Operating Engineers Local 701 (Lease Co.)

National Labor Relations Board - Board Decisions

Sep 25, 1985

276 N.L.R.B. 597 (N.L.R.B. 1985)

OPERATING ENGINEERS LOCAL 701 (LEASE CO.)
International Union of Operating Engineers, Local
No. 701 , AFL-CIO; Oregon Columbia Chapter,
the Associated General Contractors of America,
Inc. and Howard S. Lease Construction Co. &
Associates . Case 36-CE-13
25 September 1985
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
DENNIS AND JOHANSEN
Upon charges filed by Howard S. Lease Con-
struction Co. & Associates (Lease or the Charging
Party) the General Counsel of the National Labor
Relations Board issued a complaint on 16 February
1977 against the International Union of Operating
Engineers , Local No. 701, AFL-CIO, and Oregon
Columbia Chapter, the Associated General Con-
tractors of America, Inc. (Local 701 and AGC, re-
spectively, or the Respondents) alleging they vio-
lated Section 8(e) of the National Labor Relations
Act. On 28 February and 14 March 1977 Local 701
and AGC, respectively, filed answers admitting in
part and denying in part the allegations in the com-
plaint.
On 31 May 1977 the parties filed with the Board
a motion to transfer this proceeding to the Board
and a stipulation of facts. The parties stipulated to
the contents of the record and agreed that no oral
testimony was necessary or desired. The parties
further stipulated that they waived a hearing before
an administrative law judge, the making of findings
of fact and conclusions of law by a judge, and the
issuance of a judge's decision, and desired to
submit this case directly to the Board for findings
of fact, conclusions of law, and an order. The Gen-
eral 'Counsel, the Charging Party, and the Re-
spondent AGC filed briefs with the Board.
On 29 July 1977 the Board issued its order ap-
proving the stipulation and transferring the pro-
ceeding to the Board. Thereafter, the Respondents
and the Charging Party filed briefs in support of
their positions. i
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered- the entire record, as
stipulated to by the parties, as well as their briefs,
and makes the following
i As the record , and the briefs adequately present the issues and the
positions of the parties , Local 701's request for oral argument is denied
AGC's motion for leave to file a supplemental brief is denied
FINDINGS OF FACT
597
1. THE BUSINESS OF THE EMPLOYER
The parties stipulated that Lease is a Washington
corporation engaged in general construction in var-
ious States of the United States including Oregon
and Washington. During the year prior to the stip-
ulation, Lease, in the course and conduct of its
construction business, purchased goods, materials,
and supplies valued in excess of $50,000 which
were shipped to Lease directly from points outside
Oregon.
AGC is an association of employers engaged in
all types of construction work throughout Oregon
and five counties in the southwestern portion of
Washington. The employer-members of AGC, in-
cluding Lease, have delegated their collective-bar-
gaining authority to AGC for the purpose, inter
alia, of negotiating and entering into collective-bar-
gaining contracts on behalf of its employer-mem-
bers with the bargaining representatives of their
employees, including Local 701. During the year
prior to the stipulation, the employer-members of
AGC, in the course and conduct of their business-
es, purchased goods, materials, and supplies valued
in excess- of $50,000 which were shipped to these
employer-members directly from States of the
United States other than Oregon and Washington.
The 'parties stipulated, and we find, that Lease
and AGC are now, and at all material times herein
were, employers within the meaning of Section
2(2) of the Act, and engaged in commerce within
the meaning of Section 2(6) and (7) of the Act.2
II. THE LABOR ORGANIZATION INVOLVED
The parties ` stipulated, and we find. that Re-
spondent Local 701 is a labor organization within
the meaning of Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The'Issues
The primary issue in this proceeding is whether
the Respondents have violated Section 8(e) of the
Act by reaffirming the owner-operator provision in
the Master Labor Agreement between Respondent
AGC and Respondent 701, effective 1 June 1975,
and expiring 31 May 1980. With respect to this al-
leged reaffirmation of the owner-operator provi-
sion, a related issue is presented regarding whether
2 Although the stipulated facts do not unambiguously support findings
that Lease and AGC meet the statutory or discretionary jurisdictional
standards of the Board, we are in this case construing those stipulated
facts broadly in light of the parties ' further stipulation that Lease and
AGC are engaged in commerce within the meaning of Sec 2(6) and (7)
of the Act
276 NLRB No. 77
598 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the owner-operators here involved, Bud Hawks
Excavating and Ray Stickel Excavation, are inde-
pendent- contractors or employees of Charging
Party Lease.
B. Facts
The Master Labor Agreement between the ' Re-
spondents'covers a unit of,operating engineers em-
ployed by- approximately 200 employers represent-
ed by Respondent- AGC, including Lease, and
covers all of Oregon and portions of Washington.
This agreement includes an owner=operator provi-
sion, set forth in article XVIII, section 17, as fol-
lows:
When, equipment belonging to an Owner-Op-
erator is used on any, job, the operator of said
equipment shall be on the payroll of the Con-
tractor and come under all the "terms and con-
ditions of this Agreement, includiing' Schedule
Schedule A' specifies, inter alia, the man-hour
contributions applicable to health and welfare,
pension, and -vacation benefits, and also pro-
vides for overtime, premium,. and-other supple-
mental pay, rates.3 Articles XXIV, XXV, and
XXVI of the 'agreement outline the obligation
of the signatory employers to make the sched-
ule A man-hour contributions to existing trusts
for the purpose of providing these respective
health and welfare, pension,. and vacation ben-
efits "to all eligible employees covered by this
Agreement." In each of these three articles,
section 2 provides: '
In the event an Employer fails to make the
monetary contributions in -conformity with
this Article, the Union is free to take any
economic action against such contractor it
deems necessary and such action shall not be
considered a violation of this Agreement.
The agreement also includes a union-security
clause, contained in article V.4
Lease was awarded the construction contract for
the 'Eagle Point High School' at Eagle Point,
"Oregon, and commenced construction work on 15
In relevant part, schedule A'states as follows '
HEALTH AND WELFARE-Effective June 1, 1975, seventy five
(75) cents per compensable man-hour Effective June 1, 1976, one
dollar ( 100) per compensable man-hour PENSION-Effective June
1, 1975, one dollar ( 1 00) per compensable man-hour
VACATION-Effective June 1, 1975, fifty (50) cents per compensa-
ble man-hour
' The union-security clause states in full
All workmen employed by the Employers to perform work covered
within this Agreement'shall become members of the Union not later
than the eighth (8th) day following the beginning of such employ-
ment, and shall maintain membership in good standing in said union
as a condition of employment
April 1975. Apart from the equipment operators'
work discussed. below,- Lease -subcontracted all
work on the project except concrete construction
and carpentry work, for which latter work Lease
employed carpenters and laborers who were mem-
bers of their respective trade unions and covered
by labor agreements with those unions.
During the period 1975-1976, Lease entered into
verbal agreements with Hawks and Stickel, who
were voluntary members of Local 701, to perform
foundation excavating work at the site. The record
shows that Hawks worked for Lease. from May
1975 to May 1976 and that Stickel worked for at
least 2 months in mid-1975, and for a few days in
December 1975. Hawks and Stickel each owns his
own excavation equipment including a truck, trail-
er, and backhoe. They advertise in the local classi-
fied phone directory, are licensed and bonded
under Oregon's contractors licensing law, and have
their own Federal employer identification numbers.
Both quoted their prices to Lease, which were- flat
hourly rates for both labor and' equipment, and
Lease accepted their prices. Each invoiced Lease
for the hourly rate under the oral agreements, and
each kept his ' own hours of labor., No overtime
payments were due under this arrangement. Each
had other contracts . being performed at the, same
time they were working on the Eagle Point High
School. project. On three occasions, these other
jobs required that they temporarily' leave the high
school project for short periods of time, and on
one of these occasions Lease was required to con-
tract necessary excavating work to a, general con-
tracting firm. '
Hawks and Stickel have performed excavating
work, such as digging septic tanks, drain lines,
foundations, and general excavation work, for ap-
proximately 100 customers, some of whom `were
homeowners while others were general contrac-
tors. Hawks and Stickel do not participate in' ,any
employee' benefit plans of tease or any other cus-
tomer. They determine the type of equipment they
purchase, arrange their own 'financing, are free to
sell the equipment at any time, are responsible for
all PUC permits and traffic violations with respect
to the moving of their equipment, and pay all costs
of repair, service, and maintenance on their equip-
ment. They make all decisions as to what mainte-
nance is to be performed, when it will be done, and
by whom.
Lease did not prohibit them from employing, em-
ployees to work at the site and did not-control the
amount of wages or other working conditions of
such employees if so employed. Lease did not par-
ticipate in any profits that either Hawks or Stickel
might make on the project, did not assume any
OPERATING ENGINEERS LOCAL 701 (LEASE CO.)
risks of operational losses either might incur, and
did not own any interest in their equipment or their
business operations. Lease did not make workmen's
compensation, unemployment, or social security
payments for Hawks and Stickel, and made no
withholdings on the invoiced payments to them.
Further, Lease did not insure them in any way, did
not assume any obligations for premiums on per-
formance bonds or fidelity bonds regarding their
work, and did not assume any liability resulting
from their work.
With regard to the work at the jobsite, Hawks
and Stickel were given lines and grades and in-
structed to excavate to those ends. The decisions as
to which work to do, the sequence of' operations,
and the methods of excavation were left to Hawks
and Stickel. Both tried to coordinate their work so
that other operations on the project were not de-
layed,' and occasionally the job superintendent
would request, and they would perform, a different
operation to help with job coordination and se-
quence. During the weeks commencing 12 and 26
August 1975, Lease directly employed Hawks'as an
employee for a period of 50 hours when his equip-
ment was broken down, and provided Hawks with
rented equipment to continue the excavating work.
During-this 50-hour period, Hawks was covered by
the collective-bargaining agreement, including
schedule A.
Aside from Hawks and Stickel, whose status is in
dispute, the parties stipulated that the only other
employees of Lease on this construction site who
were members of Local 701 were two forklift oper-
ators.5 One of them was employed for approxi-
mately 1 week during mid-1975, and the other
worked for approximately 18 months.
In general, the record establishes that most con-
tractors in Oregon who undertake projects similar
to those, undertaken by Lease do not own the
equipment necessary to perform excavation work
such as that performed by Hawks and Stickel and
that it is a common practice for such contractors to
have excavation work performed by owners of
equipment like Hawks and Stickel.
On 22 March 1976 the trust funds' administrator
made-a demand on Lease for contributions to the
trust funds on behalf of Hawks and Stickel. The
parties stipulated that this administrator acted as an
agent of the trustees of these funds. 6 On 31 March
1976, pursuant to an inquiry from Lease, Respond-
ent AGC took the position that Lease was required
5 Lease has also employed, apparently at other construction sites, crane
operators who have been members of Local 701
6 The employer trustees of these funds were appointed by Respondent
AGC, and the union trustees were appointed by Respondent Local 701
Either Respondent has the authority to remove trustees appointed by it
599
under the owner -operator provision set forth above
to make the contributions to the trust funds on
behalf of any owner-operators that it hired directly.
On 21 May 1976 Lease filed the, charge in the iii-
stant proceeding..On 25 May 1976 Local 701 filed
a grievance in relation to Hawks' request for- pay
for several days in April and May 1976 , as well- as
the Local 's request that "all fringes be paid accord-
ing to agreement." -
Local 701 has approximately 3500 members, of
whom approximately 400 are owner -operators of
various types of equipment covered by the Master
Labor Agreement . An approximately equal number
of owner -operators in Local 701 's jurisdiction are
not members . In the event an owner-operator sig-
natory to the Master Labor Agreement employs
employees to operate his equipment on the job, the
parties agree that the owner -operator is a subcon-
tractor and subject to the terms of article VIII of
the Master Labor Agreement which prohibits em-
ployers covered by the Master Agreement from
subcontracting such work to "any person , firm or
company" who does not have an existing , labor
agreement with Local 701 covering such work.
The parties also agree that the owner-operator
clause of article XVIII has been interpreted to
apply , at all times to all jobsites of signatory em-
ployers regardless of whether or not signatory em-
ployers themselves employ Local 701 members at
said jobsites.
C. Contentions of the Parties
The General Counsel and Lease essentially con-
tend that the owner-operator clause. of the Master
Labor Agreement is secondary on its face in that it
requires the signatory contractors to refrain from
doing business with , any owner-operator who is an
independent contractor , and- that it is unlawful
under the Supreme Court's decision in Connell
Construction Co. v. Plumbers & Steamfitters Local
100, 421 U. S: 616 (1975), in that Respondent Local
701 did not , and was not seeking to, represent
Lease's employees., It is further alleged that the
owner-operator provision is not within the proviso
protection of Section 8(e) due to the related trust
fund "self-help" clauses , and that the Respondents'
'actions in March and May 1976, in attempting to
enforce this provision ,7 constituted "entering into"
the invalid clause within the 10(b) period . This al-
leged unlawful enforcement action was based on
the Respondents ' claim that Lease was obligated to
make trust fund contributions on behalf of Hawks
The Master Labor Agreement was entered into on or about 1 June
1975 The charge in this case was filed on 21 May 1976
600 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and Stickel, who the General Counsel and Lease
claim are independent contractors.
Respondent AGC does not dispute these' claims.
Respondent Local 701, however, contends that
Hawks and Stickel are employees and not inde-
pendent contractors, that the self-help provisions of
the trust clauses do not invalidate the owner-opera-
tor clause, and that the owner-operator clause is a
valid work-preservation clause.
D. Conclusions
Section 8(e) of the Act makes it unlawful for any
labor organization or employer to enter into a con-
tract in which- the employer agrees to refrain from
dealing in the product of another employer or to
cease doing business with any other person.8 How-
ever, it is well established that contract clauses
which may technically fall within the literal pro-
scription of Section 8(e) are not unlawful if the
clause is found to.be primary in nature; i.e., one in-
tended to preserve or protect the work of unit em-
ployees.9 Furthermore, even clauses which are sec-
ondary in nature, i.e., intended to affect the em-
ployment practices of other persons or employers
not party to the contract, and which are' within the
general proscription of Section 8(e), may be lawful
and protected if they, satisfy the requirements for
exemption under the construction industry proviso
to Section 8(e),
As set forth in full above, the contractual provi-
sion alleged to be violative of Section 8(e) defines
the employment terms of persons classified as
"owner-operators." However, the phrase "owner-
operators" is, capable of more than one meaning
and depending on the surrounding circumstances
may be applicable to persons who are found to be
either employees' ° or independent contractors.1 i
Accordingly, it is unclear whether this provision
on its face was intended to apply only to employ-
ees of a signatory contractor (and therefore is pri-
a Sec 8(e) of the Act provides in relevant part
It shall be an unfair labor practice for any labor organization and
any employer to enter into any contract or agreement; express or im-
plied , whereby such employer ceases or refrains or agrees to cease
or refrain from handling , using, selling , transporting or otherwise
dealing in any of the products of any other employer, or to cease
doing business with any other person, and any contract or agreement
entered into heretofore or hereafter containing such an agreement
shall be to such extent unenforceable and void Provided, That noth-,
ing in this subsection (e) shall apply to an agreement between a labor
organization and an employer in the construction industry relating to
the contracting or subcontracting of work to be done at the site of
the construction , alteration, painting , or repair of a building, struc-
ture, or other work
9 National Woodwork Mfrs Assn v. NLRB,,386 U S 612 (1967)
10 See Teamsters Local 814 (Molloy Bros Moving), 208 NLRB 276
(1974), Propane Transport. Inc, 247 NLRB 966 (1980) --
" See Teamsters Local 814 (Antini Bros), 223 NLRB 752 (1976), Team-
sters Local 42 (Irvine-Santa Fe Co.), 248 NLRB 808 (1980), Kentucky
Prince Coal Corp, 253 NLRB 559 (1980) -
mary in nature) or was intended to apply to inde-
pendent contractors (and therefore is secondary in
nature). - Because the owner-operator provision is
capable of being interpreted in a primary and,
therefore, lawful manner, we will not find it to be
on its face violative of Section 8(e) because it "also
may be interpreted to be secondary in nature. As
stated in J. K Barker Trucking Co., 12 the Board
has developed rules of construction regarding
agreements alleged to violate Section 8(6), as fol-
lows:
[I]f the meaning of the clause is clear, the
Board will determine forthwith its validity
under 8(e); and where the clause is.not clearly
unlawful on its face, the Board will -interpret it
to require no more than what is allowed by
law. On the other hand, if the clause is ambig-
uous, the' Board will not presume unlawful-
ness, but will consider extrinsic evidence to
determine whether the clause was intended to
be administered in a lawful or unlawful
manner. In the absence .of such evidence, the
Board will refuse to pass on the validity of the
clause. [Id. at 517.]
In view of the. ambiguity -inherent in the term
"owner-operator," it is appropriate and necessary
to examine extrinsic evidence about how this clause
was intended to be administered: The record is
silent as to the bargaining history underlying the
negotiations for the owner-operator clause. The
only extrinsic evidence offered to resolve the ambi-
guity regarding its meaning-is the position taken by
Respondent AGC and Respondent Local 701 that
Lease was obligated to make the trust fund pay-
ments on behalf of owner-operators Hawks and
Stickel based on the owner-operator provision.1 a
The General Counsel and Lease alleged that
Hawks and Stickel are independent contractors and
that the attempted application of the owner-opera-
tor provision with respect to them was secondary.
Inasmuch as Respondent Local 701 contends that
Hawks and Stickel are not independent contrac-
tors, a resolution of this conflict is necessary.
In determining whether individuals, -are employ-
ees or independent contractors under the National
12 Teamsters /Local 982 (J K Barker -Trucking Co), 181 NLRB 515
(1970)
13
As stated above, Respondent AGC and Respondent Local 701 each
has taken the position - that Lease is obligated to make trust fund contnbu-
tions on behalf of owner-operators Hawks and Stickel, who had been en-
gaged by Lease to do excavation work Accordingly, the Respondents'
reaffirmation of the owner -operator provision constitutes "entering into"
an agreement within the purview of Sec 8(e), and their mutual consent
regarding the application of the contract shows the parties ' intended ad-
ministration of the owner-operator clause See generally .Teamsters Local
89 (Robert E McKee), 254 NLRB 783 (1981)
OPERATING ENGINEERS LOCAL 70F(LEASE CO.)
Labor Relations Act, the Board is required to
apply common law agency principles. See NLRB
v. United Insurance Co., 390 U.S. 254 (1968). Under
this approach, "there is no shorthand formula or
magic phrase that • can be _ applied to find the
answer, but all of the incidents of the relationship
must be assessed and weighed with no one factor
being decisive." Id. at 258. The predominant con-
sideration - is whether the employer reserves not
only the right to control the results of the work in
question, but also the manner and means by which
those results are accomplished. Other relevant fac-
tors are set forth- in Restatement 2d, Agency.14
These factors conclusively demonstrate the inde-
pendent contractor status' of Hawks and Stickel.
As set forth in full above, Lease retained no con=
trol over the manner or means by which Hawks
and Stickel performed their excavation assignment.
Lease simply informed them of the lines and grades
for'the excavation work and left all details regard-
' ing how they would perform this work to their dis-
cretion, including whether to hire their own em-
ployees. The degree to which Hawks and Stickel
coordinated their work with others on the site was
based on their own volition, not on orders from
Lease or his agents . They. determined -their . own
hours of operation and engaged in excavation work
for other contractors during the same period as
their work with Lease. Such independence in hours
of operation is highlighted by one occasion on
which Lease was sufficiently inconvenienced by
their absence from the jobsite due to other business
commitments that, Lease decided to contract nec-
essary excavating work out to a general contract-
ing firm. Further, the record shows that Hawks
and Stickel are skilled equipment operators .who
make all arrangements for the acquisition and main-
tenance of their own equipment and assume all li-
ability for their operations; including profit or loss.
Regarding the latter, it is ' significant that these
owner-operators submitted bids to Lease -at a flat
14 Restatement 2d, Agency § 220(2) (1958), sets forth the following fac-
tors which , among others , are considered in determining whether an indi-
vidual is an employee or an independent contractor.
(a) the extent of control which, by the agreement , the master, may
exercise over the details of the work,
(b) whether or not the one employed is engaged in a distinct occupa-
tion or business,
(c) the kind of occupation, with reference to whether, in the locality,
the work is usually done under the direction of the employer or by a
specialist without supervision,
(d) the skill required in the particular occupation,
(e) whether the employer or the [workman) supplies the instrumen-
talities, tools, and the place of work for the person doing the work,
(1) the length of time for which the person is employed, .
(g) the method of payment, whether by the time or by the job,
(h) whether or not the work is a part of the regular business of the
employer,
(I) hether or not the parties believe they are creating the relation of
master and servant, and
(j) whether the principal is or is not in business
601
hourly rate for both labor and equipment. Accord-
ingly, these rates were set unilaterally by the
owner-operators, not Lease. In making such- hourly
payments, Lease made no withholdings and no
payments for workmen's compensation, unemploy-
ment , or social security. Finally, -their agreement
with Lease covered only the Eagle Point jobsite.
Under these facts, we find that Hawks and Stickel
were engaged by Lease as independent contractors.
In view of our finding that Hawks and Stickel
are, independent contractors, it is clear that the Re-
spondents' application of the owner-operator clause
to them had an effect of influencing the employ-
ment practices of others besides the primary em-
ployer and his employees. We further find that this
effect was not merely incidental to any primary
purpose of preserving or protecting the 'work of
unit employees,15 because the record fails to sup-
port any claim that such excavation work was bar-
gaining unit work. In making this finding, we em-
phasize that the record fails to show that unit em-
ployees of Lease or any other signatory contractor
have ever performed excavation work as a part of
their normal work assignment. We find no merit in
Local 701's arguments that Lease's occasional em-
ployment of Local 701 members to operate forklift
trucks and cranes creates a bargaining unit which
includes operators of excavation equipment. We
further find without merit Local 701's contention
that Lease's temporary employment of Hawks
during two isolated occasions in August 1975 simi-
larly served to expand the scope of the bargaining
unit in question . On these occasions, Hawks was di-
rectly employed by Lease for approximately 50
hours in order to continue excavation work while
his equipment was temporarily inoperable, and
rented equipment was provided by Lease. We fur-
ther note that it is common practice-for Lease, as
well as other general contractors signatory to the
Master Labor Agreement, to have excavation work
performed' by owners of equipment like Hawks and
Stickel and by--excavating subcontractors who ad-
mittedly are independent contractors. Thus, Local
701 does not seek, through the implementation of
the owner-operator clause , to preserve for employ-
ees in the bargaining unit work which they have
traditionally done or to recapture or reclaim for
unit employees work which they have previously
performed or which otherwise constitutes "fairly
claimable" work.16
i 5 See Teamsters Local 107 (S & E McCormick), 159 NLRB 84, 99
(1966), Colorado Building Trades Council (Utilities Services Engineering),
239 NLRB 253, 255 (1978)
16 See Sheet Metal Workers Local 216 (Associated Pipe), 172 NLRB 35,
41 (1968)
602 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Having found no evidence to support Local
701's claim • that the present application of the
owner-operator 'clause to independent contractors
Hawks and Stickel is based on primary bargaining-
unit considerations, we find that this clause, as ap-
plied, is substantially similar in thrust to secondary
"union signatory" subcontracting clauses which are
generally proscribed by Section 8(e).17 In short,
the Respondents have sought to maintain this pro-
vision in a manner which, if followed, would re-
quire the unionization and inclusion under the con-
tract of any independent contractors18 who-seek to
do business with Lease . We reject Local 701's
bootstrap argument that Lease could comply with
the owner-operator provision lawfully should the
independent contractors, with whom he may seek
to do business, agree to become his employees. As
stated by the Third Circuit in A. Duie Pyle, Inc.,
supra, 383 F.2d 772, 777:
[P]rovisions . . . that . . . require subcontrac-
tees to become . . . members of the union . . .
must . -. . be declared invalid. As in the case
of secondary boycotts generally, a union may
not employ a collective bargaining agreement
with one employer as a means of effectuating
its object to coerce another employer to un-
ionize.. Nor may it by this means seek to
coerce, self-employed persons to become union
members. [Emphasis added.]
This is precisely the shortcoming of the present ap-
plication of the owner-operator provisions.
The remaining issue here is whether the parties'
application of the owner-operator provision, de-
spite its secondary objective, is nevertheless privi-
leged by the . "construction industry • proviso" in
Section 8(e) because it pertains to "an agreement
between a labor organization and an employer in
the construction industry relating to the contract-
ing or subcontracting of work to be done at the
site of the construction." Preliminarily, we reject
the contentions of Lease and the General Counsel
that the construction industry proviso has no appli-
cation here under their reading of the Supreme
Court's opinion in Connell Construction, supra. Al-
though this matter was an open question at the
time the parties' briefs were submitted to the
",See Teamsters Local 814 (Santini Bros.), 208 NLRB 184 (1974),
Teamsters Local 921 (San Francisco Newspaper Printing), 204 NLRB 440
(1973), Teamsters 107 (S & E McCormick), 199 NLRB 531 (1972), J K
Barker Trucking Co, supra, Teamsters Local 66 (Carnation Co), 181
NLRB 882 (1970), and A Duie Pyle. Inc v NLRB, 383 F 2d 772 (3d Cir
1967), cert denied 390 U S 905 (1968)
18 In this regard, we rely particularly on art XVIII's requirement that
all owner-operators be required to "come under all the terms and condi-
tions of this Agreement " On its face, this requirement includes economic
and noneconomic terms, including the bargaining agreement 's union-secu-
rity provision See fn 3, supra
Board, the Board has subsequently held, with Su-
preme Court approval,19 that the construction in-
dustry proviso in Section 8(e) is applicable to
agreements which are sought or negotiated in the
context of a collective-bargaining relationship. The
record unequivocally shows such a bargaining rela-
tidnship here between all parties to the Master
Labor Agreement.
However, the Board has repeatedly held that the
construction industry proviso does not. immunize
agreements that permit the use of economic pres-
sure to secure compliance with any otherwise ex-
empted agreement.20 Such secondary clauses can
be enforced only through- recourse to judicial, pro-
ceedings. Here, this owner-operator provision in-
corporates by reference all the terms and condi-
tions of the contract, including certain provisions
which the General Counsel alleges allow for the
use of economic pressure to secure compliance.
Specifically, the General Counsel alleges -such a
self-help enforcement provision - is contained in
each of the fringe benefit fund articles, articles
XXIV-XXVI. Each of these articles provides as
follows:
In the event an Employer fails to make the
monetary contributions in conformity with this
Article, the Union is free to take any economic
action' against such contractor it deems neces-
sary. . . .
We find merit in the General Counsel's allegations
in this regard. Reading the owner-operator clause
which the Respondents have-relied on in requiring
fringe benefit fund contributions by Lease on
behalf of Hawks and Stickel, in conjunction with
the fringe benefit articles with which it is necessari-
ly intertwined, it is manifest that under the com-
bined provisions of the contract, the Respondents
have agreed to the availability of such prohibited
forms of self-enforcement. See Associated Builders,
supra. Accordingly, the availability of self-enforce-
ment under this contractual framework precludes
the Respondents' agreement from being exempt
under the construction industry proviso. '
Having found that the parties have "entered
into" an agreement proscribed by Section 8(e) and
that the agreement is not protected by the con-
struction industry proviso to that section because
of self-enforcement features, we conclude that Re-
18 Carpenters Local 944 (Woelke & Romero Framing), 239 NLRB 241
(1978), enfd 654 F 2d 1301 (9th Cir 1981), affd 456 U S 645 (1982)
25 Operating Engineers, Local 12 (Acco Construction Equipment), 204
NLRB 742, 751 (1973), Los Angeles Building Trades Council (Donald
Schnver), 239 NLRB 264 (1978), Operating Engineers Local 701 (Associat-
ed Builders), 239 NLRB 274 (1978)
OPERATING ENGINEERS LOCAL 701 (LEASE CO.)
spondent AGC and Respondent Local 701 have
violated Section 8(e) of the Act.
THE REMEDY
Having found that the Respondents violated' Sec-
tion -8(e) of the Act we shall order that they cease
and desist therefrom and take certain affirmative
action in order to effectuate the policies of the Act.
CONCLUSIONS OF LAW
1. Howard S. Lease Construction Co. & Associ-
ates and Respondent Oregon Columbia Chapter,
the Associated General Contractors of America,
Inc., .are employers engaged in commerce within
the meaning of Section 2(6) and (7) of the Act.
2. Respondent International Union of Operating
Engineers, Local No 701, AFL-CIO is a labor or-
ganization within the meaning of Section 2(5) of
the Act.
3. By entering into, maintaining, and giving
effect to article XVIII, section 17, of the Master
Labor Agreement between Respondents AGC and
Local 701, effective 1 June 1975, and applying such
article to owner-operators who are independent
contractors, the Respondents have engaged in
unfair labor practices within the meaning of Sec-
tion 8(e) of the Act to the extent that this article is
authorized to be enforced by the self-help provi-
sions in articles XXIV-XXVI.
4. The above unfair labor practices affect com-
merce within the meaning of Section 2(6) and (7)
of the Act.
ORDER
The National Labor Relations Board orders that:
A. Respondent International Union of Operating
Engineers, Local No. 701, AFL-CIO, Portland,
Oregon, its officers, agents, and representatives,
shall
1. Cease and desist from entering into, maintain-
ing, giving effect to, or enforcing article XVIII,
section 17, of the Master Labor Agreement with
the Oregon Columbia Chapter, the Associated
General Contractors of America, Inc., to the extent
found unlawful by reasons of the self-enforcement
provisions in articles XXIV-XXVI.
2. Take the following affirmative action designed
to effectuate the policies of the Act.
(a) Post at its business office and meeting halls
copies of the attached notice marked "Appendix
A."21. Copies of the notice, on forms provided by
21 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 Na-
tional Labor Relations Board " shall read "Posted Pursuant to a Judgment
of the United States Court of Appeals Enforcing an Order of the Nation-
al Labor Relations Board "
603
the Regional Director for Region 19, after being
signed by the Respondent's authorized representa-
tive, shall be posted by the Respondent immediate-
ly upon receipt and maintained for 60 consecutive
days in conspicuous places including all places
where notices to members are customarily posted.
Reasonable steps shall be taken by the Respondent
to' ensure that the notices are not altered, defaced,
or covered by any other-material. -
_ (b) Sign and deliver to the Regional Director for
Region -19 sufficient copies of the notice, to be fur-
nished by the Regional Director, for posting by
Howard S. Lease Construction Co. & Associates, if
willing.
(c) Notify the Regional Director in writing
within 20 -days from the date of this Order what
steps the Respondent has taken to comply.
B. Respondent Oregon Columbia Chapter, the
Associated General Contractors of America, Inc.,
Portland, Oregon, its officers, agents, successors,
and assigns, shall
1. -Cease and desist from entering into, maintain-
ing, giving effect to, or enforcing article XVIII,
section 17, of the Master Labor Agreement with
Respondent Union, to the extent found unlawful by
reasons of the self-enforcement provisions in arti-
cles XXIV-XXVI.
2. Take the following affirmative action designed
to effectuate the policies of the Act.
(a) Post at its business office and meeting halls
copies of the attached notice marked "Appendix
B."22 Copies of the notice, on forms provided by
the Regional Director for Region 19, after being
signed by the Respondent's authorized representa-
tive, shall, be posted by the Respondent immediate-
ly upon receipt and maintained for 60 consecutive
days in conspicuous places including all places
where notices to members are customarily posted.
Reasonable steps shall be taken by the Respondent
to ensure that the notices are not altered, defaced,
or covered by any other material.
(b) Sign and deliver to the Regional Director for
Region 19 sufficient copies of the notice, to be fur-
nished by the Regional Director for posting by
Howard S. Lease Construction Co. & Associates, if
willing.
(c) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent has taken to comply.
11 See fn 21 above.
604 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
APPENDIX A APPENDIX B B.
NOTICE To EMPLOYEES AND MEMBERS
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD -
An Agency of the United States Government
WE WILL NOT enter into , maintain , or give effect
to the owner-operator' clause contained in article
XVIII, section 17, of the collective-bargaining
agreement effective 1 June 1975 to 31 May 1980,
with Oregon Columbia Chapter, The Associated
General Contractors of America, Inc., or such
clause in any successor agreement, to the extent
that such clause is applied to owner-operators who
are independent contractors, and to the extent that
such clause is found unlawful because of inter-
twined self-enforcement provisions applicable to
this clause contained in that bargaining agreement's
trust fund articles, articles XXIV, XXV, and
XXVI.
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT enter into, maintain, or give effect
to the owner-operator clause contained in article
XVIII, section 17, of the collective-bargaining
agreement effective 1 June 1975 to 31 May _1980,
with International Union of Operating Engineers,
Local No. 701, AFL-CIO, or such clause in any
successor agreement, to the extent that such clause
is applied to owner-operators who are independent
contractors, and to the extent that such clause is
found unlawful because of intertwined self-enforce-
ment provisions applicable to this clause contained
in that bargaining agreement's trust fund articles,
articles XXIV, XXV, and XXVI.
INTERNATIONAL UNION OF OPERAT-
ING ENGINEERS , LOCAL No. 701,
AFL-CIO
OREGON COLUMBIA CHAPTER, THE
ASSOCIATED GENERAL CONTRAC-
TORS OF AMERICA, INC.