Smith's Van & Transport Co., Inc.

National Labor Relations Board - Board Decisions

Mar 10, 1960

126 N.L.R.B. 1059 (N.L.R.B. 1960)

SMITH 'S VAN & TRANSPORT COMPANY , INC., ETC. 1059
which the General Counsel made at page 364 of the transcript that he relies upon
Sausman 's actions , not upon Morgan 's remark to Lyle, in contending that the four
withdrawals should not be given effect by the Board . 12 In any event , I hold that
Alice B. Hazen , C. P. Jaeger, et al., d/b/a Hazen & Jaeger Funeral Home , 95 NLRB
1034, is applicable here. In that case the Board held that the employers ' assistance
to employees in typing withdrawal letters was not an unfair labor practice because
earlier the employees had decided independently to withdraw their designations and
had drafted a withdrawal letter. Moreover , in Hazen & Jaeger the withrawal letters
were prepared and signed after certain unfair labor practices had taken place, but
the withdrawals nevertheless were given effect by the Board although they destroyed
the labor organization 's majority status. Accordingly , I conclude that Sausman's
preparation of the letter was not an unfair labor practice and that effect is to be given
to the four withdrawals . One question remains, namely, whether the withdrawals
became effective upon the date of the withdrawal letter or , instead , upon the date
when Andrews later received it at his address in Georgia . The General Counsel
did not brief the point , doubtless because of his reliance upon the proposition that
Sausman 's actions constituted unfair labor practices . If the withdrawals became
effective no sooner than Andrews ' receipt of the letter , the Union had a majority when
the Respondent refused to bargain on the day the letter was mailed . I hold , however,
that the withdrawals were effective at the time of the refusal to bargain . Elliott's
statement to Sausman that the four cameramen had decided to withdraw , and his
request that Sausman write the letter , occurred within minutes before or after the
refusal . 13 Notice to Sausman of the employees ' intended action was notice to the
Respondent . The four employees , in their relations with the Union , were principals.
The Union was their agent . The Respondent was the only person designated by the
principals as the one with whom the agent was to deal . The principals were free to
terminate the agency at any time. Here, where there is no substantial evidence of an
unfair labor practice and where the principals mailed written notice of termination
to their agent upon the same day that they orally informed the Respondent that the
agency was being terminated , I hold that the notice to the Resopndent constituted
revocation of the agent's authority to represent the four principals.
In summary , I recommend that the complaint be dismissed because the Union did
not possess majority status at the time of the Respondent 's refusal to bargain and
because there is no substantial evidence to support the allegations of independent
violations of Section 8 (a) (1) of the Act.
1i When Lyle was asked why he signed the withdrawal letter, the General Counsel
objected on the ground that "what his reasons were are purely subjective ; that the fact
that he did it and did it voluntarily is all that is important ." [ Emphasis supplied.]
13 Elliott testified for the General Counsel, as already recited, that as early as Febru-
ary 14 or 15 he told Sausman that "we had decided to withdraw."
Smith's Van & Transport Company, Inc., and Smith 's Transfer
and Storage Company, Inc.' and Drivers , Chauffeurs and
Helpers Local No. 639, International Brotherhood of Team-
sters, Chauffeurs , Warehousemen and Helpers of America.
Case No. 5-CA-1451. March 10, 1960
DECISION AND ORDER
On September 29, 1959, Trial Examiner Ramey Donovan issued his
Intermediate Report in the above-entitled proceeding, finding, that
Smith's Van & Transport Company, Inc., and Smith's Transfer and
Storage Company, Inc., hereinafter sometimes referred to as Respond-
ent, had engaged in and were engaging in certain unfair labor prac-
1 The name of the Respondent is amended to reflect the Trial Examiner ' s action In
permitting amendment of the complaint to add the name of Smith ' s Transfer and Storage
Company, Inc , as a respondent.
126 NLRB No. 129.
1060 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tices within the meaning of Section 8(a) (1), (3), and (5) of the
National Labor Relations Act and recommending that they cease and
desist therefrom and take certain affirmative action, as set forth in the
copy of the Intermediate Report attached hereto. Thereafter, the
Respondent filed exceptions to the Intermediate Report and a brief in
support thereof.
Pursuant to the provisions of Section 3 (b) of the Act, the Board has
delegated its powers in connection with this case to a three-member
panel [Chairman Leedom and Members Bean and Fanning].
The Board has reviewed the rulings made by the Trial Examiner
at the hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. The Board has considered the Interme-
diate Report, the exceptions and brief filed by the Respondent, and the
entire record in the case, and hereby adopts the findings, conclusions,
and recommendations of the Trial Examiner, with the additions and
modifications noted below.
1. We agree with the Trial Examiner that the individual contracts
entered into by the Respondent with its drivers did not alter the
employee status of these drivers or convert them into independent
contractors? We also agree with the Trial Examiner that by entering
into these individual contracts with its employees during the term of
its collective-bargaining agreement with the Union, Respondent vio-
lated Section 8 (a) (5) and (1) of the Act in the following respects :
Respondent engaged in individual bargaining with its employees
at a time when the Union represented a majority of these employees
in an appropriate unit. Further, as the drivers retained their
employee status and continued to be covered by the Union's existing
collective-bargaining contract, the execution of the individual con-
tracts constituted midterm modification of the terms of the collective
contract. Section 8(d) of the Act makes it a violation of Section
8(a) (5) of the Act for a party to a collective-bargaining contract to
2In reaching this conclusion , we rely , inter alia, on the following facts : ( a) The in-
dividual drivers had no opportunity for profit or loss, which is characteristic of the
status of a business entrepieneur , since their contracts with the Respondent provided
that they would be paid a percentage of the amount charged by the Respondent to the
customer and this amount was fixed by the Respondent ; ( b) the drivers had no power
to select their helpers or to determine their wages or other terms and conditions of
employment , these matters being within the exclusive control of the Respondent ; and
(c) there is evidence here that Respondent exercised detailed control over the drivers'
method of operation . Cf. United States v. Silk , etc., 331 U S . 704, 716, 719 Chairman
Leedom agrees with this conclusion and notes that the facts here are distinguishable from
those in Shamrock Dairy, Inc, et al , 119 NLRB 998 , and 124 NLRB 494, where he
found that the individual contracts converted the drivers into independent contractors
In Shamrock , unlike here , the drivers had the right to determine the prices at which
they would resell the products to customers and thus had an opportunity not only to
realize a profit but also risked the possibility of loss In addition , in Shamrock, unlike
here , the work of the drivers was not in fact supervised by the employer and there was
no evidence that the drivers had any helpers . See 119 NLRB 998, p . 1005. Member
Bean does not consider anything decided in the instant case to be inconsistent with his
dissent in Shamrock Dairy, Inc, supra.
SMITH'S VAN & TRANSPORT COMPANY, INC., ETC. 1061
modify such a contract during its term without giving the notice
prescribed by Section 8(d). No such notice was given here.'
We find, in addition, that, even if, as Respondent contends, the
individual contracts changed the status of the drivers to that of
independent contractors, Respondent nonetheless violated Sections
8 (a) (5) and (1) of the Act. Despite the fact that, as the Trial Exam-
iner found, Respondent entered into the individual contracts for eco-
nomic reasons, the Union was entitled to bargain with respect to the
-contemplated change in status to independent contractors as it affected
the tenure of employees in the unit.' By failing to afford the Union
such opportunity before effecting such change in status, the Respond-
ent violated Section 8 (a) (5) and (1) of the Act.
2. We do not agree with the Trial Examiner that Respondent, by
entering into the individual contracts, also violated Section 8 (a) (3)
and (1). As we have already noted, this action by Respondent was
motivated by economic considerations and not by any desire to under-
mine the Union. No driver was discharged or demoted for refusing to
enter into an individual contract. On the contrary, the record dis-
closes that all the drivers who signed the contracts remained members
of the Union at the suggestion of the Respondent.
REMEDY
We have found that Respondent, by entering into individual con-
tracts with its drivers, acted in derogation of its collective-bargaining
agreement with the Union and breached its obligation to bargain, in
violation of Section 8(a) (5) and (1). Accordingly, in order to pre-
vent Respondent from enjoying the fruits of its unlawful action and
to effectuate the policies of the Act, we shall order Respondent to
abrogate the individual contracts and to make the drivers whole for
any loss which they may have suffered by reason of Respondent's uni-
lateral modification of their terms and conditions of employment
through the substitution of the individual contracts for the collective-
bargaining agreement between Respondent and the Union.5
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, Smith's Van &
3 See the opinion of Members Jenkins and Fanning in Shamrock Dairy, Inc., 124 NLRB
494. Although Chairman Leedom, in Shamrock, found no violation of the requirements
of Section 8(d), this position was based on his view that the individual contracts con-
verted the drivers into independent contractors. Since here he finds that the drivers
remained employees, Chairman Leedom agrees that the Respondent violated Section 8(d),
and therefore 8(a)(5).
4 Shamrock Dairy, Inc, supra; Brown Truck and Trailer Manufacturing Company, Inc.,
at al, 106 NLRB 999.
s Cascade Employers Association, Inc, 126 NLRB 1014; see, also, West Boylston
Manufacturing Company of Alabama, 87 NLRB 808, 813.
1062 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Transport Company, Inc., and Smith's Transfer and Storage Com-
pany, Inc., Washington, D.C., and its officers, agents, successors, and
assigns, shall :
1. Cease and desist from :
(a) Refusing to bargain collectively with Drivers, Chauffeurs and
Helpers Local No. 639, International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of America, as the exclusive
representative of all truckdrivers, helpers, packers, and warehousemen
employed by Respondent, but excluding all office and clerical em-
ployees, guards, and supervisors as defined in the Act, with respect to
adoption or continuance of a system of operation known as the con-
tract operator plan insofar as it affects the tenure and conditions of
employment of their employees.
(b) Continuing or giving effect to any individual contract operator
contracts.
(c) Dealing individually with employees in derogation of their
bargaining representative in respect to any matter properly the subject
of collective bargaining.
(d) In any like or similar manner interfering with, restraining, or
coercing their employees in the exercise of the right to bargain col-
lectively through representatives of their own choosing.
2. Take the following affirmative action which the Board finds will
effectuate the policies of the Act :
(a) Bargain, upon request, with Drivers, Chauffeurs and Helpers
Local No. 639, International Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America, with respect to adoption or
continuance of a system of operation known as the contract operator
plan.
(b) Notify, individually, and by the posting of the notice attached
hereto, all drivers with whom Respondent has made individual con-
tracts that they will no longer offer, solicit, enter into, continue, or
enforce such contracts but without prejudice to adjustment between
Respondent and said drivers of their respective legal rights in the
trucks or tractors covered by the purchase contracts.
(c) Offer to all drivers with whom Respondent has made individual
contracts immediate and full reinstatement to their former or substan-
tially equivalent positions as drivers, without prejudice to seniority
or other rights and privileges, and make each whole for loss of pay,
if any, suffered by reason of the said drivers' employment under
individual contracts.
(d) Post at their place of business in Washington, D.C., copies of
the notice attached hereto marked "Appendix." 6 Copies of such
e 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" the
words "Pursuant to a Decree of the United States Court of Appeals , Enforcing an Order."
SMITH 'S VAN & TRANSPORT COMPANY, INC., ETC. 1063
notice, to be furnished by the Regional Director for the Fifth 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 thereafter,
in conspicuous places , including all places where notices to employees
are customarily posted. Reasonable steps shall be taken by the
Respondent to insure that said notices are not altered, defaced, or
covered by any other material.
(e) Notify the Regional Director for the Fifth Region, in writing,
within 10 days from the date of this Order, what steps they have taken
to comply herewith.
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to -a Decision and Order 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 Drivers,
Chauffeurs and Helpers Local No. 639, International Brotherhood
of Teamsters, Chauffeurs, Warehousemen and Helpers of Ameri-
ca, with respect to adoption or continuance of a system of opera-
tion known as the contract operator plan.
WE WILL no longer enter into, continue, or enforce any indi-
vidual contracts with contract operators.
WE WILL offer to all contract operators with whom we have
individual contracts immediate and full reinstatement to their
former or substantially equivalent positions as drivers, without
prejudice to seniority or other rights and privileges, and make
each whole for any loss of pay suffered by reason of their employ-
ment under individual contracts.
SMITH'S VAN & TRANSPORT COMPANY, INC., AND
SMITHS TRANSFER AND STORAGE COMPANY, 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
STATEMENT OF THE CASE
Upon a charge filed by Drivers, Chauffeurs and Helpers Local No. 639, Inter-
national Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of
America, herein called the Union, the General Counsel of the National Labor Rela-
1064 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tions Board, herein called the Board, issued a complaint against Smith's Van &
Transport Company, Inc., herein called Respondent.'
In substance , the complaint alleged that while a collective-bargaining contract was
in effect between Respondent and the Union the Respondent changed the terms
thereof by executing individual contracts with certain employees covered by the
union contract without consultation with the Union and has refused to bargain with
the Union on the aforedescnbed matter or with respect to the employees involved,
thereby engaging in unfair labor practices in violation of Section 8(a)(1), (3), and
(5) of the National Labor Relations Act. Respondent 's answer denied that it had
committed unfair labor practices as alleged.
Pursuant to notice a hearing was held on June 29 and 30, 1959 , with all parties
represented by counsel , in Washington , D.C., before the duly designated Trial
Examiner.
After examination and cross -examination of witnesses and the introduction of
evidence , the parties made oral argument upon the record and thereafter Respondent
and the General Counsel filed briefs.
On the basis of the entire record in the case , and from his observation of the
demeanor of the witnesses at the hearing , the Trial Examiner makes the following:
FINDINGS OF FACT
I. THE BUSINESS OF THE RESPONDENT
. Smith's Van & Transport Company, Inc., is a Delaware corporation with its main
office and principal place of business in Washington , D.C., and branch offices in
Maryland and Virginia . Smith's Transfer and Storage Company, Inc., also has its
main office and principal place of business in Washington , D.C., at the same location
as Smith's Van & Transport Company, Inc. The same individuals own the stock
of both companies and Virgil A. Seward , Jr., is vice president in charge of the
operations of the two companies . The contract between the Union and Smith's
Transfer and Storage Company, Inc., is actually , according to both parties , between
the Union and both companies and the employees in the bargaining unit are em-
ployees of both companies?
Respondent is engaged in the storage and transporting of household goods in the
District of Columbia and the transporting of household goods among the several
States and between the District of Columbia and the several States. In a repre-
sentative 12-month period Respondent rendered services for which it received
approximately $ 1,000,000, of which $450,000 was received for services rendered
outside the District of Columbia During the same period Respondent purchased
supplies valued at $75,000 that were shipped to its District of Columbia terminal
from points outside the District of Columbia.
The Trial Examiner finds that Respondent 's business operations are in commerce
and affect commerce within the meaning of the Act.
II. THE LABOR ORGANIZATION INVOLVED
Drivers, Chauffeurs and Helpers Local No. 639 , International Brotherhood of
Teamsters , Chauffeurs, Warehousemen and Helpers of America , is a labor organiza-
tion within the meaning of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The initiation of individual contracts
Since 1954 Respondent and the Union have been parties to a collective -bargaining
agreement . The current contract is for the term of June 1, 1957 , through May 31,
1960, and provides for recognition of the Union as the exclusive representative of
Respondent 's truckdrivers, helpers, packers, and warehousemen.3
1 At the inception of the hearing counsel for the General Counsel moved to amend the
complaint to include Smith ' s Transfer and Storage Company , Inc., as a corespondent.
The motion to so amend was granted . The relationship of the two companies is discussed
hereinafter.
3 As used herein the term Respondent applies to Smith's Van & Transport Company,
Inc, and Smith ' s Transfer and Storage Company, Inc.
3 Inter alia, the contract contains a union -security clause requiring membership in the
Union as a condition of employment , a grievance procedure , and a "hot cargo" clause.
SMITH'S VAN & TRANSPORT COMPANY, INC., ETC. 1065
After considerable study, Respondent introduced a plan whereby individual drivers
of its trucks entered into contractual agreements with Respondent. Two employees
signed contracts with Respondent in June 1958; seven contracts were signed in
September 1958; one was signed in November 1958; one in February 1959; and
three in March 1959, the last dated March 30. All but two of the individuals who
signed contracts had been drivers for Respondent for varying periods of years The
two nonemployees had been secured through a newspaper advertisement of Re-
spondent. At the time of the hearing seven of Respondent's trucks or tractors were
still operated by drivers who were employee-drivers before Respondent instituted
the new type of operation and these seven drivers admittedly have continued in the
same employee-driver status.
Respondent had not advised or consulted with the Union concerning the new
individual contracts prior to initiating such agreements. Respondent, however, held
several meetings with its employee-drivers on the subject of the new arrangements
in order to acquaint them with the advantages of entering into individual contracts.
At one of these meetings, attended by Respondent's top officials and by the
employee-drivers, the chairman of the board of Respondent's directors, addressed
the employees. According to Virgil A. Seward, Jr., vice president in charge of
Respondent's operations, the aforementioned chairman informed the employees that
it was possible to earn $50 a week or more by entering into the individual contracts.
In general it was Respondent's position at the hearing that it initiated the individual
contracts because it considered such agreement to be advantageous to both the
drivers and the employer.
Julius C. Randolph, business agent of the Union who administered the contract
with Respondent on behalf of the Union, testified without contradiction that he first
learned of the individual contracts between Respondent and the drivers in the first
part of August 1958. Randolph secured his information from some of the union
members and thereafter arranged a meeting with Respondent. At the meeting
between the Union and Respondent the Union took the position that the Respondent
was not entitled to negotiate such contracts since the union contract covered the
drivers. Respondent contended that it had a right to enter into such contracts. Two
other unsuccessful meetings took place between the parties, the last occurring after
the filing of charges or the issuance of the instant complaint. At one meeting in
1958 the Union proposed that the Respondent reopen the contracts with the indi-
vidual drivers and negotiate with the Union for such drivers. The union business
agent stated that if the contracts were negotiated with the Union it would make
the terms so difficult that the Company could not operate on the contract-owner
system.
While the Respondent favored the individual contract arrangement with the
drivers and endeavored to persuade its drivers to sign such contracts the Trial
Examiner does not credit the testimony introduced by the General Counsel to the
effect that the drivers were threatened with less work and consequent lower earnings
unless they signed individual contracts. As mentioned above Respondent, who was
in a position to know whereof it spoke, did express its opinion that signers of the
individual contracts could earn more than those who did not enter into such
arrangements'
B. The provisions of and practices under the individual contracts
Each of the 14 drivers who executed an individual contract with Respondent on
the aforementioned dates, signed two instruments, one, a "Truckman's Hauling Con-
tract" and the second, a contract or purchase. Under the terms of the latter instru-
ment the driver, hereinafter in this report referred to as the contract-operator, agreed
to purchase a specific tractor from Respondent at a specified price.5 As far as
4 The 12 drivers who had been in Respondent's employ prior to signing individual con-
tracts were members of the Union. . After they signed contracts they continued their
union membership pursuant to Respondent's advice The two drivers hired from the
outside also became or remained members of the Union at Respondent's suggestion after
they signed individual contracts with Respondent.
6 The term tractor or truck refers to a vehicle consisting of a motor, driving controls,
frame, and wheels A van body or other body can be attached to the tractor for hauling
purposes. Respondent owns the van and makes the determination of which van will be
pulled by the contract-operator's tractor. The size and capacity of vans varies. The
contract-operator pays for the insurance on the van
1066 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
appears the (tractors had all been used in Respondent's operations prior to the
institution of the contract-operation system. The price of the tractor was not the
subject of negotiation between the Respondent and the contract -operator purchaser
but was determined by Respondents The purchase contract provided for the incor-
poration by reference and for the simultaneous execution by the parties of a
"Truckman's Hauling Contract" whereby the tractor was to be used exclusively in
Respondent's business. It was provided that the tractor was to be parked at a
location designated by the Respondent and that the purchaser would secure and
pay for insurance on the tractor. Payment was to be made by the Respondent
deducting a specified percentage of the purchaser's gross monthly income, with a
minimum monthly payment specified.
The "Truckman's Hauling Contract," referred to above, as well as the purchase
agreement, recites that the vehicle will be used exclusively in Respondent's business;
it is stated that the intention of the parties is that the truckman is an independent
contractor and is not an employee of Respondent; the truckman agrees that the
Respondent may have the vehicle repainted whenever, in the opinion of the Re-
spondent, there is need therefor; in devoting the vehicle to the Respondent's business
the truckman agrees to comply "with all the rules, regulations, and instructions of
the Company relative thereto"; the truckman is to hire and pay for any labor required
incident to driving, pickup, loading, and delivery and such labor help "shall be
members of Drivers, Chauffeurs & Helpers Local No. 639" and under the direction
and control of the truckman; Respondent has no responsibility for fines or costs
incurred by truckman by reason of violations of any laws; the truckman will pay
unemployment insurance, old age, and other social security taxes for his employees;
the truckman will do the necessary packing, crating, etc., when so instructed by
Respondent and will use the materials, such as crates and cartons furnished by
Respondent; the truckman will personally drive the tractor exclusively unless unfore-
seen circumstances require his employment of a qualified substitute driver, "of which
the Company shall be notified in advance and give its approval.. ."; the truckman
agrees that he or any substitute or relief driver whom he may employ will undergo
a course of instruction in the Company's method of doing business whenever so
requested by the Company; the truckman will load and unload shipments in accord-
ance with the tariffs, rules, regulations, and instructions of the Company; the truck-
man will furnish and pay for liability insurance on the truck and van and authorizes
the Company to place such insurance and charge him with the cost; the truckman
also pays for fire, theft, windstorm, collision, and other insurance; the Company
will carry cargo insurance on items shipped but the truckman will be charged for
damage to such items in his custody up to the deductible amount of the insurance
policy; in the event that the truckman satisfies the Company of his nonliability for
damage, the amount of the loss will be credited to his account; the truckman agrees
to apply for a liability bond in an amount not to exceed $1,000 and to pay the cost
therefor; the truckman agrees to deposit $250 with the Company during the
contract period until final settlement is made; all orders for service and bills of
lading are to be between the Company and the customer and if the truckman has
an opportunity to acquire moving work he will refer the same to the Company; all
money collected for hauling is to be turned over directly to the Company together
with any other sums collected "either as specified in the `Instructions to Truckmen'
issued for each shipment as covered by special instructions"; the truckman is to main-
tain the tractor in good mechanical condition at its own expense and to pay operating
and maintenance expenses ; the truckman pays license and other taxes; the truckman
is to be paid in accordance with a rate schedule whereby he receives a percentage of
the amount charged by the Company to the customer, the charge to the customer
being exclusively the right of the Company; either party may cancel the contract on
30 days' notice; also "In the event the Company believes, for good reason, the
equipment herein referred to is not being protected or used as required by this
contract, the Company shall have the right to forthwith declare this contract can-
celled and to take possession of such property.. ."; the contract is for a term of
1 year and for year to year thereafter unless terminated as provided.
6 There is testimony that Respondent used the price set forth in the "Red Book."
Although the record does not contain evidence respecting the "Red Book," the Trial
Examiner takes cognizance that there is a publication of this description used in the
automobile and truck trade and that the publication sets forth prices for various makes
and models of automobile vehicles.
SMITH'S VAN & TRANSPORT COMPANY, INC., ETC. 1067
Since all but two of the contract-operators were formerly drivers and admittedly
employees of Respondent and since Respondent still employs drivers who are not
contract-operators, a comparison between contract-operators and noncontract
drivers will be made.
Respondent pays for traffic tickets incurred by noncontract drivers while contract-
operators pay their own tickets. Noncontract drivers do not pay for any insurance
as contrasted with the contract-operators.? All noncontract drivers are bonded
whereas, notwithstanding the provision in the hauling contract, above, the contract-
operators are not bonded. Noncontract drivers do not pay operating or mainte-
nance expenses and license fees whereas contract -operators do. The latter are paid
a percentage of the gross revenue they earn whereas the noncontract drivers are paid
an hourly rate with a minimum guarantee. Contract-operators do not receive
bonuses, paid vacations, or holidays while noncontract drivers do. While waiting
for a load a contract-operator is not required to perform other work around
Respondent's terminal whereas a noncontract driver is required to perform such
work. Contract-drivers do not receive an employee's manual that is issued to
noncontract drivers.
Both the contract-operator and the noncontract drivers receive their work assign-
ments in the same manner from Respondent's dispatcher. They receive the same
type document or ticket on which the dispatcher places the individual's name. Both
classes of drivers fill in the same ticket and turn it in at the end of the day and both
mark thereon the time started and the time stopped. At the end of the week both
classes of drivers receive the same type of document in their pay envelope showing
the work performed. If there are two or three shipments to be loaded Respondent
tells both types of drivers the order in which the shipments are to be loaded and
also gives directions respecting the packing that may be involved. Both types of
drivers attend instructional motion pictures shown by Respondent dealing with the
proper method of loading vans and vehicle operation and courtesy on the highway.
Contract-operators are not required to wear a company uniform whereas noncontract
drivers are required to do so.8 In practice, some or many of the contract-operators
do wear the company uniform. Both classes of drivers have the same contact with
customers and handle money in the same way. Customers' checks are not made out
to the contract-operator but are made payable to Respondent and all moneys are
turned over in gross to Respondent in the same manner by both contract-operators
and noncontract drivers. Contract-operators and noncontract drivers are required
to park their tractors in the Respondent's parking lot and turn over the keys therefor
to Respondent at the end of a working day. The tractors may not be driven to their
homes or otherwise by the contract-operators for personal transportation. Re-
spondent may not use a contract-operator's tractor without the operator's permission
and the contract-operator's name is painted on his tractor as contrasted with the
lack of similar identification on the noncontract tractors. According to the uncon-
troverted testimony of Braxton, a contract-operator, Respondent determines any
words or advertising on the side of the tractor.
Respondent has stated in its brief that "A contract operator is permitted to refuse
to take jobs, although Respondent does expect the operator to fulfill his contract
and not refuse jobs unreasonably." The Trial Examiner finds that the record lends
support to this statement but is of the opinion that amplification is appropriate.
Contract-Operator Phillips, a witness called by the General Counsel, testified that
approximately 2 weeks before the hearing he returned to the Respondent's terminal
at about 2:30 p.m. after completing a job. Phillips had planned to move his own
household and when Traffic Manager Kuhlman told him he had another job for
him Phillips told him of his personal plans. Seward, Respondent's vice president in
charge of operations, then told Phillips that there was work to be done and that by
refusing the work Phillips' contract could be terminated. Phillips then performed
Respondent's work. Kuhlman was not called to testify but Seward testified that
he spoke to Phillips in Kuhlman's presence and appealed to Phillips to do the work,
7 All the tractors are covered by a fleet insurance policy taken out in the Company's
name. The contract-operators do not have copies of the policy and the one contract-
operator, who was asked, testified that he did not know the amount for which his
vehicle was insured. Respondent has stated at the hearing that the contract-operators
could take out their own insurance policies
s According to the credited testimony of Contract-Operator Johnson, a witness called
by Respondent , the latter has stressed neatness in dress to the contract -operators.
1068 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
without, however, threatening him with termination of the contract.9 The Trial
Examiner credits Phillips' testimony and finds that Respondent stated to him that if
he did not perform the job on hand his contract could be terminated. Bauknight,
a witness called by Respondent, had been a noncontract driver for Respondent for
13 years prior to becoming a contract-operator. He testified that he had refused
jobs from Respondent, giving Respondent his reasons therefor, when he was a
noncontract driver and also when he was a contract-operator. In both instances the
Respondent accepted Bauknight's refusal. He testified that when he was a non-
contract driver the Company's acceptance was not as "easy" as under the present
system but in any event the Company did not discipline him for his nonacceptance
when he was a noncontract driver. The Trial Examiner credits Bauknight's afore-
mentioned testimony.
Seward testified that Respondent makes periodic checks on its noncontract drivers
throughout the city and that at one time it maintained a constant road check.
Respondent does not make this type of check on its contract-operators.'° There are
also various things concerning which "you don't have to instruct any household
goods mover" since, according to Seward, an experienced mover would know what
to do.'i
9 Seward testified •
Q Did you, as he [Phillips] testified, threaten him with termination of the con-
tract if lie didn't take the job"
A I did not threaten him, no. I would do it this way If a man is not going to
work for us, a contract operator or an employee, lie is of no use to us, and if he is
not going to work, there is no point in having people that are not working.
t t ♦ # $ t t
I asked him in a very nice way if he wouldn't help us out and go take this job-
• t R
*
! i t
Q Was any reference made to the contract in the conversation?
A I don't recall. I would say this • That if a contractor has a contract to haul
furniture for Smith's Transfer & Storage Company, that if he doesn't abide by the
contract, the contract would be terminated
Q. Well, did you remind him of that or refer to that fact in any way?
A. I would say that it is possible that I reminded him of the fact that if he
didn't follow his contract that it would be terminated, but not in a threatening
manner I don't believe in that method of operation.
10 Seward testified that the reason why the noncontract driver was "supervised much
more closely" than the contract-operator was because the latter was employing the
labor, i e, the helpers on the truck and "we don't have to watch him to see whether he
stops or not. . . . The responsibility is his."
It may be noted in this connection that both contract-operators and noncontract
drivers turn in to Respondent the same document showing the time started on the job
and the time when the job was completed. Respondent states that the only reason why
the contract-operator fills in this time report is to enable Respondent to compare actual
job time with the estimate of job time furnished to the customer by Respondent's sales-
man. Acceptance of this explanation, however, is not inconsistent with the fact that
Respondent has an important interest in job time since Respondent could not reasonably
be expected to be indifferent to a situation where a contract-operator was consistently
taking a longer time on jobs than either Respondent or its customers expected
11 If a contract-driver came to a customer's home and found items that were not in-
cluded in the estimated price, he could call Respondent Respondent would tell him to
take the additional items but would make some adjustment for labor on the job ticket.
Seward testified that there have been instances of a contract-operator refusing to move
a large piece of uncrated ,plate glass However, if the Respondent accepted the re-
sponsibility apparently there would be no problem and Respondent customarily accepts
such responsibility since as Seward stated ". . . we can't get into a hassle with a driver
or contract operator, employee, or whatever he might be. He is there to satisfy the
customer." It is not clear whether a noncontract driver would move a large uncrated
piece of plate glass without similar clearance with the Company since his "no claim for
damage" bonus if nothing else, would prompt such a position When a customer files a
claim for damage, Respondent makes the determination of whether or not the contract-
operator should pay for the damage. Thus, in one instance, the contract-operator was
called to Traffic Manager Kuhlman's office and was told of the customer's claim regarding
some scars or scratches on furniture. Respondent sent a man out to fix the scratches
and billed the contract-operator for the repair work.
SMITH 'S VAN & TRANSPORT COMPANY, INC., ETC. 1069
In the course of its operations Respondent is not completely detached from the
activities of its contract-operators when they are out on an assigned job. Thus, there
is uncontroverted evidence , which the Trial Examiner credits, to the effect that a
contract-operator had a moving job in an elevator apartment building. The contract-
operator placed a screwdriver under the elevator door in order to hold it open.
The manager of the building phoned Respondent and Traffic Manager Kuhlman came
to the scene. Kuhlman told the contract-operator that he should not have used the
screwdriver to hold the door ; and that he was not supposed to be there until 9 a.m.,
whereas the contract-operator had arrived at 8:30 a.m. Another contract-operator
had taken his vehicle out on a job and Traffic Manager Kuhlman received a report
from the helper that the contract -operator had left the vehicle. Kuhlman went to
the jobsite and reported to Seward that the contract -operator was under the influence
of liquor. Respondent thereupon terminated the contract with the contract -operator
whose relationship with Respondent ceased entirely.12
Both the contract -operators and the noncontract drivers are required to and do
use the same helpers and the same number of helpers. The helpers are all employees
of Respondent and are covered by Respondent 's contract with the Union. The
helpers are and must be members of the Union and there are two helpers on every
large van or trailer and one helper on a small van . The helpers are paid the wages
set forth in the contract between the Respondent and the Union and the helpers'
conditions of employment are governed by the seniority , grievance, and other clauses
of the union contract.13 The contract-operator has not entered into any contract with
the Union . Helpers are assigned to contract-operators and noncontract drivers by
Respondent . If a contract-operator asks for a particular helper, Respondent some-
times complies with the request and sometimes refuses, assigning another man. If
a man does not like or get along with a helper , the Respondent tries, according to
Seward , to make a change and this is true with respect to noncontract drivers as
well as contract -operators . If a contract-operator is not working on a particular
day, the helper reports to Respondent and may be assigned to a noncontract driver,
another contract -operator , or otherwise . The helper 's wages are deducted by
Respondent from the contract-operator's percentage or commission ( gross pay) on
a job when the helper is working for the contract-operator . Also deducted , on behalf
of the helper , from the contract-operator's gross are social security payments , income
taxes, health and welfare fund payments to the Union , and a charge for the paid
vacations and holidays under the union contract . When a contract -operator 's helper
has a claim under the workmen 's compensation law the claim would be made on
behalf of Respondent and not the contract -operator . Respondent has a regular
claim number whereas the contract -operator does not. The W-2 income tax forms
and the social security forms for the helpers bear Respondent 's name and not that
of the contract -operator . 14 The helpers receive their pay at Respondent 's pay window
and the slips that they receive showing various deductions bear the name of
Respondent and the helper.
C. Conclusions
1. The status of the contract -operators
The parties are in complete disagreement respecting the status of the contract-
operators . Respondent contends that the operators are independent contractors
while the General Counsel asserts that they are employees as defined in the Act.
Both the Board and the courts have frequently held that the determination of whether
an individual is an independent contractor or an employee within the meaning of
the Act requires the application of the common law "right -of-control" test. Under
z, Seward testified that a contract-operator would be required to call Respondent if he
was delayed on a trip so that the Respondent could notify the customer of the delay
and the cause thereof.
'p Pursuant to the contract between the contract-operator and Respondent the contract-
operator must personally drive or be on the tractor at all times unless unforeseen circum-
stances require him to secure a substitute driver, of which the Company must be notified
in advance and give its approval. In addition to the necessity for Respondent's approval
of a substitute driver, the contract provides that the substitute as well as the contract-
operator will undergo a course of instruction in the Respondent's method of doing busi-
ness whenever requested to do so by Respondent. In practice, the substitutes are taken
from the ranks of the helpers and are paid in accordance with the union contract although
a contract-operator may see fit to pay his substitute something extra from his own pocket.
14 Respondent makes no tax or social security deductions for the contract-operator
himself.
1070 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
this test , an employer-employee relationship is said to exist where the person for
whom the services in question are performed reserves the right to control not only
the end to be achieved but also the means to be used in reaching such end.15
Although this rule is readily stated its simplicity is deceiving since the simplicity is
more in ,the formulation than in the application.ls
In its able brief Respondent places major emphasis upon U .S. v. Silk, etc ., case,
infra, and recites the points in common between the instant case and the cited case.
There is no doubt , in the Trial Examiner 's mind , that the contracts in the two cases
have some or many provisions that are similar or identical . However, Silk requires
careful analysis and merits exposition . There were actually two cases under the
caption of U.S. v. Silk, one involved the Silk Coal Co. and the other was Greyvan
Lines, Inc. Both companies were litigating their liability for social security taxes
for certain individuals whom they contend were independent contractors and whom
the Government said were employees . Silk hired two types of individuals , unloaders
and truckmen . The unloaders received an agreed price per ton to unload coal
from railroad cars . "These men come to the yard when and as they please and are
assigned a car to unload . . They furnish their own tools, work when they wish
and work for others at will ." 17 The Silk Company owned no trucks . It therefore
made contracts with individuals who owned trucks to deliver coal at a particular
price per ton . These individual truckowners established a call list among themselves.
When Silk rang a bell in a building used by these truckers the man on the top of
the list had the opportunity to deliver the particular order and furnish his own
helpers. However , he was perfectly free to accept or reject the job and he could
do hauling for others . In the Grey van case, where Greyvan had contracts with
truckmen contract-operators comparable to the instant contracts , the contract-
operators could hire their own helpers and could determine whether to drive them-
selves or to hire others to drive.18 With regard to the situation presented by the
instant case , the operators could hire only company employees as helpers and pos-
sessed, in the last analysis , no effective power of choice even among this limited
group since Respondent was vested with the ultimate power to decide which helpers
worked for which operators and the number thereof . The instant operators had
no voice in the wages or other important conditions of employment of their helpers.
The latter were covered by a contract between the Respondent and the Union and
the operators were charged with the contract wage scale, paid vacations and holidays,
and other requirements and charges under the contract . There is no instance of a
contract -operator discharging a helper and the evidence indicates that the extent of
the operator 's power in this respect was to ask Respondent for another helper, a
request which Respondent in its discretion could grant or deny. Respondent could
of course hire or discharge helpers in the same manner as it could with respect to
any other employees . Nor could the contract-operators decide whether to drive the
trucks themselves or to hire others to do so since it was only where "unforeseen
circumstances " or a vacation occurred that they could engage a substitute and then
only with Respondent 's approval . That the matter of the freedom of the contract-
"'Oklahoma Trailer Convoy, Inc., 99 NLRB 1019; Bob, Inc., 116 NLRB 1931;
Williams v. U.S. 126 F. 2d 129 (CA. 7).
116 N L.R B. v. ,Hearst Publications , Incorporated, 322 U.S. 111, 121 . "Few problems in
the law have given greater variety of application and conflict in results than the cases
arising in the borderland between what is clearly an employer-employee relationship and
what is clearly one of independent , entrepreneurial dealing " Ibid.
"The problem of differentiating between employee and an independent contractor, or
between an agent and an independent contractor, has given difficulty through the years
before social legislation multiplied its importance." US. v. Silk, 331 U S. 704, 713.
it 331 U.S . 704, 706.
Is In concluding that the Greyvan truckmen were independent contractors the Court
of Appeals for the Seventh Circuit, 156 F. 2d 412 , 414, said • ". . . They [ the truckmen]
traveled long distances from the company place of business and were on the road for long
periods of time and it was therefore impracticable and impossible for the Company to
exercise control over the means and manner of the transportation , loading and unload-
ing." In the instant case , as Respondent states in its brief, the Respondent "operates a
local moving business in and around Washington , D.C." Moreover , as the evidence in
the preceding section of this report illustrates Respondent told the contract-operators
the order in which shipments were to be loaded , gave directions regarding the packing of
goods, and exercised other control over the personal conduct of contract -operators in the
performance of their work , e.g., interfering on the Jobsite with a contract-operator's
decision to use an elevator in moving goods in an apartment building and with the
operator's decision to hold a door open with a screwdriver.
SMITH'S VAN & TRANSPORT COMPANY, INC., ETC. 1071
operator with respect to his helpers is important will be seen from the language of
the court of appeals and the Supreme Court in the Silk and Grey van cases where
the courts concluded that the truckmen were independent contractors:
While many factors in this case indicate such control [by the company over the
contract-operator] as to give rise to that [employer-employee] relationship,
we think the most vital one is missing because of the complete control of the
truckmlen as to how many, if any, and what helpers they make use of in their
operations [156 F. 2d 412, 441-416 (C.A. 7), cited in the Supreme Court
decision affirming the holding on the truckmen.] [Emphasis supplied.] 19
The Supreme Court (p. 719) held that:
where the arrangements leave the driver-owners so much responsibility
for investment and management as here, they must be held to be independent
contractors. These driver-owners are small businessmen. They own their own
trucks. They hire their own helpers. In one instance they haul for a single
business, in the other for any customer. The distinction, though important, is
not controlling. It is the total situation, including the risk undertaken, the con-
trol exercised, the opportunity for profit from sound management, that marks
these driver-owners as independent contractors.
In holding that the truckmen of Silk and Greyvan were independent contractors,
the courts made it clear that no single element was determinative but that the decisive
factor was the "total situation" that revealed the operator as an independent business-
man, possessing true entrepreneurial freedom to conduct his business without being
controlled in essential elements by someone else. It is worthy of note that the
Supreme Court found that the unloaders in Silk were not independent contractors
although they owned their own tools. In the opinion of the Trial Examiner, this
conclusion of the Court adds emphasis to the concept of the "total situation" or es-
sential nature as the correct criterion as distinguished from a collection of indicia
or forms. Stated another way, while independent contractors usually own their
own tools or equipment such ownership does not make an independent contractor.
This is true of other indicia usually found with independent contractors. An em-
ployee can own his tools and equipment without becoming an independent con-
tractor, thereby: he can receive his remuneration on a percentage or commission
basis; he may earn more by his own efforts or diligence on a piecework or incentive
basis; he can pay his own taxes and insurance without changing his status; 20 and
he can wear his own clothes or wear company coveralls. In short , while these
factors may serve an indicia they are not to be confused with the substance of the
independent contractor relationship.21
There are numerous cases on this subject of independent contractor or employer-
employee status and Respondent has cited many of them singling out points in com-
>a The court of appeals also stated in the above case :
We think it cannot be said that a truckman to whom is left the determination of
whether to do the work himself or engage others to do it is a mere employee.
20 If a company ' s position is that an individual is an employee it pays social security
taxes and withholds income taxes . On the other 'hand if the company ' s position is that
the individual is an independent contractor it does not pay the foregoing taxes. It is
difficult to conclude that the question of whether the individual is an employee or an
independent contractor can be determined by whether or not he pays his own taxes.
The same reasoning may be applicable to various other costs.
It may also be stated that if an employer -employee or an independent contractor rela-
tionship exists, its description by the parties as anything else is immaterial. If an in-
dividual , according to record evidence, functions as and is a supervisor within the
meaning of the Act, the employer and a union either singly or together cannot make
him an employee by their stipulation or profession . "Where the work done, in its essence,
follows the usual path of an employee , putting on an 'independent contractor ' label does
not take the worker from the protection of the Act [Fair Labor Standards Act]
Rutherford Food Corp. v. McComb, 331 U.S. 722, 729.
ii To digress slightly by way of analogy : A cat has four legs, a tail , fur, whiskers,
sharp teeth , two eyes, and two ears ; this creature has four legs, a tail , fur, whiskers,
sharp teeth , two eyes, and two ears, therefore it is a cat . The syllogism ' s premise is
vulnerable since the elements chosen apply to a dog as well as a cat and the premise is
lacking the essence of the cat although it does contain elements found in cats. There
are elements found in the independent contractor relationship but because they are found
in a particular situation does not necessarily establish the independent contractor status.
1072 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
mon with the instant case or restrictive elements not found in the case before us,
despite which an independent contractor relationship was found to exist. For in-
stance, Respondent cites U.S. v. Mutual Trucking Co., 141 F. 2d 655 (C.A. 6), which
was cited with approval in the Silk case, supra. While the individuals therein found
to be independent contractors were subject to conditions not found in the instant
case, there were important elements of difference. Thus, in holding that the owner-
operators were independent contractors, the court noted that the owner-operators
selected, discharged, and paid their own drivers. The district court in reaching the
same conclusion had said that the nature of the relationship had been "clearly
stamped" by the "degree of control over the hiring, paying, managing and discharg-
ing" of his employees by the owner-operator and the court also referred to the fact
that the owner-operator could drive himself or hire others. (51 F. Supp. 114, 115,
Dist. Ct. N.D. Ohio, W.D.) In referring to the Mutual case, supra, the Court of
Appeals for the Third Circuit, in N.L.R.B. v. Nu-Car Carriers, Inc., 189 F. 2d 756,
760, cert. denied 342 U.S. 919, stated that in Mutual the owner-operators "were
actually the owners of their tractors and trailers before they contracted with the
Company, retained almost complete dominion over them and they hired, paid and
discharged their own drivers." 22 The decision in Nu-Car Carriers itself was that the
owner-operators were employees. There are both similarities and differences be-
tween Nu-Car and the instant case. Principally, in Nu-Car the contract expressly
stated that the Company would have supervision and control over the vehicles. In
the instant case, as the evidence set forth heretofore will show, Respondent had de
facto supervision and control over essential elements. As the court stated in Nu-Car,
"The fact of ownership of tools or equipment is helpful in deciding whether one is
an independent contractor only because of the inference of right to control arising
from ownership. But if the owner, as part of the agreement to perform service,
surrenders complete dominion over the instrumentality and the right to decided how
it shall be used, as here, then the fact of ownership loses its significance." (P. 759).23
Comparison of various independent contractor and employer-employee cases on the
basis of the similarity or distinction with respect to each of many contract provisions
in the respective cases is not altogether rewarding. An example of the pertinency
of this observation is the case of National Van Lines, 117 NLRB 1213, which held
that the operators were employees. Both the General Counsel and Respondent have
cited this case and various contract provisions therein in support of their respective
positions 24
On all the facts in this case, the Trial Examiner finds that the contract-operators
were and are employees and not independent contractors as those terms are defined
in the Act. To achieve the entrepreneurial fredom of an independent contractor
the umbilical cord of the employer-employee relationship must be severed and any-
thing less is not the legal equivalent of the aforementioned incision. The contract-
operators are independent contractors in form but not in substance. Their owner-
ship of the tractors is qualified in ways that make the ownership difficult to
distinguish from a right to drive for a commission and to pay operational and
maintenance costs therefor. The owner must park his tractor on Respondent's
premises at all times when he is not moving furniture for Respondent. He may
not use the tractor for his own purposes even when not engaged in Respondent's
hauling. The contract-operator by the provisions of his contract is bound to comply
"with all the rules, regulations, and instructions of the Company"; he is obligated
to undergo a course of instruction in the Company's method of doing business
when so requested by the Company; he is bound to "load and unload shipments in
za In Williams v. U.S, 126 F 2d 129 (C.A. 7), the question was whether an orchestra
leader engaged by an establishment was an independent contractor or an employee In
finding an independent contractor relationship the court noted that the orchestra leader
and not the establishment could hire and discharge orchestra members. "To our mind
this circumstance alone comes near being decisive. It is difficult to conceive of an
employer-employee relationship without such a right on the part of the employer [i e., the
orchestra leader, the independent contractor]" (at p 133).
2a One of the points to which Respondent adverts is that title to the tractor did not
pass in Nu-Car but remained in the company for the duration of the contract. Although
the court mentioned this fact in describing the contract in Nu-Car it is difficult to con-
clude that this was a decisive factor. In some jurisdictions a sale of a truck might be
under a chattel mortgage with title in the purchaser while in other jurisdictions a con-
ditional sale with title in the seller would be the accepted method
zi On the general subject see also Oklahoma Trailer Convoy, Inc., supra; Nelson-Ricks
Creamery Company, 89 NLRB 204; Cement Transport, Inc., 111 NLRB 175 ; Shamrock
Dairy, Inc., et al., 119 NLRB 998, and 124 NLRB 494.
SMITH 'S VAN & TRANSPORT COMPANY, INC., ETC . 1073
accordance with the tariffs , rules , regulations , and instructions of the Company";
he attends, together with noncontract drivers, motion pictures shown by Respondent
dealing with loading furniture and courteous operation on the road ; Respondent
determines when, at the contract -operator 's expense , his tractor should be painted;
and when there is a claim by a customer for damage to furniture the Respondent
determines whether or not the contract -operator is responsible and should be billed
for the amount of the claim . Respondent , in its sole discretion , assigns the kind
and number of jobs to the operators.
The freedom which the contract -operators purportedly enjoy in other respects is
more apparent than real . The "right" to refuse specific moving jobs is firmly
qualified by the fact that the evidence demonstrates that Respondent expects contract-
operators to perform jobs when Respondent deems their services necssary or desirable
and at all times Respondent has the power to forthwith cancel the operator's
contract when it "believes, for good reason" that the vehicle is not being used as
required . This sanction of the Respondent is at all times present and may be and
has been exercised with respect to personal conduct of the operator on a job.
Cancellation of the contract is indistinguishable from a discharge in its ultimate
effect upon the operator . Moreover , regularity of working and availability for
work of the operator are both insured by the fact that he must drive his tractor
exclusively for Respondent and his interest in regularity of work is as great as his
interest in regularity of eating and providing for his family.
Respondent asserts that the contract-operator has an opportunity for profit
"through such things as personal management of his tractor and crew and savings
on gas and oil." The opportunities that the operator has to realize a profit from
the management of his tractor are decidedly limited as we have seen . This con-
clusion is also applicable with respect to crew management . The operator cannot
engage someone else to drive his tractor except in exceptional circumstances and
then subject to Respondent 's approval . An operator who can engage others
to drive his vehicle or elect to drive himself has one of the powers often associated
with an independent contractor who is essentially an entrepreneur or small business-
man25 A similar observation is applicable with respect to the instant contract-
operator's relationship to his crew of helpers . The opportunity for personal man-
agement in this area is sharply circumscribed . The operator has no voice in the
wages or other conditions of employment governing the helpers since such factors
are established by a contract between the Respondent and the Union . The helpers
receive their pay from Respondent both physically and in written form although
the contract -operator is charged with this expense. The operator 's choice is limited
to helpers who are in Respondent 's employ and who are union members possessing
seniority , vacation and holiday pay, and other contractual rights. The opportunity
for profit to an operator in hiring a strong nephew or other strongbacked individual
who might be willing and able at an agreed -upon wage to perform the work of
two of Respondent 's helpers is nonexistent . The interest of the union helpers in
working as hard and as fast as the contract -operator desired might well be tempered
by the fact that they received a fixed hourly rate, plus overtime pay, whereas their
alleged employer was working on a straight percentage . The area for profitable
personnel management by the operator would seem to be limited to verifying that
his helpers worked while they were with him and to exerting on his helpers whatever
personal magnetism or inspiration that he possessed in the interest of greater output.
The opportunities for profit by savings on gas and oil in this case are not such as to
characterize the operators as small businessmen possessing true entrepreneurial
freedom . Gas is presumably saved by such expedients as driving 25 miles per hour
instead of 30 miles per hour or by turning off the motor when waiting for a garage
door to be opened or when waiting for a traffic light and by keeping the motor in
good condition.26 In any event , although costs are an important consideration to
ffi Such a person may, in the typical success story of the small businessman , gradually
acquire additional tractors and employ drivers therefor . However, even if such an
individual elects to own only one tractor he may be in a position to make a profit on
his investment through the labor of a substitute while not depending wholly on his
own labor for a profit.
%The savings in gas to be gained by driving slowly may be offset by the greater
amount of time required to accomplish a particular moving job . If slow driving necessi-
tates payment of overtime rates to the contract-operator 's helpers to load or unload his
truck, the savdng in gas may be illusory. Turning off the motor at frequent intervals
could save some gas although a higher percentage of gas is probably used in starting the
engine than in idling the engine for a short period. Moreover , frequent starting may
554461-60-vol. 126-69
1074 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the small businessman independent contractor, his opportunity for savings in gas
and oil on one tractor, in the circumstances of this case, are not such, in the opinion
of the Trial Examiner, as to characterize him as an independent contractor.27
2. Respondent's obligation to bargain -
The Trial Examiner finds that the Union at all relevant times has represented a
majority of Respondent's employees in an appropriate unit and that at all relevant
times there has been in effect between the Respondent and the Union a collective-
bargaining contract and that by reason of the provisions of the Act and the contract
the Union is and has been the exclusive collective-bargaining agent for Respondent's
employees, including truckdrivers whether contract drivers or otherwise. The obli-
gation to bargain with the Union being exclusive, it exacted "the negative duty to
treat with no other." Medo Photo Supply Corp. v. N.L.R.B., 321 U.S. 678, 683-684.
By its conduct in negotiating and executing individual contracts with its contract-
drivers, Respondent acted in derogation of the exclusive bargaining agent status of
the Union. Since it is found that the contract-drivers retained their employee status
the Respondent modified or terminated the collective-bargaining contract by the
execution of the individual contracts without complying with the requirements of
Section 8(d) of the Act. Respondent, by its conduct described hereinabove, has
violated Section 8 (a) (1) and (5) of the Act.2a
Although Respondent adopted the course of action described for economic reasons,
it is found that its conduct was also violative of Section 8(a)(3) of the Act since
the employees had the right (and the obligation) to be represented by the exclusive
create greater wear and tear upon the truck's electrical system such as battery, starter,
generator, and ignition. However, let us assume that a contract-operator can accomplish
a 10-percent saving in gas by the expedients mentioned above. This would mean that a
truck, which previously ran 10 miles per gallon of gas, now runs 11 miles. If an operator
drove 800 miles per week he would use 80 gallons of gas if he was not an independent
contractor but only 73 gallons if he was an entrepreneur (independent contractor).
Since contract-operators could purchase gas from Respondent at 28 cents per gallon, the
7 gallons saved would equal $1.96 weekly profit on this phase of the contract-operator
operation. The opportunity for making a profit by saving on oil would appear to be
oven more limited N B , Contract Operator Braxton for the week of November 1, 1958,
nad paid Respondent $22 72 for 82 gallons of gas and $2 80 for 7 quarts of oil. His net
take home pay was $124 62 (General Counsel's Exhibit No. 4) prior to his payment of his
own income and social security taxes.
11 In the course of the hearing Respondent sought to introduce evidence that the in-
come of contract-operators was greater than their income as noncontract drivers. This
evidence was rejected but Respondent was permitted to make an offer of proof and to
place an exhibit in the rejected exhibit file. It is the Trial Examiner' s opinion that the
question of whether individuals are independent contractors or employees does not de-
pend upon the amount of income earned. An employee on an incentive or percentage
basis of pay can earn more by working faster and by working longer hours but his income
Is not entrepreneurial profit
After the close of the hearing Respondent sought to reopen the record to introduce
evidence that Walter Person, a witness of the General Counsel, had been arrested and
charged with forgery and that it was Respondent's information that Person had signed
a confession The Trial Examiner denied Respondent's motion to reopen. Thereafter
,Respondent moved for reconsideration of its motion and the Trial Examiner reopened the
record, excluded the evidence aforementioned on the ground of insufficient materiality to
warrant reconvening of the hearing, but allowed Respondent to make an offer of proof in
writing. Prescinding from the question of the type of evidence available for impeach-
ment of a witness, the Trial Examiner has not relied upon the testimony of witness
Person in arriving at the findings of fact or conclusions of law in this report
28 The Trial Examiner is unable to agree with Respondent's contention that the problem
is merely one of conflicting interpretation of contract. The facts and the legal principle
involved,in such cases as United Telephone Company, etc, 112 NLRB 779, and McDonnell
Aircraft Corporation, 109 NLRB 930, are distinguishable from the instant case, i.e., in
McDonnell the Board found that the issue was not one of a subversion or disparagement
of the collective-bargaining process but was a question of contract interpretation as shown
by the union's initial act of filing a grievance and processing the grievance through three
steps. In United Telephone the Board noted that the issue of construction of the contract
was pending before a court and that therefore there was no reason for the Board-to enter
the controversy Neither of these cases involved execution of individual contracts with
employees in the face of an existing union contract.
SMITH'S VAN & TRANSPORT COMPANY, INC., ETC. 1075
bargaining agent, the Union, and to be governed by conditions of employment estab-
lished by the collective-bargaining contract. Individual contracts necessarily changed
the conditions of employment of employees who could neither waive their con-
tractually established terms and conditions of employment nor be discriminated
against by alteration of these terms and conditions of employment. J. I. Case
Company v. N.L.R.B., 321 U.S. 332, 336-338. The individual contracts in the
instant case, by setting at nought the conditions of the union contract with respect
to the drivers in question, discouraged membership in the Union; these individual
contracts also purported to remove employees from the bargaining unit in the union
contract and thereby discouraged union membership, also, these employees were no
longer required to become or to remain union members as a condition of employ-
ment; the effect of such action was to discourage union membership contrary to the
provisions of the contract.29
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the Respondent set forth in section III, above, occurring in con-
nection 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 Respondent has engaged in certain unfair labor practices, it
will be recommended that it be ordered to cease and desist therefrom and take
certain affirmative action designed to effectuate the policies of the Act.
In the opinion of the Trial Examiner it is appropriate that Respondent be required
to bargain with the Union as the exclusive bargaining representative of the em-
ployees, including the contract-operators. The Trial Examiner is further of the
opinion that individual contracts between Respondent and its employees, the contract-
operators, dealing with terms and conditions of employment, and a collective-
bargaining contract between Respondent and the Union, as exclusive bargaining
agent, are mutually inconsistent conceptions. The individual contracts "obviously
must yield or the Act would be reduced to a futility." J. I. Case Company v.
N.L.R.B., 321 U.S. 332, 337. As a consequence, it is necessary that Respondent
cease giving effect to the individual contracts with the contract-operators 30 It is
likewise necessary in order to restore the status quo that contract-operators and other
employees be made whole for any net loss of pay that they may have suffered by
reason of the substitution of individual contracts for the terms and conditions of the
existing collective-bargaining contract.
CONCLUSIONS OF LAW
1. Drivers, Chauffeurs and Helpers Local No. 639, International Brotherhood of
Teamsters, Chauffeurs, Warehousemen and Helpers of America, is a labor organ-
ization within the meaning of Section 2(5) of the Act.
2. All truckdrivers, helpers, packers, and warehousemen employed by Respond-
ent, excluding all office and clerical employees, guards, and supervisory employees
as defined in the Act, constitute a unit appropriate for purposes of collective bargain-
ing within the meaning of Section 9(b) of the Act.
3. At all times material since June 1, 1957, the Union has been the exclusive
bargaining representative of all employees in the aforesaid unit within the meaning
of Section 9(a) of the Act.
4. By failing 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) (1) and (5) of the Act.
5. By the foregoing conduct Respondent has discriminated in regard to the terms
20
Respondent's suggestions to contract-operators to continue in the Union was not the
equivalent of the obligation imposed by the union-shop contract
au
While there is nothing to prevent ownership of a truck or other equipment by an
employee or to prevent arrangements for pay in the form of percentage or commission or
other arrangements, the terms and conditions of employment, pursuant to Section 8(a) (5)
and 8 (d) of the Act, are subjects for negotiation between the employer and the bargain-
ing agent and any resulting contract or modification should be between the employer and
the bargaining agent. Cf. Local 24 'of Teamsters, Chauffeurs, Warehousemen and Helpers
of America, AFL-CIO, et al. v. Oliver, A.C.E. Transportation Company, Inc, 358 U. S. 283.
1076 DECISIONS, OF NATIONAL LABOR RELATIONS BOARD
and conditions of employment of its employees, thereby discouraging membership
in the Union, and thereby has engaged in and is engaging in unfair labor practices
within the meaning of Section 8 (a) (3) of the Act.
6. 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.]
Radio Frequency Connectors Corporation ; Automatic Metal
Products Corporation i and Local 485, International Union of
Electrical, Radio and Machine Workers, AFL-CIO, Petitioner.
Cage No. 2-RC-10226. March 10, 1960
DECISION AND DIRECTION OF ELECTION
Upon a petition duly filed under Section 9(c) of the National Labor
Relations Act, a hearing was held before William C. Haemmel, hear-
ing officer. The. hearing officer's rulings made at the hearing are free
from prejudicial error and are hereby affirmed.
Pursuant to the provisions of Section 3 (b) of the Act, the Board
has delegated its powers in connection with this case to a three-member
panel [Chairman Leedom and Members Bean and Fanning].
1. The Employer is engaged in. commerce within the meaning of the
National Labor Relations Act 2
2. The labor organizations involved claim to represent certain em-
ployees of the Employer.3
3. The Petitioner seeks a unit comprising the employees of both
Radio Frequency and Automatic. Radio Frequency, Automatic, and
Local 815 moved to dismiss the petition on the ground that their cur-
rent contracts between Local 815 and each of the companies are a bar.
The Petitioner denies that either contract is a bar. The motion to
Herein called Radio Frequency ' and Automatic, respectively.
2 Because of our finding below that the contract between Radio Frequency and Local 815,
International Production Service and Sales Employees Union, hereinafter called Local 815,
is a bar as to Radio Frequency , it is unnecessary to determine whether , as contended by
the Petitioner, Radio Frequency and Automatic constitute a single Employer for unit
purposes.
3 At the hearing , Local 815 was allowed to intervene on the basis of a contract interest
in the , employees . of both Radio Frequency and Automatic , relying , in part , on its claim
to have succeeded to the contractual rights of Metal , Plastic, Miscellaneous Sales , Novelty
and Production Workers , Local 222 , hereinafter called Local 222. The Petitioner moved
to deny such intervention on the ground that Local 815 is not a successor to Local 222.
This motion was referred to the Board . The record shows that in January 1959, Local
222 joined with other unions to form Local 815. In March 1959 , Radio Frequency and
Automatic were notified that Local 815 was the bargaining representative of their em-
ployees and since that time Radio Frequency has executed a contract with LOCO 815 fof,
its employees . and Automatic has treated Local 815 as the successor to Local 222 's rights
in a contract between it and Automatic expiring November 2, 1960 . In these circum-
stances, we find that Local 815 has a sufficient contractual interest in the employees of
Radio Frequency and Automatic to warrant its intervention herein . The Petitioner'R
motion is hereby denied . See United States Gypsum Company, 114 NLRB 185 , footnote 1,
and cases cited therein.
126 NLRB No. 128.