Shamrock Dairy Inc.

National Labor Relations Board - Board Decisions

Aug 13, 1959

124 N.L.R.B. 494 (N.L.R.B. 1959)

494 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Shamrock Dairy, Inc., Shamrock Dairy of Phoenix, Inc., and
Shamrock Milk Transport Co. and International Brotherhood
of Teamsters, Chauffeurs, Warehousemen and Helpers of
America, Local Union No . 310. Case No. 21-CA-2292. Augvst
13, 1959
DECISION AND ORDER ON REMAND
On December 16, 1957, the National Labor Relations Board, act-
ing through a panel composed of Chairman Boyd Leedom and Mem-
bers Abe Murdock and Stephen S. Bean issued its Decision and
Order in the above-entitled proceeding.' A majority of the panel,
consisting of Chairman Leedom and Member Murdock, found that
the Respondent had refused and was refusing to bargain collectively
with International Brotherhood of Teamsters, Chauffeurs, Ware-
housemen and Helpers of America, Local Union No. 310, the Charg-
ing Union, and ordered the Respondent to cease and desist therefrom
and take certain affirmative action. Member Bean dissented from
that portion of the Decision and Order. Another majority of the
panel, consisting of Chairman Leedom and Member Bean, found that
the Respondent had not violated Section 8 (a) (3) of the Act by dis-
charging six drivers and dismissed the remaining allegation of the
complaint alleging such a violation. Member Murdock dissented from
that portion of the Decision and Order.
Thereafter, on November 5, 1958, after hearing oral argument on
the Union's petition to review and modify the Board's Order in this
case, the United States Court of Appeals for the District of Columbia
"concluded that it cannot properly review the Order of the ... Board
without specific findings" on certain questions which are hereinafter
set forth, and directed the Board to make such findings and transmit
them to the court.
Thereafter, on February 26, 1959, upon the Board's application 2
the court rescinded the remand previously ordered and remanded the
case to the Board "with directions to reconsider the entire cases in-
cluding, but not limited to, the questions specified in the Order of
November 5, 1958."
The questions specified in the court's remand are as follows :
(1) Whether, upon the facts of this case, the drivers retained
their employee status notwithstanding the negotiation of the in-
dividual contracts between the employer and the drivers,.or
whether their status changed to that of independent contractor.
1119 NLRB 998.
2In the interim, the composition of the Board's membership had changed. Member
Murdock's term of office expired on December 16, 1957; he was succeeded by Member
John H. Fanning.
124 NLRB No. 63.
SHAMROCK DAIRY, INC. 495
(2) Whether, if the Board should find that the drivers became
independent contractors, the employer, Shamrock Dairy, Inc.,
violated Section 8(d) of the National Labor Relations Act when
it negotiated the individual contracts with the drivers.
(3) . .. should the Board find that Section 8(d) was vio-
lated, ... whether Section 8(a) (3) was violated by the em-
ployer's discharge of the six employees.
Pursuant to the court's remand order, the entire Board, with the
exception of Member Rodgers who disqualified himself,, has con-
sidered the case de novo. The Chairman, Member Bean, and Mem-
bers Jenkins and Fanning, respectively, have divergent views as to
the disk osition of this case. In accordance with such views, there
is herewith transmitted to the court the following findings and
determinations :
With respect to jurisdiction, the Board hereby makes the same find-
ings and determinations made in the Board's Decision and Order of
December 16, 1957.
The Board hereby denies the Respondent's request for oral argu-
ment, as the record, exceptions, and briefs adequately present the
issues and the positions of the parties.
The Board has reviewed the rulings of the Trial Examiner made at
the hearing and finds that no prejudicial error was committed. Ac-
cordingly, the rulings are hereby affirmed. The Board has considered
the Intermediate Report, the exceptions and briefs, and the entire
record in this case, and hereby adopts the findings, conclusions, and
recommendations of the Trial Examiner set forth in his Intermediate
Report, a copy of which is attached hereto, only to the extent con-
sistent herewith.'
The Board hereby makes the same findings of fact which were set
forth as the essential facts in this case in the Board's Decision and
Order of December 16, 1957.
A majority of the Board, consisting of the. Chairman and Members
Jenkins and Fanning, find that the Union had majority status and was
at all times material the exclusive representative of the employees
involved here. The Respondent granted exclusive recognition to the
Union as the representative of the Respondent's employees in the 2-
year contract, executed on October 1, 1953. Such recognition raises
a presumption of regularity, namely, that the Union was the majority
representative of the employees at the time of the execution of the
contract; for, otherwise, it would have been unlawful for the Respond-
ent to have extended such recognition. There is no evidence to rebut
3 Aniong other things, the Trial Examiner found that, by "making credits in the re-
tirement fund immediately available to those who purchased routes," the Respondent
independently violated Section 8(a) (1). There is no such allegation in the complaint
and the record evidence does not support such an allegation.
496 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
this presumption. Nor is there any evidence that the Union lost such
majority status at any time after execution of the contract. By
virtue of the existence of the contract, the Union was entitled to exclu-
sive recognition for at least the term of the contract. Hextron Furni-
ture, 111 NLRB 342. N.L.R.B. v. Dorsey Trailers, Inc., 179 F. 2d
589 (C.A. 5), relied on by the Respondent, is inapposite. There, unlike
here, the contract had terminated before the time of the alleged refusal
to bargain. On the basis of the foregoing, the Respondent was obli-
gated to treat with the Union as the majority representative of the
employees at the time of the alleged unfair labor practices which
occurred in the period from sometime in July to October 3, 1955,
inclusive.
Member Bean finds that the Union did not represent a majority of
the employees at the time of the alleged unfair labor practices, as more
fully set forth in his separate opinion filed herewith. Member Bean
states therein that "the contract can be of no value as an indication of
the Union's status among the Respondent's employees considered as
a separate unit" because, in substance, the contract covered other
employers as well as the Respondent. However, as pointed out in
the decision of December 16, 1957, the complaint alleged that the
Respondent's employees alone constituted an appropriate unit and the
Respondent's answer admitted that the Respondent contracted with
respect to such unit in the contract of October 1953. Moreover, the
Respondent's answer further admitted that such contract unit was
"an appropriate unit"; the Trial Examiner found that the Respond-
ent's employees alone constituted an appropriate unit; and the Re-
spondent at no time took the position that a more comprehensive unit
was appropriate.
Adhering to his previously expressed position in the Decision of
December 16, 1957, and for the reasons stated therein, the Chairman
finds that the Respondent, which had theretofore distributed its prod-
ucts through driver-salesmen, entered into individual contracts with
the bulk of its driver-salesmen which converted their status from that
of employees to that of independent contractors, without any notice
and without bargaining with the Union, the recognized exclusive
representative under an existing contract. The Chairman further
finds that the Respondent adopted the new distributorship system for
economic reasons and that, in discharging the six drivers who refused
to sign independent distributorship contracts, the Respondent was
motivated by economic reasons and thus did not violate Section
8 (a) (3) of the Act. In addition, the Chairman finds, even though
the drivers became independent contractors under the individual con-
tracts, that the Respondent violated Section 8(a) (5) and (1) of the
Act in that it failed to bargain with the Union as to whether the inde-
pendent contractor system of distribution should be adopted.
SHAMROCK DAIRY, INC. 497
In the Decision of December 16, 1957, the Chairman stated that, as
he had found a violation of Section 8 (a) (5) on another ground, he had
no occasion to pass on whether the Respondent also violated Section
8(a) (5) by reason of a violation of Section 8(d). Accordingly, in
the Decision of December 16, 1957, the Chairman did not pass on
whether the Respondent violated Section 8 (d). Pursuant to the
court's remand, the Chairman now makes a determination of that
issue and, in doing so, finds that the Respondent did not violate Sec-
tion 8 (d) for the following reasons :
Insofar as pertinent, Section 8 (d) provides that : "... where there
is in effect a collective-bargaining contract covering employees . . .,
the duty to bargain collectively shall also mean that no party to such
contract shall terminate or modify such contract, unless the party de-
siring such termination or modification" serves written notices 60 days
prior to the expiration date of the contract and, continues in full force
and effect, without resorting to strike or lockout, "the existing con-
tract for a period of sixty days after such notice is given or until the
expiration date of such contract, whichever occurs later . . . ." At
the time of the establishment of the independent distributorship plan
here in July 1955, there was in existence a collective-bargaining con-
tract which was to expire on October 1, 1955. No statutory notices
were served by the Respondent. However, although the Respondent
executed individual contracts with the bulk of the drivers, these con-
tracts were not contracts of employment and the Respondent con-
tinued in full force and effect the provisions of the collective-bargain-
ing contract until October 1, 1955, with respect to those drivers who
did not sign individual contracts and as to plant employees (non-
drivers) who were covered by the collective-bargaining contract but
not directly affected by the institution of the independent distributor-
ship system for drivers. The execution of the individual contracts
was not inconsistent with the collective-bargaining contract as the
individual contracts pertained not to terms or conditions of employ-
ment but involved the termination of the employment status of the
drivers who signed the individual contracts and substitution therefor
of the status of independent contractor. Thus, no provision in the
individual contracts conflicted with or changed the collective-bargain-
ing contract in any respect. See Sloan v. Journal Publishing Co., 42
LRRM 2490; Adams Dairy Co. v. Dairy Employees Union, 363 Mo.
182, 250 S.W. 2d 481, 30 LRRM 2128. As the Respondent did not
modify or terminate the collective-bargaining contract, the Chairman
finds that there was no violation of Section 8 (d).
Members Jenkins and Fanning agree with the Chairman for the
reasons stated hereinafter that the Respondent violated Section
(a) (5) and (1) by failing to bargain with the Union as to whether
525543-60-vol. 124--33
498 DECISIONS OF .NATIONAL LABOR RELATIONS BOARD
the so-called independent-contractor system of distribution should be
adopted.
The Respondent adopted the so-called independent distributorship
plan without notice to the Union and entered into individual contracts
with the drivers without giving the Union, the exclusive bargaining
representative, a chance to negotiate with regard to the tenure of the
employees to be affected by the alleged independent distributorship
plan. Thereafter, the Respondent ignored the Union's letter request-
ing rectification of the change and notified the Union that the Re-
spondent 'would. not bargain with respect to those drivers who had
signed individual contracts. By this course of conduct, the Respond-
ent failed to performed its duty to bargain collectively. This duty
includes the obligation to notify the collective-bargaining representa-
tive and to :give such representative a, chance to negotiate with respect
to a contemplated change concerning the tenure of the employees and
their conditions of employment. Brown Truck and Trailer Manufac-
turing Company, Inc., 106 NLRB 999. In Brown Truck, where the
employer. moved its Charlotte plant to Monroe, North Carolina, for
economic reasons, discharged its Charlotte employees, and did not em-
ploy them at Monroe, the Board found that the employer violated Sec-
tion 8(a) (5). Here, as in Brown Truck, the employer did not give
the Union an opportunity to bargain with respect to the contemplated
change as it affected the tenure of the employees. The Union was en-
titled to such opportunity, and the Respondent failed and refused to
accord it. By such conduct, the Respondent violated Section 8 (a) (5)
and (1) of the Act.4
In addition thereto, Members Jenkins and Fanning also find, as did
the Trial Examiner, that the Respondent violated Section 8 (a) (5) and
(1) of the Act on the following two grounds : (1) The drivers re-
tained their employee status under the individual contracts, and thus
the Respondent engaged in unlawful individual bargaining by execu-
tion of the individual contracts; and (2) as the drivers retained their
employee status under the individual contracts, the Respondent modi-
fied or terminated the collective-bargaining contract by the execution
of the individual contracts without complying with the notice re-
quirements of Section 8(d).
4 The Respondent contends that the Union waived its bargaining rights with respect to
the institution of the so-called independent distributorship plan by not requesting bar-
gaining concerning it, by advising the drivers to consult a lawyer as to whether they
should sign the individual contracts offered , and by taking no action other than out-
lined in the statement of facts referred to above. However , as the Trial Examiner found,
the Union made an adequate request to bargain in its letter of July 29 , 1955. On
August 2, 1955, the Union promptly filed refusal -to-bargain charges based upon institu-
tion of that plan. At the bargaining meeting of October 3, 1955, ,the Respondent expressly
stated that it would not recognize the Union with respect 'to those drivers who had
signed individual contracts . And, as the Trial Examiner found, any attempt by the
Union thereafter to bargain with respect to those drivers would have been futile. For
these reasons, the Board finds no merit in the waiver contention.
SHAMROCK DAIRY, INC. 499
With respect to the first of the foregoing two additional grounds,
Members Jenkins and Fanning are of the view that the drivers re-
tained their employee status under the individual contracts for the
following reasons. An employer-employee relationship exists where
the person for whom the services in question are performed reserves
.the right to control not only the result to be achieved but also the
means to be used in reaching such result.
An examination of the provisions of the individual distributorship
contract reveals that the Respondent 's drivers who signed such a
contract did not lose their existing employee status by execution of
the individual contracts. In the individual contract, the Respondent
granted to the drivers the exclusive right to distribute its products
upon express terms set forth therein . These terms included (1) in
the event that the Respondent determined that the territory assigned
to a driver was too large for the driver adequately to service , the Re-
spondent at any time could alter the boundaries of the territory to
assure to the Respondent's satisfaction that customers were properly
serviced; (2) that a driver must not sell any product in his territory
not manufactured by the Respondent ; ( 3) that the Respondent would
set the prices at which its products are sold to a driver, and the Re-
spondent reserved the absolute right to change those prices ; ( 4) that
the Respondent could prescribe the time and places at which delivery
of its products to the drivers must be received as well as prescribe the
times and places for delivery of its products to customers ; ( 5) that
the Respondent retained the "continuing , unconditional and irrev-
ocable option to purchase at any time the entire distribution business"
of a driver , including the truck , route, clientele, and good will, at a
preestablished price, and that the driver had no right to sell or assign
any rights under the contract without the Respondent 's consent; (6) in
the event the Respondent exercised the option to purchase the business,
the driver could not reenter the business of distributing dairy products
for a period of 2 years; (7) that, if the Respondent determined that
customers would not receive prompt delivery of its products because
of "any accident , strike, emergency or any other cause, " the Respond-
ent would take over a driver's route and equipment , without notice to
him, and operate and continue same during these periods ; ( 8) that a
driver must diligently and faithfully promote sales of the Respond-
ent's products, complying with all laws, rules, and regulations relating
to health and sanitation , and maintain a neat and tidy appearance;
(9) that drivers were required to insure their trucks for property
damage in certain stated substantial amounts , all insurance policies
to be approved by the Respondent ; ( 10) that in the event a driver's
truck broke down, the Respondent would furnish a spare truck at no
s Sec, for example, Oklahoma Trailer Convoy, Inc., 99. NLRB 1019, 1022; Nu-Car
Carriers, Inc., 88 NLRB 75, 83, enfd. 189 F. 2d 756 (C.A. 3).
500 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
expense to the driver except for gasoline and oil ; however, if the
driver chose to use a vehicle other than that provided by the Respond-
ent, the Respondent must first approve the use of such vehicle; and
(11) in the event that a driver became incapacitated and was unable
to perform his duties, the driver must select a substitute named and
approved by the Respondent and the driver was required to compen-
sate the substitute at a wage and commission fixed by the Respondent.
Thus, the individual contracts reserved to the Respondent the right
to terminate unilaterally the services of the driver for any cause, the
right unilaterally to name and appoint substitutes for the driver and
to fix the compensation of such substitutes, the right unilaterally to
determine the times and places at which the drivers'. services are to be
performed, and the right to police the manner in which those services
are rendered. Moreover, under the terms of the individual contract
the driver was required to deal exclusively in the Respondent's prod-
ucts. Under all the circumstances, Members Jenkins and Fanning
conclude that the individual contracts here involved did not convert
the status of the drivers who signed them from that of employees to
that of independent contractors and that the drivers retained their
employee status under the individual contracts. Members Jenkins and
Fanning further find that the execution of the individual contracts
with such drivers who were and remained employees of the Respondent
constituted individual bargaining with those individual employees at
a time when they were represented by the Union as their statutory
representative, and thus the Respondent violated Section 8(a) (5)
and (1) of the Act.
With respect to the second of the two additional grounds referred
to above, Members Jenkins and Fanning are of the view that the
Respondent, by the execution of the individual contracts, modified or
terminated the collective-bargaining contract, without complying with
the notice requirements of Section 8(d) of the Act, for the following
reasons. By enactment of Section 8(d), the terms of which are set
forth above, Congress intended to insure that parties to contracts
in industries covered by the Act resort to collective bargaining to
resolve differences regarding modification or termination of such
contracts rather than to engage in strikes or lockouts which would
obstruct commerce. To this end, parties to such contracts are obli-
gated by Section 8(d) to give proper notice of their intention to
modify or terminate them and to offer to meet to resolve their dif-
ferences. When the Respondent adopted its so-called independent
distributorship plan by executing individual contracts with its drivers,
it was under contract with the Union which was the statuory repre-
sentative of its drivers. That contract expressly provided that "no
employee shall be required to make a verbal or written contract which
in any way conflicts with.the articles of this agreement." When the
SHAMROCK DAIRY, INC. 501
Respondent required its drivers to execute the individual contracts on
pain of discharge, the Respondent was acting to modify the collective-
bargaining contract with the Union, as the terms of the individual
contracts changed the terms of the collective-bargaining contract and
were inconsistent therewith. Nevertheless, the Respondent gave no
notice to the Union of intent to modify its contract and did not offer to
meet with the Union to discuss this determination. Thus, the Re-
spondent failed to discharge the duties imposed upon it by Section
8(d). Members Jenkins and Fanning, therefore, find that, by such
conduct, the Respondent violated Section 8 (a) (5) and (1) of the Act.
Members Jenkins and Fanning also find, as did the Trial Examiner,
that the six drivers, who refused to sign individual contracts, retained
their status as employees, and that the Respondent violated Section
8(a) (3) by discharging the six drivers. Members Jenkins and Fan-
ning reach this conclusion on the basis of the following rationale. As
the Union was the exclusive bargaining representative-, the six drivers
had a right to refuse to deal with the Respondent on an individual
basis; the drivers were exercising such right in refusing to enter into
individual contracts; and they were discharged for so doing.
Even if the Respondent did not violate Section 8(a) (3) by dis-
charging the six drivers, Members Jenkins and Fanning would order
their reinstatement with back pay to remedy the 8 (a) (5) violation
hereinafter 'found. West Boylston Manufacturing Company of Ala-
bama, 81 NLRB 808. Such relief is not limited by the Act to those
cases in which the Board has found that Section 8(a) (3) has been
violated. The statute empowers the Board to fashion the remedy to
the situation which calls for redress. In West Boylston, the Board
found that an employer violated Section 8 (a) (5) by failing to confer
with a union as to the recall of laid-off employees. Here, as in West
Boylston, where the Board ordered reinstatement with back pay for
the employees not recalled but not found to have been discriminated
against within the meaning of Section 8(a) (3), the six drivers lost
their jobs as a direct consequence of the Respondent's failure to confer
with the Union, and, by parity of reasoning, they should be restored
to their jobs and made whole.
Member Bean finds that the Respondent engaged in no unfair labor
practice alleged and votes to dismiss the entire complaint for the rea-
sons stated in his separate opinion filed herewith.
Based on the combined vote of the Chairman and Members Jenkins
and Fanning, the Board hereby finds that the Respondent violated
Section 8 (a) (5) and (1) of the Act, as set forth above.
. As indicated above, the. Chairman and Member Bean have found
that the Respondent did not violate Section 8(a) (3) by discharging
the six drivers, while Members Jenkins and Fanning have found that
the Respondent committed such unfair labor practices. Under these
502 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
circumstances , as a majority of the Board does not find that the
Respondent violated Section 8(a) (3) of the Act, the Board will dis-
miss the allegation of the complaint that the respondent violated
Section 8 (a) (3) of the Act by discharging the six drivers.
THE REMEDY
'Chairman Leedom and Members Jenkins and Fanning have found
that, by not according the Union an opportunity to bargain with
respect to the adoption of the individual distributorship system as it
affected the tenure of the employees, the Respondent violated Section
8(a) (5) and (1).
Members Jenkins and Fanning are of the view that the remedy,
which is set forth below, does not go far enough to remedy the violation
found. As the remedy in this case does not abrogate the unlawful
individual contracts, they are of the view that it fails to restore the
status quo ante and permits the Respondent to retain the fruits of its
unlawful conduct. Accordingly, Members Jenkins and Fanning
would order abrogation of these contracts so that effective bargaining
on this subject may take place. However, Members Jenkins and
Fanning, of course, go at least as far as the remedy ordered, and,
therefore, they concur in this remedy for the purpose of framing a
majority order in the case.
To remedy this violation, the Board finds that it will effectuate the
policies of the Act to require that the Respondent accord the Union
such an opportunity to bargain. Accordingly, we shall order that the
Respondent bargain with the Union as the exclusive representative of
the employees in the appropriate unit, including the employees who
signed individual distributorship contracts, concerning the subject
matter stated above; and we shall enjoin the commission of the unfair
labor practices found through the usual cease and desist provisions
in our Order.
Pending fulfillment of its obligation to bargain, we shall require
that the Respondent refrain from entering into any new independent
distributorship contract with any person.'
ORDER
Upon the entire record in this case, and pursuant to Section 10(c)
of the National Labor Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent, Shamrock Dairy,
a The Board is aware that It has not resolved, by majority vote, the questions pro-
pounded by the court in its remand order, but this is due to the fact that despite care-
ful and persistent Board deliberations extending over a considerable period of time, a
majority of the Board has been unable to reach agreement as to how these questions
should be answered. In lieu thereof, each signatory to the instant Decision has sub-
mitted his individual views.
SHAMROCK DAIRY, INC. 5 '03
Inc., Tucson, Arizona, its officers, agents, successors, and assigns,
shall :
1. Cease and desist from :
(a) Refusing to bargain collectively with International Brother-
hood of Teamsters, Chauffeurs, Warehousemen and Helpers of
America, Local Union No. 310, as the exclusive representative of all
regular relief and special drivers, and all plant men employed at the
dairy of Shamrock Dairy, Inc., at Tucson, Arizona, but excluding all
office and clerical employees, guards, and supervisors as defined in
the Act, with respect to adoption or continuance of a system of prod-
uct distribution known as the independent distributorship plan inso-
far as it affects the tenure of its employees.
(b) Entering into any new independent distributorship contract
with any person unless and until it bargains with the aforesaid labor
organization as stated above.
(c) In any like or similar manner interfering with, restraining, or
coercing its employees in the exercise of the right to self-organization,
to form labor organizations, to join or assist International Brother-
hood of Teamsters, Chauffeurs, Warehousemen and Helpers of
America, Local Union No. 310, or any other labor organization, to
bargain collectively through representatives of their own choosing,
and to engage in other concerted activities for the purposes of col-
lective bargaining or other mutual aid or protection, or to refrain
from any or all such activities, except to the extent that such rights
may be affected by an agreement requiring membership in a labor
organization as a condition of employment as authorized in Section
8(a) (3) of the Act.
2. Take the following affirmative action, which the Board finds will
effectuate the policies of the Act :
(a) Bargain, upon request, with International Brotherhood of
Teamsters, Chauffeurs, Warehousemen and Helpers of America,
Local Union No. 310, with respect to adoption or continuance of a
system of product distributorship known as the independent distribu-
torship plan insofar as it affects the tenure of its employees in the
aforesaid appropriate unit, in accordance with the section of this
Decision and Order On Remand entitled, "The Remedy."
(b) Post at the dairy in Tucson, Arizona, copies of the notice at-
tached hereto marked "Appendix." 7 Copies of such notice, to be
furnished by the Regional Director for the Twenty-first Region,
shall, after being duly signed by. the Respondent's authorized repre-
sentative, be posted by the Respondent immediately upon receipt
thereof and be maintained by it for 60 consecutive days in conspicu-
7 In the event that this Order is enforced by a decree of a United States Court of
Appeals , there shall be substituted for the words "Pursuant to a Decision and Order
on Remand" the words "Pursuant to a Decree of the United States Court of Appeals,
Enforcing an Order."
504 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ous places, including all places where notices to employees are cus-
tomarily posted. Reasonable steps shall be taken by the Respondent
to insure that said notices are not altered, defaced, or covered by any
other material.
(c) Notify the Regional Director for the Twenty-first Region in
writing, within 10 days from the date of this Order, as to what steps
the Respondent has taken to comply herewith.
IT IS FURTHER ORDERED that the complaint be, and it hereby is, dis-
missed insofar as it alleges that the Respondent violated Section
8 (a) (3) of the Act by discharging John Foley, Dave Egleston, Robert
Pry, Alexander Toro, Frank Koenig, and John Kozacki.
MEMBER BEAN, dissenting in part and concurring in part :
This case is now before this Board on remand from the Court of
Appeals for the District of Columbia under directions to reconsider
the entire case, including certain questions set forth in a previous
order of the court. Pursuant to this remand I have given the entire
case my careful reconsideration and again am impelled to the conclu-
sion which I set forth in my original dissenting opinion, that the
record presents a material issue as to the fact of the Charging Union's
majority status which is crucial to the entire case and which can only
be answered in the negative.
In this case, the Charging Union's majority status was put in issue
by the complaint's allegation that at all material times the Union
represented a majority of the Respondent's employees, and the Re-
spondent's answer asserting a lack of knowledge or information as to
such majority, by reason of which it denied the allegation and de-
manded strict proof thereof." The Respondent did not abandon this
position but continued to maintain it at the time this case was origi-
nally considered by the Board, as shown by its filing of an exception to
the Trial Examiner's finding of the Union's majority status based
upon the Respondent's execution of the contract in 1953.
The record shows that the Respondent has dealt with the Union,
apparently on a multiemployer basis, since 1937. In October 1953 the
Respondent, together with Borden Company, Carnation Company,
and Sunset Dairy, all of Tucson, Arizona, entered into a contract with
the Union covering the drivers and plantmen of these four employers
together in a single unit, for a 2-year term to October 1, 1955. The
record contains not a bit of evidence that at any time from the begin-
8 Paragraph 6 of the complaint alleged that :
At all times material herein, the Union has represented a majority of the em-
ployees of Respondent Dairy, Inc., in the unit described . . . above.
The following appears in the Respondent's answer :
Answering Paragraph 6 of the complaint, Respondent Dairy, Inc. alleges that
it is without knowledge or information sufficient to form a belief as to the truth of
the allegations contained therein and therefore denies the same and demands strict
proof thereof.
SHAMROCK DAIRY, INC. 505
nirig of, or during, this contractual relationship did the Union offer or
the Respondent request any sort of proof of the Union's right to serve
as a majority bargaining representative, either for the employees in a
multiemployer unit or for a unit limited to the Respondent's employ-
ees. Nor does the record contain any evidence that the Union was
in fact such a representative.' Indeed, insofar as the Respondent's
own employees are concerned, I can only judge from the Respondent's
answer formally denying knowledge of possession by the Union of
majority status, that at least on the Respondent's part its recognition
of and dealing with the Union must have been purely a "sweetheart"
arrangement. This is a matter not to be taken lightly, for in this
state of the record the Board is entirely without authority to order
the Respondent to bargain with the Union, and in doing so the Board
is in fact doing nothing more than requiring the Respondent, under
legal compulsion, to adhere to an unlawful arrangement.
As indicated above, I would not find the Respondent to have
violated Section 8(a) (5) by failing in any manner to deal with a
labor organization as to which there is a complete negation of ma-
jority status.10 As to the allegations of a Section 8(a) (3) violation,
9In lieu of evidence , my majority colleagues have relied upon two presumptions
that: (1) possession by the union of majority representative status may be presumed
from the mere fact of the Respondent 's recognition of and dealing with the union ; and
(2) such status , thus established , is presumed to continue thereafter in the absence
of evidence to the contrary . With the latter of these two presumptions I could, as a
matter of general legal principle , agree ; but I cannot agree that such a presumption
as the former one exists, or, if it did exist, that it would not be completely rebutted
by the Respondent's denial of knowledge that the union possessed , at any material time,
such status.
Moreover , in law , the presumption that a state of things once shown continues to exist
does not arise merely upon the basis of some prior presumption . The existence of that
which is presumed to continue , must originally have been established by evidence.
'See American Jurisprudence , vol. 20, p. 205 , at § 207, which states the proposition
as follows :
It is well established that when the existence of a person , a personal relation, or
a state of things is once established by proof, the law presumes that the person, rela-
tion , or state of things continues to exist as before, until the contrary is shown, or
until a different presumption is raised from the nature of the subject in question.
[Emphasis supplied.]
In the present case the possession of majority status by the union was as of no time
established by proof , and hence the finding of such majority in this case is only by a
departure from established legal principle and amounts to no more than piling the
Pelion of one presumption upon the Ossa of another to reach a result which is not
supported by the record.
10 Even assuming the theory of my colleague 's decision , that the existence of majority
representative status can be deduced from the fact merely of execution of a collective-
bargaining contract , there is yet another reason why it is error to apply It in this case.
As above indicated , an examination of the 1953-55 contract in the record discloses that
it was executed by four dairy firma in the Tucson area, and by its terms covers the
Respondent 's employees in a single unit which Includes also the employees of the other
employers . In situations Involving a multiemployer unit such as this , Board standards
require only that the contracting union be the majority representative of the employees
in the unit as a whole , and it is not necessary, for a contract in such larger unit to
be lawful , that the contracting union be designated b a majority among the em to
of each separate emp r, us, in any event , the contract can be of no value as an
indication, of- the Union 's status among the Respondent 's employees considered as a
separate unit.
506 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
I would dismiss them also because, in the absence of a showing of
majority representation by the Union, the discharge of employees for
failure to sign individual contracts governing their relationship with
the Respondent cannot, as the General Counsel contends, be found to
discourage a right to bargain through the Union.
In view of the disposition which I believe should be made of this
case as shown by my opinion above, I do not reach the questions
whether the Respondent complied with Section 8(d) in negotiating
individual contracts with the drivers, whether such contracts were
effective in converting the status of employees to that of independent
contractors. I shall therefore, with all deference and respect for the
Court of Appeals which has remanded this case to the Board, refrain
from attempting to resolve what in my view of the case have become
only hypothetical issues.
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to a Decision and Order on Remand of the National Labor
Relations Board, and in order to effectuate the policies of the National
Labor Relations Act, we hereby notify our employees that :
WE WILL bargain collectively, upon request, with International
Brotherhood of Teamsters, Chauffeurs, Warehousemen and
Helpers of America, Local Union No. 310, with respect to adop-
tion or continuance of a system of product distribution known as
the independent distributorship plan. The appropriate unit is:
All regular, relief, and special drivers and all plantmen
employed at our dairy in Tucson, Arizona, excluding all
office and clerical employees, guards, and supervisors as de-
fined in the Act, as amended.
WE WILL NOT in any manner interfere with, restrain, or coerce
our employees in the exercise of the right to self-organization,
to form labor organizations to join or assist International Brother-
hood of Teamsters, Chauffeurs, Warehousemen and Helpers of
America, Local Union No. 310, or any other labor organization,
to bargain collectively through representatives of their own
choosing, and to engage in other concerted activities for the pur-
poses of collective bargaining or other mutual aid or protection,
or to refrain from any or all such activities, except to the extent
that such rights may be affected by an agreement requiring mem-
"bership in •a labor organization as a condition of employment as
authorized in Section 8 (a).(3) of the Act.
All our employees are free to become, remain, or refrain from becom-
ing members of any labor organization except to'the extent that such
SHAMROCK DAIRY, INC. 507
right may be affected by an agreement requiring membership in a
labor organization as a condition to employment, as authorized in
Section 8(a) (3) of the Act.
SHAMROCK DAIRY, INC.,
Employer.
Dated---------------- By-------------------------------------
(Representative ) ( Title)
This notice must remain posted for 60 days from the date hereof,
and must not be altered , defaced, or covered by any other material.
INTERMEDIATE REPORT AND RECOMMENDED ORDER
STATEMENT OF THE CASE
Upon a charge duly filed by International Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America, Local Union No. 310, AFL-CIO, herein
the Union, the General Counsel of the National Labor Relations Board issued his
complaint against Shamrock Dairy, Inc., Shamrock Dairy of Phoenix, Inc., and
Shamrock Milk Transport Co., herein, respectively, the Respondent, Phoenix, and
Transport, alleging that the Respondent had engaged in and was engaging in certain
unfair labor practices affecting commerce within the meaning of Section 8(a)(1),
(3), and (5) and Section 2(6) and (7) of the National Labor Relations Act, 61
Stat. 136, herein the Act.
In respect to unfair labor practices, the complaint alleges in substance that on
and after July 12, 1955, the Respondent although then required by the Act to recog-
nize and bargain with the Union nonetheless negotiated with its employees indi-
vidually and entered into individual contracts with them, thus refusing to bargain
collectively in good faith with the Union. It is further alleged that on or about
October 3, 1955, the Respondent discriminatorily discharged Dave Egleston, Robert
Pry, Alexander Toro, Frank Koenig, John Foley, and John Kozacki.
Respondent's answer duly filed denies the commission of unfair labor practices
and denies that it is or has been engaged in commerce within the meaning of the
Act.
Pursuant to notice a hearing was held before the duly designated Trial Examiner
from October 8 through 18, 1956, in Tucson, Arizona. All parties were represented
by counsel and participated in the hearing. Counsel for a number of so-called in-
dependent distributors sought intervention to the end that no order might issue
from the Board invalidating in any respect contracts which those individuals had
with the Respondent. Because this proceeding is narrowly restricted to the protec-
tion and enforcement of public rights not deriving from or dependent upon any
contract between the Respondent and its one-time employees, the petition to inter-
vene was denied. Those who have contracts with the Respondent and whose status
may be affected by the enforcement of any final order of the Board in this proceeding
are left free to assert such legal rights as they may have acquired thereby in another
forum.'
A brief has been received from counsel for the Respondent.
Upon the entire record in the case and from my observation of the witnesses, I
make the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT
Phoenix and Transport although nominally Respondents in this proceeding are
not here so treated. It is not alleged that either of them severally or jointly with
the Respondent has committed an unfair labor practice. The Respondent is the
owner and operator of a dairy plant and distribution business in Tucson, Arizona,
and is a corporation beneficially owned and actively managed by members of the
McClelland family. Transport, a corporation beneficially owned and actively man-
aged by the same family group, hauls milk to and from the Respondent and from
the Respondent to Phoenix. Phoenix, a corporation similarly owned and man-
aged, is engaged in the distribution of milk in Phoenix, Arizona, and secures all of
its milk in packaged form from the Respondent. Deliveries from the Respondent
1 National Licorice Company- v. N.L.R.B., 309 U.S. 350, 363-366.
508 DECISICNS OF -NATIONAL LABOR RELATIONS BOARD
to Phoenix are made by Transport. Not alone are the. three corporations under
substantially the same ownership and family management, but it is evident consti-
tute a single integrated enterprise. The milk from the producers is gathered by
Transport and delivered to the Respondent for processing and packaging. Respond-
ent handles the distribution in the Tucson area and Phoenix performs the same
function in the Phoenix area. In urging that the three should not be regarded as a
single employer, counsel for the Respondent relies upon the apparent fact that
there is no transfer of employees between the three corporations, and that there is
no common labor.policy applicable to them. There is support in some Board de-
cisions for the argument that these criteria have some weight affecting such a deter-
mination, but where, as here, integration is complete, I consider and find that the
lack of uniform labor policy and absence of transfers is of little consequence. It
seems obvious that a group of corporations owned by substantially the same interests
and wholly integrated in operation do constitute a single employer. The conditions
for establishing a uniform labor policy exist, even though no such step has been
taken. On the considerations outlined above I find that the Respondent, Phoenix,
and Transport constitute for purposes of jurisdiction a single employer within the
meaning of the Act.
The parties stipulated and I find that during the calendar year 1955 the Respondent
made purchases from concerns outside the State of Arizona which were shipped
directly to it at Tucson, having a value of $548,000; that Phoenix, during the same
period, made such purchases, having a value of $73,000; and that Transport, for
the same period, made purchases in the same circumstances having a value of $438.
Counsel for the Respondent argues in his brief that certain purchases of trucks and
other materials totaling approximately $116,000 were not in fact made by the
Respondent for its own account and should not therefore be considered in arriving
at the total purchases. Although I do not consider the argument so advanced to
be meritorious, it is unnecessary here to consider the question raised. Even if this
amount were deducted from the purchases of the three corporations, there would
remain as direct purchases from without the State during the year 1955 an amount
in excess of $500,000, and thus the Board's jurisdictional criteria are satisfied. I
find that the Respondent's business operations are in commerce and affect commerce
within the meaning of the Act.
II. THE ORGANIZATION INVOLVED
The Union is a labor organization admitting to membership employees of the.
Respondent.
III. THE UNFAIR LABOR PRACTICES
In October 1953 the Respondent and the Union entered into a collective-bargaining
agreement covering wages, rates of pay, hours of employment, and other conditions
of employment affecting all regular, relief, and special drivers and all plant men
employed by the Respondent.2 Within the coverage of this agreement were all
drivers who delivered milk in and near Tucson to retail and wholesale customers.
The agreement, by its terms, was to be in effect until October 1, 1955. Without con-
sulation with the Union, in July 1955 the Respondent began discussing with its
drivers the establishment of a so-called independent distributors plan whereby the
milk routes, both wholesale and retail, would be sold to .the individual drivers along
with the trucks. The drivers would receive as compensation the difference between
the price charged to them for the packaged milk and the price at which they could
sell it to their customers. The Respondent then had in effect a profit-sharing and
retirement plan covering most of the drivers. The drivers were told by the Re-
spogdent•that all credits due each of them under the retirement plan, would-be paid
immediately in cash which could be used to purchase a route. Those who did not
desire to enter into this arrangement would be paid their credit in five annual install-
ments. Of the Respondent's approximately 70 drivers, almost all by October 3,
1955, had signed individual agreements.
The Union soon learned of this development and by letter dated July 29, 1955, the
Union's president, Howard Grant, wrote the Respondent as follows:
Please be advised that by reason of your recent action with certain employees
of your Company, members of this Organization, you have breached our
Agreement.
Unless you are willing to meet with Representatives of this Organization in the
immediate future to rectify this situation, we will be forced to take necessary
action.
9 The Union has been recognized by the Respondent continuously since 1937.
SHAMROCK DAIRY, INC.' 509
.Certainly this message is. cryptic and does not unmistakably call to. the attention of
the Respondent just what is the subject of complaint. 1 think, however, there. can be
no doubt but that the Respondent recognized this to be a protest by the Union against
the institution of the independent distributor system. No other matter occasioning
a possible dispute with the Union is revealed by this record to have existed at this
time. Other than the communication of July 29, no attempt was made by the Union
,to gain a meeting with the Respondent until in September when the Union sent the
,Respondent proposed amendments to the existing contract which it hoped might be
put in effect at,the expiration of that agreement. On October 3, 1955, Grant met
with representatives of the Respondent. Grant, noting that the Respondent had his
attorney present, said that he was not in a position to negotiate as his counsel was
out of the city. He received from Respondent's counsel a proposal that the Respond-
ent not recognize the Union as the collective-bargaining agent for persons who dis-
tributed the Respondent's products under individual contracts. No further meeting
'has taken place between the Respondent and the Union, and the Union has made
no request that such a meeting occur.
Individual drivers, faced with the problem of deciding whether to accept the
proffered individual contracts or to refuse them, consulted with Grant. There is
testimony that he advised them to refuse the offers in their own interests and in any
event to consult an attorney to see to what extent the offers were advantageous or
,otherwise. To the suggestion that Grant negotiate with the Respondent in that con-
nection, he replied that the Respondent had to come to him.
On October 3, 1955, Dave Egleston, Robert Pry, Alexander Toro, Frank Koenig,
John Foley, and John Kozacki, each of whom until that time had been an employee
of the Respondent as a driver in the delivery of milk products and within the unit
represented by the Union, were told individually that since each had expressed dis-
interest in purchasing a route and becoming an independent distributor their services
no longer were required.
Individuals who were working as retail milk distributors were offered a contract
with the Respondent providing that the driver would have the exclusive right to dis-
tribute Respondent's products at retail within a described territory, the boundaries of
which by mutual agreement could be changed from time to time; that the driver
would purchase at an agreed figure the customers already existing in the territory and
buy all the accounts receivable in that connection; the Respondent reserved the right
to change the prices it would charge the driver for its products by giving notice in
writing, and the driver agreed to pay in cash for all products given to him for resale;
the driver covenanted that he would not in any manner sell or distribute any products
of any kind within the territory other than those manufactured, produced, distributed,
or offered for sale by the Respondent. Additionally, the driver agreed to operate
and maintain his own truck and other equipment: The driver granted an uncondi-
.tional and irrevocable option to the Respondent to purchase the entire distribution
business at any time after a 30-day notice by registered mail of intention to do so.
The driver agreed that he had no right to sell or assign the business or any part
thereof to any person without the consent in writing of the Respondent. Should for
any reason the individual contract be terminated, the driver agreed to hold all in-
formation pertaining to the route and customers in confidence for a period of 2 years
and not to disclose such information without the prior consent of the Respondent.
The driver also agreed that upon termination of his contract for whatever reason he
would not within a period of 2 years after that date, directly or indirectly, on his own
behalf or for any other person, engage in the distribution of dairy products within
the territory where he had operated. It was agreed in the event of any accidents,
strike, or other emergency threatening to interfere with the proper distribution of
products, the Respondent would have the right in such event without notice to the
driver to take over the route, his equipment, and business, and to operate it during the
continuation of such an emergency. An agreement substantially the same in all
important respects was offered to and accepted by most of the wholesale drivers.
The General Counsel argues that all drivers signing these agreements were and re-
mained employees of the Respondent and as such continued to be represented by the
Union whose majority status in July 1955 is not questioned. The Respondent con-
tends that by accepting these individual contracts the drivers become in truth and in
fact independent contractors; that thereafter the Respondent's control over them
was not that of an employer.
There is no real dispute in the evidence concerning the changes accomplished by
the individual contracts. Before July 1955 each group of drivers was under the
supervision of a route supervisor who recommended promotions and dismissals and
.in general directed the drivers' activities. After July the supervisors 'were' employed
as sales promotion men and no longer undertook to supervise the work of the drivers.
510 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Before the change drivers were required to attend training classes. Afterward they
were not. Before, they were required to make a certain number of solicitations of
new accounts each day; afterward not. Some of the drivers now purchase their own
advertising media and have their names painted on their trucks. If they desire to take
a-vacation they must hire someone as a replacement for that time. Their trucks are
their own property and the maintenance expense is upon them. A few augment their
income by selling ice cream, oleomargarine, eggs, bacon, hams, and turkeys. None
of these items are handled by the Respondent. They procure and carry their own
public liability insurance and pay taxes to the city of Tucson. Before, all were re-
quired to wear a uniform. Now, although it appears that most of them wear a uni-
form quite the same or at least similar to that worn before, the requirement does not
exist. Because the Respondent has relaxed its controls over the drivers, because each
of them has a substantial investment of his own money or money borrowed with the
aid of the Respondent's endorsement in the purchase of route and equipment, and
because the earnings of each individual is determined entirely by the difference be-
tween what he pays for Respondent's products and the return he gets from his sales,
the Respondent argues that the drivers are now in all respects independent business
men.
In early 1956 the contracts between the wholesale and retail drivers and the Re-
spondent were amended in certain respects. However, the irrevocable option to pur-
chase still remained with the Respondent and the drivers in each situation agreed
that they would not be engaged in the delivery of milk within the territory assigned
for a period of 2 years after the termination of their agreement with the Respondent.
I find that no change in the contractual relation between the Respondent and its
drivers of controlling significance here was accomplished by the 1956 amendments.
Since the time that the routes have been serviced by drivers under individual
contracts, the Respondent has not made deductions from payments to drivers for
income tax purposes and has not paid to the State of Arizona the taxes levied in
connection with unemployment benefits. Sometime in August or September 1955
the Respondent brought an action against the Union in the Superior Court of the
State of Arizona seeking to enjoin the Union from picketing its establishment. There
is no evidence in this record in connection with that picketing. The Respondent's
action was based upon a section of the Arizona Code reading:
It shall be unlawful for any labor organization to picket any establishment
unless there exists between the employer and the majority of employees of such
establishment a bona fide dispute regarding wages or working conditions.
The theory of the Respondent was that as its drivers were now working under
individual contracts, they were not employees, and hence could not within the
meaning of the Arizona statute be parties to a bona fide dispute regarding wages or
working conditions. In denying the prayer for injunction the court held that the
individual contracts did not change the status of the drivers from employees to
independent contractors. The Employment Security Commission of Arizona has
issued two proposed (tentative) determinations, to the effect that the drivers under
the individual contracts are still employees of the Respondent and that the Respondent
is liable to the State of Arizona for contributions for unemployment insurance in
respect to them. The decision of the court and the proposed determinations of the
Employment Security Commission are, of course, not based upon the Act and
presumably give effect to the public policy of the State of Arizona as set forth in
the statutes applicable to the litigation as well as other guides to decision. It has
sometimes been found that the relation between one who sells his labor and one
who uses it is that of employee-employer where common-law tests would indicate
an independent contractor relationship. For example, it has been held that an
employee of the lessee of a gasoline service station is the servant of the corporate
lessor, thus making the lessor liable for his negligence.3 Such a holding appears to
be based upon the assumed economic desirability of finding such responsibility as
the lessees are frequently in no better economic position than the usual minor
employee.4 The Board, however, has in all cases coming before it uniformly
applied the common law test of "right to control" to decide what the relationship in
fact is. This is the test which will be applied to the facts set forth above.
Obviously, it is of paramount interest to the Respondent that milk be delivered
to its customers in the various territories which make up the Tucson area promptly,
regularly, and efficiently, to the end that the customers will remain satisfied and will
8 Dockens V. La Caze, 78 F. Supp. 515 (W.D. La. 1948).
4 Subagents and Subservants , by Warren A. Seavey, Harvard Law Review, voL 68, No. 4,
658-670.
SHAMROCK DAIRY, INC. 511
not be tempted to switch their business to a competing dairy. In order to keep this
customer relationship unbroken, it is to the advantage of the dairy that its drivers
be personable and presentable; that the equipment used in making the deliveries be
reliable and appropriate. Before entering into the individual contracts the Respond-
ent had the unquestioned right to accomplish by means of selecting employees, by
supervising them, and by purchasing and maintaining equipment to insure that
these conditions would prevail. Has it divested itself of this right? And has it made
a genuine sale of the distribution business to its drivers? I conclude that it has not.
The core of the matter is the reservation of the irrevocable right in the Respondent
to terminate the contractual relation at any time and for any reason, with the
lack of any right on the part of the driver should he become dissatisfied with his
arrangement to terminate it without also losing the customer clientele. Upon
analysis, the driver has actually purchased nothing from the Respondent, except a
truck. The purported sale of the customer accounts is no more than a sale of a
right to service the accounts as long as the Respondent is satisfied with the manner
of servicing.5 The driver in simple fact has done no more than to sell his labor
to the Respondent on terms and conditions which differ from those existing at the
time that he was concededly an employee. Much was made at the hearing of the
fact that some of the drivers chose not to wear the uniforms which had been standard
prior to July 1955, and that some of them found it advantageous to sell, in addition
to products of the Respondent, certain other items, such as ice cream and oleo-
margarine. These manifestations of independence are possible only because of
Respondent's sufferance. Wielding the club of unilateral decision to terminate the
contract, the Respondent can impose upon these drivers any conditions that could
have been imposed when they were in the employee relationship. It can insist that
they wear designated uniforms, that they not sell products other than those supplied
by it, that deliveries be made only during certain hours and in a specified sequence,
and that trucks be painted in a style and with emblems satisfactory to the Respond-
ent. Any driver who might persist in disregarding any direction or suggestion of
the Respondent in connection with any such matter would, of course, recognize that
he might be imperiling his right to continue servicing Respondent's customers. I
find that Respondent's right to control its drivers has not been diminished by reason
of the individual contracts and that the drivers are now and at all times have been
employees of the Respondent within the meaning of the Acts
The complaint alleges that all regular, relief, and special drivers, and all plant
men employed by the Respondent, excluding office and clerical employees and
guards, and supervisors, constitute a unit appropriate for purposes of collective
bargaining within the meaning of Section 9(b) of the Act. Respondent's answer
concedes that this was the unit concerning which it had contracted with the Union
in October 1953. The unit described appears to be a usual one in the dairy business
and there is no contention that if the drivers are employees the unit is not an
appropriate one. I find that the unit set forth above is now, and at all times material
herein has been, one appropriate for purposes of collective bargaining. Presumably,
the Union represented a majority of the Respondent's employees in the appropriate
unit at the time that the 1953 contract was made and there is no evidence tending to
indicate that the Union has since in any way lost its status as such representative
except possibly by reason of Respondent's unfair labor practices. I find that the
Union is now and at all times material herein has been the majority representative of
Respondent's employees in the appropriate unit.
In July 1955 the Respondent was in contractual relation with the Union and was
under an obligation imposed by Section 8(d) of the Act not to terminate or modify
the contract without giving written notice to the Union and offering to meet and
confer with the Union in connection with the proposed modification. This, of
course, the Respondent did not do, choosing rather to ignore the requirements of
the contract and of the Act and to seek out the employees individually to contract
with them. By this conduct the Respondent denied to the employees the right to
be represented by an organization of their own choosing and thus refused to bargain
in good faith with the Union, in violation of Section 8(a) (5) of the Act. By depriv-
ing the employees of their right of representation in this fashion, and by making
credits in the retirement fund immediately available to those who purchased routes,
the Respondent interfered with, restrained, and coerced its employees in the exercise
of the rights guaranteed in Section 7 of the Act and thereby violated Section 8(a) (1)
of the Act.
5 The right to terminate is unlimited and is not conditioned upon any default by the
driver.
6 See The H. E. Koontz Creamery, Inc., 102 NLRB 1619.
512 DECISIONS OF NATIONAL LABOR- RE, BOARD
Each of the!six employees named -earlier in this report who-were. discharged on
October 3_1955, either had refused' or had otherwise expressed- disinterest in signing
an individual contract witht the Respondent. Each of them had a right to rely upon
his collective-bargaining representative to take care of such matters with the Re-
spondent and a right to refuse to deal individually with the Respondent. Because
they exercised this right they were discharged.. I find that by, the discharge of Dave
Egleston, Robert Pry,. Alexander Toro, Frank Koenig; '-John Foley, and John
Kozacki the Respondent interfered with, restrained, and coerced those individuals, in
the exercise of their rights under Section 7 of the Act and thereby violated Section
8( . a),( I) of the Act. - By these discharges the Respondent discouraged 'membership
in a labor organization and thereby *violated Section 8,(q)(3) of the Act.7
On October 3, 1955, as has been said, the Respondent and Grant, the Union's
president, met. No bargaining took place on this occasion and-no request to bar-
gain has been made by the Union since. However, the Respondent, by proposing
then not to include the drivers in any negotiations and by its action before in dealing
with them as individuals, manifested an intent not to bargain concerning the drivers.
It is apparent that an attempt by -the Union to engage in bargaining with the Re-
spondent in that connection would have been futile.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the Respondent set forth in section III, above, occurring `in
connection with its operations described in section I, above, have a close, intimate,
and substantial relation to trade, traffic, and commerce among the several States and
tend to lead to labor disputes burdening and obstructing commerce and the free
flow of commerce.
. V. THE REMEDY -
Having found that the Respondent has engaged in certain unfair labor practices, it
will be recommended that it be ordered to cease and desist therefrom and take cer-
tain affirmative action designed to effectuate the policies of the Act.
Having found that the Respondent has refused to bargain collectively with the
Union and has, on the contrary, engaged in individual bargaining with its employees
in derogation of the Union's representative status, it will be recommended that the
Respondent cease and desist therefrom and that it no longer offer, solicit, enter into,
continue, enforce or attempt to enforce the individual contracts with its drivers, with-
out prejudice to any assertion, by the drivers of any legal rights they may have ac-
quired under such contracts, and that upon request it bargain collectively with the
Union in respect to wages, hours, and other terms and conditions of employment
affecting employees within the appropriate unit and, if understanding is reached
embody such understanding in a signed agreement.
Having found that the Respondent has discriminated in regard to the hire and
tenure of employment of certain employees, it will be recommended that each be
offered full reinstatement to his former or substantially equivalent position,8 as an
employee, without prejudice to seniority or other rights and privileges, and that each
be made whole for any loss of earnings he may have suffered by reason of the dis-
crimination against him by payment to each of a sum of money equal to that which
he normally would have received in Respondent's employ as -a route driver from
October 3, 1955, to the date of offer of reinstatement, less his net earnings during
such period.9 The Respondent is not excused from taking this step as to Foley on
7N.L.R.B. v. Stewart Oil Co., 207 F. 2d 8 (C.A. 5).
'It is contemplated that each of the named individuals will be offered reinstatement
to the same route that he operated at the time of his discharge unless for some reason,
entirely unconnected with the unfair labor practices found, such an assignment is' im-
possible. The Chase National Bank of the City of New York (San Juan, Puerto Rico,
Branch), 65 NLRB 827. -
U Robert Pry, Dave Egleston, Frank Koenig, Alexander Toro, and John Kozacki received
letters from the Respondent in April 1956 indicating that each upon application would
be reemployed in a substantially equivalent position to that which he had occupied
prior to termination. No such offer was made to John Foley. Toro and Kozacki Ignored
the letter. Pry, Egleston, and Koenig spoke with the Respondent in connection with
reemployment. At most, each was offered 'a job as a relief driver with earnings possibly
the equivalent of what they made before discharge. However, in April 1.956 and at
all times since all routes were for sale. The Respondent was in no position to offer
and did not offer to,any of them the route which he had 'held prior-to discharge with any
assurance that at some later date it would not be sold. I do not consider that in -the
case of any of the drivers a bona fide offer of reinstatement has been extended.
INTERNATIONAL IDLEWILD CATERING CORPORATION 513
the ground that-the latter has expressed unalterable opposition to the independent
distributor plan. Back pay shall be computed in the manner established by the
Board:and the Respondent shall make available to the Board payroll and other
records to facilitate the checking of the amount due.
The character and scope of the unfair labor practices engaged in by the Respond-
ent, indicate an intent to defeat self-organization of its driver-employees. It will
therefore be recommended that the Respondent cease and desist from in any manner
interfering with, restraining, and coercing its employees in the exercise of rights
guaranteed by the Act.
Upon the basis of the foregoing findings of fact and upon the entire record in the
case, I make the following:
CONCLUSIONS OF LAW
1. International' Brotherhood of Teamsters, Chauffeurs, Warehousemen and Help-
ers of America, Local Union No. 310, AFL-CIO, is a labor organization within
the meaning of Section 2(5) of the Act.
2. By, discriminating in regard to the hire and tenure ' of employment of John
Foley, Dave Egleston, Robert Pry, Alexander Toro, Frank Koenig, and John
Kozacki, thereby discouraging membership in the Union, the Respondent has en-
gaged in and is engaging in unfair labor practices within the meaning of Section
8(a)(3) of the Act.
3. All regular, relief, and special drivers, and all plant men employed by the
Respondent, excluding office and clerical employees, guards, and supervisors, con-
stitute a unit appropriate for purposes of collective bargaining within the meaning
of Section 9(b) of the Act.
:. 4. The Union was,' in July 1955, and at all times material since has been, the
exclusive bargaining representative of all employees in the aforesaid unit within
the meaning of Section 9(a) of the Act.
. 5. By refusing to bargain collectively with the Union as the exclusive bargaining
representative of the employees in the appropriate unit and by entering into indi-
vidual contracts with the drivers, the Respondent has engaged in and, is engaging in
unfair labor practices within the meaning of Section 8(a)(5) of the Act.
6; By the discharges, by refusing to bargain, and by offering financial inducements
to its employees to enter into individual contracts, the Respondent has interfered
with, restrained, and coerced its employees in the exercise of rights guaranteed in
Section 7 of the Act and has thereby engaged in and is engaging in unfair labor
practices within the meaning of Section 8(a) (1) of the Act.
7. The aforesaid unfair labor practices are unfair 'labor practices affecting com-
merce within the meaning of Section 2(6) and (7) of the Act.
[Recommendations omitted from publication.]
International Idlewild Catering Corporation and International
Association of Machinists , AFL-CIO. Case No. 2-CA-6124.
Augvist 14, 1959
DECISION AND ORDER "
On March 13, 1959, Trial Examiner Sydney S. Asher issued his
Intermediate Report in the above-entitled proceeding finding that the
Respondent had engaged in and was engaging in certain unfair labor
practices and recommending that it cease and desist therefrom and
take certain affirmative action, as set forth in the copy of the Inter-
mediate Report attached hereto. Thereafter, the Respondent filed
exceptions to the Intermediate Report and a supporting brief.
Pursuant to the provisions of.Section 3(b) of the Act, the Board
"has delegated its powers in connection with these cases' to a' three-
.member panel [Members Rodgers, Jenkins, and Fanning].'..
124 NLRB No. 66.
525548-60-vol. 124-34