ham, Eugene Stephens , and Luther Bagwell . On November
3, 1970, the October 7 grievance was amended "to include
any owner-operator that was on the job."
The aforesaid grievances were heard about the first part
of January 1970 by the board of adjustment, composed of
an equal number of AGC members and joint council of
Teamster members. The board of adjustment was unable
to resolve the grievances and became deadlocked. The
dispute was finally resolved by agreement of Flintkote and
the Respondent. Pursuant to this agreement, Flintkote on
February 1, 1971, prepared backpay checks to drivers as
follows : $37.84 to Luther Bagwell ; $737.40 to Eugene
Stephens; $860.27 to Victor Burnham; and $54.18 to Norie
Gibson. The aforesaid checks were mailed by AGC's
counsel to the Respondent's counsel for delivery to the
drivers with an accompanying letter, dated February 8,
1971, which set forth the agreement between Flintkote and
the Respondent as follows:
As discussed in our prior conversations, in order to
settle this matter we request from your office a letter on
behalf of Teamster Local #386 stating that the
settlement of this case shall in no way prejudice the
position of The Flintkote Company and the Associated
General Contractors of California regarding the issues
evolving from the above-mentioned grievances. The
checks enclosed are in settlement in full and no further
1 Los Angeles Mailers Union No. 9, 1.T. U. (Hilbro Newspaper Printing
Company), 135 NLRB 1132, enfd . 311 F.2d 121 (C.A.D.C.); N.L.R.B. v.
Milk Wagon Drivers Union, Local 753, 335 F.2d 326, 329 (C.A. 7); Dan
1043
liability accrues to The Flintkote Company regarding
the above-mentioned grievances.
On March 1, 1971, Flintkote withheld from its progress
payments to CMT the payments it had made on the
aforesaid settlement agreement. The money withheld from
CMT was itemized as $2,096.69 for payroll plus 30 percent
thereof or the amount of $629.01 for fringe benefits paid
on behalf of the drivers.
D. Analysis and Conclusionary Findings
I agree with the General Counsel that within the 6-month
period preceding the filing of the charge, there was a
reaffirmance or reentering of the subcontractors clause,
Sections 30(C) and (D) of the AGC contract so as to
preclude the operation of a 10(b) bar in the event those
sections of the contract are found in violation of 8(e). This
reaffirmance or reentry is clearly manifested in the
demands made by Respondent's officers, Kiser and Miller,
on officials of Flintkote and Fabry in July, August, and
September 1970 and in the written grievances filed by the
Respondent against Flintkote in October 1970 seeking to
enforce the wage, vacation, and holiday pay requirements
of the AGC contract, and in Flintkote's withholding of
sums of money from CMT in March 1971.1
I also agree with the General Counsel that the subcon-
tract from Flintkote to CMT was not covered by the
construction proviso to Section 8(e) which provides "that
nothing in this subsection (e) shall apply to an agreement
between a labor organization and an employer in the
construction industry relating to the contracting or
subcontracting of work to be done at the site of the
construction, alteration, painting, or repair of a building,
structure, or other work." I reach this conclusion notwith-
standing the fact that Flintkote was producing the road
building materials at the portable crushing plant for its
own use in the construction of roads by its own employees
at the Boise-Cascade projects. It is noted that the portable
rock crushing plant was situated approximately 15 miles
from the Boise-Cascade construction sites, requiring
CMT's truckdrivers to travel approximately 15 miles of
public road to carry the crushed rock and blacktop from
Flintkote's portable crushing plant at Merced Falls to the
construction sites where the drivers dumped their loads. In
comparable situations, the Board has held that the
construction site proviso to Section 8(e) is not applicable to
the work of the truckdrivers. See, for example, Local Union
No. 551, Teamsters (Dravo Corporation), 176 NLRB No.
109; Teamsters Local 294 (Island Dock Lumber, Inc.), 145
NLRB 484, enfd. 342 F.2d 18 (C.A. 2); Drivers Local 695
(Madison Employers Council), 152 NLRB 577, enfd. 361
F.2d 547, 552 (C.A.D.C.). In short, I find that the work of
the CMT drivers was not performed at the construction
site.
The parties are in agreement that Section 8(e) does not
proscribe a subcontractors clause which limits subcontract-
ing to employees who observe the wage standards provided
by the prime contract. The Board in Highway Truck
Drivers and Helpers Local 10 (S. E. McCormick, Inc.), 159
McKinney Co., 137 NLRB 64); Sheet Metal Workers Union, Local 216
(Sheet Metal, Heating and Air Contractors, et at. ), 172 NLRB No. 6;
Brotherhood of Painters, Local No. 823, 161 NLRB No. 44.
1044 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
NLRB 84, clearly announced its policy henceforth to!
recognize the validity of subcontractor clauses limiting
subcontracting to employers who observe the proscribed
wage and hour standards of the prime contract, in keeping
with the rationale of the Court of Appeals for the District.
of Columbia which had reversed the Board's findings of
8(e) violations in previous cases. At 159 NLRB 101, the
Board stated its agreement with the Court of Appeals for
the District of Columbia as follows:
We turn now to the issue of whether subparagraph
(a) of article 33, "Subcontracting," is unlawful under
Section 8(e), as contended by the General Counsel.
That clause is identical to one of the provisions which
we found violative of Section 8(e) in The Patton
Warehouse, Inc. In that case we held the clause to be
secondary because in our view it "dictate[d] to the
Employer those persons with whom he shall be
permitted to do business, rather than obliging him to
refrain from contracting out work previously per-
formed by employees in the bargaining unit." The
Court of Appeals for the District of Columbia
disagreed, however. It drew a distinction between
secondary union-signatory subcontracting clauses
which impose boycotts on nonsignatories of union
agreements and primary union standards clauses
"which merely require subcontractors to meet the
equivalent of union standards in order to protect the
work standards of the employees of the contracting
employer." Interpreting the clause "as merely requiring,
that subcontractors observe the equivalent of union
wages, hours, and the like," the court found the clause
to require only union standards and not union
recognition; therefore, not interdicted by Section 8(e).
We have since reconsidered our decision in the light
of the court's reasoning and we now conclude in
agreement with the court that the clause is primary, and
thus not violative of Section 8(e).
See also Truck Drivers Local 13 [Brown Transport Corp. and
Patton Warehouse] v. N.L.R.B., 334 F.2d, 539 (C.A.D.C.),
where the court said at page 548:
Union signatory subcontracting clauses are secondary,
and therefore within the scope of 8(e), while union
standards subcontracting clauses are primary as to the
contracting employer. We so held in Building &
Construction Trades Council v. N.L.R.B., 117 U.S. App.
D.C. 239, 328 F.2d 540 (1964). We drew this same
distinction in Orange Belt District Council of Painters
No. 48 v. N. L. R. B., 117 U.S. App. D.C. 233, 328 F.2d
534 (1964); in District No. 9, International Association of
Machinists v. N.L.R.B., 114 U.S. App. D.C. 287, 315
F.2d 33 (1962); and in Retail Clerks Union Local 770,
etc. v. N. L. R. B., Ill U.S. App. D.C. 246, 296 F.2d 368
(1961).2
We now come to grips with the question whether the
subcontractors clause at sections 30(C) and (D) heretofore
set forth in this Decision is a union signatory clause
proscribed by 8(e) of the Act or a wage standards clause
not proscribed by 8(e). I have already found hereinabove
that these clauses were reentered into and reaffirmed
within the 6-month period preceding the filing of the
charge in this case. Under section 30, subcontracting (C),
2 See also United Mine Workers (Dixie Mining Co.) (W.A. Boyle), 179
NLRB No. 80; United Mine Workers, 165 NLRB 467; Orange Belt District
Council v. N.L.R.B. (C.A.D.C.), 315 F.2d 33; J. K. Barker Truck Co., 181
the employer agrees that when subcontracting work is not
to be performed at a construction site, he will subcontract
such work only to an employer or person who agrees that
,the persons performing such work will work in accordance
with the schedule of hours and will receive not less than thei
wages and economic benefits provided in this agreement,,
including holidays, vacations, premiums, overtime, health]
and welfare and pension contributions or benefits or their,
equivalent, and any other programs or contributions]
required by this agreement and who further agrees to
submit any grievance or disputes concerning his perform-'
ance or compliance with such undertaking to the proce
dures set forth in section 15 of this agreement.
Although the General Counsel concedes that so-called
"primary" or "area standards" clauses are legitimate, he
contends that the subcontractors clause, section 30(C) not
,only requires the subcontractor to pay "wages and
economic benefits" provided for in the AGC master
agreement ; but also requires conformance with "any other
,programs . . . of the contract and imposes the obligation
to submit disputes arising under a subcontractor's perform-
ance to the grievance procedure set forth in Section 15 of
this agreement" The General Counsel argues that the
phrase "any other programs" read in conjunction with the
requirement that the subcontractor submit to the contract's
,grievance procedure invalidates the subcontractor's clause,
the General Counsel contending further that the phrase
"any other programs" embraces noneconomic provisions in
the contract, for example, section 9, union security, section
14, records and itemized statements, section 18, conflicting.
contracts, section 22, employer's membership, and section
36, authorized agents . The General Counsel concludes
"that the thrust of the Respondent's contract is, in effect,
to force the subcontractor to abide by all the provisions of
the AGC Construction Master Agreement."
I do not agree. The phrase "any other programs"
contained in Section 30(C) is ambiguous. It is not,
unreasonable to construe that phrase as referring only to,
economic programs related to wage and hour standards,
working conditions, and fringe benefits. In the absence of
evidence to the contrary, the legal presumption of validity
should be accorded to the phrase "any other programs." A
problem of contract construction was resolved in favor of
legality in Highway Truck Drivers, etc. (S.E. McCormick
Inc.), 159 NLRB 84, with these words by the Board at
footnote 30 on page 102:
In these circumstances, we do not deem it appropriate
for us to indulge in a presumption of illegality. As the
Supreme Court stated in N.L.R.B. v. News Syndicate
Company Inc., 365 U.S. 695, " .. as we said in Teamsters
Local 357 v. Labor Board decided this day federal law .
against a clear command of this Act of Congress. As
stated by the Court of Appeals, `In the absence of
provisions calling explicitly for illegal conduct, the
contract cannot be held illegal because it failed
affirmatively to disclaim all illegal objectives (365 U.S.
695, 699-700)."'
The circumstances attending the dispute between the
Respondent on the one hand and Flintkote and CMT on
the other, disclose that Respondent's officers, Kiser and
NLRB No. 67; TV and Radio Artists (Westinghouse Broadcasting Co., Inc.),
160 NLRB 241; Sheet Metal Workers Union (Reno Employees' Council), 168
NLRB 893.
GENERAL TEAMSTERS LOCAL 386 1045
Miller, construed the subcontractors clause as purely one
limited only to economic benefits, namely wages, vacation,
and holiday pay.
Thus, the complaint made by Kiser to Kenealy was
concerning the lesser wage rate being paid by CMT to its
drivers, and Respondent's demand was that CMT pay the
wage rate provided for in the AGC contract. The
Respondent's September 4, 1970, telegram to CMT and
Flintkote demanded that the CMT drivers hauling for
Flintkote be "put on the AGC rates of pay and benefits."
The Respondent's October 7 written grievance alleged the
contract violation as "not paying proper rate" and it
sought backpay for the drivers. Respondent's October 13
written grievance specified the contract violation as "not
paying proper scale," complaining that CMT "paid $4.30
per hour instead of $6.25 plus vacation and holiday pay."
It is clear , and I find, on the basis of the demands made
by the Respondent on CMT and Flintkote, that it was the
intention of the parties, and so construed by the Respon-
dent, that the phrase "any other programs" in the
subcontractors clause had reference only to economic
programs provided for in the AGC contract.
Moreover, it is appropriate in construing the meaning of
section 30(C) to examine it in context with section 30(B) of
the AGC contract.
Section 30(B) whose validity is not challenged by the
General Counsel reads as follows:
(B) The Employer agrees that when subcontracting
work covered by this Agreement, which is to be
performed within the geographical area covered by this
Agreement, and at the site of construction, alteration,
painting or repair of a building, structure, road or other
work, he will subcontract such work only to an
employer or person who will agree to comply with all
the terms and conditions of this Agreement.
It is section 30(B) which has the scope and reach which
the General Counsel contends is found in section 30(C).
Since 30(B) is limited on its face to the performance of
jobsite work, it is permitted by the construction industry
proviso of Section 8(e) of the Act. Comparing the language
of 30(C) with 30(B), it is clear that the contracting parties
did not intend 30(C) to have the reach or scope urged by
the General Counsel. Section 30(B) requires the subcon-
tractor to "agree to comply with all the terms and
conditions of this agreement," whereas section 30(C)
requires only that the subcontractor pay not less than the
wage and other economic benefits of the AGC contract.
I am satisfied, and I find, that section 30(C) is a
legitimate , primary "wage standards" provision outside the
scope of Section 8(e)'s prohibition.
I further am of the opinion, contrary to the position of
,the General Counsel, that section 30(C)'s requirement that
the subcontractor "further agree to submit any grievance
or disputes concerning his performance or compliance with
such undertaking to the procedures set forth in Section 15
of this agreement," is confined only to grievances relating
to the wage and economic standards provided for in the
AGC contract. I am in agreement with the Respondent
that the grievance procedure language is ancillary to the
legitimate primary job protection purpose of section 30(C)
and is designed to effectuate this same lawful primary
purpose. The grievance procedure substitutes peaceful
procedures in lieu of strike or other economic action as a
means of resolving disputes as to whether the wages and
economic benefits of the AGC contract are being observed
by the subcontractor.
There is no need to repeat again the language of section
30(D). It merely outlines the steps the Employer is required
to take to assure compliance by the subcontractor with his
undertaking to meet the wages and other economic
standards of the AGC contract.
Although the United States Court for the Eastern
'District of California issued a temporary injuction in the
instant case pursuant to Section 10(1) of the Act upon the
conclusion that there was reasonable cause to believe the
Respondent violated Section 8(e) of the Act, the United
'States District Court for the Northern District of Califor-
nia in 10(1) proceedings in Letter v. Building Material &
Construction Teamsters Local Union 216, 76 LRRM 2369
(Oct. 1, 1970), involving Section 30(C) and (D) of the AGC
contract and under a factual situation similar to the instant
case, declined to issue a temporary injunction, stating:
There is not reasonable cause to believe . . . that the
parties to the agreement have interpreted or applied
these provisions [Sections 30(C) and (D)] in the manner
alleged in the petition; rather, there is reasonable cause
to believe that the provisions have in practice consist-
ently been interpreted to require compliance by a
subcontractor only with the wages, hours and other
economic obligations or their equivalent, imposed by
the agreement. As so interpreted and applied, Section
30(C) and (D) of the Construction Teamsters Master
Agreement is not a violation of Section 8(e) of the Act
as alleged in the petition.
CONCLUSIONS OF LAW
1. Flintkote and CMT are employers engaged in
commerce within the meaning of Section 2(6) and (7) of
the Act.
2. The Respondent is a labor organization within the
meaning of Section 2(5) of the Act.
3. Section 30(C) and (D) of the subcontractors clause,
of the AGC master agreement, and the Respondent's
,reentry and reaffirmation of said subcontractors clause is
not violative of Section 8(e) of the Act.
4. The Respondent has not violated Section 8(e) of the
Act.
Upon the basis of the foregoing findings of fact,
conclusions of law, and the entire record in this proceed-
ing, and pursuant to Section 10(c) of the Act, I hereby
make the following recommended: 3
ORDER
The complaint is dismissed in its entirety.
3 In the event no exceptions are filed as provided by Section 102 46 of
the Rules and Regulations of the National Labor Relations Board, the
findings , conclusions, and recommended Order herein shall, as provided in
Section 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