Handy Spot, Inc.

National Labor Relations Board - Board Decisions

May 30, 1986

279 N.L.R.B. 1320 (N.L.R.B. 1986)

1320 HANDY SPOT, INC.
Handy Spot, Inc. and Warehouse Delivery Drivers
and Salesmen, Local 848, International Brother-
hood of Teamsters , Chauffeurs, Warehousemen
and Helpers of America . Cases 31-CA-12324
and 31-CA-12539
30 May 1986
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
DENNIS AND BABSON
On 27 December 1985 Administrative Law
Judge Harold A. Kennedy issued the attached deci-
sion. The General Counsel filed exceptions and a
supporting brief, and the Respondent filed an an-
swering brief to the exceptions.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge 's rulings , findings, i and
conclusions and to adopt the recommended Order
as modified.
REMEDY2
Having found that the Respondent, by failing to
bargain with the Union over the effects of its deci-
sion to subcontract, has engaged in unfair labor
practices within the meaning of Section 8(a)(5) and
(1) of the Act, we shall order that the Respondent
cease and desist therefrom, and take certain affirm-
ative action designed to effectuate the policies of
the Act.
i Although finding all the facts that would support such a conclusion,
the judge did not make a specific determination that employee Macias
was involuntanly transferred out of the unit and subsequently laid off
The judge declined to do so because he erroneously found that the Gen-
eral Counsel did not request such a finding The General Counsel did
make such a request in her brief to the judge We find that about 17 Sep-
tember 1982, Macias was involuntarily transferred out of the unit and
subsequently laid off as a result of the Respondent 's sale of its delivery
routes In making this finding, we particularly rely on the admission by
Respondent 's president , Eli Calton, that Macias was transferred because
of a lack of work resulting from the subcontracting and that he would
have been laid off had he not accepted the transfer
z Both parties contend that certain ambiguous language and dates
within the judge's "Conclusions of Law" and "Remedy" sections tend to
suggest that the instant violation was based on the failure to bargain over
the decision to subcontract as distinguished from the judge' s ultimate find-
ing of a failure to bargain over the effects of the subcontracting In order
to clarify this ambiguity, we substitute for the judge 's recommended
remedy the traditional language the Board uses to remedy an effects-bar-
gaining violation See Transmarine Navigation Corp, 170 NLRB 389
(1968) Additionally, we substitute the following for pars 4 and 5 of the
judge's Conclusions of Law, renumbering the subsequent paragraph ac-
cordingly
"4 Respondent violated Section 8(a)(5) and (1) of the Act on 14
January 1982 and thereafter by failing to provide the Union with
notice and an opportunity to bargain over the effects of selling its
remaining delivery routes in the metropolitan Los Angeles, Califor-
nia area to independent contractors "
As a result of the Respondent's unlawful failure
to bargain about the effects of subcontracting, the
laid-off or terminated employees have been denied
an opportunity to bargain through their collective-
bargaining representative at a time when the Re-
spondent might still have been in need of their
services and a measure of balanced bargaining
power existed. Meaningful bargaining cannot be as-
sured until some measure of economic strength is
restored to the Union. A bargaining order alone,
therefore, cannot serve as an adequate remedy for
the unfair labor practices committed.
Accordingly, we deem it necessary, in order to
effectuate the purposes of the Act, to require the
Respondent to bargain with the Union concerning
the effects of the subcontracting on its employees,
and shall accompany our order with a limited
backpay requirement designed both to make whole
the employees for losses suffered as a result of the
violation and to recreate in some practicable
manner a situation in which the parties' bargaining
position is not entirely devoid of economic conse-
quences for the Respondent. We shall do so in this
case by requiring the Respondent to pay backpay
to its employees in a manner similar to that re-
quired in Transmarine Navigation Corp., 170 NLRB
389 (1968). Thus, the Respondent shall pay all af-
fected employees backpay at the rate of their
normal wages when last in the Respondent's
employ from 5 days after the date of this Decision
and Order until the occurrence of the earliest of
the following conditions: (1) the date the Respond-
ent bargains to agreement with the Union on those
subjects pertaining to the effects of the subcon-
tracting on its employees; (2) a bona fide impasse in
bargaining; (3) the failure of the Union to request
bargaining within 5 days of this decision or to com-
mence negotiations within 5 days of the Respond-
ent's notice of its desire to bargain with the Union;
or (4) the subsequent failure of the Union to bar-
gain in good faith, but in no event shall the sum
paid to any of these employees exceed the amount
the affected employees3 would have earned as
wages from the dates on which they were laid off
or terminated to the time the employees secured
equivalent employment elsewhere, or the date on
which the Respondent shall have offered to bar-
gain, whichever occurs sooner; provided, however,
that in no event shall this sum be less than these
employees would have earned for a 2-week period
at the rate of their normal wages when last in the
Respondent's employ.
3 The final determination of who is an "affected employee" shall be
left to the compliance stage of this proceeding
279 NLRB No. 177
HANDY SPOT, INC.
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge as modified below and orders that the Re-
spondent, Handy Spot, Inc., Los Angeles, Califor-
nia, its officers , agents, successors , and assigns,
shall take the action set forth in the Order as modi-
fied.
1. Substitute the following for paragraph 2(b).
"(b) Pay the employees laid off or terminated
their normal wages for the period set forth in the
remedy section of the Decision and Order."
2. Substitute the attached notice for that of the
administrative law judge.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found
that we violated the National Labor Relations Act
and has ordered us to post and abide by this notice.
WE WILL NOT refuse to bargain in good faith
concerning the effects of selling certain of our de-
livery routes in the metropolitan Los Angeles,
California area to independent contractors with the
Warehouse Delivery Drivers & Salesmen, Local
848, International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of Amer-
ica as the exclusive representative of employees in
the following bargaining unit:
Included: All outside service men, outside
helpers and outside checker-service men em-
ployed by Respondent.
Excluded: All other employees, office clerical
employees , guards and supervisors as de-
fined in the Act.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the exer-
cise of the rights guaranteed you by Section 7 of
the Act.
WE WILL, on request, bargain in good faith with
the above-named Union concerning the effects of
our decision to sell certain delivery routes in the
metropolitan Los Angeles, California area to inde-
pendent contractors.
WE WILL pay those employees laid off or termi-
nated by reason of the sale of certain delivery
routes in the metropolitan Los Angeles, California
area to independent contractors their normal wages
1321
for a period specified by the National Labor Rela-
tions Board , plus interest.
HANDY SPOT, INC.
Donald P. Cole and Mort Pam Rubin' for the General
Counsel.
Kenneth Simmon of Beverly Hills, California, and Patricia
Zugibe2 of Santa Ana, California, for the Respondent.
Patricia Waldeck of Los Angeles, California, for the
Charging Party.
DECISION
HAROLD A. KENNEDY, Administrative Law Judge.
Respondent Handy Spot, Inc., a southern California dis-
tributor and seller of sundries is charged in this proceed-
ing with violating Section 8(a)(1) and (5) of the National
Labor Relations Act (the Act). On 6 December 1982 Re-
spondent signed a unilateral" settlement agreement,
which was later approved by the Region 31 of the Na-
tional Labor Relations Board and intended to dispose of
charges made against Respondent by the Charging Party,
Warehouse Delivery Drivers and Salesmen , Local 848,
International Brotherhood of Teamsters , Chauffeurs,
Warehousemen and Helpers of America (Local 848 or
the Union). The Union appealed for Region 's approval
of the settlement , but the General Counsel sustained the
Region 's action . Subsequently , on 20 January 1984, the
Regional Director vacated the settlement agreement, and
on 30 January 1984 issued the consolidated complaint
which is the basis of this proceeding.
Respondent 's answer admitted that it is a California
corporation engaged in the sale and distribution of sun-
dries to convenience markets and liquor stores , that it
purchases and received goods or services valued in
excess of $50,000 directly from out-of-state suppliers, and
that is an "employer" engaged in commerce and in a
business affecting commerce within the meaning of Sec-
tion 2(6) and (7) of the Act.
The trial took place in Los Angeles on 9 and 10 April
and 20 June 1985. At the conclusion of the General
Counsel 's case-in-chief the parties entered into a stipula-
tion which reads as follows:
1. The Charging Party Union is now, and has
been at all times material herein , a labor organiza-
tion within the meaning of Section 2(5) of the Act.
2. At all times material herein up to the dates set
forth below , the following persons occupied the po-
sitions indicated and were supervisors of Respond-
ent within the meaning of Section 2(11) of the Act
and its agents:
' Rubin substituted for Cole on the last day of the trial
Zugibe appeared for Respondent on 20 June 1985 while Simon testi-
fied as a witness for Respondent
a The Union never agreed to the settlement
1322 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Name Position
Left
Respondent
Leo Shultz Vice President 7-12-82
Joseph Bensler Vice President (Chief Oper- 6-14-82
ating Officer)
Sheldon Cohen Route Supervisor 1-21-83
Leonard Sales Manager 6-24-83
Luzell
Manny Vice President
Luxemburg
2-24-84
3. The unit described in paragraph 6 of the Com-
plaint (herein called the Unit)4 was appropriate for
the purposes of collective bargaining within the
meaning of Section 9(b) of the Act at all times ma-
terial herein until September 24, 1982. The facts
stipulated to in this paragraph 3 are not intended to
preclude the General Counsel from presenting evi-
dence or arguing that the Unit was also appropriate
for the stated purposes after September 24, 1982.
4. At all times material herein until September 24,
1982, the Union was the exclusive representative for
the purpose of collective bargaining of the employ-
ees in the Unit. The facts stipulated in this para-
graph 4 are not intended to preclude the General
Counsel from presenting evidence or arguing that
the Union was also such exclusive bargaining repre-
sentative after September 24, 1982
5. Commencing on or about February 1, 1981,
and continuing until September 24, 1982, Respond-
ent altered its method of merchandising by gradual-
ly ceasing to employ employees in the Unit, by sell-
ing to independent contractors delivery routes cov-
ering the geographical areas formerly serviced by
such employees and by selling its delivery vehicles.
By September 24, 1982, Respondent had completed
such alterations of its method of merchandising in
that as of that date, there were no employees re-
maining in the Unit and routes covering the entire
geographical area formerly serviced by employees
in the Unit had been sold to independent contrac-
tors
6. (a) On the following dates, the routes indicated
were sold by Respondent to the independent con-
tractors indicated, and the geographical areas cov-
ered by such routes ceased to serviced by employ-
ees in the Unit-
Date Route No and Description Contractor
Feb 1, 1981 Route 80-Riverside/San Jack Johnson
Bernardino
May 11, 1981 Route 82-11 Marvin
Murovitz
Par 6 of the complaint reads as follows
The following-described employees of Respondent constitute a
unit appropriate for the purposes of collective bargaining within the
meaning of Section 9(b) of the Act
Included All outside service men, outside helpers, outside checkers
and outside checker -service men employed by Respondent
Included All other employees, office clerical employees, guards and
supervisors as defined in the Act
Date Route No and Description Contractor
Nov 12, 1981 Route 9 South Bay Marvin
Murovitz
Route 82-11 Ralph Vasquez
Feb. 1, 1982 Route 4-Orange County Steve Glover
Feb. 1, 1982 Route 40-Orange County Ken Stoddard
Feb. 17, 1982 Route 50-South-Central Alan Davis
L A.
Apr. 12, 1982 Route 70-South Pasadena/- Wayne
San Gabriel Williams
June 7, 1982 Route 1-Hollywood Manuel Mena
& Pablo
Rivas
June 7, 1982 Route 12-South Central Van James
LA
July 1, 1982 Route 2-Santa Monica, Rudy Ayon
Malibu, W L.A.
July 12, 1982 Route 8-Pasadena , Glen- David Green
dale Burbank
Aug 30, 1982 Route 10-South and East Ralph Uribe
L A /Whittier
i No stipulation has been reached with respect to the route
description of Route 82
6. (b) Respondent also created other new routes
as independent contractor routes on dates prior and
subsequent to the dates set forth in paragraph 6(a),
the geographical area covered by which had not
previously been staffed by Respondent's employees
in the Unit.
7. The route descriptions, set forth above in para-
graph 6, reflect the geographical area covered by
the routes in question after their sale to the inde-
pendent contractors indicated. The geographical
area covered by such routes does not necessarily
correspond to the geographical area covered by Re-
spondent's routes serviced by employees in the Unit
prior to their sale to independent contractors, and
the parties do not intend in paragraph 6 to stipulate
to the geographical area covered by any routes
prior to their sale.
8. Of the independent contractors named in para-
graph 6 above, only five had formerly been employ-
ees of Respondent in the Unit: Rudy Ayon, Rablo
Rivas, Manuel Mena , David Green and Alan Davis.
The remaining independent contractors named in
paragraph 6 above were never employees of Re-
spondent in the Unit.
9. The total geographical area covered by the in-
dependent contractor routes set forth above in para-
graph 6 represents substantially the entire geo-
graphical area covered by routes serviced by Re-
spondent's employees in the Unit prior to Respond-
ent's engagement in the conduct described above in
paragraph 5.
10. The geographical area covered by independ-
ent contractor route 80 and a small portion of the
geographical area covered by routes 4 and 40 de-
scribed above in paragraph 6(a) were considered by
Respondent and the Union to be in outlying areas
of Respondent' s business territory. The geographi-
cal area covered by the remaining independent con-
tractor routes described above in paragraph 6(a)
HANDY SPOT, INC 1323
were considered by Respondent and the Union to
be in the "Los Angeles Metropolitan Area" of Re-
spondent's business territory
11. Respondent engaged in the acts and conduct
described above in paragraph 5 unilaterally and
without having afforded the Union an opportunity
to negotiate and bargain as the exclusive representa-
tive of Respondent's employees with respect to the
effects of such acts and conducts The facts stipulat-
ed to in this paragraph 11 are not intended to pre-
clude Respondent from arguing that, as a matter of
law, it was under no duty to bargain over the ef-
fects of such acts and conduct, if any.
12. The entire complement of Respondent's em-
ployees who were employed in the Unit between
January 14, 1982 and September 24, 1982 was as
follows:
Name Date of Employment in Unit
Chris Anderson 2/11/80-3/26/82
Glenn Barrow 3/15/78-12/14/79
3/10/80-2/2/82
Marty Benison 12/15/81-2/8/82
David Brix 3/13/78-6/8/79
11/9/79-4/16/82
Martin Louthan 1/5/81-7/1/82
Robert Mortimer 6/2/80-8/30/82
Gary Padilla 9/13/78-4/28/82
Merill Richman 5/13/74-8/27/82
Art Robledo 7/14/80-2/22/82
Mario Romero 9/10/79-4/23/82
Rudy Ayon 11/3/47-6/30/82
Robert Fitzsimmons 9/7/65-7/31/82
Ken Lewis 7/23/79-7/20/82
Manuel Mena 12/27/77-5/21/82
Pablo Rivas 5/22/78-5/21/82
John Welch 8/1/67-9/24/82
Alan Davis 9/4/80-2/5/82
David Green 12/20/79-7/2/82
Joe Macias 11/26/80-9/17/82
Conrad Miranda 11/23/79-9/17/82
13. Those employees named in paragraph 12
above who are not also named in paragraph 6(a)
above did not at any time become independent con-
tractors.
The Charges
Paragraphs 9 through 19 of the complaint , as amended
at the hearing,s contain the following allegations:
The General Counsel's attorney stated at the hearing that because of
the Board 's decision in Otis Elevator Co (11), 269 NLRB 891 (1984), cer-
tain changes were being made in the complaint and that "we 're only al-
leging that effects bargaining was not engaged unlawfully by Respond-
ent." Added the General Counsel's attorney
Now of course at the time it happened we believe they had to bar-
gain over the decision , but that of course no longer matters So
what's left is the refusal to bargain over the effects which is sort of
[sic] would say subsumed in what was at the time a greater duty
Now since they refused to bargain over the effects we're claiming
that under the Transmarine case [170 NLRB 389 (1968), on remand
from 380 F 2d 933 (9th Cir 1967)] and the many cases that have fol-
lowed it when there's refusal to bargain over effects but it's no
longer possible for-really to ask that this status quo anti [sic] be re-
9. Commencing on or about January 14, 1982,
Respondent has unilaterally subcontracted a portion
of its sales and/or delivery routes in the metropoli-
tan Los Angeles area to independent contractors.
10. Commencing on or about January 14, 1982,
Respondent has unilaterally transferred work out of
the bargaining unit described above in paragraph 6.
11. Respondent engaged in the acts and conduct
described above in paragraphs 9 and 10 without
prior notice to the Union and without having af-
forded the Union an opportunity to negotiate and
bargain as the exclusive representative of Respond-
ent's employees with respect to . . . the effects of
such acts and conduct.
12. (a) Commencing on or about September 17,
1982, Respondent transferred its employees Conrad
Miranda and Joe Macias out of the bargaining unit
described above in paragraph 6 and subsequently
laid them off.
(b) On or about September 20, 1982, Respondent
laid off its bargaining unit employee John Welch or
caused him to resign rather than be laid off.
(c) On or about August 1, 1982, Respondent
caused its employee Robert Fitzsimmons to transfer
out of the bargaining unit, described above in para-
graph 6, and subsequently laid him off
13. Respondent engaged in the acts and conduct
described above in paragraph 12 and its subpara-
graphs because of a lack of work within the bar-
gaining unit which lack of work resulted from the
acts and conduct of Respondent described above in
paragraphs 9 and 10.
14. On or about December 6, 1982, Respondent
entered into a settlement Agreement in Cases 31-
CA-12324 and 31-CA-12539.
15. Commencing on or about July 13, 1983, and
continuing to date, the Union has requested, and is
requesting Respondent to bargain collectively over
the effects of the acts and conduct described above
in paragraphs 9 and 10.
16. Commencing on or about July 13, 1983, and
at all times thereafter, Respondent did refuse, and
continues to refuse, to bargain collectively with the
Union over the effects of the acts and conduct de-
scribed above in paragraphs 9 and 10.
17. By the acts and conduct described in para-
graph 16 above, Respondent has failed and refused
to comply with the terms of the Settlement Agree-
ment referred to above in paragraph 14.
18. On or about January 20, 1984, the Regional
Director for Region 31 vacated and set aside the
Settlement Agreement referred to in paragraph 14.
19. On or about September 20, 1982, Respondent
through Luzell, told an employee that the latter
stored There is a limit in backpay remedy to afford the union some
bargaining power which they would not otherwise have since there
are no longer employees in the unit
So essentially that's our case, that there was a failure to inform the
union in advance over the sale of the routes Therefore, the Re-
spondent in doing so Respondent['s] unilateral action constituted re-
fusal to bargain over the effects of that act of the subcontractor
1324 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
would have to resign from the Union in order to
become an independent contractor.
According to the complaint, the alleged acts and con-
duct referred to in paragraphs 13, 15, and 16 constituted
a failure to bargain in good faith and violation of Section
8(a)(5) of the Act. Also, according to the complaint, the
alleged acts and conduct referred to in paragraphs 13,
15, 16, and 19 through 20 interfered with, restrained, and
coerced employees in violation of Section 8(a)(1) of the
Act.
The General Counsel's attorney conceded at the trial
that Respondent posted the notice contained in the settle-
ment agreement as required Referring to the prohibi-
tions contained in the notice, the General Counsel's at-
torney indicated that Respondent had not violated the
settlement agreement except for the "negative prohibi-
tions" set forth in paragraph 3 concerning the failure and
refusal to bargain in good faith. The full text of the third
paragraph of the notice reads (G.C. Exh. 6):
WE WILL NOT fail and refuse to bargain collec-
tively in good faith with Wholesale Delivery Driv-
ers & Salesmen Local 848 as the exclusive repre-
sentative of the employees in the appropriate unit
described below with respect to wages, rates of pay,
hours of employment, and other terms and condi-
tions of employment by unilaterally subcontracting
sales and/or delivery routes, by unilaterally trans-
ferring work out of the appropriate unit described
below, or, as a result of such unilateral subcontract-
ing of routes or transfer of unit work, by transfer-
ring our employees in the appropnate unit to posi-
tions outside such unit and/or by laying off such
employees 6
The General Counsel's attorney stated that he was not
conceding that employees had been made whole (re-
ferred to in the last paragraph of the notice) and that he
might later assert a claim for backpay even though "we
don't allege that particular individuals are owed particu-
lar amounts of backpay in the complaint " Counsel for
the General Counsel indicated that he was not challeng-
ing that part of the agreement which "says we will not
do anything that interferes with these rights and we will
not tell our employees they must resign from the above
named labor organization, or from any labor organiza-
tion in order to become independent contractors."
The Evidence
A number of exhibits were introduced by agreement
without objection including the following:
G.C. 6, Settlement Agreement, signed by Re-
spondent's president on 6 December 1982 and ap-
8 The fifth paragraph of the settlement agreement notice , which con-
tains the "corresponding positive directive to bargain" is repetitive of the
third paragraph , and it was understood that no concession was made by
the General Counsel to it See Tr 268-276 The remarks attributed to me
at Tr 273, LL 11-20 are in error, and I order the deletion of my name
and title as they appear on Tr 273, L I1
proved by the [Acting] Regional Director on 5 Jan-
uary 1983.
G C 7(a) through (f), papers relating to the
Charging Party Union 's appeal from the Regional
Director 's approval of the Settlement Agreement
and the General Counsel 's 24 June 1983 denial of
the appeal.
G.C. 8(a) through (1), postsettlement papers,
which include letters sent by the parties and the Re-
gional Director 's letter of 20 January 1984 letter an-
nouncing withdrawal of approval of the Settlement
Agreement.
Seven witnesses testified-William Radtke, business
agent and recording secretary for the Charging Party;
Eli Catron, Respondent's president and chief executive
officer; Kenneth Simon, counsel for Respondent, Leo
Shultz, former vice president of sales for Respondent;
and three other former employees of Respondent,
Conrad Miranda, Robert Fitzsimmons, and Manuel
Mena. Their testimony is summarized below 7
William Radtke testified that he served as a business
agent for Local 848 from 1970 to 1972 and again from
1979 to date. He said he would visit Respondent's facility
every 3 or 4 weeks and noticed, beginning around May
1981, that there were fewer drivers around. He made in-
quiry of two of Respondent's officials, Leo Shultz and
Joe Bensler, and was told that business was "bad" due to
the competition of two other firms, Glazer Brothers and
Certified Grocers. As a result, routes were being consoli-
dated, he was told, and no new drivers were being hired.
According to Radtke, the company officials denied that
any of the routes were being contracted out.8
Three or four weeks later Radtke spoke to the then
shop steward, Richard Quinonez, and was told that the
Company was subcontracting its routes On 13 July 1981
Radtke sent a letter (G.C Exh. 3) to Respondent which
asserted that the Company had turned over to outside
jobbers, contrary to the collective-bargaining agreement
in effect at the time (G C Exh 2), bargaining unit ac-
counts and requested arbitration A couple of weeks later
Radtke again spoke to Shultz and Bensler and they "did
admit that they were subcontracting out a route in Palm-
dale [and] Saugus Newhall." Radtke said he told the offi-
cials that if he learned of any "other" area being con-
tracted out he would file another grievance. Radtke said
the officials assured him that "this would not be done "9
' The General Counsel offered an affidavit given by Leonard Luzzell
to a Board agent in the presence of Respondent's counsel At the time
Luzell gave the statement he was sales manager of Handy Spot The par-
ties stipulated to the authenticity of the document but do not agree about
its probative value See Tr 277-285 1 place no reliance on the document
See NLRB Y Sherwood Trucking Co, 774 F 2d 744 (6th Cir 1985), and
cases cited therein
8 On cross-examination, Radtke stated that he believed Shultz was the
speaker and that Bensler had agreed with Shultz
9 Radtke testified later on rebuttal that there was a route identified by
Handy Spot Officials Leo Shultz and Joe Bensler as the "Palmdale/-
Lancaster/Newhall" route and was distinct from the West Valley route
The Palmdale route was the first route converted to Radtke's knowledge
Shultz and Bensler had told him the route was too far out, low in sales,
and unprofitable
Handy Spot witnesses Shultz and Cation indicated in their testimony
that there had been no Handy Spot route in the Palmdale area
HANDY SPOT , INC 1325
Radtke said he continued to observe that there were
"fewer and fewer" of his members at Respondent 's facili-
ty and spoke to the Union 's new steward , David Green,
in early March 1982 . Green reported that the Company
was subcontracting out routes , but he was unable to
identify who the subcontractors were . Two weeks later
Radtke approached Shultz and Bensler again . The offi-
cials acknowledged that the "outlying areas" of Orange
County were being served by nonunit personnel , claim-
ing that " it didn 't pay for them to send a driver into the
area ." Radtke said he would try to verify the latter infor-
mation but complained of the fact that the Union had not
been notified of the change . Radtke said he was satisfied
with the Company 's explanation after speaking with
Steward Green , who "agreed that it didn ' t pay to send a
driver" to the "very slow area" of Orange County 10
Radtke said he spoke to Bensler and Shultz around
June 1982 after returning from a vacation . He noticed at
that time that "there were even fewer people" at Re-
spondent 's facility and that some of the Company's vans
were being painted a silver color . He had talked previ-
ously with Steward Green and a unit employee, Rudy
Ayon , both of whom had reported that the Company
was subcontracting routes . A warehouse steward for
Local 595 had also advised Radtke that people whom
she did not recognize had been picking up merchandise.
Shultz and Bensler again denied contracting out any ad-
ditional routes . Radtke said he received a telephone call
from Shultz shortly thereafter when he had returned to
his office . He gave this account of the telephone conver-
sation he had with Shultz:
Well he told me , yes, of course we are bringing
these trucks in from the outlying areas to pick up
this merchandise . He said I didn ' t want to say any-
thing in there in front of Joe Bensler but this is
being done and I can assure you it will stop as of
now. I said what about the subcontracting, Leo, I
know you're doing it . I know Rudy Ayon was of-
fered a route . He said, look, I dust work there. .I
asked him to put this in writing to the effect that
there would be no more of these outside carriers
coming in to pick up merchandise and he said he
would.''
10 Radtke said the jurisdiction of the , Umon included "parts of Orange
County" and all Los Angeles County except for an area west of Thou-
sand Oaks near the boundary of Ventura County Radtke said he under-
stood that Respondent had distributed merchandise in the San Bernan-
dino area through an independent operator for a long time, but he was
not concerned over that fact as that area was outside of the Union 's,luns-
diction
t' Radtke testified that he had agreed to allow the Company to make
deliveries to "Palmdale, Saugus , Newhall and the outlying areas of
Orange County" from which independent operators could distribute the
goods , but he had not agreed that such operators could come to Re-
spondent's facility and pick up the merchandise Later , during cross-ex-
amination, Radtke said he would never have agreed to subcontracting in
the western part of Los Angeles County (west of Woodland Hills) as "all
of west valley is part of our jurisdiction " Radtke said that in an outlying
area the distance between stops are great but that there was no "outlying
area" within Los Angeles County
Shultz sent such a letter to Radtke under date of 24 June
1982, which Radtke identified as General Counsel's Ex-
hibit 5 . The letter read in part:
Regarding your letter date June 21, 1982 relative to
the independent contractors coming into our ware-
house to obtain their loads of merchandise , I truly
apologize to you again , as I did at our meeting this
morning . Certainly it had taken place in the past but
will not occur again.
Radtke identified the 21 June 1982 letter (G.C. Exh. 4) as
one he had written a couple of days prior to his "con-
frontation with Leo Shultz on the phone ." Radtke testi-
fied that at no other time had personnel of the Company
ever indicated it had contracted out any of its routes.
Radtke said he spoke to Shultz one day in July 1982
while in the drivers' room (after Bensler had left the
Company 's employ , Radtke thought ) and that Shultz
gave a contradictory comment about whether the Com-
pany was continuing to contract out its routes . Shultz re-
portedly knew nothing about the contracting out and
could not do anything about it.
Radtke said he visited Respondent 's facility again in
August 1982 and discovered that none of the bargaining
unit drivers was working for the Company.
Under questioning by the Union 's counsel , Radtke in-
dicated that he had thought that the subcontractors who
had taken over deliveries in the Palmdale area and outly-
ing areas of Orange County were not coming to Re-
spondent 's facility to get their merchandise. But he
learned in June 1982 , he said , that the subcontractors
were coming to Respondent 's facility to pick up the mer-
chandise . Radtke estimated the number of drivers in the
bargaining unit in May 1981 around 30 By March 1982
he thought the number was down to 18 or 20, and by
June 1982 the number was 14 or 15.
Testifying on cross-examination , Radtke said he
learned in July 1982 that at least one employee (Rudy
Ayon) had been given a chance to purchase a route from
Respondent . Radtke agreed that the Union 's 13 July 1981
grievance concerning the subcontracting of the so-called
Palmdale route never went to arbitration and that it did
not because he accepted the Company 's explanation for
its action . Radtke stated that he did not pursue a griev-
ance over the Orange County subcontracting because he,
again , accepted Respondent 's explanation for making the
change
It is not at all clear from Radtke ' s testimony whether
he intended to grieve the conversion of the so-called
Palmdale route or not . (Compare his testimony at Tr. 83
and 572 .) Testifying later as a rebuttal witness, Radtke
indicated that his July 1981 grievance (G C. Exh. 3) was
not directed at the conversion of the Palmdale/-
Lancaster/Newhall route. What prompted the grievance,
he said, was what he saw happening at Handy Spot at
that time He said he observed that more routes "were
being done away with " and "less and less of our people
working ." Also, he said he "was being told by our shop
steward that some of the other routes were being taken
over by independent carriers." The grievance was re-
solved ("dropped "), however , after Radtke spoke with
1326 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Shultz and Bensler and then later with the steward. The
territory discussed at the time, according to Radtke, was
the "outlying areas" of Orange County over which
Local 848 had no jurisdiction. t 2
Radtke filed a second grievance in June 1982 (G.C.
Exh. 4) because, said Radtke, Handy Spot was selling
routes "to some of our people and some outside people."
By that time, however, Radtke thought all the routes
had been converted. The explanation of Shultz and
Bensler was that business was bad and all the areas were
being combined. At no time, according to Radtke, did
Handy Spot inform him of a policy of implementing a
conversion of routes. Radtke was not told, he said, that
Alan Davis, David Green, or any other employee had
asked to buy any routes.' 3
Radtke acknowledged receiving Simon's 7 December
1982 letter offering "to commence negotiations" on the
conversion of routes and the "effects of that action." He
said the Union did not respond to Simon's letter on
advice of counsel because the settlement agreement had
been appealed. On being advised in July 1983 that the
appeal had been acted on and that the Union must re-
spond in 5 days, Radtke said he promptly called Simon
and asked, again acting on advice of counsel, to negoti-
ate an agreement on the routes. According to Radtke,
Simon laughed and told Radtke that he was "out of
time ." Later, on 16 November 1983, Radtke wrote Re-
spondent requesting that the Company bargain with re-
spect to the Company's "outside" personnel (G.C. Exh.
8(j)). Radtke agreed on cross-examination that he did not
ask in writing that Handy Spot bargain on the subcon-
tracting issue . Radtke also testified on cross-examination
that it would be hard for him to say whether Local 848
members had been laid off to make room for independent
contractors, but that he "got complaints" about employ-
ees being laid off for a lack of work.
Conrad Miranda went to work for Respondent as a
driver's helper in November 1979 and later became a
driver for the Company. Around September 1982 his
foreman, Leonard Luzell, told Miranda that driving
routes were no longer available and that he could either
transfer to the warehouse or be laid off. Miranda then
went to work for awhile, less than a month he thought,
in the warehouse and was then laid off.
Miranda explained on cross-examination that another
driver, Joe Macias, also transferred to the warehouse
about the same time and was laid off, along with another
employee Bob Dede, about the same time."
Robert Fitzsimmons testified that he went to work for
Handy Spot in September 1964 and was laid off in Octo-
ber 1982. He started as a driver-helper and later worked
12 Radtke testified later that members of Local 848 did service certain
areas of Orange County, also such members may have done "fill-in"
work in the San Bernardino area
13 Radtke stated that his 21 June 1982 grievance was a two-part griev-
ance The first part related to the selling of routes and the other related
to outside carriers coming into Respondent's premises and picking up
merchandise The second part was resolved, but the first part was not
Radtke said he sought help from the Board rather than go to arbitration
because the contract language was not strong enough
14 Miranda was a member of Local 848 when he drove for Respond-
ent He said that the work performed in the warehouse was under the
jurisdiction of Local 595
as a checker, driver, and in sales. He became a member
of Local 848 and remained a member except while em-
ployed in sales during parts of 1973, 1974, and 1982.
Fitzsimmons stated that Leo Shultz approached him in
June 1982 and suggested that he return to the sales de-
partment or look elsewhere for employment. Shultz con-
tinued to urge Fitzsimmons to return to sales work and
seeing "the routes going away" Fitzsimmons reluctantly
agreed to return to sales work in August 1982. He went
to the union hall and, after explaining "the problem" he
had at Handy Spot to Business Agent Radtke, he took
out a withdrawal card. Fitzsimmons worked in sales then
until 29 October 1982, when he was laid off.
Fitzsimmons explained that while working in sales at
Handy Spot, a position he did not like, it was his job to
go out and obtain new customers. Checkers, he said,
were called on to take note of items needing restocking,
and drivers would then make delivery of the merchan-
dise. When the routes were sold, the new buyers-called
"franchise holders" by Fitzsimmons-took over the re-
sponsibility of servicing the accounts. The franchise
holders would turn in their orders at Handy Spot, and
they, or their drivers, would take delivery of the mer-
chandise.
Fitzsimmons said at one time he had been a checker
for Route 10, which included Orange County, and that a
person named Conrad would deliver the merchandise on
that route. Fitzsimmons recalled that "a route into the
valley area" was owned by a franchise holder. He also
identified Rudy Ayon and Dave Green as persons who
became franchise holders. According to Fitzsimmons,
franchise holders were not to come on to Handy Spot
property "because of the union being there." He stated
that while working in sales he had delivered merchandise
for franchise holders at a Safeway parking lot.
Leo Shultz became a Handy Spot employee around
1950. Around 1960 he was promoted to a sales manage-
ment position and in 1967 or 1968 he was made vice
president of sales. In the latter capacity he was in charge
of labor relations and responsible for the administration
of the joint agreement the Company had with Locals 848
and 595. Shultz retired from Handy Spot in July 1982
but has continued to work as a consultant for the firm.
Shultz was questioned concerning the Company's
methods of distributing its merchandise, especially after
January 1981. He testified that in January 1981 Handy
Spot employees represented by Local 848 delivered mer-
chandise for the Company in various areas of Southern
California. Shultz said:
The driver would deliver the merchandise into
the store . The driver would place that merchandise
on the customer 's shelves, rotating , dusting , fronting
the merchandise and serving a complete service to
that customer.' 5
15 Local 848 Business Agent Bill Radtke testified that he understood
Handy Spot routes to be serviced by a three -man team "One was an ad-
vance man, who would go get orders And then, another one would
bring the merchandise , and another one would put the merchandise up "
HANDY SPOT, INC 1327
According to Shultz, Handy Spot began distributing
merchandise in Santa Barbara through an independent
contractor in 1976. Later the Company utilized an inde-
pendent contractor to distribute its products in the Ba-
kersfield area.
Shultz agreed that he and Joe Bensler, another Handy
Spot official, had discussed the Company's use of an "in-
dependent contractor in the West Valley," an area he
said included Los Angeles County, cities of Van Nuys,
Pacoima, Reseda, Granda Hills, Tarzana, Enconio, and
Sherman Oaks, in the summer of 1981. Shultz said he
told Business Agent Radtke that the Company had
turned to an independent distributor in that area because
of the "devastating blow that took place to Handy Spot
when Fair Trade went off."
Shultz explained that Handy Spot's primary business
was with convenience stores. "When Fair Trade went
off naturally the foot traffic ran to the chain stores to
buy their merchandise at a much cheaper price," he said.
Shultz stated that the competition of firms like Glazer
Brothers also figured in the decision of the Company to
switch to independent contractors. Shultz indicated that
Radtke was sympathetic to Handy Spot's problems and
even offered to assist Respondent by trying to organize
Glazer Brothers.
Shultz said he and Bensler had discussed the subject of
Handy Spot changing its method of distribution with
Business Agent Radtke "many times."16 Shultz later re-
called that Radtke "confronted" the Handy Spot officials
about the fact that an independent distributor was serv-
ing company accounts in Orange County (later identified
as accounts that had been part of either Route 4 or
Route 40). Shultz stated that he and Bensler had ex-
plained the decline of business in that territory and that
"it seemed that Mr. Radtke was satisfied."
Shultz testified that he was aware of no grievance
being filed over the sale of Handy Spot routes after 28
May 1982, the date of a memorandum he had written on
the subject. He indicated that the idea of selling Handy
Spot routes may have come from Radtke. Shultz stated
that, during a conversation he had with Radtke, Radtke
had mentioned that if routes were to be sold Radtke
would like to see retired Handy Spot employees be given
an opportunity to buy them.17
Shultz identified certain independent contractors as
former Handy Spot employees: Jack Johnson (San Ber-
nandino);18 David Green (Route 8, San Gabriel and
IB Shultz identified a 28 May 1982 memorandum (R Exh 2) that he
had written which refers to discussions had with Union Officials Radtke
and Jim Fizznoglia about the sale of routes Shultz stated that the "Palm-
dale" route was sold "maybe the early part of '82 ," but he said he re-
called no discussion with Radtke about it As indicated , infra, Shultz
agreed on cross-examination , after reviewing an affidavit he had signed,
however, that the subject of selling the Palmdale-Saugus-Newhall route
had been discussed
17 When recalled later, Radtke testified that he did talk to Shultz
around late 1981 or early 1982 about Handy Spot making use of retired
employees The idea of them being independent contractors was not dis-
cussed , Radtke said , however "They would be goodwill men from the
Company, salesmen "
18 Johnson was identified as a retired Handy Spot employee
Pasadena); Rudy Ayon (Route 2, Santa Monica, Malibu,
and West Los Angeles); 19 Palo Rivas and Manuel Neva
(Route 1, Hollywood); and Alan Davis (Route 50, south
central Los Angeles). Shultz stated that the south central
Los Angeles area was a high crime area and that drivers
did not want to go there. According to Shultz, Davis of-
fered to buy the route, and Radtke knew of the sale.
Shultz said he was "pretty sure" Radtke also knew of
Green's purchase of a route. According to Shultz, Green
had initiated the purchase of his route as did Rivas and
Neva with respect to their route.20 Shultz stated that he
thought that Radtke knew of the sale of routes before
June 1982 because of earlier discussions he and Radtke
had had on the subject. Shultz denied tha the Company
had threatened any of the buyers with layoffs before
they purchased their routes. Shultz indicated that the
Company consolidated routes but no one had been laid
off "due to the change that was taking place." When em-
ployees left voluntarily, territories were made available,
he said.
On cross-examination by the General Counsel's attor-
ney, Shultz indicated that he did "not necessarily" have
a continuing relation with Handy Spot after his retire-
ment, but he agreed that he had continued to visit the
Company's premises "every 2 weeks or so." Shultz
agreed that the Company had not paid money into the
Union's pension fund on routes held by independent con-
tractors. Shultz also agreed that Radtke had mentioned
that retired persons could only work a certain amount
without having their pensions being affected.
Shultz said he did not recall discussing with Radtke
the sale of the Palmdale-Saugus-Newhall route. Shultz
indicated that Palmdale itself had not been served by
Handy Spot but that the cities of Saugus and Newhall
had been. However, after being shown an affidavit he
had signed in August 1982 Shultz agreed that he and
Bensler did discuss with Radtke in July 1981 the fact
that the Palmdale-Saugus-Newhall route had been sold
to Marvin Murovitz (on 11 May 1981). According to
Shultz, "Palmdale didn't belong in there" but Saugus and
Newhall were a part of the West Valley route.21
Shultz was questioned about "a distant part of Orange
County," which was either a part of Route 4 or Route
40.22 Shultz agreed that he had discussed this area with
le Don Ayon was a co-owner of Route 2 , but he had not been a
Handy Spot employee
20 Shultz identified two letters signed by Rivas and Neva, one dated 21
May 1982 and the other one dated 4 June 1982 The earlier letter indicat-
ed that Rivas and Neva wished to resign from the Company in order to
go into business In the later letter they asked to buy a franchise route.
Shultz later testified that Rivas and Neva bought their route on 7 June
1982 and that their territory took in the Hollywood area and portions of
Los Angeles with Santa Monica being the "borderline "
21 Shultz testified later that there had been Handy Spot customers in
Palmdale "many , many years ago " He testified on surrebuttal that the
Company had served Newhall and Saugus as part of the West Valley
route but not Palmdale or Lancaster He said he did not recall any
"North Valley" route that Radtke had referred to in his testimony
Handy Spot's chief executive officer, Eli Catron, testified that the West
Valley route went west to Thousand Oaks and took in Tarzana, Encino,
Canoga Park , Saugus, and Newhall Catron also maintained that there
was no Handy Spot route that had served Palmdale
22 Handy Spot's chief executive officer later testified that Route 4 cov-
ered South Orange County and that Route 40 covered North Orange
County
1328 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Radtke and that it had been subcontracted to a person
named Steve Glover. Shultz said he did not recollect
telling Radtke of the Company's sale of the south central
Los Angeles route to Alan Davis before it occurred.
Radtke also conceded that he had not advised the Union
about the sale of a route to David Green. Finally, Shultz
testified that Handy Spot employees Neva, Rivas, Green,
and Davis had each come to him and requested a chance
to become independent contractors for the Company
before resigning from the Company or the Union.
During his later cross-examination by the General
Counsel, Shultz testified that the policy of converting
Handy Spot routes to independent contractor status was
formulated by "various different principals" of the Com-
pany. The policy, he said contemplated that at no time
no member of the bargaining unit was to be terminated
or threatened. It was a "known policy," he said, but he
did not recall that it was ever reduced to writing.23
Shultz testified later under cross-examinations of the
Charging Party in somewhat more detail about the
Handy Spot routes and their conversion to independent
operations.24 Shultz identified Route 80, also known as
the Riverside-San Bernardino and the Desert route, as
the first employee route that was converted to an inde-
pendent contractor status. Shultz said he could not recall
when the changeover took place, but he accepted Febru-
ary 1981 as the approximate time of the event. John
Welch, a member of the Local 848 bargaining unit, had
driven the route until sometime before it was sold to
Jack Johnson.25 According to Shultz, Welch had
become ill and was taken off the route for awhile. Welch
was later assigned to Route 7 (San Gabriel).26
The second employee route to be converted, accord-
ing to Shultz, was Route 82, the West Valley route
Shultz identified the following cities as being a part of
that route: Saugus, Newhall , Simi , Granda Hills, San
Fernando, Van Nuys, Tarzana, Encino, Sherman Oaks,
and parts of Hollywood. (He later stated that Chats-
23 Shultz' testimony whether he ever advised Local 848 about its
policy is vague and confusing He claimed that he had discussed the pos-
sibility of converting the Handy Spot routes to independent operations
"no specific times, but many times " Under later questioning by Respond-
ent's counsel, Shultz testified that he had told Radtke of the decision to
convert the routes before sales were made to Davis, Green, and Johnson
Still later he conceded that he had stated in his affidavit that he had not
told the Union of the sale of a route to Green by 12 July 1982
24 Cross-examination of Shultz by the Union took place 2-1/2 months
after his direct examination. He was aided at that time by the use of cer-
tain notes he had made and certain stipulations reached by the parties
25 Shultz agreed that Welch had once been a member of another unit,
Teamsters Local 166, while he drove the Desert route for Handy Spot,
but according to Shultz, Welch later transferred to Local 848 and contin-
ued to serve the Desert route as a Handy Spot employee for a time
Radtke's rebuttal testimony, to the effect that Welch had once been a
member of Local 166 and a member later of Local 848 before retiring,
was not significantly contradictory Radtke stated that the Desert route
was never within his Union's jurisdiction and "never really paid much
attention" to that territoy
26 On redirect Shultz testified that the sale of Route 80 to Johnson was
consistent with the Company's policy of selling only those routes that
became vacant Shultz said Welch's illness caused Route 80 to be "vacant
for some time " Under further questioning Shultz conceded that the con-
version of the Desert route was "a confused situation " He thought that
Welch stopped driving a route "possibly" in mid-1980, and that it was
served by "fill-ins" for awhile and then by Merrill Richman, who had
been driving the south central Los Angeles route
worth and Northridge were also part of Route 82.) Bob
Mortimer, a member of the Local 848 unit, had served
the route prior to its conversion and sale to Marvin Mur-
ovitz in May 1981. Murovitz operated the West Valley
route for about 9 months prior to being reassigned to the
South Bay area . Shultz testified that he had discussed
with Business Agent Radtke two or so times the fact that
the south central Los Angeles route, a territory that had
been served by Handy Spot employee Alan Davis, was
being sold to Davis. Shultz testified at first that the dis-
cussions "probably" took place after the sale. Later, he
said he thought he had told Radtke that Davis had asked
to buy the route and "that we were proceeding ahead."
Shultz testified that he also had talked with Radtke a
couple of times about the sale of Route 8 (later changed
to 82) to David Green. Shultz said he told Radtke, with
Jim Fizznoglia present, he thought, that Green had ap-
proached the Company about buying the route and that
"we were in the process of negotiating."27
With respect to a discussion Shultz said he had with
Radtke concerning the use of retired Handy Spot drivers
as independent operators, Shultz agreed that Radtke had
pointed out that they would have to be paid pension ben-
efits. Shultz stated that such was acceptable to him, but
he did not know whether pension moneys were paid on
Jack Johnson, a retired Handy Spot employee who had
purchased the Desert route.28
Shultz indicated that he was in error in having testified
earlier that no grievance had been filed after May 1981
with reference to the sale of Handy Spot routes. He ac-
knowledged receiving the Union's 13 July 1981 griev-
ances but said he did not recall discussing them or seeing
the Union's later 21 June 1982 grievance.29
Manuel Mena testified that he was employed as a
checker and driver for Handy Spot from 1977 until 1982.
He stated that he and another Handy Spot employee,
Pablo Rivas, had decided to go into business for them-
selves with "a third party" but that "it didn't work out
too good."30 Mena said he noticed before quitting at
Handy Spot that the Company was franchising its routes
so he and Rivas "came back and asked for a route."
Mena indicated that he and Rivas left the Company vol-
untarily and their later purchase of the route from the
Company was voluntary. After resigning as an employee
Mena took out a withdrawal card from the Union.
27 Shultz later testified that Green took over Route 7, which included
San Gabriel , Pasadena , and Glendale Shultz said he thought he had
talked with Radtke before and after the sale to Green Then Shultz said
he could not recollect whether the contact occurred before or after the
sale Finally, Shultz agreed that he had not contacted the Union about
Green taking over a route as an independent contractor
29 Shultz testified on redirect that Jack Johnson was the only retiree's
name that was mentioned in the discussions with Radtke The names of
Don Ayon and Bob Lally also "had come up " He said Rudy Ayon, who
had been a checker on the Santa Monica route , personally approached
Shultz about the purchase of route and was ultimately given one
29 On redirect Shultz said he remembered sending the Union his 24
June 1982 letter (G C Exh 5), but said he could not recall the Union's
letter of 21 June 1982, presumably sent him 3 days' earlier
30 Mena stated that the letter of resignation which he and Rivas signed
(R Exh 3) was written by Mena's wife Mena said that the business that
he and Rivas went into involved painting and maintenance of houses
The business lasted only 2 weeks Mena said because a third party ran off
with the money and equipment
HANDY SPOT, INC
Mena stated on cross-examination that he and Rivas
had owned their Handy Spot route since 1982 and that
their relation with the Company had continued to be a
good one. Mena recalled that at one time 15 or 16 routes
had been served by Handy Spot employees. He said he
was not sure how many routes were still being served by
Handy Spot employees when he left, but he thought
there were three or four or maybe more. He understood,
he said, "that when people were retiring or quitting or
getting fired then they would replace the routes" with
franchises. Mena stated that the Company never told him
that it was going to franchise all the Handy Spot routes,
but he agreed that it looked "that way' He also indicat-
ed that the Company had stopped hiring new drivers.
Eli Catron testified that he has been president and
chief executive officer of Handy Spot since November
1972. Catron said the Company had a joint collective-
bargaining agreement with Locals 595 and 848 until 30
September 1980, the expiration date of the last joint
agreement. The drivers and checkers were represented
by Local 848, and the warehouse workers were repre-
sented by Local 595 Handy Spot signed a new agree-
ment (R. Exh. 7) with Local 595 covering the period 1
October 1982 thru 30 September 1985, but Local 848 did
not participate in the negotiations and was not a party to
the agreement Catron said that no Handy Spot employ-
ees served any routes after August 1982.
According to Catron, Handy Spot's principal business
involved the sale of health and beauty aid products to
liquor stores, "delis and Mom and Pop convenience
stores." Prior to the switchover to independent contrac-
tors, a Handy Spot employee would call on a customer
retailer and write up an order for merchandise. A couple
of days later a Handy Spot employee would deliver the
merchandise, bearing a price sticker, and place it on the
shelf. Since 1982 Respondent has relied on independent
contractors to sell and service routes under exclusive
contracts.3 i Catron said , "They maintain the customers
and provide the merchandise of the shelves." The inde-
pendent's compensation is derived from a commission on
the amount of business they do.
Catron identified Respondent Exhibits 8 and 9 as
copies of agreements Handy Spot had made with inde-
pendent contractors Jack Johnson and Marvin Murovitz
in May and February 1981, respectively.32
Catron testified that Handy Spot had routes in Santa
Barbara and San Diego which had always been served
by independent contractors. He said he first gave consid-
eration to converting Handy Spot routes to independents
around late 1980 or early 1981 when Jack Johnson, a
former employee, approached the Company about
buying the "Desert Route." About the same time Marvin
Murovitz, who was then representing another company,
approached Handy Spot about buying the "West Valley"
31 Catron indicated that the independent contractors generally have
mutually exclusive territories , although he said there is some "geographic
overlap" as in the case of Routes 4 and 40 in Orange County and Routes
82 and 8X in San Fernando Valley
32 R Exh 8 indicates Johnson's territory to be the "high and low
desert" and lists certain cities, including San Bernardino According to
Catron, Murovitz' territory was originally West San Fernando Valley,
but he was later reassigned to cover the South Bay area
1329
territory. "It was at that time," according to Catron,
"that we established the plan and policy for proceeding
in this direction with the restructuring of the company."
Catron explained the reasons for the "restructuring" of
the business as follows:
Well, a number of factors which caused the dev-
astating decrease in our business over the previous
two years, such as the fair trade going off the liquor
stores since 95 plus percent of our customers are
liquor stores. Were then and now. And the very,
very strong competition brought in by Glaser
Brothers, a very very large company operating in
the Western United States, serving probably 95 per-
cent of our stores with tobacco and candy anyway.
And they decided to go into the health and beauty
aid business, taking a lot of customers away from
us. We were in a situation where we had to make
some, in order to continue business, we would have
to make a major capitol investment in our fleet Our
fleet was old and worn and our maintenance costs
were excessive, and we just had to find new ways
of doing business. We couldn't continue to keep our
doors open under those circumstances.
Catron testified that the Company had a "stated policy"
not to lay off anybody. "We would handle the change
over through attrition," he said. Added Catron:
As people left for reasons of retirement or to find
another position we would not replace him with an
employee driver. We would bring independent con-
tractors to staff the routes.33
Catron said he thought the first former Handy Spot em-
ployee to buy a route was Alan Davis in February 1982.
Davis had resigned earlier from the Company and, ac-
cording to Catron, Davis' offer to take over the south
central Los Angeles route "solve[d] a problem" for the
Company as employees did not want to go there.
Catron testified that there were certain requirements
for persons to be eligible to purchase a Handy Spot
route. They would need a van , some capital, and some
experience in the field. Catron said the Company had
sold three or four of its vans to persons who became
contractors. He denied that the Company had ever paint-
ed any of the vans.
Catron estimated that there were 28 to 30 members of
Local 848 in the bargaining unit in early 1981 when the
Company sold routes to Johnson and Murovitz Catron
believed that 12 of them were checkers and that the
others were drivers and helpers. There were probably 20
to 22 in the unit at the end of 1981 and 11 or 12 in June
1982. He said that employees Miranda and Marcias and
another employee were assigned warehouse jobs under
the jurisdiction of Local 595 which provoked complaints
from that Union's steward. Local 595's membership also
declined in 1981 and 1982 for "lack of business," accord-
33 Catron had indicated earlier, however, that the routes sold to John-
son (identified later by Catron as a Handy Spot retiree) and Murovitz
had been served by employees represented by Local 848
1330 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ing to Catron, although he said that Handy Spot employ-
ees at that time "were working mostly for 595 anyway."
Catron stated that 12 independents now serve approxi-
mately the same geographical areas (but fewer accounts)
that had been previously served by its own employees.
Catron acknowledged receiving General Counsel's Ex-
hibits 3 and 4, letters of Union Business Representative
Radtke dated 13 July 1981 and 24 June 1982, each of
which had requested arbitration on the sale of accounts
to "outside jobbers." According to Catron, the issue
raised by both letters were resolved, without arbitration,
in meetings held between other company officials and
Business Representative Radtke.
Catron acknowledged that there were former employ-
ees other than Davis who had bought Handy Spot
routes, naming Pablo Rivas, Manuel Mena , Rudy Ayon,
and Dave Green, the latter being a former steward for
Local 848. Catron claimed that routes were made avail-
able, however, only because persons had retired or re-
signed. No employee was told, Catron said, that he had
to retire or resign in order to get a route.34
Catron identified the settlement agreement (G.C. Exh.
6) which he had signed on 6 December 1982. It was stip-
ulated that the employees named therein, Conrad Miran-
da, Joe Macias , and John Welch, were sent checks in
certain amounts ($1741.79, $2086.53, and $3023.53, re-
spectively) on 30 December 1982.35
Catron was questioned about certain correspondence
that had been stipulated into the record. Catron main-
tained that Handy Spot had fully complied with the set-
tlement agreement. In support of his position he referred
to Compliance Officer Robert Arey's letter of 13 July
1983 (G.C. Exh. 8(c)) which states, among other things,
that the General Counsel had "sustained the Regional
Director's approval of the Settlement Agreement" and
"the Employer may now comply with the terms there-
of." The compliance officer's letter points out that a
notice to employees must be posted, and contains a final
paragraph which reads:
As you have already supplied this office with a
letter dated December 7, 1982, addressed to the
Charging Party, requesting that contract negotia-
tions commence, and have also supplied this office
with evidence of payment of backpay pursuant to
the Settlement Agreement, the Employer need not
take any further action in these areas at this time.36
Catron said he heard nothing from the Union thereafter
until he received Business Representative Radtke's 16
November 1983 letter (G.C. Exh. 8(j)) requesting negoti-
a' Catron testified later that if former employees Rudy Ayon, Jack
Johnson , David Green, and Alan Davis had not retired or resigned they
might still be operating Handy Spot routes as employee -members of
Local 848 Catron added , however, that Handy Spot was able to reduce
its costs by converting its routes to independent operations Catron
claimed that the Company lost approximately $ 1 5 million between Feb-
ruary 1981 and mid-1982
an The parties stipulated that checks were only sent to these three
Handy Spot employees and that the amounts sent to them covered only
their wages and earned vacation No pension fund contributions or other
fringe payments were made on behalf of any employees
ae Catron testified on cross-examination that the Company did not
send another letter requesting bargaining after 8 December.
ations for certain "outside" personnel in the bargaining
unit . Catron helped Handy Spot's counsel prepare a
reply letter dated 16 December 1983 (G.C. Exh. 8(k)) re-
jecting the Union's request for bargaining. Respondent's
response recited that a joint contract with Local 848 and
Local 595 had expired on 30 September 1982 and that
Local 848 had waived its right to negotiate by failing to
participate in the later negotiations that took place be-
tween the Company and Local 595. Respondent's letter
adds that agreement was reached with Local 595 and
that the Company no longer had any "outside service-
men, outside helpers and outside checkers."
Catron did acknowledge that he had received a copy
of Compliance Officer Arey's letter of 3 November 1983
(G.C. Exh. 8(i)), which advised that Handy Spot's 7 De-
cember 1982 offer to bargain did not satisfy the Compa-
ny's "bargaining obligation nor toll its backpay liability
by attempting to fulfill the terms of the Settlement
Agreement before the Union's Appeal had been acted
upon." The compliance officer's letter also advised that
the matter had been submitted to the Board's Division of
Advice for consideration, concluding with the message
that approval of the settlement agreement would be
withdrawn unless the Company agreed to bargain with
the Union and to furnish certain payroll records within 5
days.37 Catron said he did not know that the Union had
appealed the Regional Director's approval of the settle-
ment agreement prior to his receipt of the Regional Di-
rector's 3 November 1983 letter.
Finally, Catron testified on direct that had Local 848
and Handy Spot met after Handy Spot had sent the
Union its 7 December 1982 "offer to bargain" letter, it
would have been his hope that a relationship could have
evolved whereby the drivers would have been willing to
work on a commission basis, drive their own trucks,
have their own health and welfare, "and so forth."
On cross-examination by the General Counsel, Catron
testified that once he decided to contract out the Handy
Spot routes in early 1981 he felt that the sooner it hap-
pened the better it would be for the Company. The
Company's policy, which was not ever reduced to wnt-
ing, did not allow the sale of routes to persons still in the
Company's employ. He agreed that Miranda and Macias,
who had worked for the Company as fill-in drivers, were
transferred to the warehouse and would have otherwise
been laid off. And, as it happened, they were laid off
anyway after working in the warehouse for several
weeks.
Catron did acknowledge receiving Local 848's letter
dated 28 June 1982 which expressed "a desire to com-
mence negotiations for a new contract as soon as possi-
ble" (G.C. Exh. 11). Catron said he made no response to
the Union's letter, although it had been the Company's
prior practice to respond to the Union's letters sent out
on "earlier contract expirations."
Under cross-examination by the Union 's counsel,
Catron said he had seen Union Officials Radtke and
Fizznoglia on occasion at Handy Spot premises during
3T The Regional Director did withdraw approval of the settlement
agreement on 20 January 1984 allegedly for the Company's failure to
comply with the settlement agreement (G C Exh 8(l))
HANDY SPOT, INC
1981 and 1982, but he had had no personal dealings with
either of them . Catron indicated he had only a general
knowledge of Handy Spot routes , but he furnished some
new information on Handy Spot routes that were con-
verted to independent operations . Catron stated that
there were 28 employees in the bargaining unit on 1 Feb-
ruary 1981 , 12 of whom were drivers servicing Handy
Spot routes . Catron testified that a policy covering the
sale of Handy Spot routes developed only after Route 80
(the Desert route) had been sold to Jack Johnson and
Route 82 (West Valley) had been sold to Marvin
Murovitz . 38Catron said that Route 80 became available
because John Welch had been reassigned to a "closer
route ." 39 Murovitz purchased Route 82 , or part of it
anyway , on 11 February 1981, but Catron did not know
how the route became available . 40 Catron acknowledged
that he did not inform the Union of the new policy or
tell his subordinates in management to do so.
The next route sold was to Ralph Vasquez, who took
over the West Valley route from Murovitz . This took
place in November 1981 when Murovitz asked for and
received a transfer to Route 9 or South Bay Route.
Route 9 became available , Catron said , because Handy
Spot employee Bob Lally , who had been servicing Route
9, had "some heart disease .. . and he subsequently re-
tired."
Catron indicated that the two Orange County Routes
(4 and 40) were converted to independent routes around
1 February 1982. Route 4 was sold first. He indicated
one route became available because "one fellow retired,"
and "the other one, I think , dust quit , left the company."
In April 1982 Wayne Williams bought Route 70.
Catron said he did not know which Handy Spot employ-
ee was serving the route then , but, according to Catron,
he would have "had to resign or retire ." "That's the
only condition under which we sold the routes ." Catron
stated.
Route 12 became available , Catron thought, by virtue
of retirement of Merrill Richman . Routes 8 and 10 had
also been serviced by members of the bargaining unit,
but Catron said he did not know how the routes became
available for sale.
According to Catron, Route 2 became available by
virtue of Rudy Ayon 's resignation . After "a week or
two" Rudy came back and bought the route.
Catron said that bargaining unit employees Conrad,
Miranda , and Joe Macias had driven routes for Handy
Spot , but neither had a permanent driving assignment.
Testifying on redirect , Catron said he had not in-
formed Local 848 of the new policy to convert its routes
because such information , even if the changeover was to
be by attrition , would cause "a great deal of unrest."
Moreover , Catron thought there was no obligation on
the part of the Company to inform the Union Catron
as Catron testified on redirect that the policy contemplated that all
Handy Spot routes "that became available " would be sold-which did
not necessarily mean that all routes would be sold
09 Catron agreed that Welch was not given a chance to buy Route 80
ahead of Johnson , whom he referred to as "a former employee "
40 Catron considered Pocoyma [sic ] and Granada Hills to be part of
"North Valley ," but he was skeptical that there had been a North Valley
route He stated that there was a route 8X or East Valley route which
included North Hollywood , Studio City, and Burbank
1331
said he did not expect the employees ' reaction-with em-
ployees "scrambling for routes"-that did come.
Finally , Catron acknowledged that even if Handy Spot
routes had not become vacant , there could have been ex-
tensive layoffs with the Company losing so many ac-
counts . And he indicated further that if the layoffs lasted
for 6 months or more , there would have been no duty to
recall the affected employees.
Ken Simon has been labor counsel for Respondent
since about 1970. He identified certain proposed settle-
ments that had been presented , including General Coun-
sel Exhibit 6, which was ultimately approved . According
to Simon , Compliance Officer Robert Arey told him on
6 December 1982 that the settlement would be ultimately
approved whether the Union agreed to it or not and that
Respondent "could go forward with implementing" it.
Simon said he told the compliance officer that he would
immediately advise the Union of its readiness to bargain
and did so by a letter (G.C. Exh . 8(a)) hand -delivered on
the following day. The Union did not respond, Simon
said According to Simon , backpay could not be comput-
ed initially but that it could be once the Union had failed
to respond in 5 days to the Company 's offer to bar-
gain .4 i Simon said he concluded that the Company
could then calculate backpay, pay it , and then "be free
of any further obligation under the settlement agree-
ment ." Simon told the compliance officer the basis of the
backpay computation , explaining, however , that the
"fringe benefit hasn 't been resolved ." At Simon's direc-
tion , the Company sent checks (G.C. Exhs. 16(a)-(f)) to
Handy Spot employees John Welch ($3023.03), Joe
Macias ($2086 . 53), and Conrad Miranda ($ 1741.79).
Simon identified a letter he wrote to Compliance Offi-
cer Arey on 8 July 1983 (G.C Exh. 8(b)) in response to
Arey 's request for information concerning the Compa-
ny's efforts to comply with the settlement agreement.
Simon also identified Arey 's response of 13 July 1983
which advised , inter alia, that approval of the settlement
agreement had been "sustained" by the General Counsel.
Simon said Arey then told him orally that the Union had
written letters (G.C. Exh . 8(e)) and (G.C. Exh . 8(f)),
claiming Respondent had not complied with the agree-
ment . Simon then wrote letters to Arey asserting that the
Company was in compliance with the settlement agree-
ment (G.C. Exhs . 8(g) and 8 (h)).42
Simon stated that Compliance Officer Arey informed
him around early November 1983 that the Company was
not in compliance with the settlement agreement first by
telephone and then by letter (G.C. Exh 8 (i)).43
41 Simon testified that there were four conditions in the settlement
agreement that could terminate backpay liability, and failure to respond
in 5 days was one of them
42 Simon explained that the request to bargain was sent to the Union
on the day Respondent had signed the agreement but that no notice
could be posted as fringe benefits had not yet been resolved and no
notice had been furnished to Respondent
43 Arey's letter of 3 November 1983 to Simon , which indicates that
Region 31 did not consider Respondent in compliance with the settle-
ment agreement, stated that "this matter was submitted to the Division of
Advice for consideration "
1332 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Simon acknowledged familiarity with the Union's 16
November 1983 request to bargain, his 16 December
1983 letter declining to do so (G.C. Exh. 8(k)) and the
Regional Director's letter of 20 January 1984 withdraw-
ing approval of the settlement agreement (G.C. Exh.
8(l)).
Simon maintained (on redirect) that the Board's Re-
gional Office had advised (prior to issuance of the com-
plaint) Respondent that all it need do to avoid withdraw-
al of the settlement agreement was to offer to bargain.
Compliance Officer Arey so advised him by phone and
in writing.44
Under cross-examination Simon admitted that when he
sent his 7 December 1982 letter to the Union he realized
that the Union did not agree to the settlement agreement
and that it had not been approved. Simon also acknowl-
edged having a "vague recollection" of the fact that the
Union had telephoned and requested bargaining after the
General Counsel had sustained the Regional Director's
approval of the settlement agreement
Analysis
A. Was the Regional Director justified in withdrawing
approval of the settlement agreement?
The first question to be determined is whether the Re-
gional Director properly withdrew the settlement agree-
ment which he had approved on 5 January 1983. As Re-
spondent points out, unless the General Counsel proved
Handy Spot violated the agreement, the withdrawal was
unjustified, and it must be reinstated. See E.S.I. Meats,
270 NLRB 1430 (1984); Hatfield Trucking Service, 270
NLRB 136 (1984); and K-Mart Corp., 242 NLRB 855
(1979), enfd. 626 F.2d 704 (9th Cir. 1980).
Respondent argues that the General Counsel has failed
to establish violation of the settlement agreement. It as-
serts that "the only particular in which Respondent is
even alleged to have violated the Settlement Agreement
is that it refused to bargain with the Charging Party in
response [to] its July 13 oral demand to bargain." Re-
spondent states that the General Counsel "must prove
that the Charging Party's demands to bargain declined
by Respondent were viable and effective because Re-
spondent's December 7, 1982, offer to bargain did not
have to be accepted by Charging Party during the pend-
ency of its Appeal of the Regional Director's unilateral
approval of the settlement agreement."
Respondent's argument on this issue is predicated on
the settlement agreement being immediately effective on
6 December 1982, the day the document was signed by
Handy Spot's president and submitted to the General
Counsel's Regional Office, and that the Charging Party
had only a limited time, 5 days, in which to "accept Re-
spondent's offer."45 Much is made of the testimony of
44 In support of this contention Simon referred to Arey's letter of 3
November 1983 (G C Exh 8(i)) and the Regional Director's letter of 20
January 1984 (G C Exh 8(l))
46 Quoting from R Br 15 "So at the time the Notice set a five-day
limit on Charging Party's time to accept an offer to bargain in order that
backpay not be cut off under the Transmanne remedy put in the Notice,
no appeal had yet been filed by Charging Party "
Respondent's counsel to the effect that a compliance offi-
cer in the General Counsel's Regional Office told him on
that day that the agreement was going to be approved
whether the Charging Party joined in it or not and that
the Respondent could "go forward with the implement-
ing." Respondent contends that the Charging Party acted
at its peril in refusing to respond to Respondent's De-
cember 1982 offer to bargain and the effectiveness of the
agreement "was not stayed by the Charging Party's
appeal."
The difficulty with Respondent's argument on this
issue is that it overlooks the express terms of the agree-
ment . The first line of the settlement agreement makes it
clear that the agreement, even if the Charging Party had
joined in, was "subject to the approval of the Regional
Director " Also, set forth in paragraph captioned, "RE-
FUSAL TO ISSUE COMPLAINT," these words
appear: "The Agreement is contingent upon the General
Counsel sustaining the Regional Director's action in the
event of a review." Further, in the paragraph captioned,
"PERFORMANCE," these words appear: "Performance
by the Charged Party with the terms and provisions of
this Agreement shall commence immediately after the
Agreement is approved by the Regional Director, or, if
the Charging Party does not enter into Agreement, per-
formance shall commence immediately upon receipt by
the Charged Party of advice that no review has been re-
quested or that the General Counsel has sustained the
Regional Director." The record herein established that
the Charging Party acted timely on being advised that
the appeal had been denied by making an oral offer to
bargain. Respondent's failure to respond favorably to the
Charging Party's offer to bargain in July 1983 in a timely
manner constituted a violation of the settlement agree-
ment.
It does appear that there was some passive assent on
the part of the Regional Office in Respondent's efforts to
effect early compliance with the settlement agreement.
Respondent's counsel consulted with the Region's com-
pliance officer and kept him advised concerning the
amount of backpay checks sent to Miranda, Macias, and
Welch, as well as the fact that an offer to bargain over
the establishment of independent contractor routes was
being made to the Charging Party. No doubt Respond-
ent's counsel was surprised to learn "out of the clear
blue sky" in November 1983 that the "matter was sub-
mitted to the Division of Advice for consideration" and
that Respondent's efforts at compliance "didn't count"
(R. Br. 18 ; G.C. Exh . 8(i)). But I am unable to hold, as
Respondent requests, that the Regional Office should be
held as estopped from withdrawing approval of the set-
tlement agreement and that the General Counsel should
be barred from proceeding herein. As I have indicated,
the settlement agreement was not to become operative in
any event until it was approved by the Regional Direc-
tor and, if appealed, not until the appeal had been acted
on by the General Counsel.
Respondent relies on Transportation Enterprises v.
NLRB, 630 F 2d 421 (5th Cir. 1980), in support of its po-
sition that the Region must be "found to have waived
the provisions of the Settlement Agreement delaying its
HANDY SPOT, INC. 1333
effectivity until Charging Party's appeal was deter-
mined." But Transportation Enterprises v. NLRB, is en-
tirely different from the case at bar, and the court's hold-
ing in the case does not in any way suggest that the con-
duct of the Region or the General Counsel here would
require dismissal of the instant proceeding. There are
many differences in the two cases. The Board in Trans-
portation Enterprises v. NLRB sought to hold a bus com-
pany for certain conduct after the Regional Director had
ruled that the Board had no jurisdiction over the firm.
The Union, which had petitioned the Regional Director
to take action against the bus company , did not appeal
the Regional Director's action. At a later time the Board
itself, following the holding of a representational hearing,
ruled that the Board did have jurisdiction over the com-
pany An unfair labor practice case was instituted still
later and an order entered against the company. The
court ruled, understandably, that the Regional Director's
unappealed ruling was a "final determination which
bound the parties and upon which they could rely with
confidence." Quoting from the court's opinion (630 F.2d
at 425):
[W]hen the Board has spoken, either directly or
through its regional director, and has declined to
exercise its jurisdiction, the employer is justified in
concluding that he is not subject to the Act and will
not be subjected to a retroactive application.
Distinguishing the case before it from other decisions
holding an employer's good-faith belief that it is acting
lawfully is not a defense to an unfair labor practice
charge, the court said (630 F.2d at 426)•
T.E.I.'s conduct was not guided solely by its own
or its counsel's views of NLRB jurisdiction. T.E.I.
was relying on a formal ruling by the regional
office that the Austin shuttle bus service was not
covered by the Act. We consider the contention
that T.E I could rely on this official action only at
its peril untenable.
The instant case involved no prior ruling of a Regional
Director on jurisdiction or any other issue . It involved,
rather, a settlement agreement which was contingent, by
its terms , on the Regional Director's approval and, if ap-
pealed, on action by the General Counsel. Here the Re-
gional Director did not approve of the instant settlement
agreement until Respondent's efforts to comply with its
bargaining obligation had come to an end. Further, the
Union had appealed the Regional Director's approval,
and the settlement agreement did not become effective
until the General Counsel acted thereon approximately 6
months later.46
46 Respondent questions whether the Charging Party made a proper
request to bargain in July 1983, but I credit Radtke 's testimony that he
telephoned Respondent ' s counsel within 5 days of getting notice of the
General Counsel 's action on the Union 's appeal and told him that he
wished to "sit down to negotiate an agreement with the routes" This
was sufficient to trigger Respondent 's duty to respond in a timely
manner, and it did not do so It was not necessary that the Union's re-
quest contain a demand to bargain over "the effects of the route change-
overs," as Respondent contends Nor was it significant whether the
Union's July 1983 offer to bargain conformed to its later November 1983
B. Did the sales of Respondent 's routes involve
unilateral transfers of unit work with such effects as to
require bargaining and, if so, was there a waiver on the
Union's part?
Respondent contends that there was "no unilateral
`subcontracting ' and transferring out of unit work" and,
thus , no bargaining "effects" because the changes in em-
ployee status of Respondent's drivers and checkers was
accomplished voluntarily.
Citing the testimony of Respondent 's president,
Catron, and Sales Vice President Shultz, Respondent
maintains that it disclosed and strictly adhered to a
policy of never selling a route unless it became vacant by
resignation or retirement . Had employees not left the
Company , Respondent asserts , none of the routes would
have been converted.47 Such policy, even if it had been
strictly enforced, did not satisfy Handy Spot's obligation
under the Act, however. It was not enough that routes
were sold only after they were vacated by resignation or
retirement . Nor is it a sufficient answer for Respondent
to say no employee was forced to give up his route. In
any event, Respondent never advised the Union that it
had such a policy so it could discuss the effects on the
bargaining unit . The effects of such unilateral action on
the bargaining unit was obviously devastating . See para-
graphs 6(a) and 12 of the parties' stipulations , General
Counsel's Exhibit 10.
An employer's unilateral change in a condition of em-
ployment, which certainly encompasses the sale of a
route served by his employees, while a collective-bar-
gaining relation continues , is clearly a violation of Sec-
tion 8(a)(5) of the Act. See NLRB v. Katz, 369 U.S. 736
(1962).
In its brief Respondent focuses on the supposed way
of how the routes became vacant and were thereafter
sold to Respondent's employees or others, which as indi-
cated above, misses the mark.48
I disagree with Respondent 's interpretation of the testi-
mony given by Conrad Miranda and Robert Fitzsim-
mons. The credible testimony of these two employees
persuaded me that their transfers and subsequent layoffs,
which unquestionably resulted from Respondent 's unilat-
eral action, were not voluntary choices on their part.
written request (G C Exh 8(f)) that Respondent commence contract ne-
gotiations regarding its outside personnel
The General Counsel contends that Respondent also violated the settle-
ment agreement by failing to pay fringe benefits to Miranda, Macias, and
Welch, as well as to other former employees The fact that the backpay
checks sent to the named employees did not include any fringes is appar-
ently not disputed by Respondent, but I need not rule on this issue, as I
find the settlement agreement was violated by Respondent 's failure to
bargain as agreed and in view of the counsel for the General Counsel's
statement that he was not asserting in this proceeding that "particular in-
dividuals are owed particular amounts of backpay "
19 Respondent adds, however, that had employees stayed on and busi-
ness fell off, the Company would consolidate routes as it had before, and
lay off employees with recall rights
4B Respondent's testimony on this point is not persuasive . I have some
difficulty accepting the assertion that Manuel Mena and Pablo Rivas re-
signed as employees to open another business and then decided to pur-
chase a Handy Spot route These employees hardly had time to open a
business and have it fail See R Exhs 3 and 4. One of Respondent's em-
ployees, Conrad Miranda, testified that Macias had been laid off as others
had been
1334 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Neither of the two cases cited by Respondent, Bernal,
Inc., 206 NLRB 72 (1973), and NLRB v. Transmarine
Navigation Corp., 380 F.2d 933 (9th Cir. 1967), is apposite
here. The challenged sale of part of a predecessor's busi-
ness that was involved in Bernal did not adversely affect
employees and the union involved did not protest in
spite of having advance notice of the sale . In Transmar-
ine, the court held that although that employer's decision
to terminate an operation and relocate its business was a
managerial one, it was under a duty to notify the union
sometime well in advance so the "effects" (pensions, va-
cations, etc.) on the displaced employees could be bar-
gained over.
Respondent's principal argument is based on waiver:
the Charging Party Union was aware of the route
changeovers and never demanded bargaining concerning
their effects, thus, acquiescing in Handy Spot's subcon-
tracting actions. I reject such contention.
The complaint challenges only route conversions that
occurred after or about 14 January 1982. The General
Counsel concedes that Radtke acquiesced in Respond-
ent's subcontracting of the "PSN [Palmdale-Saugus-Ne-
whall] and outlying Orange County routes"-even
though it is apparent from the record that he learned
about both of these conversions after they were fait ac-
compli.49 As the General Counsel's attorney points out,
citing Armour Oil Co., 253 NLRB 1104 (1981), and Ciba-
Geigy Pharmaceuticals Division, 264 NLRB 1013 (1982),
enfd. 722 F.2d 1120 (3d. Cir. 1983),50 acquiesence re-
garding these routes did not operate to waive the
Union's right to protest the sale of other Handy Spot
routes. The law is clear that a waiver of bargaining
rights is not to be lightly inferred. See Armour Oil Co.,
supra, and cases cited therein.
Radtke testified that he told Respondent's officials
Shultz and Bensler after sale of the PSN route that he
would file a grievance if Respondent sold additional
routes, and Respondent's officials assured him that such
would not happen. The remaining routes were then sold
off, and Respondent did not timely advise the Union
about any of them. The stipulation reached by the parties
(G.C. Exh. 10, par. 6) shows that nine Handy Spot
routes were converted between 1 February 1982 and 30
August 1982. All but two of these routes (Routes 4 and
40), which served Orange County and whose conver-
sions are not challenged here '51 served the metropolitan
area of Los Angeles (and, in some cases, communities
close by). Radtke testified credibly that Respondent
never advised the Union of the sale of any Handy Spot
routes. Any conversations Shultz had with Radtke con-
cerning the sale of Handy Spot routes, I am persuaded,
occurred well after the sales and taken place. 52 A bar-
49 The PSN or so-called Palmdale route was sold in 1981 and the
Orange County routes were sold in February 1982
so See also Benchmark Industries, 269 NLRB 1096 (1984), enfd 724
F 2d 974 (5th Cir 1984)
61 Radtke indicated his union had no jurisdiction over certain areas of
Orange County, like other areas somewhat distant from Los Angeles, and
were of little concern to him . See pars 6 and 10 of the stipulation (G C
Exh 10)
52 Shultz was the Handy Spot representative who dealt primarily with
the Union and was the company official most knowledgeable about labor
matters, but he was an uncertain witness Shultz admitted to having a
gaining request would have been futile , and a finding of
waiver concerning the sale of such routes in such cir-
cumstances is simply not possible . National Car Rental
System , 252 NLRB 159 (1980), modified 672 F.2d 1182
(3d Cir . 1982).
Respondent cites two cases , International Offset Corp.,
210 NLRB 854 (1974 ), and U. S. Lingerie Corp., 170
NLRB 750 (1968), in support of its contention that the
Charging Party waived its right to demand bargaining
over the route sales . Both are inapposite . It is enough to
say with respect to International Offset that the complaint
in that case was predicated on an alter ego theory and
contained no allegation that would put the Company "on
notice that it might be held answerable for a refusal to
bargain ." The union in U.S. Lingerie, unlike the Charging
Party here , was clearly on notice as a result of state-
ments made by the company 's president to the union's
president that the company was contemplating changes
in its operations (relocation of its plant) and made no at-
tempt to bring the issue to the bargaining table.
The testimony of Conrad Miranda and Robert Fitzsim-
mons supports the allegations of the complaint as it per-
tains to them (pars. 12(a) and 12(c)). The record estab-
lishes that each of them was assigned , due to the lack of
work resulting from the sale of Handy Spot routes, to
work outside of the bargaining unit and then laid off.
The General Counsel 's attorney refers to the testimony
of Miranda and Fitzsimmons under his summary of the
"Facts," but he does not request a specific finding on the
allegations in which these two employees are named.53
For the foregoing reasons I reach the following
CONCLUSIONS OF LAW
1. The Respondent, Handy Spot, Inc., is, and has been
at all times material, an employer engaged in commerce
and in a business affecting commerce within the meaning
of Section 2(6) and (7) of the Act.
2. The Union, Warehouse Delivery Drivers & Sales-
men Local 848, International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of America, is,
and has been at all times material, a labor organization
within the meaning of Section 2(5) of the Act.
3. The following described employees of Respondent
constituted an appropriate unit for purposes of collective
bargaining within the meaning of Section 9(b) of the
Act:
Included : All outside service men, outside helpers
and outside checker-service men employed by Re-
spondent.
Excluded: All other employees , office clerical em-
ployees , guards and supervisors as defined in the
Act.
poor memory His testimony whether he discussed the sale of routes with
Radtke and , if so when , was so vague and contradictory that I am unable
to credit it
as The complaint also challenges the transfer and layoff of Joe Macias,
but the General Counsel has not requested a specific finding with respect
to the allegations involving him The charge involving the alleged threat
of former Supervisor Luzell is being dismissed Counsel for the General
Counsel appears to have abandoned this charge and, moreover , as previ-
ously indicated, I do not find Luzell's proffered affidavit to be probative
HANDY SPOT, INC.
4. Respondent violated Section 8(a)(1) and (5) of the
Act beginning about January 1982 by unilaterally con-
verting all of its remaining delivery routes in the metro-
politan Los Angeles, California area and transferring
work out of the bargaining unit without prior notice to
the Union.
5. Respondent violated Section 8(a)(1) and (5) of the
Act about 13 July 1983 and thereafter by failing and re-
fusing to bargain collectively with the Union over the ef-
fects of selling its remaining delivery routes in the metro-
plitan Los Angeles, California area to independent con-
tractors.
6. Respondent has not been shown to have otherwise
violated the Act.
REMEDY
Having found that Handy Spot , Inc. engaged in unfair
labor practices , I shall recommend that it be ordered to
cease and desist therefrom and to take certain affirmative
action designed to effectuate the policies of the Act.
Having found that the Company violated Section
8(a)(1) and (5) of the Act by unilaterally selling its deliv-
ery routes in the metropolitan Los Angeles , California
area to independent contractors , I recommend that the
Company be ordered to cease such practices. And
having found that the Company violated Section 8(a)(5)
and (1) of the Act by refusing to bargain in good faith
with the Union , I also recommend that the Company be
ordered, on request , to bargain in good faith with the
Union as the exclusive representative of its employees in
the appropriate unit described above . Further , my rec-
ommended Order includes a limited backpay provision
designed to make whole the employees for losses suf-
fered after 14 January 1982 (when the 10(b) period
began) as a result of the 8 (a)(5) violation by requiring
Respondent to pay backpay to affected employees at the
rate of their normal wages when last in Respondent's
employ until the occurrence of the earliest of the follow-
ing conditions : ( 1) the date Respondent bargains to
agreement with the Union on the effects of the sale of its
delivery routes in the metropolitan Los Angeles, Califor-
nia area to independent contractors ; (2) a bona fide im-
passe in bargaining ; (3) they failure of the Union to re-
quest bargaining within 5 days of this decision, or to
commence negotiations within 5 days of Respondent's
notice of its desire to bargain with the Union ; or (4) the
subsequent failure of the Union to bargain in good faith;
but in no event shall the sum to any of Respondent's em-
ployees exceed the amount he would have earned as
wages from the date on which he would have been laid
off or terminated to the time he secured equivalent em-
ployment elsewhere or the date on which Respondent
offers to bargain , whichever occurs sooner ; provided,
however , that in no event shall this sum be less than
these affected employees would have earned for a 2-
week period at the rate of their normal wages when last
in Respondent's employ.54
°' See NLRB v. Transmarme Navigation Corp, 380 F 2d 933 (9th Cir
1967) Also Avila Group, Inc., 218 NLRB 633 (1975), and cases cited in
National Family Opinion, Inc, 246 NLRB 521 (1979).
1335
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed55
ORDER
The Respondent, Handy Spot, Inc., Los Angeles, Cali-
fornia, its officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Refusing to bargain in good faith with Warehouse
Delivery Drivers and Salesmen, Local 848, International
Brotherhood of Teamsters, Chauffeurs, Warehousemen
and Helpers of America concerning the effects of selling
of its delivery routes in the metropolitan Los Angeles,
California area to independent contractors.
(b) In any like or related manner interfering with, re-
straining , or coercing its employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) On request, bargain collectively with Warehouse
Delivery Drivers and Salesmen , Local 848, International
Brotherhood of Teamsters, Chauffeurs, Warehousemen
and Helpers of America with respect to the effects on its
outside service men, outside helpers, and outside check-
er-service men of its decision to sell its delivery routes in
the metropolitan Los Angeles, California area to inde-
pendent contractors. '
(b) Make whole all employees who were transferred,
laid off, or terminated on and after 14 January 1982 in
the manner set forth in the remedy section of the deci-
sion by reason of Respondent's sale of delivery routes in
the metropolitan Los Angeles, California area to inde-
pendent contractors.
(c) Preserve and, on request, make available to the
Board or its agents for examination and copying, all pay-
roll records, social security payment records, timecards,
personnel records and reports, and all other records nec-
essary to analyze the amount of backpay due under the
terms of this Order
(d) Mail a copy of the attached marked "Appendix"56
to the Union and to all employees in the above-described
appropriate unit . Copies of such notice, on forms provid-
ed by the Regional Director for Region 31, after being
duly signed by its authorized representative, shall be
mailed immediately on receipt thereof at their last known
address.
(e) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondent has taken to comply.
as If no exceptions are filed as provided by Sec 102 46 of the Board's
Rules and Regulations, the findings, conclusions, and recommended
Order shall, as provided in Sec 102 48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses
58 If this Order is enforced by a judgment of a United States court of
appeals, the words in the notice reading "Posted by Order of the Nation-
al 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 "
* U.S. GOVERNMENT PRINTING OFFICE : 1988 0 - 192-343