Industrial Feeding and Catering Service

National Labor Relations Board - Board Decisions

Mar 14, 1975

216 N.L.R.B. 1098 (N.L.R.B. 1975)

1098 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
John W . Davis, d/b/a Industrial Feeding and Catering
Service and General Teamsters Local No. 439,
International Brotherhood of Teamsters , Chauf-
feurs, Warehousemen and Helpers of America.
Case 20-CA-9000
March 14, 1975
DECISION AND ORDER
BY MEMBERS JENKINS, KENNEDY, AND
PENELLO
On December 12, 1974, Administrative Law Judge
Jerrold H. Shapiro issued the attached Decision in
this proceeding. Thereafter, the General Counsel
filed exceptions and a supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions and brief
and has decided to affirm the rulings, findings,' and
conclusions of the Administrative Law Judge and to
adopt his recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the complaint
herein be, and it hereby is, dismissed in its entirety.
1 The General Counsel has excepted to certain credibility findings made
by the Administrative Law Judge . It is the Board 's established policy not to
overrule an Administrative Law Judge's resolutions with respect to
credibility unless the clear preponderance of all of the relevant evidence
convinces us that the resolutions are incorrect . Standard Dry Wall Products,
Inc., 91 NLRB 544 (1950), enfd . 188 F.2d 362 (C.A. 3, 1951). We have
carefully examined the record and find no basis for reversing his findings.
DECISION
STATEMENT OF THE CASE
JERROLD H . SHAPIRO, Administrative Law Judge: The
hearing in this case , held on November 14, 1974,1 is based
on unfair labor practice charges filed by the above-named
Union on February 28, as amended March 29, and a
complaint issued April 15 on behalf of the General
Counsel of the National Labor Relations Board , hereafter
called the Board , by the Regional Director for Region 20
of the Board , alleging that the above-named Respondent
had engaged in, and was engaging in, unfair labor practices
affecting commerce within the meaning of Section 8(axl),
(3), and (5), and Section 2(6) and (7) of the National Labor
1 All dates hereafter , unless otherwise specified , refer to 1974.
2 The Board in its Order issued September 18 denying General Counsel's
Motion for Summary Judgment, was of the opinion that Respondent's
letters to the Regional Director and to counsel for the General Counsel were
sufficient to operate as a timely denial of the alleged unfair labor practices.
216 NLRB No. 191
Relations Act, hereafter called the Act. Respondent fileo
an answer denying the commission of the alleged unfair
labor practices.2
Upon the entire record, and from my observation of the
demeanor of the witnesses, and having considered the
posthearing brief filed by the General Counsel, I make the
following:
FINDINGS OF FACT
I. THE BUSINESS OF RESPONDENT
Respondent is an individual, John W. Davis, doing
business in Stockton , California, and vicinity, as a sole
proprietor operating a restaurant , an in-plant feeding
service, and an industrial catering service for retail
customers under the trade name of Industrial Feeding and
Catering Service . During the past calendar year , Respon-
dent received gross revenues in excess of $500,000 from his
business operations and purchased supplies valued over
$10,000 from suppliers located within California who
received the supplies directly from outside California.
Based on the foregoing, I find Respondent is an employer
engaged in commerce within the meaning of Section 2(6)
and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
General Teamsters Local No. 439, International Brother-
hood of Teamsters , Chauffeurs, Warehousemen and
Helpers of America, hereafter called the Union, is
admittedly a labor organization within the meaning of
Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Questions To Be Decided
The questions to be decided, broadly stated, are the
motivation of Respondent in deciding to change his
method of distributing foods and beverages and, whether
Respondent afforded the Union, the mobile catering
drivers' bargaining representative , an opportunity to
bargain over the decision to change Respondent 's method
of distribution and over the decision's impact upon the
drivers' terms and conditions of employment.
B. The Facts
Respondent's mobile catering service is the part of his
business involved in the instant unfair labor practice
proceeding. On February 25, the date the alleged unfair
labor practices occurred, there were five regular catering
drivers in Respondent's employ. They drove mobile
catering lunch trucks owned by Respondent and sold food
and beverages to employees employed by commercial
establishments. Each driver had an assigned route covering
a defined area with specific groups of customers to be
serviced at certain times of the day. The drivers had been
At the hearing, counsel for the General Counsel sought to have stricken the
last sentence of Respondent's letter addressed to him which contains
scandalous and scurrilous language . Upon reconsideration , the motion is
granted, and this portion of the letter is hereby stricken.
INDUSTRIAL FEEDING & CATERING SERVICE 1099
represented by the Union since November 1971. On April
13, 1972, Respondent entered into a collective-bargaining
agreement with the Union covering the drivers, which is
effective until December 31, 1974. The agreement provides,
among other things, that the drivers be paid a weekly
salary plus commission.
This proceeding involves Respondent's decision to
change the status of the mobile catering drivers from
employees, whose terms and conditions of,employment are
governed by the Union's collective-bargaining agreement,
to that of independent contractors not covered by any such
agreement. The facts pertinent to an evaluation of
Respondent's conduct are set out herein.
Respondent, during the summer of 1973, consulted an
attorney about leasing his mobile catering trucks and
routes to the drivers and, to help the attorney, secured lease
agreements used by other employers in the industry. Also,
Respondent told his drivers it was possible he would
distribute the food and beverages to his catering service's
customers using a lease arrangement. In August 1973,
Respondent told drivers Guzman and Flemings that he
was thinking of having them lease the trucks they drove
and predicted they would be able to earn more money
leasing the trucks than they were currently earning working
on salary and commission . Likewise, in January 1974,
Respondent told drivers Dunn and Thompson he was
thinking about leasing the catering trucks to the drivers,
but his attorney was working on the details.
In addition to mentioning a possible lease arrangement
to his drivers, Respondent, during the same period, August
1973 through January 1974, had several brief conversations
on the subject with Ace Hatton, the Union's representative
responsible for administering the collective-bargaining
agreement, which covered the drivers. Hatton visited
Respondent's premises to discuss Respondent's failure to
make payments into the contractual health and welfare
fund. The subject of the lease agreement was also
discussed.
Specifically, it is undisputed that in August, September,
and October 1973 Respondent advised Union Representa-
tive Hatton that he was considering operating the catering
service using a lease arrangement under which the drivers
would lease their trucks and routes. Likewise, it is
undisputed that on January 24, Respondent advised
Hatton that Respondent had decided he would definitely
change to a lease arrangement with the drivers. Hatton
testified that at all times he told Respondent that during
the term of the current collective-bargaining agreement the
drivers would not have to agree to work under a lease
agreement and that the Union wanted the opportunity to
discuss such a change before it was effectuated. Respon-
dent, on the other hand, testified that whenever Respon-
dent advised Hatton he was contemplating changing over
to a lease arrangement , and when he eventually told
Hatton on January 24 that he had decided to do this, that
Hatton refused to discuss the matter taking the position
"you cannot do it" and told Respondent that the matter
was not negotiable. Respondent further testified that
Hatton's adamant refusal to discuss the subject resulted in
Respondent's failure to ever give a copy of the lease
agreement to the Union. Of the two witnesses, Respondent
impressed me as the more trustworthy and reliable, and I
credit his version of the discussions with Hatton involving
the drivers' lease agreement.
In January, apparently after his January 24 conversation
with Union Representative Hatton, Respondent entered
into a lease agreement with the catering driver who worked
nights, Robin Taylor. Thereafter, on February 22, Respon-
dent notified the four catering drivers employed on days of
his decision to have them lease their trucks and routes.
Drivers Guzman and Flemings were told by Respondent
that he had decided to lease them their trucks and routes,
gave them each a copy of the lease agreement, explained
the agreement in general terms, and indicated it was a legal
agreement which had been approved by the Union and
asked Guzman and Flemings to notify him the next day if
they would agree to enter into such an arrangement.
In the case of driver Dunn, as Dunn credibly testified,
Respondent on Friday, February 22, gave her a copy of the
lease agreement. Later that day, Dunn informed Respon-
dent she was not interested in signing the agreement. On
Sunday, February 24, the drivers' immediate supervisor,
Manager Jeanie Ragsdale, visited Dunn and stated that
Respondent wanted Dunn to tell the other drivers she had
signed the lease agreement. When Dunn refused to agree to
this ploy, she received a phone call later that day from
Respondent, who said Dunn could still drive for Respon-
dent, even if she did not execute the lease agreement
provided she told the other drivers she had signed the
agreement. Dunn agreed to consider the proposition and to
notify Respondent of her decision.
Regarding driver Thompson, Respondent, on Friday,
February 22, handed her a copy of the lease agreement and
left the room whereupon, Manager Ragsdale, in an effort
to convince Thompson to sign the agreement, represented
that driver Dunn had already signed, thus leaving only
three routes and that Respondent intended to eliminate
one route, which would leave just two for the three
remaining drivers. Ragsdale warned that, if Thompson did
not sign the agreement immediately, she was in danger of
losing her job.
During the weekend, the Union's representatives learned
about Respondent's ultimatum that the drivers sign the
lease agreement if they desired to continue working. The
result was that on Monday, February 25, when drivers
Guzman, Dunn, Flemings, and Thompson reported for
work, they were accompanied by Union Representatives
Hatton and Connolly. Respondent asked the drivers if they
would sign the lease agreement . Each replied in the
negative. Respondent told them they were discharged, or
voiced words to that effect, and prepared their final
paychecks. At some time during the exit interview, one of
the Union's representatives asked, in substance, if Respon-
dent did not intend to acknowledge the fact he had a
collective-bargaining agreement with the Union. Respon-
dent answered that the agreement was worth as much as
the paper it was written on and that he did not have to
abide by it .3
3 The description in the text of the pertinent remarks made during the testimony of Dunn, Thompson , Guzman , Flemings, and Hatton, which
drivers ' exit interview on February 25 is based on a synthesis of the credible testimony is not specifically contradicted by the Respondent 's version of
this meeting.
1100 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Following the discharge of his four day-shift catering
drivers, Respondent replaced them with persons who
executed the lease agreement. The only regular driver not
discharged was the one night-shift driver, Taylor, who as
described earlier, in January, had signed a lease agreement.
The lease agreement, which the drivers refused to
execute, significantly effected their terms and conditions of
employment. For example, it changed completely the
drivers method of compensation, effectively eliminated all
contractual fringe benefits, and changed their conditions of
employment in other substantial respects.
C. Conclusions
1. The alleged unlawful discharges
The complaint, in substance, alleges that Respondent
violated Section 8(a)(3) and (1) of the Act by discharging
his mobile catering drivers employed on days because of
their union membership, and because they engaged in
concerted activities for the purpose of collective bargain-
ing. The drivers, as described previously, were discharged
on February 25 because they refused to work for
Respondent pursuant to the terms of a lease agreement.
Respondent's explanation for changing to the lease
arrangement, which resulted in the drivers' discharge, is
undisputed and can be briefly stated.
The mobile catering service was losing money, in large
part, because Respondent's competition was almost all
independently operated, thus, unlike Respondent, not
bound by the terms of a collective-bargaining agreement.
For this reason, competitors had an advantage over
Respondent. The loss of money incurred in operating the
catering service was substantial enough , Respondent
credibly testified, to force him to decide whether to go
completely out of this business or to change his method of
distribution by leasing the trucks and routes to the drivers.
In deciding to lease the trucks and routes rather than go
out of business, Respondent believed he would be able to
compete better against the other mobile catering services,
also, the lease arrangement would give the drivers more of
an incentive to increase their sales and to guard their
merchandise against theft .4
In my opinion, the contention of the General Counsel
that Respondent's change over to a lease arrangement was
discriminatorily motivated is not supported by a prepon-
derance of the evidence . Respondent was losing money, a
condition which Respondent believed was caused in part
by the Union's collective-bargaining agreement and in part
by the failure of his drivers to exercise sufficient incentive
in making sales and preventing theft. The mere fact that
Respondent considered the union contract as a factor in
his decision to change his method of operation does not
constitute an admission that he was motivated by union
animus or by a desire to retaliate against the drivers
because they were represented by the Union. Otherwise,
4 It was not unusual for customers to take food or beverages from the
mobile catering trucks without paying . In fact, Respondent's drivers, on
occasion, observed them do this without protest . Since the merchandise
belonged to Respondent, he suffered the loss which apparently contributed
every time a unionized employer who is losing money
frankly admits that he evaluated the effect of the union
contract in making a managerial decision to change his
method of operation , he would be subject to charges of
discriminatory conduct . See Plymouth Industries Inc., 177
NLRB 607, 613 ( 1969). Also, see International Ladies'
Garment Workers Union [McLoughlin Mfg. Corp.] v.
N.L.R.B., 463 F.2d 907 , 919-921 (C.A.D.C., 1972), where in
enforcing the Board 's Order in a case where an employer
relocated because of economic hardship resulting in part
from its union contract , the Court refused to infer that the
"purpose of the move itself was discriminatory" or "part of
a scheme to rid itself of the union ," even though the
employer fraudulently concealed his decision to relocate
from the union and failed to bargain with it about that
decision.
In evaluating Respondent's motive for engaging in the
conduct involved herein , I have taken into account his
misrepresentations and other underhanded conducted
designed to secure the drivers' signatures on the lease
agreements , his failure to make contractual health and
welfare payments , his use of profane language, his
assertion that the union contract was worthless ,5 and am of
the opinion that this is not the type of evidence sufficient
to establish discriminatory motivation and taint the
legitimate business considerations which existed for Re-
spondent 's decision to change his method of operation.
For all of the aforesaid reasons, I find that the General
Counsel has failed to prove by a preponderance of the
evidence that , in deciding to change his method of
operation , Respondent was motivated by impermissible
discriminatory considerations rather than by legitimate
business reasons . Accordingly, I shall recommend that the
portion of the complaint alleging the discriminatory
discharge of the four drivers be dismissed.
2. The alleged refusal to bargain
The complaint, in substance, alleges that Respondent
violated Section 8(a)(5) and (1) of the Act by, without
bargaining to an impasse or agreement with the Union,
unilaterally contracting out the operation of its catering
trucks and abolishing all of the work in the bargaining unit.
In support of the allegation, the General Counsel urges in
his posthearing brief that "Respondent did not afford the
opportunity for discussion and negotiation of the terms
and conditions under which the employees would become
owner-operators." The record does not support this
contention . Respondent, as I have previously found, in
August, September, and October 1973, notified Union
Representative Hatton that he was considering changing
his method of operation by leasing the catering trucks and
routes to the drivers. Then, on January 24, about 1 month
before this lease arrangement was placed into effect,
Respondent notified Hatton of his intent to operate using
to the catering service's unsatisfactory economic condition . Under the lease
arrangement, the drivers ' inventory - which must be purchased from
Respondent - is paid for and owned by the drivers , who now presumably
exercise greater vigilance against theft.
S This remark was made after Respondent had changed its method of
operation.
INDUSTRIAL FEEDING & CATERING SERVICE
such an arrangement . Plainly an adequate opportunity
existed for the Union to negotiate over the Respondent's
decision to service its customers using lessor -operators or
to negotiate about the impending effect of such a change
upon the drivers represented by the Union. The Union,
however, took the position that it was not proper during
the term of the current collective -bargaining agreement for
Respondent to change to this new method of distribution,
and for this reason adamantly refused to discuss the
subject with Respondent . In other words , the Union never
tested Respondent's willingness to bargain in good faith
over the matters involved herein, rather it took the position
that Respondent could not lease out its trucks and routes.
Under these circumstances , I conclude that the Union's
fixed position establishes that the parties had reached an
impasse or that the Union waived its bargaining rights. The
Respondent , whichever way the matter is viewed, in these
circumstances , was free to institute changes in its method
of distributing food and beverages by leasing out its trucks
and routes to the drivers . I shall , therefore, recommend
that this portion of the complaint be dismissed in its
entirety.
Of course, if the lease agreement did not create an
independent contractor relationship, and the drivers
remained employees, then Respondent violated Section
8(a)(5) and (1) of the Act by inducing them to enter into
employment agreements in derogation of their bargaining
representative and by modifying the existing collective-
bargaining agreement , without complying with the require-
6 In the event no exceptions are filed as provided by Sec . 102.46 of the
Rules and Regulations of the National Labor Relations Board, the findings,
conclusions , and recommended Order herein shall, as provided in Sec.
1101
ments of Section 8(d) of the Act. E.g., Carnation Company,
172 NLRB 1876 (1968). The complaint, however, is not
broad enough to encompasse these violations. It simply
alleges that Respondent without bargaining to an impasse
or agreement with the Union engaged in two acts, namely,
"contracted out the operations of trucks used to provide
catering service" and "abolished all the jobs in the
[appropriate unit]." Counsel for the General Counsel has
never urged that the theory of the complaint is that the
drivers, despite the lease agreement, have remained
employees. Nor does the language of the complaint
remotely suggest such a theory. Indeed, the General
Counsel's posthearing brief does not raise this as an issue
in the case. Under the circumstances, I am not satisfied
that Respondent, or for that matter Counsel for the
General Counsel, was sufficiently put on notice that the
question of whether the lease agreement created an
independent contractor relationship, as well as the unilat-
eral aspect thereof, was an issue to be litigated in the case.
For these reasons, I have not decided whether the lease
agreement created an independent contractor relationship
between Respondent and the drivers.
Upon the foregoing findings of fact, conclusions of law,
and the entire record, and pursuant to Section 10(c) of the
Act, I hereby issue the following recommended:
ORDER6
The complaint is dismissed in its entirety.
102.48 of the Rules and Regulations, be adopted by the Board and become
its findings, conclusions , and Order , and all objections thereto shall be
deemed waived for all purposes.