Appendix — Land Air Delivery, Inc. v. National Labor Relations Board

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MAY 8 198

‘7 JOSEPH F. ShANtOL OR.

CLeae

Lee

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1988

LAND AIR DELIVERY, INC, - - ~- Petitioner

versus

NATIONAL LABOR RELATIONS

BOARD, - - - - - - - Respondent

APPENDIX TO PETITION FOR CERTIORARI

DAVID LEIGHTTY

TILFORD, DOBBINS, ALEXANDER

& BUCKAWAY

600 W. Main Street, Suite 202

Louisville, Kentucky 40202

(502) 584-6137

Counsel of Record

PAUL V. GUAGLIARDO

601 W. Main Street, Suite 202

Louisville, Kentucky 40202

Counsel for Petitioner

LOUIS J. AMATO

Attorney at Law

P. O. Box 340

Bowling Green, KY 42102-0340

Of Counsel

WESTERFIELD-BONTE CO., 619 W. KENTUCKY~P.O. BOX 3251, LOUISVILLE, KY. a

~ err:

TABLE OF CONTENTS

{| Note: The required Rule 28.1 statement appears in

the accompanying Petition For Writ of Certiorari. |

Opinion and Judgment of Court of Appeals (as orig-

inally decided, December 2, 1988) ...........2005.

Order of Court of Appeals, denying petition for re-

hearing (entered March 2, 1989) ................

Order of Court of Appeals denying suggestion that

rehearing be en banc (March 2, 1989) ...........

Order of Court of Appeals denying motion to stay

mandate ( hiarel Do, BOCB): «visi vices ca iNieweddes's

Order of Court of Appeals amending original opinion

(SCE es SO ce aes nae wien sas ed be

Decision and Order of NIRB (November 27, 1987)

Decision and Recommended Order of ALJ (Septem-

her 30, 1986)

ee we oe A ie ae ae a, we a i a ae ae be tae i i hoe ia a Ge Ee Pay ee et

PAGE

UNITED STATES COURT OF APPEALS

No. 87-1758

Argued October 3, 1988 Decided December 2. 1988

Laxp Aim Detivery, INc., ‘: - . Petitioner

NaTIonaL LABor Retarions Boarn, . - Respondent

Petition for Review of an Order of the

National Labor Relations Board

Darid Leightty, with whom Louis J. Amato was on the

brief, for petitioner.

Joseph A, Oertel, Attorney, National Labor Relations

Board, with whom Aileen A. Armstrong, Deputy Associate

General Counsel, and Howard EF. Perlstein, Attorney, Na-

tional Labor Relations Board, were on the brief for re-

spondent.

sefore: Rurn B. Gixspure and Sinperman, Circuit

Judges, and Miron Pouiack,* Senior District Judge,

United States District Court for the Seuthern Distriet of

New York.

Opinion for the Court filed by Circit Judge SitpernM an,

SILBERMAN, Crrewt Judge: This is a petition for review

of a decision by the National Labor Relations Bonrd. The

Board affirmed a finding by an administrative law judge

that Land Air Delivery, Inc. violated sections S(a)(5) and

S(a)(1) of the National Labor Relations Act, 29 U.S.C.

$§ 158(a) (5) & 158(a)(1) (1982), by permanently contract-

ing out bargaining unit work during the course of a strike

*Sitting by designation pursuant to 28 ULS.C. § 294¢d),

without notifying and bargaining with the Teamsters Local.

The Board also found that Land Air violated sections 8(a)

(3) and 8(a) (1) of the Act, 29 U.S.C. §§ 158(a) (3) & T58(a)

(1), by refusing to reinstate strikers, who made an uncon-

ditional offer to return to work, in place of new independent

contractors. We eonelude that the Joard’s decision was

supported by eubstantial evidence in the record as a whole,

and therefore we deny the petition for review.

}

Land Air Delivery, Inc. is an air freight motor carrier

that engages in the pickup and delivery of small packages

for overnight earriers. In 1973, the Board certified Team-

sters Local 41 as the exclusive bargaining agent of “fa]l]

truck drivers and warehousemen” employed by Land Air.

Tn 1975, the Board clarified the bargaining unit by exclud-

ing independent contractors who transported freight for

Land Air. At the time of the strike that led to this litiga-

tion, Land Air employed 13 bargaining unit truckdrivers

and used an additional group of independent contractor

drivers.

The unit employees were covered by the Teamsters’

National Master Freight Agreement (“NMEA’), which

was effective from March J, 1982 to March 31, 1985. The

extent of Land Air’s use of independent contractors was a

major issue iM the 1982 negotiations for a new contract.

Petitioner presented at least three subcontracting pro-

posals to the nnion during their negotiations, and the union

rejected each one. The union insisted upon the more

restrictive subcontracting language provided in Article 32

of the NMFA, which prohibited the subcontracting of work

that employees in the bargaining unit performed. The

parties eventually reached a bargaining impasse in late

1982 over the subcontracting language (and over an ac

ceptable grievance machinery), and the union struck to

enforce its demands. After three days, Land Air agreed to

the subcontracting language in the NMEA.

In November 1984, the union notified the company that

the union had authorized a strike, pursuant to the terms of

the NMFA, to protest both the company’s failure to comply

with certain grievance awards and its refusal to take a

deadlocked grievance to the next step of the grievance

procedure. All 13 unit employees struck, and Land Air

immediately hired replacement workers. To continue its

business during the strike in INansas Citv, Land Air used a

mix of employees from other locations, its contractors and

contractor drivers, newly-hired employees, and its) own

staff and supervisors. The company hired eight new em-

ployees in November and December 1984; three of these

employees were terminated in December 1984, and five were

terminated on March 28, 198». Thus, as of Mareh 28, 1985,

Land Air had terminated all of its replacement employees.

The company also signed agreements with 12. inde-

pendent contractors between February 20 and March 1,

1985. Five of these persons had not been contractors before

the strike, and all 12 contractors continued to work for

Land Air after the end of the strike. Although the exact

timing is not clear from the record, the combination of

subcontracting on February 20 and March 1 and termina-

tion of replacement employees on March 28 resulted in the

elimination of all bargaining unit positions by March 1950.

The strike lasted almost five months, until April 1985,

and it resulted in violent action by the strikers against

replacement workers and company property. During the

course of the strike, Land Air filed an unfair labor practice

charge against the union stemming from these acts of

violence and coercion, On February 4, 1985, the union

entered into an informal settlement agreement, which con-

tained a nonadimission clause, and it also issued a Notice to

Employees and Members that it would not engage in eoer-

cive acts.

The strike ended on April 9, 1985, when the union mem-

bers offered orally to return to work unconditionally. Mt

that time, the general manager of Land Air informed the

former strikers that there was no work for them. On

April 11, the union’s business agent communicated the same

unconditional offer to Land Air by mail. Land Air took no

action to reinstate the striking employees, and the union

filed a charge against the company alleging that it) had

committed an unfair labor practice by refusing to reinstate

the strikers. The Board’s regional director dismissed the

charge, finding that “the subject strike was an economic

strike giving the employees the right to reinstatement only

at such time when positions become available.” Because

Land Air had not hired any new employees since the uneon-

ditional offer of April 9, the regional director concluded

that the company’s refusal to reinstate the strikers was not

a violation of the Act.

After the regional director issued his ruling, the union

made several requests for employment information from

Land Air, On June 3, the union asked whether the com-

pany had hired any new employees since April 1, 1985 or

whether any of the work previously performed by the

bargaining unit employees was subcontracted as of June

3. Land Air, erroneously stating that the inquiry involved

inatters relating to 2 pending case before the Board,' de-

clined to comment on the inquiry. On June 22, the union

went back on strike. On July 16, the union’s attorney again

requested information from the company, this tine asking

for “the employment status of each and every member with

Land Air Delivery, Ine.” Land Air responded that it would

'The relevant unfair labor practice charge was dismissed on

May 21. 1985, and the period allowed for filing an appeal had

expired by the date of Land Air's response.

reply to the request by August 2, but it failed to do so. On

August 16, the union’s attorney again requested employ-

ment information from the company and, for the first time,

accused Land Air of subcontracting bargaining unit work

without first bargaining with the union.

On August 22 1985, Land Air’s attorney responded to

the union’s queries. His letter stated that with regard to

“putting a label” on the employment status of the persons

working for the company, “your guess is as @ood as mine.”

Ife went on to say that during the strike, the company “hired

“some additional employees as replacements and continued

to conduct business as it formerly did prior to the strike.”

On October 9, 1985, after some further communication with

the company, the union filed a charge with the Board as-

serting that Land Air had violated sections 8(a)(1) and (3)

of the Act by, teter alia, “continuling] to allow independent

contractors or sub-Independent contractors to continue to

perform work of the bargaining unit once there was an

unconditional offer to return to work.” On February 20,

1986, the union filed an amended charge alleging violations

of sections 8(a)(1), (3), and (5), and specifying:

On or about February 1, 1985, [Land Air] by its offi-

cers, agents and representatives subcontracted out

bargaining unit work without notice to or bargaining

with the Union.

On or about April 9, 1985, [Land Air] by its officers,

agents and representatives failed and refused to re-

instate striking employees who had made an uncondi-

tional offer to return to work.

The administrative law judge found that Land Air had

violated sections 8(a)(1), (3), and (5) of the Act by per-

manently subcontracting unit work without prior bargain-

ing. He determined that by March 1985, petitioner had

contracted out all bargaining unit positions. He ordered

the company to reinstate nie strikers and directed that

they receive backpay from Land Air (four of the striking

employees were not ordered reinstated because of specific

instances of employee misconduct). The ALJ rejected the

company’s claim that the union’s charges were barred by

the statute of limitations in section 10(b) of the Aet, 29

U.S.C. § 160(b) (1982). The Board affirmed the AL.J’s

findings on these issues, and Land Air petitions this court

for review.

Petitioner contends that as a matter of law an employer

is entitled to replace economic strikers permanently with

subcontractors at any time during the strike without bar-

eaining with the union over that decision.2. The Board, on

the other hand, appears to maintain that an employer is

vever (even during an economle strike) permitted to sub-

contract permanently, without bargaining over the deci-

sion.’ We reject petitioner’s contention, and do not find it

necessary, in order to resolve this case, to pass on the

Board’s proposition. Even if pressing “business necessity”

“Although neither petitioner nor the Board in their briefs is

entirely clear as to what is meant by pormanent subcontracting,

we take the term to mean subcontracting for an indefinite future

period not to terminate at the expiration of the strike.

8The Board urged that an emplover has two options when faced

with an economic strike: (1) it can hire permanent employee re-

placements or (2) it can contract out the werk on a temporary

basis. But ef. Elliott River Tours, Tne., 246 N.L.R.B. 935 (1979)

(Board countenanced contracting out for two years, which exeeeded

the duration of the strike, because subcontractor demanded jong

term as condition for taking on the work). Tn view of Elliott River

Tours, Wwe do not take the Board's current position to preclude

argument that at least long-term subcontracting is available in

special circumstances, ic, When permanent replacements or tem-

porary subcontractors are not viable options.

would justify permanently contracting out unit work, Land

Air has not shown such necessity here,

Long settled is the rule that an employer-—at least

absent an economic strike—is obliged to bargain with his

union before he decides to subcontract. The basis for this

requirement is that subeontracting erodes the bargaining

unit and is an “appropriate” subject for collective bareain-

ing. Fibreboard Paper Products Corp. v. NLRB, 379 U.S.

205 (1964). Also lone settled, however, is the principle that

an employer faced with an economic strike is entitled to

replace strikers permanently with new employees. VILRD

v. Mackay Radi, 304 U.S. 3335 (1938). Land Air elaimes

that Mackay Radio in ettect “trumps” Fibreboard, because

there is no meaningful distinction between replacing strik-

ers with permanent employees and replacing them with

permanent subcontractors. We see at least a theoretical

distinction, however, and that difference probably has

practical consequences,

A permanent subcontract diminishes the bargaining unit

hy the scope of the subcontract. See International Union,

UAW v. NLRB, 381 F. 2d 265, 266 (D.C. Cir.), cert. denied,

889 UL S. 857 (1967). Contracting out all bargaining unit

work, as occurred in this case, completely destroys the bar-

gaining unit. Although as a practical matter it may be

true that total replacement of strikers by new permanent

employees will often result in a decertification of the union,

there is a legal difference between the employer unilaterally

dissolving the unit by contracting out its work and the em-

ployees in the unit themselves decertifying the union. Until

decertification, the employer is obliged to bargain with the

striking union over all terms and conditions of employment

in the bargaining unit, and his obligation would be lessened

if a portion of the work of the unit were permanently sub-

contracted. Bringing on permanent replacements, more-

over, does not necessarily lead to the extinction of the

bargaining unit. A striking union might be able to gain

the allegiance of at least some of the replacement empley-

ees Who, combined with strikers, could provide the union

With continued imajority support. We think, therefore, that

the Board is within its authority to treat permanent sub-

coutracting during a strike differently from the use of

permanent employee replacements for purposes of scetion

S(a)(5) of the Act.

Despite our conclusion that permanent subcontracting

iz not legally equivalent to the use of permanent replace-

ments, we still must confront the question whether per-

manent subcontracting violated the NLURA under the cir-

culistances of this case, Petitioner relies for support

primarily on the decision of the Ninth Cireuit in Mawai

Meat Company v. NERB, 321 F. 2d 397 (9th Cir. 1963),

where the court held that an employer's unilateral decision

to subcontract work permanently during an economic strike

did not violate section S(aj(5). But cf. American Cyana-

mid v. NLRB, 592 F.2d 256, 360 1.7 (Tth Cir, 1978) (read-

ing Tawan Meat as compatible with distinction between

eenerally permissible temporary subcontracting in face of

strike and generally impermissible permanent subcontract-

ing): sce also Soule Glass & Glazing Co. v. NLRB, 652 F.2d

1095, 10s8s-S9 (Ist Cir. 1981); NERB ve. King Radio Corp..

416 I. 2d 569, 572 (10th Cir. 1969) (distinguishing between

‘Petitioner claims that his decision to subeontract did not fore-

close reuiployment of strikers, because it planned to offer strikers

the right to reinstatement if the subcontractors ceased operations.

This argument, as far as we can determine, was not preserved in

Land Air’s exeeptions to the ALJ°’s decision or presented to the

Board. so it is not properly before us. We note, however, that

unless petitioner was asserting that the subcontracting was really

temporary, cf. EMiott River Tours, Ine., supra note 3, the argument

misses the point, for whether or not petitioner was prepared to

reamploy strikers if the subcontractors terminated their relation

ship. the bargaining unit was truncated in the meantime.

permanent and temporary subcontracting). Judge Dnni-

way’s opinion in Ilawaii Meat, however, was carefully

drawn to deal with the exigencies of the partienlar situation

presented, and to exclude from the decision’s compass cases

like the instant one. In Jawai Meat, the employer deter-

mined before the strike to subcontract permanently its

hauling operations in the event of a strike, and it notified

the union of its plans just before the strike. It was un-

disputed that the emplover’s purpose in subcontracting was

totaily defensive—to keep its plant operating during the

strike. Jd, at 399.) The court rejected the Board’s finding

of a violation of section 8(a)(5), because to require an

employer to bargain to impasse over a subcontracting deci-

sion under those exigent circumstances would be to give the

union a practical veto over the decision. As the court

observed, the union could easily delay an impasse and

thereby prevent the employer from continuing business

during the strike. See id. at 400. We read Hawaii Meat,

then, to stand for no more than the proposition that an

employer may not be obliged to bargain with a union about

permanent subcontracting during a strike when that sub-

contracting is necessary to the business purpose of keeping

the plant continuously in eperation and time of decision is

of the essence.’

‘The Board’s brief dismisses Hawaii Meat altogether. because

it was decided prior to the Supreme Court's decision in Fibrehoard.

That position seems quite disingenuous to us, because the court in

Hawau Meat assumed the result in Fibreboard, as it had been de-

cided by the Board and by this court. Sce Hawaii Meat, 321 F.2d

at 399. Indeed, Judge Duniway’s reasoning, suggesting that it is

anomalous to require an employer to bargain with the union about

measures the employer needs and will use to blunt a strike before

they are employed, does not appear inconsistent with Chief Justice

Warren's opinion in Fibreboard, which foensed on the *tappro-

priateness’” of bargaining over the subcontracting decision, Fibre-

board. 379 U.S. at 214.

——————————

Although the Board has permitted unilateral subeon-

tracting that extends bevond the end of a strike in a case

where the subcontractor insisted on such an arrangement,

see Elliott Liver Tours, 246 NLRB. 935 (1979) (two year

subcontract), it does not appear to have accepted even our

narrow reading of Haean Meat that permanent subcontrac-

ting may be undertaken without first bargaining when

needed to continue operations. See supra note 3. It is

unnecessary for us to pass on the Board’s reluctance to

endorse Hawai Meat, however, because it is clear to us

that the ALJ was amply supported in his finding that peti-

tioner’s decision was not motivated by business necessity."

The subcontracting at issue in this case took place more

than three months after the strike started, and Land Air

had successfully operated during that entire period with a

mixture of employees from other locations, pre-strike con-

tractors, ngav employees, and office staff and supervisors.

Although the employer pointed to violence by union mem-

bers and large security expenses as the business reason for

the decision, the subcontracting did not take place until

after the unicn had settled the employer’s unfair labor

practice charge stemming from the violence. Thus, since

"In its line of cases concerning temporary subcontracting dur-

Ing an economle strike, the Board uses the phrase ** business neces-

sitv’’ to refer to decisions motivated by the desire to maintain

business operations during the course of a strike. See Elliott River

Tours, 2406 NLRB. at 935; Empire Terminal, 151 N.L.R.B. 1359,

1364-65 (1965), aff'd sub nom. Dallas General Drivers, Local No.

745 V. NLRB, 3595 F.2d 842 (D.C. Cir. 1966); Shell Oil Co., 149

NLRB. 285, 285 (1964). It is not clear from the Board’s de-

cisions Where the burden of proof lies on that issue, nor has the

Board enunciated a standard of proof. As far as we can tell, for

example, it has never held that an employer must meet the burden

of demonstrating that defensive measures taken were its only op-

tion or that they were the option that would have the least adverse

effect on the barewainine wnt.

_——___ ee

the ALJ found no evidence of violence after the entry of the

settlement agreement, it was reasonable for him to conclude

that the contracting out was not an effort to avoid violence.

(If the ALJ’s determination were unsupported, we would

have quite a different case.) And, despite petitioner's

contention that the employees themselves asked to be con-

verted to subcontractors, the ALJ found that the employees

had not demanded subcontractor status as a condition for

their continued service. In faet, Land Air’s president

testified before the ALJ that the reason for the shift to

independent contractors was “something that had happened

somewhere as far as court cases were concerned ... .”

In the context of the past years of dispute between

petitioner and the union over the degree of subecontraet-

ig, Land Air’s decision to subcontract all of its driving

work during the union’s ineffective strike hardly looks

motivated by business necessity. Rather, it appears that

petitioner seized the opportunity it thought legally avail-

able to fashion a final solution to the dispute over the use

of independent contractors. There is no reason to believe

that negotiation with the union over that issue was any

more inappropriate or anomalous in March 1985 than it had

been in previous years. See American Cyanamid Ce:;-¥,

NLRB, 592 F. 2d 356, 361 (7th Cir. 1979) (“There has been

no showing that this company would have been harmed by

negotiating with the union [during a strike] prior to con-

tracting out the maintenance work permanently.”). The

union could not have at that point, as it could have in

Hawan Meat, used manipulative bargaining to stymie Land

Ain’s efforts to maintain operations.’

‘The Seventh Cireuit in American Cyanamid seems to suggest

that an initial decision to subcontract in the face of a strike is by

definition always temporary and becomes permanent only at the

employer's discretion (perhaps only when le refuses to reinstate

: (Footnote Continued on Nevrt Page)

Se, we see no need to consider what circumstances would

justify an employer’s unilateral decision permanently to

subcontract bargaining unit work to withstand a strike.

Whatever those circumstances arguably might be, they do

not exist in this case. Land Air was able to operate at the

onset of ihe strike without permanently contracting out unit

work, and there is no evidence that it was unable to con-

tinuine doing so.*

IIT.

Land Air's final contention is that the union’s claim is

barred by the statute of limitations in section 10(b) of the

Act, which provides that “no complaint shall issue based

upon any unfair labor practice occurring more than six

months prior to the filing of the charge with the Board...”

29 TLS. © 160(b) (1982). The union’s unconditional offer

to return to work came on April 9, 1985; the union filed its

original charge, alleging a violation of sections 8(a) (3) and

(1) on October 9, 1985, and it filed an amended charge,

(Footnote Continued From Preeeding Page)

strikers). 592 F.2d at 360. But that view ignores the prospect

that an employer may not be able casily to obtain subeontracting

on a temporary basis. In that regard, the American Cyanamid

court may not have fully comprehended the Ninth Cireuit’s Hawai

Meat opinion; the court there held that the employer did not have

to bargain before making its decision to subcontract permanently,

but might have to bargain after the decision if the union asked to

bargain about whether to keep the subcontracting arrangement in

effect once the strike ended. Compare American ‘Cyanamid, 392

F.2d at 360 0.7 with Mawau Meat, 321 F.2d at 399.

‘Because the company’s unilateral decision to use contractors

was illegal under section S(aj)(9), it follows that the use of con-

tractors cannot justify the company’s refusal to reinstate the em-

plovees. Thus, the Board also was correet,to find a violation of

section Sfa)(3).

which specifically alleged a violation of section 8(a)(5), on

lebruary 20, 1986.

We agree with the Board that although the alleged vio-

lation of section S(a)(5) took plaee more than six months

before the filing ef the amended complaint on February 20,

1986, the union did not have notice of the permanent sub-

contracting of unit work until a date within the six month

period preceding February 20. The limitations period

does not begin to run until the party filing the charge knows

or has reason to know that an unfair labor pratice has oe-

eurred. See, e.g... NERB v. International Brotherhood of

Klectrical Workers, 827 F.2d 530, 533° (9th Cir. 1987);

Teamsters Local Union No, 42 Vv. NLRB, S825 F.2d 608, 614

(Ist Cir. 1987); cf. ILGWU v. NLRB, 463 F.2d 907, 922

(D.C. Cir. 1972) (where uniow’s “failure to file a charge

Within six months .. . [is] due to the company’s frandulent

concealment of its plans rather than the union’s lack of

diligence,” time bar is tolled). Although the union did

accuse the emplover on August 16, 1986 of unilaterallly sub-

contracting unit work, Land Air’s return letter of August

22, which stated that the company had “continued to con-

duct business as it formerly did prior to the strike,” could

reasonably have been construed as a denial.

Alternatively, we agree with the Board that the original

charge, which was filed within six months of the uneond-

itional offer to return to work, was sufficient to support

the General Counsel’s seetion S(a)(5) complaint. It alleged,

iuter alia, that Land Air had “continued to allow indepen-

dent contractors or sub-Independent contractors to continue

to perform work of the bargaining unit once there was an

unconditional offer to return to work.” The Supreme

Court bas instructed that in framing its complaint, the

Board is not Jimited to specific matters alleged in the

charge, NLRB v. Famt Milling Co., 360 US. S01, 307-08

(1999), and we have recently held that “when the Board

ventures outside the strict confines of the charge, it must

limit itself to matters sharing a significant factual affilia-

tion with the activity alleged in the charge.” G.JV. Gallo-

way Co. v. NLRB, 856 F.2d 275, 280 (D.C. Cir 1988). Be-

cause the factual activity alleged in the union’s charge in

this case was the precise activity that supported the Board’s

allegations under section S(a)(5), it seems clear that the

Board did limit itself to matters “sharing a significant fact-

ual affiliation” with the activity alleged in the original

charge.

* ¥ * 1 *

For the foregoing reasons, the petition for review is

Denied.

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 87-1758

September Term, 1988

Lanp Air Detivery, Inc., . - : : Petitioner

NaTIONAL Lapor Revations Boarp, . - Respondent

Berore: Ruth B. Ginsburg and Silberman, Circuit Judges,

and Pollack, Senior District Judge, U.S. District

Court for the Southern District of New York

ORDER — Filed March 2, 1989

Upon consideration of petitioner’s petition for rehear-

ing, filed January 18, 1989, and of petitioner’s motion to

supplement the appendix it is

ORDERED, by the Court, that the motion to supplement

the appendix is denied and it is

FurTHER OrpeRED, by the Court, that the petition for

rehearing is denied.

kor The Court:

Constance L. Dupre, Clerk

(s) By: Robert A. Bonner

Robert A. Bonner

Deputy Clerk

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 87-1758

September Term, 1988

Lanp Air Detivery, INc., - - : . Petitioner

NationaL Lasor Reiations Boarp, - - Respondent

BerorE: Wald, Chief Judge, Robinson, Mikva, Edwards,

Ruth B. Ginsburg, Starr, Silberman, Buckley,

Williams, D. H. Ginsburg and Sentelle, Circuit

Judges ;

ORDER — Filed March 2, 1989

Petitioner’s Suggestion For Rehearing Hn Bane has

been circulated to the full court along with petitioner's

motion to supplement the appendix. Upon consideration of

the foregoing it is

OrpERED, by the Court ex bane, that the motion to sup-

plement the appendix ts denied and, no member of the court

having requested the taking of a vote upon the suggestion,

it is

FurTHER Orperen, by the court ex bane, that the sug-

vestion for rehearing ci bane is denied.

Kor The Court:

Constance L. Dupre, Clerk

(<) By: Robert A. Bonner

Robert A. Bonner

Deputy Clerk

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 87-1758

September Term, 1988

Lanp Air Detivery, INc., - - . - Petitioner

National Lanor Revations Boarn, - - Respondent

Brerore: Ruth B. Ginsburg and Silberman, Cireuit Judges,

and Pollack, Senior District Judge, U.S. District

Court for the Southern District of New York

ORDER — Filed March 29, 1989

Upon consideration of petitioner’s Motion to Stay Man-

date it is

OrpereD, by the Court, that the motion is denied.

For The Court:

Constance L. Dupre, Clerk

(s) By: Robert A. Bonner

Robert A. Bonner

Deputy Clerk

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 87-1758

September Term, 1988

Lanp Air Detivery, INc., - . . - Petitioner

National Lasor Revations Boarp, - . Respondent

Berore: Ruth B. Ginsburg and Silberman, Circuit Judges,

and Pollack, Senior District Judge, U.S. District

Court for the Southern District of New York

ORDER — Filed Mareh 29, 1989

Upon consideration of the Motion of the National La-

bor Relations Board to Correct) Inadvertent Error = in

Court’s Order it is

OrvERED, by the Court, that the motion is granted and

the opinion of the court filed on, December 2, 1988 is

—_y

amended as follows:

Delete the last paragraph of. the opinion at page 14,

and substitute therefor

Kor the foregoing reasons, the petition for review is

denied and the Board’s cross-application for enforce-

ment is granted.

Kor The Court:

Constance L. Dupre, Clerk

(x) By: Robert A. Bonner

Robert A. Bonner

Deputy Clerk

UNITED STATES OF AMERICA

BEFORE THE

NATIONAL LABOR RELATIONS BOARD

Case 17—CA—12750

Lanp Ate Denivery, Inc.,

AND

Teamsters Locau 41, Arrmiareo Witt INTERNATIONAL

BrorueRHoop oF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN

AND Hetprers or America, AFL-CIO!

DECISION AND ORDER

On 36 September 1986 Administrative Law Judge Robert

G. Romano issued the attached decision. The Respondent

filed exceptions and a supporting brief, and the General

Counsel filed an answering brief.

The National Labor Relations Board has delegated its

authority in this proceeding to a three-member panel.

The Board has considered the decision and the record

in light of the exceptions and briefs and has decided te

affirm the judge’s rulings, findings,? and eanclusions,® to

1On 1 November 1987 the Teamsters International Union was

readmitted to the AFL-CIO. Accordingly, the caption has been

amended to reflect that change.

“The Respondeat has excepted to some of the judge’s eredi-

bility findings. The Board’s established policy is not to over-

rule an administrative law judge's credibility resolutions unless

the clear preponderance of all the relevant evidence convinces

us that they are incorrect. Standard Dry Wali Products, 91

NLRB 544 (1950), enfd. 188 F. 2d 362 (3d Cir. 1951). We have

(Footnote Continued on Next Page)

(Footnote Continued From Preceding Page)

carefully examined the record and find no basis for reversing the

findings.

*We agree with the judge that the Respondent’s defense based

on See. 10(b) of the Act lacks merit because the Union did not

have notice of the permanent subcontracting of unit work until

a date within the 6-month period preceding the filing of the

20 February 1986 amended charge.

In addit'en, we would find that See. 10(b) does not bar this ae-

tion even if the Union was somehow on notice of the permanent na-

ture of the subcontracting as of 9 April 1985, when the Respondent

responded to the strikers’ unconditional offer to return by. tell-

ing them that there was no work available. This is so because

the 8 October 1985 charge was filed within 6 months, thereafter,

and, although it alleged a violation only of See. 8(a)(3) and (1)

of the Act, it described the conduct complained of in terms suffi-

cient to encompass the complaint allegations that the Respondent

had contracted out the bargaining unit work without prior no-

tice to or bargaining with the Union. (Thus, the October 1985

charge had alleged, inter alia, that in violation of See. 8(a)(3)

of the Act, the Respondent hired one employee and caused some

of its independent contractors to hire other employees or “sub-

independent contractors” to perform bargaining unit work; and

had also alleged that the Respondent continued to allow inde-

pendent contractors or subindependent contractors to perform such

work even after the striking bargaining unit employees had

offered to return to work.) The February 1986 amendment to

the charge, elaborating on the legal theory, was thus not an

essential preditate for the complaint, as the October 1985 charge

sufficiently identified the conduct in question to accord due process

and fulfill the function of a charge under the Act’s procedural

scheme. See NLRB vy. Fant Milling Co., 360 U.S. 301, 307 (1959) ;

National Maritime Union vo NLRB, 683 F. 2d 305, 307—308 (9th

Cir. 1982); NLRB vy. Allen’s LGA. Foodliner, 651 F.2d 438. 441

—442 (6th Cir, 1981).

modify the remedy,* and to adopt the recommended Order

as modified.°

The Respondent, Land Air Delivery, Ine. is an air

freight motor carrier engaged in the interstate transporta-

tion of air freight shipments between airports. On 13 No-

vember 1984, during the term of the collective-bargaining

agreement (1 March 1982 through March 1985), the Union

began a lawful economic strike against Land Air to force it

to process further certain grievances that were deadlocked

at the Grievance Committee and to comply with certain

other Committee decisions. Some of these grievances con-

cerned alleged breaches of the subcontracting clause con-

tained in the collective-bargaining agreement between the

Union and the Respondent. The Respondent admits that

it subcontracted all unit work and maintains that the work

has been entirely contracted out since at least March 1985,

the subcontracting at issue occurring primarHy between 20

February and 1 March 1985.) The Respondent acknowl-

edges that it did not give notice to or bargain with the

Union concerning its decision to subcontract part and then

‘In accordance with our decision in New Horizons for the Re-

tarded, 288 NLRB No. 181 (May 28, 1987), interest on and after

1 January 1987 shall be computed at the ‘‘short-term Federal

rate” for the underpayment of taxes as set out in the 1986 amend-

ment to 26 U.S.C. § 6621. Interest on amounts eccrued prior to

1 January 1987 (the effective date of the 1986 amendment to 26

U.S.C. § 6621) shall be computed in accordance with Florida Steel

Corp., 231 NURB 651 (1977).

"The judge granted the General Counsel’s request that the

Order include a visitatorial clause authorizing the Board, for

compliance purposes, to obtain discovery from the Respondent

under the Federal Rules of Civil Procedure under the supervision

of the United States court of appeals enforcing the Order. We

have concluded that m the cireumstanees of this case such a

clause is not warranted. We shall modify the recommended

Order accordingly.

the entirety of the unit work. On 9 April 1985 the 15

striking employees made an unconditional offer to return

to work. At no time did the Respondent recall any of the

strikers.

The judge found that the Respondent violated Section

S(a)(5) and (1) of the Act by permanently contracting

out all unit work to independent contractors, without any

prior notice to the Union and without affording the Union

an opportunity to negotiate and bargain. The judge fur-

ther found that the Respondent violated Section 8(a) (3)

and (1) beeause since the strikers’ unconditional offer to

return to work on 9 April 1985, Respondent has failed and

refused to reinstate the employees.”

The Respondent urges that it was within its rights to

permanently replace the strikers by contracting out the

bargaining unit work without notice to or bargaining with

the Union. The flaw in the Respondent's argument is that

permanently contracting out the work of unit employees is

not equivalent to replacement of one employee by another.

A die ris ail Cyanamid t-2,. J; be) NLRB 1516 (1978), enfd. IZ

K. 2d 356 (7th Cir. 1979): blerander Linn Hospital ASSN,

244 NLRB 387 (1979), eufd. 624 F. 2d 1090 (3d Cir, 1980).

With regard to replacing the strikers, the Respondent had

two options to assure its continued operation: the Respond-

ent had the right to hire permanent employee replace-

ments, the strikers thereby retaining reinstatement rights

‘Pour of the striking employees are not entitled to reinstate-

ment because of certain specific individual instances of employee

misconduct. The evidence before us is insufficient to establish

that the Union was responsible for the strike-related misconduet

and we agree with the judge that the misconduct present here

does not warrant depriving the Union of its representative status

as in Laura Modcs Co., 144 NLRB 1592 (1963). Chairman Dotson

agrees that a Laura Modes sanction ts inappropriate because the

strike miscondiet cannot be attributed to the Inion

in accordance with Laidlaw Corp., 171 NLRB 1366 (1968),

enfd. 414 FY. 2d 99 (1269), cert. denied 397 U.S. 920 (1970) :

or the Respondent had the right to contract out the work

temporarily for the duration of the strike, in aecordance

with American Cyanamid, supra! The Respondent’s ad-

mitted course of action—unilateral permanent contracting

out of the work—-1s, absent proof that the options set forth

above were unavailable to it, not permissible under the

Act.” Thus, we agree with the judge that the Respondent's

‘The Union is not «hallenging the Respondent’s right to con-

tinue operating by contracting out unit work on a temporary

basis. As the Seventh Cireuit observed in) American Cyanamid,

supra, 992 F. 2d at 360—361:

|The Union| objects only to the Company's unilateral decision

to make the arrangement permanent in the absence of an emer-

gency. This Company did not need to effectuate permanent

contracting out to remain in business because the plant had

been operational since the inception of the strike through

temporary arrangements nor was that contractor re-

quiring that relations with the Company remain permanent

as a condition of continuing to work for the Company. There

has been no showing that this Company would have been

harmed by negotiating with the Union prior to contracting

out the. . Work permanently. Therefore no justifica-

tion has been shown for the Company’s failure to observe the

bargaining obligations set forth in the <Aect.

‘Permanent subcontracting is distinguished from non-perma-

nent, stopgap, or temporary measures entered into by an employer

to continue service during a strike See Mim pire Terminal Ware-

house Co., 151 NLRB 1359, 1364—1365 (1965). An employer

is not under a duty to bargain over temporary subcontracting

necessitated by a strike where such subcontracting does not

transcend reasonable measures necessary to maintain operations

» 149 NLRB 283

(1964). The appropriate temporary character may exist even if

in strike circumstances. See, e.¢.. Shell Oil Co.

the subcontract period extends bevond the strike, provided the

(Footnote Continucd on Nest Page)

permanent contracting out the work previously performed

by bargaining unit employees without notifying and bar-

eaining with the Union constituted an unfairdabor practice,

even though done in the course of a strike.” Refusing to

afford the strikers their reinstatement rights, in reliance

on the unlawful contracting, further violated the Act as

found by the judge,

(Footnote Continued From Preecding Page)

subcontracts when entered are onls of such duration as is dic-

tated by the exigencies of the strike, or because of the threat of

imminent strike. See, e.g.. Elliot River Tours, 246 NLRB 935

1979

We agree with the judge's conclusion that the decision was a

mandatory subject of bargaining, consistent with First National

Maintenance Corp. v: NDRB. 152? U.S. 666, OS7 1981). and with

any of the views expr cco] in the Board's decision in Ofis Eli

rator, 269 NLRB 891 (1984). Chairman

1 conclusions, based on the opinion of former

Olis Klevator, supra. that tl

Dotson agrees with the

judge's findings an

Member Hunter and himself in

to perma the un

Respond nis decision nily contract out

ry subject of bargaining

constituted “i oMnandats

ORDER

The National Labor_Relations Board adopts the recom-

mended Order of the administrative law judge as modified

below and orders that the Respondent, Land Air Delivery,

Inc., Kansas City, Kansas, its officers, agents, successors,

and assigns, shall take the action set forth in the Order

as modified.

Substitute the following for paragraph 2(f).

“(f) Notify the Regional Director in writing within 20

days from the date of this Order what steps the Respondent

has taken to comply.”

Dated. Washington, D.C. 27 November 1987

Donald L. Dotson, Chairman

Wilford W. Johansen, Member

James M. Stephens, Member

National Labor Relations Board

(SEAL)

UNITED STATES OF AMERICA

BEFORE THE

NATIONAL LABOR RELATIONS BOARD

DIVISION OF JUDGES

Case 17—CA—12750

Lanp Air Deuivery, Inc.,

AND

Teamsters Locat 41, Arrmiuatrep Wirn INTERNATIONAL

BrorieRHoop oF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN

AND HeLrers or AMERICA,

Naomi Stuart, Esq., of Kansas City, KS, for the General

Counsel.

David Leightty, Esq., (Tillford, Dobbins, Alexander and

Buckaway), of Louisville, Nentucky, and

Louis J. Amato, Esq., of Bowling Green, KY, for the

Respondent.

Michael D. Matteuzi, Esq., of Kansas City, MO, for the

Charging Party.

DECISION

Statement of the Case

Ropert G. Romano, Administrative Law Judge: I heard

this case on 14-16 April 1986 in Kansas City, Kansas.

Teamsters Local 41, affiliated with International Brother-

hood of Teamsters, Chauffeurs, Warehousemen and [Help

ers of America (herein Local 41, or Charging Party Union)

filed a charge on & October 1985 (amended 20 February

1986) against Land Air Delivery, Ince. (herein Land Air,

or Respondent Employer). The Complaint, which issued

on 24 February 1986, (essentially) alleges that the Ri

spondent Minplover: fa) On Or about ] Kebruary 1985, ~Utp

contracted to independent contractors the pick-up and de-

livery of air freight previously performed by unit employ-

ees represented by Local 41, without prior notice to the

Union and without having afforded the Union an oppor-

tunity to negotiate and bargain as the exclusive represen-

tative of unit employees with regard to such subcontracting,

aid its effects, in violation of Section S(a)(5) and (1) of

the Act; and (hb) that since 9 April 1985, Respondent Em-

ployer has refused to reinstate 13 named previously strik-

ing employees upon their unconditional offer to return to

employment, in violation of Section 8(a)(1) and (3) of the

Act. Respondent, by Answer filed 10 March 1986, denies

the commission of any unfair labor practices: and inter alia

affirmatively defended in Answer that the allegations are

barred by applicable time limitation (10(b)) +: and it asserts

otherwise that the above named individuals, or certain of

them, have ceased to be employees of Respondent Employer

by virtue of their own (strike misconduct) actions. Re-

spondent also contends in brief the subcontracting issue

has been raised by union in a federal district court matter,

and consequently this is not the proper forum for resolu-

tion of the subcontracting is: ue.

Upon the entire record, from my observation of. the

demeanor of the witnesses, and after due consideration of

the briefs filed by General Counsel and the Respondent Em-

ployer on or about 24 May 1886, | make the following:

Kindings of Fact

1. Jurisdiction

Land Air Delivery, Ine. is an air freight motor carrier,

with an office and place of business, inter alia, in’ Kansas

City, Missouri, whereat it performs the ground portion of

air freight shipments to and from airports. Land Air de-

rived gross revenues in excess of 850,000 in 1985 for the

transportation of freight and commodities in interstate

commerce pursuant to agreements with and as agent for

‘arious common earricrs that operate between and among

‘arious States of the United States, but principally Emery

Worldwide, Inc. (herein Emery). It is clear that Land Air

functions as an essential link in the transportation of

freight and commodities in interstate commerce; and I

find on the basis of the above, and entire record, that Land

Air is an employer engaged in commerce within the mean-

ing of Section 2(2), (6) and (7) of the Act. The Complaint

alleges and Respondent Employer admits that Local 41 is

a labor organization within the meaning of Section 2(5)

of the Act.

ll. The alleged unfair labor practices

art One

A. Background

1. Land Air Management and operations

Joseph P. Schneller, Sr., is the president and owner of

Land Air, an air freight motor carrier. Schneller, Sr. has

heen in the industry since 1955. Ilowever, in 1960 he

founded Land Air to provide such service to Emery; and

since then, Emery has been Land Aiv’s major customer-

client. Land Air handles the ground portion of air freight

shipments to and from airports, which is basieally pick-up

and delivery work. In addition to performing such service

in the Kansas City metropolitan area, Land Air apparently

operates routes as far west and south as Salina and

Wichita, Kansas, and as far east and south as Springfield

and Joplin, Missouri. In the conduct of its business Land

Air used mostly small equipment, primarily vans ane « few

pickups, though it also had occasions to use some 1 or 2

ton trucks, and a few tractor trailers. For years, and to

Feat

date, Land Air bas operated out of Emery facilities lo-

cated at Prarie View Road, Kansas City, Missouri, though

about 5-6 years ago it added its own facilities on the other

side of the airport at 10251 North Everton St. It appears

that each facility is essentially a dock area where inbound

freight for delivery can be broken out and sorted, and where

outbound freight i= reversely handled. Although president

Schneller does keep track of whether the business is profit-

able, he had net been involved in the day-to-day physical

operations for about 15 years. President Schneller now

lives in Bowling Green, Kevtucky. While Land Air has

offices at the Bowling Green airport, Schneller, Sr. also

runs a beer distributing business, and a farm in Bowling

Green.

Land Air employed Joe Michalski as its general man-

ager of its Kansas City operations from 1951 until about

July 1985. At time of hearing Michalski was the subject

of a Land Air lawsuit for recovery of certain money pur-

portedly borrowed an.l owed. Michalski did not. testify

in this proceeding. Joseph P. Schneller, Jr. (president

Schneller’s oldest son) took over as general manager on

20 July 1985. Schneller, Jr. had previously been employed

by Land Air as a supervisor for 7-S vears, and had been

initially employed 4-5 years before that. Inter alia, as

supervisor, Schneller, Jr., in material times handled pay-

roll. Jack Mawby is a supervisory dispatcher employed

by Land Air. Mawhby is located at the Emery facilities

located at Prarie View Round, Kansas City, Missouri, as

were Michaelski and Schneller, Jr. Land Atv initially em-

ploved Jerry (Jerome) Lynch as a driver in 1977. Al-

though Land Air engaged Lynch (d/boa Lynch Delivery)

as an independent contractor initially in 1979, and continues

to do so to date, Land Air has employed Lynch as a fill-

fime supervisor at its own North Everton facility since

February, 1980.) President Sclineller, former general man-

ager Michalski, former supervisor and now general man-

ager Schneller, Jr., and supervisors Mawby, and Lyneh as

well (I find) are supervisors of Respondent Employer with-

\in the meaning of Section 2(11) of the Act, and agents of

Respondent Employer within the meaning of Section 2(13)

of the Act.

2. The Union representatives, and its exclusive

majority representative status

Daniel Johnson is Secretary-Treasurer of Local 41.

Local 41 employs C. B. “Doce” Conder and Dennis R. Speak

as (apparently) business agent, and assistant business

agent, respectively, though Conder may have been an as-

sistant business agent during some of the material time

herein. Loeal 41 was certified as the exclusive collective-

bargaining representative of the following appropriate

unit of Respondent’s employees on 14 December 1975:

All truck drivers and warehousemen employed by Land

Air Delivery, Inc. at its delivery service located at

Kansas City, Missouri, but Excluding office clerical em-

plovees, guards, and supervisors as defined in the Act.

In 1975 Land Air employed approximately 50 employees,

including 25 individuals classified as truckdrivers. In the

instant proceeding president Schneller testified that Land

Air had never employed employees as warehousemen,

Otherwise president Schnetler testified that the only time

he didwt employ coutractor drivers was for about a 2-5

month period when he first started some 26 years ago, as-

serting most carriers use contractors. In any event a dis-

pute arose in 1974 between Local 41 and Land Air over the

status of two individuals riz., Dale Cain and Robert Woods.

Local 41 petitioned for clarification of the above unit, con-

tending drivers Cain and Woads were employees and should

be ineluded. At that time, both Cain and Woods had

worked for Land Air for 14 years. Land Air eontended

they were independent contractors, not employees, and

should not be ineluded in the unit. A hearing was held on

the issues. Thereafter, on 16 January 1975, the Board’s

Regional Director for Region 17 issued a Decision and

Clarification of Bargaining Unit, in which, for reasons

therein stated, the Regional Director coneluded and found

Cain and Woods were independent contractors: and, ac-

cordingly, the Regional Director clarified the above unit

description to specifically exclude independent contractors.

(The decision in such matter in Case No. 17-UC-S6 (Case

No. 17-RC-7348) is officially noticed; and it is in-evidence

as G.C. Ex. 4.).

}. Additional prior subcontracting and grievance

disputes; and related contraet provisions

In late 1981, or early 1982, Speak became the agent in

charge of presenting grievances and policing the contract

between Loeal 41 and Land Air. The contract in effeet

at that time by its terms had duration from 1 April 1979

through 381 March 1982.) Speak confirmed that the bar-

gaining unit employees that Local 41 represents perform

work as an exclusive pickup and delivery agent for Emery,

though Speak’s understanding was the Land Air also per-

formed such services for Zantop, Inc., an airline servicing

mostly parts (delivery) for General Motors. Speak’s under-

standing was that Zantop was the chent, but president

Schneller has testified more definitively, and convincingly,

that General Motors’ Leeds facility was actually theclient ;

and that it was Land Ais second largest ©ustomer.

Speak more definitively relates that the bargaining unit

employees reported daily for work at the Hmery dock located

at Prarie View Road in IWansas City, Missouri, The unit

employees regularly wear uniforms with Emery’s name on

it. Although Speak did not know whether Emery owned the

uniforms, he knew that Land Air furnished and maintained

the uniforms. The unit employees are hourly paid, and

they punch a timeclock located in Hmery’s dock. In ma-

terial times there were 13 unit drivers, 12 assigned to

Emery, and 1 to General Motors’ Leeds work. Whether

any others, e.g. contractors, performed any other work

for General Motors’ Leeds facility, is unclear. What is

clear is that only one unit employee was involved in that

work.

Speak acknowledged that Land Air has operations in

cities other than Kansas City; and he further readily ac-

knowledged that work was not done by people in his bar-

gaining unit. However Speak also testified that Land Air

does business (from Kansas City) outside the immediate

ansas City area; and Speak claimed from (union) paper-

work (records) he had access to, unit employees in the

past had performed certain such work, giving as examples

runs to Joplin, Springfield, Tola and Sedalia in 1976-78.

Speak specifically referred to Land Nir contracting out a

run to Sedalia: and he related that circumstance to be one

involvia & Land Air actually taking a bargaining unit em-

plovee »/f that run, and putting a contractor on it. Tlow-

ever, 5, -ak did not have direct knowledge of the incident.

Speak also asserted there was a (later) letter of a former

business agent, Who was no longer available, but who had a

squabble (registered a protest) with Land Air about the

subcontracting. There were no prior unfair labor prac-

tices filed. The record does not indieate whether the em-

ployment status of any unit employees changed.

At hearing, on direct examination, Speak had testified

that at the time he first began policing the 1979-82 agree

ment there were about 12 employees in the bargaining unit,

and about 25 people working on some hind of contract

basis. Speak acknowledged on cross-examination that he

ony

was aware of the unit clarification decision (in regard to

Land Air’s use of two independent contractors). Respond-

ent established that in an aflidavit given 1 May 1985 to

a Regional agent, Speak therein stated, “Since that time

by 1982 we had about 12 employees on the seniority list

and approximately 25 independent contractors.” Employer

has also submitted in evidence the then applicable 1979-82

agreement, which provided in pertinent part, Article 32,

Subcontracting, Section 1:

For the purpose of preserving work and job oppor-

tunities for the employees covered by this Agreement,

the Employer agreed that no work or services of the

kind, hature or tvpe covered by, presently performed,

or hereafter assigned to the collective bargaining unit

will be subcontracted, transferred, leased, assigned or

conveyed in whole or in part to any other plant, per-

son or nonunit employees, unless otherwise provided

in this Agreement.

The Emplover may subcontract work when all of

his regular employees are working, except that in no

event shall read work presently performed or runs

established during the life of this \ereement be farmed

out. No dock work shall be farmed out except for

existing situations established by agreed to past prae-

tices. Overflow loads may be delivered by drivers other

than the Employer's employees provided that this shall

not be used as a subterfuge to violate the provisions

of this Agreement, Loads may also be delivered by

other agreed to methods or as presently agreed. to.

Owner-Operators performing subcontracted work which

is permitted herein shall receive no less than the wages,

hours and general working conditions of this Agree-

ment and the appheable Supplement,

The instant record has made it abundantly clear that

subcontracting was a major issue in the 1982 negotiations

for a new contract. Negotiations between the parties for

a succeeding contract covered a period extending (at least)

from March to November, 1982. The central issues (even-

tually) separating the parties were wages, subcontracting

and grievance and arbitration machinery. For these nego-

tiations, Land Air's negotiators were general manager

Michalski, attorney Amato of Bowling Green, Kentucky,

and (later) attorney Dan Denk of “"»nsas City, Missouri.

Both Conder and Speak participated in the negotiations,

for the Union. Speak testified that Land Air succumbed

to the Union’s position; and it took the Union's (contract)

clause which expressly forbids subcontracting,

Speak testified relatedly, and General Counsel has pre-

sented in evidence (at least) three of the subcontracting

proposals that Employer had presented to the Union dur-

ing their negotiations, one on 31 March 1982, one on 13

April 1982, and a third undated. Bach provided substan-

tively:

It is specifically understood and agreed that the

Employer is presently utilizing owner-operators who

are independent contractors and net employees ef the

Kmployer to perform pick up and delivery work and

to supplement its driver employees covered by the

terms of this Aereement. This Agreement shall in no

way restrict the Employer's use of said owner-opera-

tors provided that the Employer agrees that no driver

presently employed shall be laid off asia result of the

Mmployer’s use of owncr-operators, Owner-operators

shall not perform dock work if any of the employees

presently employed are laid-off.

The Union rejected the proposal each time made; and

it maitained its own position that they would settle for

no less than the subcontracting language provided in Ar-

ticle 82 of the National Master Freight Agreement cover-

ing Over the Road and Local Cartage Employees of Private

Common, Contract and Local Cartage Carriers (herein sim-

ply NMEA). Article 52 of NMEA provides in pertinent

part.

ARTICLE 32.

SUBCONTRACTING

Section 1.

For the purpose of preserving work and job onpor-

tunities for the employees of the signator Employer

covered by this Agreement, the signator Mmplover

agrees that no work or services of the kind, nature or

type covered by, presently performed, or hereafter as-

signed to the collective bargaining unit, by the signator

Kmployer, will be subcontracted, transferred, leased,

assigned or conveyed in whole or in part by the signator

Mmplover to any other plant, person or nonunit: em-

ployees, unless otherwise provided in this Agreement,

This subcontracting provision is also applicable to the

establishment or coutinuation by the signator Km-

plover of a transportation company or business which

engages in the same type of operation covered by this

National Master Freight Agreement, which company

of business is owned or controlled by the signator Em-

ployer. Tlowever, the above provisions shall not be

interpreted so as to expand the provisions of Article

3 (Recognition).

The Employer may subcontract work when all of

his regular employees are working, except that in no

event shall road work presently performed or runs

established during the life of this \@reement be farmed

out. No dock work shall be farmed out except for

existing situations established by agreed-to past prac-

tices. Overflow loads may be delivered by drivers

other than Employer's employees provided that this

shall not be used as a subterfuge to violate the pro-

visions of this Agreement. Loads may also be deliv-

ered by other agreed-to methods or as presently agreed

to. Owner-operators or other persons performing sub-

contracted work which is permitted herein shall receive

no less than the wages, hours and general working

conditions of this Agreement and the applicable Sup-

plement.

The record herein reveals that on 9 November 1982

Local 41 and Land Air reached an impasse. The parties

were at impasse mostly on subcontracting, but also on ac-

ceptable grievance machinery. The Union struck to enforce

its demands. The strike lasted 3 days at which time on

12 November 1982, Land Air signed an interim agreement

accepting the NMEA, with certain wage and erievalice ex-

ceptions (but evidencing no exception as to the subcon-

tracting clause). Those excepted areas were further nego-

tiated by Conder and Speak, and attorney Denk. Insofar

as pertinent, Land Ai’s attorney Denk confirmed their

agreement on grievance procedure by letter dated 17 No-

vember 1982:

2 Grievance Procedure — It was agreed that griev-

ances would be handled by the Cartageman’s Associa-

tion Grievance Committee as opposed to the present

committee hearing the Land Air Delivery grievances,

Speak further explicated that it had been agreed the griev-

ances would be heard at the Greater Kansas< City Publie

Warehouse Joint Grievance Panel as the first step; and

that any decision reached there would be final and binding.

Condor confirmed by letter dated 22 November TO82, in

pertinent additional part:

In addition we agreed that in the event a griev-

ance was deadlocked at this committee the company

may elect at any time following to notify the Union

that it does not wish to precess the grievance through

any further committee steps, in which case the Union

would be free to resort to economic recourse notwith-

standing any other provisions of the agreement,

(Both earlier interim agreement and NMEA provided

otherwise for certain no strike undertakings. )

Speak summarized (seemingly in regard to deadlock)

the Company had the right to take it to the next step, or,

refuse to do so; and the Union could then strike to foree

it to do so. Speak also testified that Land Air had not

only succumbed to the Union's position on subcontracting,

but that general manager Michalski had promised faithfully

to return that (previously subcontracted) work to our bar-

gaining unit by attrition. Speak testified that Michalski

first said that to Conder in Denk’s office; and that general

manager Michalski repeated it to Speak in front of union

steward Mike Carleton ina meeting held at Shoney’s Rest-

aurant, shortly after the signing of the contract, in late 1982,

or early 1985. Although Speak acknowledged the promise

of Michalski was not reduced to writing, Speak also testi-

fied that he believed attorney Denk would verify it. Neither

Michalski or attorney Denk testified on this matter: and

there is no direct evidence offered to the contrary. I credit

Speak as to Michalski’s stated promise to him. I futher

credit Speak’s testimony that Michalski subsequently added

one employee to the bargaining unit (Bill Greenfield) but

only through grievance machinery, in late 1983, or early

19S4. However, it is also apparent ifra, that Employer

asserts it put (at least) three individuals under original

contract in this period, ez. Mark Rinehart, February 1983;

Russell Sloan, December 1983: and Bill) Haney, August

1984.) There is no evidence offered that any of them then

performed unit work. It is clear that the parties had

agreed to and that their applicable subcontracting clause

was Article 32 as contained in the NMEA, and that that

contract (and its terms) had duration from 1 March 1982

through 31 March 1995. It is also clear that the issues pre-

sented here relate only to the status of some 15 Iansas

City (local) divers whom Local 41 represents.

B. The Bridence

1. The cause of the Strike on 13 November 1984

At about 6 aam. on 13 November 1984, Speak, Land Air

employee and union steward Walt Malinowski, and Dave

Evans, a nonemployee but member of Local 41, drove to

Land Air's Emery facilities. Speak hand-delivered a letter

to Land Air dispatcher Mawby. The letter, dated 12 No-

vember 1984, related that it gave general manager Michal-

«ki 72-hours notice that pursuant to Article S, Section 2

of NMEA, Local 41 had authorized strike action for Land

Air's failure to comply with certain earlier grievances de-

cided in favor of the Union, riz. 25 July 1983 grievances,

the “Frank Martin” grievance and the “Jim MeDonald”

grievance. The letter however went on to state:

The seventy-two (72) hour notice contained herein is

not related to any cconomic action we might take in

response to your action in choosing not to process dead-

locked grievances to further committee steps. As you

are aware, when the Company chooses not to further

process a deadlocked grievance, we have the right to

tuke economic recourse without notice as outlined in

Conder’s November 22, 1982 letter to your attorney

Haniel B. Denk. For example, Land Air chose not to

proceed to the further steps of the erievance procedure

With respect to the deadlocked “Lonnte Thateher”

grievance. Therefore, we reserve the right to take

economic action without notice to support our position

in the Thatcher grievance.

Speak testified that all the unit employees commenced

a strike on 13 November 1984. According to Speak the

strike was caused by the grievances of McDonald and Mar-

tin, and the (deadlocked) Thatcher grievance; and that the

reason for the strike was Land Air’s, “Failure to abide by

the grievance decisions and failure to take it to the next

step.” Speak clarified on cross-examination that he had

not testified that striking was the Union's only recourse

at the time; and he acknowledged another recourse was an

action in court to enforce the collective-bargaining agree-

ment. The alternate procedure of pursuing a court enforce-

ment of favorable grievances did not preclude a strike over

the deadlocked Thatcher grievance.

Respondent has established that in an Employer suit,

the Union has filed counterclaim seeking enforcement of

certain grievances. In that regard, the parties have agreed

that Union's counterclaim seeks enforcement of three griev-

ances, at least one of which refers to subcontracting. Briefs

have been filed and decision ts pending on the Union's

counterclaim, Employer’s base claim having been already

resolved favorably to Employer. The instant case does not

involve resolution of any grievances. The details of the

above grievances are not even in evidence. Nonetheless

Employer has advanced general argument that since (at

least) one of the grievances involves subcontracting, the

Board is not the correct forum to handle any issues herein

involving subcontracting. President Schneller (essential-

ly) acknowledged that Local 41 was free to strike without

notice over the deadlocked “Thatcher” grievance, and Land

Air’s (thus admitted) refusal to proceed to further griev-

anee step for its resolution.

2? The Strike in nature and origin was a lawful

economic strike over prior grievances

On 13 November 1954 the following 18 named employ-

ees,’ who collectively constituted the entire unit of em-

plovees then (unquestionably) represented by Local 41,

ceased work concertedly and (1 find) engaged in a lawful

economic strike, over the prior grievances:

Carleton, Mike Greenfield, Bill Malinowski, Walt

Cunditf, Lindsay Gunn, Walter Stevens, Don (Ron)

Fincher, Joe Guyton, Dale Thomas, Dave

Farris, John Harring, Ken Vest, Norman

Kochn, Jerry

The Union and unit employees picketed Employer's facili-

ties, principally the Emery facility that Land Air em-

ployees used. The Union, the striking employees and cer-

tain nonemployees, but union members also engaged in

ambulatory picketing. In November, and the following

month of December Employer contends that all of its above

striking employees engaged in various acts of misconduct,

These allegations, and their circumstances are handled in

Part Two of this decision. Suffice it to note here there was

violence, and threat of violence, by certain individuals. The

strike lasted five » onths, from 13 November 1984 to 9 April

1985.

3. The inimediate replacement of strikers; the

varied nature of replacements

President Schneller was in’ Bowling Green when the

strike began. He had no prior notice of the strike before

receiving a call that Local 41 had served a letter; and that

a strike had begun. As noted Schneller acknowledged that

'The names of employees appear as reflected in) Respondent

Kriplover’s records,

Local 41 didn’t have to give prior notice of its strike over

the deadlocked grievance that Mmployver elected to refuse

to process further. Schneller did not immediately go to

Kansas City. He called his attorney on what to do, and

about his obligations. Hmery’s business is rapid delivery

(usually) of small items, packages or envelopes. The nor-

mal morning freight was already there. Land Air had con-

tractual obligation with Emery to get their stuff (sic)

handled; and there were also deadlines that Land Air had

to meet in doing it. Schneller explained that Emery is

involved in a very competitive business. People pay a

$10-$15 premium for rapid delivery of parts (and more

recently) documentation. Time is of the essence; and the

quicker you get the item delivered, the better. At this time

certain areas of the city had to be delivered by 10:50 a.m.,

and others by 12 noon. If Land Air consistently failed to

meet the established time limits, Emery would get some-

one else. Sehneller testified that he was sure Emery was

sympathetic, but they primarily want their freight de-

livered.

After speaking with his attorney, president Schneller

told them (local management, and presumably Michalski)

to just do whatever had to be done; and to do the best we

could. Schneller testified that Michalski had the primary

responsibility of getting and interviewing replacements.

However, Schneller testified in general that to do the work

that had to be done we got anybody we could. According

to Schneller, with a picket line up its hard to get people

to work under the conditions vou got; but they had gone

through a strike previously and they handled it the same

way. They hired people to put in Land Air's equipment.

There are also contractors who work around the airport for

themselves. According to president Schneller they tried

to get everybody that had their own truck and worked for

themselves to work for us and do the job; and they got

(some unidentified) people with their own equipment, ears

and pickups. Laud Air also used people out of the office

(e.g. supervisors). Schneller, Jr., at the time a supervisor,

confirmed that he didn’t find out about the strike until he

drove on the premises; and that they hustled up everyone

and anyone they could to perform the services for Emery.

Supervisor Schneller, who regularly paid them, testified

that in a week or so they had kired drivers as employees,

on contractors, or (used) supervisors. Land Air apparently

also at first brought some (people) in from Joplin (Mis-

sourl) and Wichita (IXansas). They used some wives, and

brothers of drivers. They drove Land Air Equipment.

President Sehneller testified they used everybody; and

it Was not part of a scheme to do away with the bargaining

unit. The only scheme was to get the Emery freight de-

livered. We had to get it done, or Emery would get some-

one clse to do it. They (lmery) are not going to be

bothered with our (Land Air) problems. Michalski had

the responsibility for hiring employees and independent

contractors; and president Schneller presumed that he did

most of the interviewing, as that was lis primary respon-

sibility.

President Schneller confirmed that prior to the strike

Land Air had done business with General Motors’ Leeds

facility. At a point early in the strike Land Air ceased

performing that work. General Motors cut off the busi-

ness as they did not want Land Air out there because the

pickets would come out there, and they did not want their

business interrupted. President Schneller testified, and

Speak earlier lad acknowledged, that Shock Transfer, a

competitor of Land Air is new doing that business; and

that Shock Transfer employs (only) driver employees, who

are represcuted by Local 41. However, Speak’s testimony

that (only) one Land Air unit employee had been pre-

viously assigned to do this work, does not appear to have

been contradicted by Employer.

4. Land Air’s notice of contract termination

By letter dated 28 January 1985 from president Schnel-

ler and attorney Amato, Land Air gave Local 41 the fol-

lowing notice:

This letter hereby gives written notice, pursuant to

Article 39 of the current National Master Freight

Agreement with the Central States Area Local Cartage

Supplemental Agreement, that Land Air Delivery, Ine.

desires to cancel and terminate the Agreement in effect

from March 1, 1982 to and including March 31, 1985,

and hereby does so.

This letter will further advise that Land Air De-

livery, Inc. will not be a member of any Employer

Association or any Emplover Bargaining Group in the

negotiation of a new contract. Land Air Delivery, Ine.

will not be bound by, or in any way obligated by, the

terms of any Agreement wiich may be negotiated by

an Employer Association,

Although the above letter on its face is susceptible of an

interpretation of an intended immediate termination of the

existing NMEA agreement with Land Air, | conelude and

find the reference to duration of the contract. and to Article

89 would appear to clarify timployer understanding the

contract's effective duration remained through 51 March

1985.2 Moreover, president Selineller acknowledged at

ZArticle 39, Duration, Section (1) provides: “The Agreement

shall be im full force and effect from Mareh 1, 1982. to and in-

eluding Mareh 31. 1985. and shall continue from year to year

thereafter unless written notice of desire to cancel or terminate

the Agreement is served by either party upon the other at least

sixty (60) days prior to date of expiration.”

hearing that the contract did not expire until 31 March

L985.

). The independent contractors

a. Records of current contractors,

and their initial contracts

In response to General Counsel 20 December 1985 sub-

poena calling iter alia for Respondent's record of current

independent contractors and date of original contract, or in

lieu thereof a compilation, Respondent supplied (in part)

a pertinent compilation on the original: dates. (The Iim-

ployer’s response was introduced as G.C. Ex. 7.) Aceord-

ing to Respondent’s records, Respondent’s independent

contractors as of 20 December 1985, and with month and

vear of original contract are:

October, 1976 Griffitts, Diek

June, 1978 Thatcher, Lonnie

February, 1979 Smith, (William) Ken

July, 1979 Lynch, Jerome

February, 1985 Rinehart, Mark

December, 1985 Sloan, Russell

August, 19s4 Haney, Bill

February, 1959 Benefield, Don

February, 1985 Horton, Kenneth

February, 1985 Fowler, Donald

February, 1985 Pope, Tom

Mareh, 1985 Mawby, Jack

Respondent also answered in its compilation that it had no

records reflecting the names or dates of employment of any

employees of the above named contractors. Respondent

however related that a survey of the contractors indicated

that as of 1 November 1984, the contractors then had 12

full-time and 1 part-time employees. Thus, in sum, not the

°F contractor and or contractor drivers Speak in this re-

cord stat® appears to have off and on again recalled, but

at most 19-20, though not all contractors drove, all the tune.

The latter number is however, very compatible with the

certain daily reports contained in G.C, Ex. 6, discussed fur-

ther infra. As of 15 December 1985, the contractors sur-

veyed reported they then had 18 full-time and 3 part-time

employees. (The evidence reflects an overall substantive

change of 6 full-time and 2 part-time employees employed

by current contractors in period from shortly before strike

to 15 December 1985.)

Speak confirmed that there were independent contraet-

ors that did some work at Emery, that (at least) some them-

selves did employ employees, some part-time. Speak could

not tell by observing the Emery dock how many drivers are

employees of independent contractors. Speak knew per-

sonally a few of the contractors and their employees, but

he did not know how it was otherwise; and that they all

wear Emery uniforms.

i. The informal settlement in Case No, 17-CB-3006,

Land Air filed a charge against Local 41 in Case No.

17-CB-3006. On 4 February 1985, Local 41 entered an in-

formal settlement agreement which contained a nonadimis-

sion clause, and also a Notice to Employees and Members

that it would not engage in coercive acts in general, and cer-

tain specified coercive acts, including various threats of

bodily harm, or damage to property; and or engage in cer-

tain acts of damage to property; blocking Ingress Or egress ;

following employees to and from picket line driving in a

dangerous or reckless manner; or in any like or related

manner restrain or coerce Land Air employees. Respond-

ent has introduced a copy ef said informal settlement into

evidence without General Counsel objection. (Hmployer

did not join in the settlement.) The agreement was approv-

ed by the Board's Reeional Director on 28 February 19s5.

The General Counsel would have it observed that mo evi-

denee Was presented of any union employee or member

> 46

misconduct on, or alter 4+ February. None is presented in

this record.

bh. The February-March, 1985 (independent

contractor) contracts

President Selineller testified that he did not have the

number of contractor drivers, or owner operators who

worked out of Kansas City, before, or after the strike. At

the outset it is to be noted that General Counsel does not

contest the status of Land Air’s contractors as independent

contractors. Neither did president Schneller know the last

date (day) that Land Air had employed employees (as op-

posed to all contractors). General manager Schneller, Jr.

testified that Land Air keeps no records of employees that

the independent contractors have, though he acknowledged

they took a count at one time, Although Schneller, Jr.

testified that he would make the decision on whether an-

other contractor should be hired, he asserted that he hasn’t

had to make that decision. However, Schneller, Jr. has

acknowledged that either he, or Mawby make the current

decisions as to whether or not to mecrease the volume of bus-

iness that is given to the independent contractors. Schnel-

ler also testified that he didm’t know for sure if any of the

contractors have hired new employees since 9 April (when

employees offered to return to work unconditionally, to be

discussed infra.) This is however diffieult to fully accept,

since Schneller, Jr. regularly paid the contractors for the

work they and their drivers performed. Employer kept

daily records of the revenues generated in the service of its

principal customer Emery. Some of those records are in

evidence, see e.g. G.C. Ex. 6, a series of 21 such records.

Those records, limited though they may be, not only show

revenues generated in deliveries for Emery, but they also

show, at least in significant part for present purpose, the

pickup and deliveries by certsin contractors and by certain

drivers as related to certain contractors. Tam constrained

to conclude therefrom that if Schneller, Jr2s referenced

“for sure” has not indicated a mental reservation he had

in his complete denial, his complete denial itself exhibits

a reluctance to candidly respond as to what he did know,

eo, from these records.

The General Counsel has placed in evidence twelve con-

tracts exeeuted by Land Air contractors in February-March

1985, Not Michalski, but Schneller, Jr. (then supervisor)

signed each such contract on behalf of Land Air (though

without his title being expressed). The aforesaid December

1985 listed current contractors are the same 12 contractors

under contract as of February-Mareh 1985.) Kaeh such eon-

tract provided the contractor would be paid 75% of gross.

Kach such contract has an addendum acknowledzement of

receipt of certain equipment into Land Air's service, which

in cach instance is acknowledged by supervisor Jack Mawby.

Hach contract contains a signatory page with a place for

signature of the contractor evidencing agreement to the con-

tract, but also a place on that same page for a dated

(second) signature acknowledging receipt of a fully execut-

ed copy. In the body of the agreements there is statement

that the agreement is made on 20 February 1985, though

in Mawby’s case it is stated as made on 1 Mareh 1985, All

twelve contracts bear contractor signatures evidencing their

agreement to the contract’s terms. All twelve contractors

signed the acknowledgment of receipt of a fully executed

copy. Though nine have not dated that acknowledgement,

three have, namely William IK. (hen) Smith on 20 Peb-

ruary TSo; Tom Pope on 22 February 1985; and Jack

Mawhby on 1 March 1985, No other evidence is presented as

other date of execution. On weight of the above evidence

(as presented) it is concluded and found that Pope executed

his contract on 22 February; that (supervisor) Jack Mawby

executed his contract on 1 March 1985; and that the other

10 contractors executed their above contracts on or about

20 February 1985. However, from Employer's own for-

mal and compiled report as to original date of contracts,

it is apparent, and T find, that five had vof previously been

under contract, namely Benetield, Horton, Fowler, Pope

“and supervisor Jack Mawby.

President Schneller offered testimony in explanation of

the execution of these contracts in February-Mareh on the

general basis that something had happened ina court case

somewhere, and Employer's attorney had drafted a new

contract: that he was not involved in it; and that Land Air

changed them (contracts) with anybody we had. Although

president Schneller related he would imagine each (con-

tractor) had, or should have had one contract earlier, it is

apparent from the supplied data compilation from lm-

ployer’s own records that was not the case as to the above

five. Inter alia, each such contract also contains the follow-

ing paragraph:

13. As required by the Interstate Commerce Commis-

sion Lease and Interchange regulations, this Agree-

ment shall continue in effect for a period of thirty (30)

days from the day and date first above written, and

thereafter continuously unless cancelled by either party

by thirty (30) days written notice.

Upon review of the aforesaid 12 contracts, president

Schneller identified only five that he personally free had

heen independent contractors before the strike. CPhey are

reflected below by asterisk.) The General Counsel however

appears to concede in brief that the record will support two

others, namely Russell Sloan and Bill Haney as hired by

Land Air as subcontractors before 20 February 1985 (pre-

sumably) satisfied with support for the Employer reported

dates of December 1985 for Sloan, and Angust 1984 for

Haney. In any event, on evidence presented of record, if

is so found. The aforesaid 12 contracts, with equipment

referenced as then placed in use are:

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OULEN

This is not to sav Tam without reservation in certain

of these equipment findings, particularly in regard to the

extent of Sloan equipment, chiefly because G.C. x. 6 series

of dates of service would not support use of that much

equipment by contractor Sloan in Land Air use, at least

much before the end of June. Tlowever, G.C. Ex. 6 was

offered definitively for other purpose, is far from a com-

plete daily list; and it does not address many intervening

days. On the other hand Employer conceded in brief that

Roger Williams, who testified he was hired and employed

by Sloan for a week before being employed by Thatcher,

also testified that while he was employed by Sloan and

Thatcher, both had wo other drivers working for them,

The General Counsel does argue in bricf that Employer's

employment records are incomplete and contradictory at

best. Employer confirmed at hearing (and see G.C. Ex. 7)

that Employer had hired (at least) eight (8) employees

after the strike, and that these eight continued to be employ-

eos of Emplover until date stated. Shown in order of date

of hire, secondly by date of termination, and alphabetically

otherwise, they are:

Name date hired date terminated

Mawby, Janice 19 Nov. 1984 28 March 1985

Epperson, Edward 21 Nov. 1984 20 Dee. 1984

Hlodges, Mark 21 Nov. 1984 20 Dec, 1984

Horton, Bob 31 Nov. 1984 2) Dec, 1984

Millis, James 2} Nov. 1984 2S Mareh 1985

Horton, Ken’ 21 Nov. 1984 2S Mareh 1985

Lynch, Jack 21 Nov. 1984 28 March 1985

Fowler, Donald 1 Dee. TOS4 2S March 1985

It js apparent from the above that HMmoployer had ter-

minated three of the eight on 20 December 1984; and that

it terminated all the remaining five employees on 28 March

1985. Minplover offers no explanation for its termination

of these 5 employees on 2S Mareh 1985. Moreover, the

asterisk above denotes two (purported) employee drivers

who had (purportedly) signed independent contractor con-

tracts with Employer on 20 February 1985, thus over a

month earlier than their termination as employees on 2S

Mareh 1985. These two individuals do not appear with

contractor designation on 27 February 1985, though they

do on 20 and 29 March 1985 (See G.C. Ex. 6 series). Two

others, not listed as hired employees, Pope and Benefield

similarly do not appear with contract. designation on 27

February 1985 (though also purportedly independent con-

tractors as of 20 February 1985); and they do appear with

contractor designation on 20 and 29 Mareh. Benefield how-

ever had worked carlicr for Emplover on 7 December 1984.

Tt mnust be, and is included there is inconsistency, if not out-

right contradiction in Emplover’s records on employee vis-

a-vis independent contractor status, which Employer has

not adequately explained.

Respondent’s witness Michael Lawrence Reynolds test-

ified specifically that he was hired in October, 1982; that

since then he and Griffitts drove (Griffitts’) two vehicles:

and that Griffitts did't hire auymore employees. Respond-

ent’s witness Roger Williams testified specifically that he

was initially hired by Sloan on 19 or 20 November 1984,

but worked less than a week for Sloan; that he was then

employed by Thatcher; and that thereafter only he and

Thatcher drove (Thatcher's two vans). No employee of

Ken Smith (apparently) testified; and president Schneller

could not recall if Smith was a contractor who did not drive

himself for a period, but had come back to driving (during

the strike). From testimony of Respondent's witness

Jimmy Allen MeDonnell, it is apparent that MeDonneli in

material times (indeed from June-July 1984 on) regularly

drove Lyneh’s oie vehicle, Lyich was a Land Air full-time

supervisor all along (since 1980), It is thus clear from

weight of evidence of record that during the strike, and

thereafter, Lynch drove regularly and substantially. It is

as readily apparent that when Lynch drove, he drove Land

Air’s equipment, while still employed as a full-time Land

Air supervisor; and he did so after the striking employees’

unconditional offer to return. Respondent’s witness David

Andrew Nelson testified that he was emploved by M.N.T.

» days before the strike: and Nelson testified that shortly

after the strike he drove striking employee Walter Gunn’s

route, and continued to do so as of hearing date. Nelson

did not testify as to other drivers of contractor Rinehart

dobva M.K.T.. However it is clear Rinehart had six vehi-

cles contracted ia Land Air use. On 26 November 1984, the

first such daily record available (G.C. Ex. 6 series im evi-

dence ) 1 addition to Mark Rinehort honself, five other

drivers are listed in association Ww Ainchart contract

ric., Nelson, Green, Craig, Anderso; Barb. It is thus

indicated that Rinehart had six velie: ua use for Land Air

at that time. Whether such was an expansion of lis sub

contract service, and the degree of same on unit work ts not

specifically apparent.

Prior to the strike Land Air owned the trucks (mostly

Vans), driven hy unit eniployees, According to president

Schneller most of them have now been sold. Selneller

acknowledged some were sold to (unidentified) contractors,

some were junked, or sold to truck dealers; and a few lave

heen retained. Schneller however confirmed the latter are

presently used by supervisors, and as spares for the con-

tractors. (The exact number remaining does not appear of

record.) Schneller also testified that, as before, super-

Visors occasionally work the trucks, when needed. Presi-

dent Schneller however acknowledged at times in the past

he had had union grievances filed when supervisors pre-

viously worked the trucks. .lecording to president Schuel-

ler, Land Air presently has wo employee drivers working

ont of Nausas City; its all contracted out. Selineller ae

} } }

nowledged there a Land A

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ight maintenance ‘hanical work. &

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and delivery work,

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According to president Schneller, the emp

‘ .

rep ements (who are now contractors) had

}

said they would rather work as contractors. Oh

had testified that they had asked Jim about it. (on cross

examination he testified they had asked Michalski.) Ne

ler talked to his attorney. The attorney talked to manage

ment there (Kansas City). They then did what they did:

riz. put them on as contractors. (No former emplovee and

now contractor corroborated president Sehneller.) | Schne!

ler testified it was before the employees offered to return

to work. At best it is arguably but shortly before 20

February 1985 because one of the factors President Schne!-

ler asserted he considered was a reduction ino security

expense by virtue of contractors taking their veliicles home.

In that regard, Respondent Employer had paid (partially,

with Emery) for night security of parked trucks, for 3

months, thus into February, 1985.

Speak has testified that at no time during the period

when the 1982-1985 collective-bargaining agreement Was in

effect did Land Air notify the Union that it wanted to

bargain coneerning subcontracting unit work; nor did. it

bargain with the Umon during that period. Clearly that

testimony encompasses that Respondent Employer never

discussed with the Union its intent to subcontract out a//

unit work, permanently. TL conclude and find Employer

clearly had not notified the Union, or any employees, before

9 April 1985 that all unit positions had been permanently

subcontracted.

6. The unconditional offers to return to work

a. The oral offer

At 6 am., 9 April 1985, Speak and all unit employees,

except Joe Fincher and Walt Malinowski whom Speak re-

lates were working that day, met at a local restaurant and

discussed the subject of an unconditional return to work.

At 7 am. Speak and the above unit employees drove to

Emery’s dock. Speak remained on the street as the unit

employees went to the dock. A few minutes later the em-

plovees left the dock area and went to an adjacent lot. One

of the employees informed Speak that they had been in-

formed to wait in the lot until they (local management, but

otherwise unidentified) spoke to their lawyers. Speak

joined the employees in the lot.

At S:50 a.m. general manager Michalski, accompanied

by a Company lawyer (Rod Turner) came out to the group.

Michalski asked Speak if he was the spokesman. Speak re-

plied he was. Michalski inquired of Speak if Speak was

agreeing to return to work unconditionally ; and Speak re-

plied, yes, we was (sic) going to return to work without

conditions. Michalski said there would be no work today.

(Qn cross-eXamination Speak confirmed that during their

conversation Michalski had told Speak, “I didiw’t know you

all would be offering to come back to work.” Speak in the

same conversation asked, “What about tomorrow?” Mich-

alski replied his answer stood, there would be no work to-

day. Michalski then inquired if there had been any changes

in (employee) address or telephone number. Two unit em-

ployees, Ron Stevens and Bill Guyton responded, giving

their changes, After obtaining the changes, Michalski re-

peated “There’s no work today. This meeting is over.”

Michalski waiked back into the building. KEmployer did not

seek clarification on the absence of Malinowski and Fincher

from the group. Employer also did not inform the Union

that all unit work had been contracted out, let alone per-

manently contracted out.

bh. the written offer

Speak did not hear from the mployer that day, or the

next day, 10 April. Although Speak at one point testified

that he wrote Employer a letter requesting information con-

cerning them (Land Air) hiring employees and subcontract-

ing our work, Speak acknowledged on cross-examination,

and it is otherwise clear in the record that a request specifi-

cally on subcontracting information was not made of Km-

ployer until 5 June. By letter dated 11 April 1985, address-

ed to Michalski, and sent by certified mail, Speak wrote

Kinployer:

This is to inform vou that as of April 9, 1985, we have

agreed to return to work at Land Air Delivery without

conditions.

Please be advised that our complete seniority list has

been and still is available for work.

It is concluded and found that on 9 April the Union made

an oral unconditional offer to return on behalf of all unit

employees; and that, in any event, on 11 April Speak con-

firmed the unconditional offer to return was on behalf of

all unit employees, in writing.

Speak also again sent the unit employees to return to

work, with union steward John Farris as spokesman. Re-

spondent established that in prior statement, Speak stated

he was later informed that the men were (again) told there

was no work for the day; but he was also told that the em-

ployees were told they should stay off the Company's pro-

perty. Whether this incident occurred before or after, as

to which the evidence appears ambiguous, though before

would appear more likely, in any event, Local 41 filed a

charge against Land Air on 11 April 1985.

7. The first unfair labor practice charge; union

refusal to withdraw and dismissal.*

In this charge docketed as Case No. 17-CA-12654, Local

41 alleged that Land Air had violated Seetion S(a)(1) and

(3) in that:

Since on or about April 9, 1985, the above named Kim-

plover, . . . refused to return to work unfair labor

practice strikers who unconditionally offered to return

to work and sinee such date has refused to return to

work said strikers, all hecause said strikers engaged in

an unfair labor practice strike on behalf of Teamsters

Loeal No. 41, against the above-named Employer.

President Schneller has testified that when the employ-

ees made their offer to return to work, the Company had

no work for them to do; and he referred the whole matter

to the attorney. The attorney advised Schneller that we

couldu’t discriminate against taking them (employees) back,

but right now they had been replaced: and if we had any

openings that they’d have to be considered and (it) not be

held against them that they were - just heeause they were

on strike. The attorney also talked to president Schneller

about the effect that upcoming collective-bargaining might

have on whether we would be taking some of the employees

back, or giving them some work that was currently being

done by contractors. The attorneys were going to negoti-

ate that; and president Schneller relates, T wouldn't get in-

2This charge was apparently amended, but in what respeet

does not appear directly of record.

volved in that. It is clear to me from context president

Schneller’s intended nieaning was that his attorney(s) were

to handle such negotiations for him. It is equally clear to

me and T find that Employer had internally adopted the

position that the former striking employees had been a//

permanently replaced by contractors; but also, tifernally

had not precluded a return of certain unit positions, by

negotiation (e.g. by subcontract cancellation).

Following investigation the Regional Director for the

soard’s Region 17 dismissed the aforesaid charge (as

amended) concluding that further proceedings were not

warranted, and reciting therein ivfer alia:

From the evidence disclosed by the investigation,

it appears that the collective-bargaining agreement in

effect at the time of the Union’s strike which conmnene-

ed on November 13, 1984, provided that in the event a

grievance deadlocked at the Cartagemen’s Association

Grievance Comittee level, the Employer could exer-

cise its right to refuse to process a grievance further.

Under this provision, the Union can then resort to

economi¢ recourse notwithstanding any other provision

of the collective-bargaining agreement. The investiga-

tion revealed that the strike which commenced on No-

vember 15, 1984 was in fact prompted by the Employ-

er’s refusal to process further a deadlocked grievance

involving a driver. In addition, it was noted that in its

correspondence to the Employer announcing the strike,

the Union notified the Employer that it was taking

“economic action” against the Company.

Under these circumstances, it appears that the sub-

ject strike was an economic strike giving the employees

the right to reinstatement only at such time when po-

sitions become available. In this regard, it does not

appear that the Employer has hired any employees

since the Uniomws April 9, 1985 unconditional offer to

return to work. Therefore, the Employer's refusal to

immediately reinstate its striking employees is not a

violation of the Act.

There is no reference to Mmiplover having subcontracted

all unit work permanently.

8. The request for information on subcontracting:

interim employee communication with Schneller,

Jr.; and strike resumption.

a. request for information

Local 41 did not withdraw the charge, but neither did

it appeal the Regional Director's dismissal of the charge.

Rather, by letter dated 3 June 19590, Speak wrote Michalski

making the following further inquiries :

Would you please respond to me as soon as pos-

sible if vou have hired any new employees since April

1, 198).

Also are you subcontracting any of the work pre-

viously performed by our Bargaming Umit employees

prior to the strike?

If vou need any further questions answered con-

cerning these questions please contact me.

Speak (essentially) acknowledges this was the first inquiry

he had specifieally made about the subcontracting of the

Employer. By letter dated 5 June 1985, Michalski ae-

knowledged receipt of Speak’s letter, and advised Speak

it had been forwarded to Hmplever’s attorney. By letter

dated 10 June 1985, attorney Amato, who had not been

copied with charge dismissal letter wrote Speak, and ad-

vised:

Since vour questions involve matters directly relat.

ing toa pending case before the N.LLR.B. T don't feel

that it would be appropriate for me to discuss these

matters at this time.

In point of fact the charge had been already dismissed on

21 May 1985; and tlie period for filing an appeal had well

run out by 10 June. Speak testified credibly that Land Air

did not answer (and I find Employer did not timely answer)

the questions Speak had asked in his 3 June letter. While

it is apparent that Speak did not seek any immediate clari-

fication of the Amato letter’s erroneous reliance on the

charge still being under investigation, it is apparent that

Amato had sent copy of his letter to both Schneller (pre-

sumably president Sehneller) and Michalski. Assuming

Amato was not aware of the earlier dismissal, it is difficult

for me to accept he would net have soon thereafter become

aware of it. The fact is no clarification of position on the

subcontracting was timely forthcoming from Employer,

though Speak had specifically requested it.

hy. This COUT E rsations Lie hore i ¢ miploye fe Cundiff

and Schucller, Jr.

Schneller, Jv, testified that at 7:28 on 10 June (thus

While Schneller was still sw]pervisor) he had a phone conver-

sation with employee Lindsay Cunditf (a former striker),

In that conversation, according to Sehneller, Cundiff said

that 90% of the men who worked at Land Air just wanted

their fair settlement of vacation time and sick days that

were owed to them by Land Air Cundiff told Sehneller,

Jr. that as far as we was concerned the whole thing was

over, but he did not know the Unions position on this mat-

ter. Supervisor Schneller told Cundiff we have to check

with the attorneys, Cundiff said he did not want the wni-

forms Land Air had provided him, just the pay that should

be coming to him. According to Schneller, Cundiff also

said that he was working then; and that he would deny this

conversation ever took place. Cundiff gave Schneller a

phone number were he could be reached. Schneller relates

that a few days later, on 13 June 1985, at 7:30 a.m., Cundiff

ealled Schneller, Jr. back. According to Schneller, Cundiff

this time said all of the former employees wanted their

settlement on their vacation and sick days immediately be-

cause they knew it was over. Cundiff told Schneller that

the Uniows basis for delaying this is to recover backpay.

Cundiff said all of the former employees felt this way, ex-

cept Joe Fincher, because they (the other employees) did

not want anything to do with him. According to Schneller,

Jr. he told Cundiff that he still had not heard from his at-

torneys. There is no evidence that Employer at this time

sought any clarification on Union's prior offer on behalf

of all employees to unconditionally return to work. What

is only apparent is that on the same day as Cundiff’s first

couversation, Amato sent his nonresponsive letter to the

Union.

Cundiff was called as a rebuttal witness by General

Counsel. Cundiff confirmed he had two phone conversa-

tions with Schneller, Jr, and that he placed the calls. Cun-

diff testified that he was concerned about his vacation

time: and that in the first conversation he asked Schneller,

Jr., about vacation time that he felt was due him. Ac-

cording to Cundiff Schneller told him he would get with the

lawyers, and to eall him back in a couple of days. Cunditf

did call a second time; and according to Cundiff, Schneller

told Cundiff this time that the cheeks were in the hands

of the lawyer and that’s all he knew. Cundiff asserted that

was the end of the conversation.

Cundiff otherwise specifically denied that he told Schnel-

ler that all he wanted was his money, and that he didn’t

want to come back to work: and hie specifically denied that

he said that all that any of the other strikers wanted was

their money, and that they didm’t want to come back to

work. Cundiff dened that there was any discussion of

sick leave. (It appears that as of July the Union was claim-

ing as due to Cundiff: $1,541.54 for pro rata vaeation

earned through 12 November 1984; $305.76 for 39 days sick

pay; and $101.82 for 8 hours worked on 12 November 1984,

the day before the strike. By answer of Amato letter of

22 August 1985, Emoplover contended that Cundiff had been

paid on 17 November for the work on 12. November; con-

firmed the amount of the vacation pay then due; and con-

tended otherwise that Cundiff was due only 2 days. sick

leave benefit of $208.84. There were other disputed claims.

If such claim disagreements appear inconsistent with Cun-

diff recollection of Schneller, Jr. assertion the checks were

in the hands of the attorneys, vo more does Employer's

assertion that all the employees no longer wanted to return

appear imconsistent with Amato's response to requested

negotiations at this time, and resumption of strike activity

on 22 June 1985,

be thie strike resmiunphron

On 22 June 1985, Local 41 went back on strike; and

according to Speak this time they began to stay at the

Kmery facilities. Speak has testified they observed new

employees come apd go whom they had not seen before.

Speak asserted that prompted the Union to file the new (in-

stant) charges. Tlowever, as noted, the new (instant)

charges were not to be tiled until S October. There is some

evidence (in G.C. fix. 6 series) to support Speak’s reported

observations, 772, an apparent appearance of new contract

driver names in June, July and Aneust. At least as of

time of renewed strike, Employer could not doubt continued

Interest im return to employment by its unit employees,

9, Negotiations and correspondence

By letter of 1 July 1985 to Conder, attorney Amato

acknowledged receipt of an earlier letter of 78 June 1980

from Local 41's seeretary-treasurer Johnson designating

Conder as a member of the Union's subcommittee for nego-

tiations. After presenting the details of his existing sched-

ule for the month of July, looking to mutual agreement on

a date to begin negotiations, Amato requested that the

Union's proposal, if available, be submitted prior to the

meeting to be arranged. Though Speak had a recollection

at one point that there were a number of letters hetwoen

Johnson and Amato as to which Speak has asserted Amato

could not make the meetings with Johnson, none were intro-

duced. Moreover, Speak later acknowledged that Conder

had the negotiations; and Speak was not aware of any

direct letters, or phone calls between Conder and Amato.

Conder did not testify. Conder did reply to Amato, but on

this record, in September, Other matters were being pur-

sued by the Union in the interim,

Local 41° attorney Michael A. LeVota wrote a letter

dated 16 July 1985. Therein, in addition to requesting

that certain vacation and other (sick leave) benefits pay-

ments be made to the thirteen unit employees, LeVota

requested :

We hereby request that you provide us with the

employment status of each and every member with

Land Air Delivery, Ine. hereinafter referred to as the

“company” and pursuant to 290140 RS, Mo, 1982, pro-

vide us with the effective date of their layoff status or

termination,

By letter dated 22 July 1989, Foe Schr HN, Jr, acknowledged

receipt of the above letter ou that day sand observed it Wa

misaddressed. Schnell, Ja, advised Land Abies respouse

.*)

would accordingly be written 10 days from the date of

Schneller’s letter, not LeVota’s letter as requested. There

Was however no response from Employer before Local 41's

attorney had occasion to write a second letter.

LeVota's second letter, dated 16 August 1985, addressed

to Amato stated prior Employer correspondent indicated

the Union would receive a reply by 1 August 1985; but that

it had not received a reply as of 16 August. The LeVota

letter recited, inter alia:

In addition to our lack of information as to our

members’ status, Land Air... refuses to clarify its

position with reference to the reinstatement of our

members, Te refresh your memory, our members un-

conditionally offered to return to work on or about

April 9, 1985.) Our members’ unconditional offer to

return to work has continued unabated sinee April 9,

even though Land Air has refused to take meaningful

and concrete steps to schedule collective bargaining.

Additional requests to clarify the company’s position

have not been fruitful.

Copies of prior correspondence were supplied; and it was

specifically broaght to the attention of Amato that the ap-

peal time had run prior to Ainato’s letter of 10 June 1985,

LeVota’s letter then went on to further assert:

The company's position with regard to the uncen-

ditional return of our members is further complicated

by an indication by the company that our members

would only be offered re-employment as independent

contractors and not as employees which are part of the

bargaining unit. We reached this conclusion beeause

the only communications we have in this matter is a

draft of a letter that was mailed to me but addressed

to Teamsters Local 41 by Joseph Sehneller Sr. diated

April 9, 1985, a copy of whieh is attached hereto. Thi-

draft does not appear to have memorialized into a final

correspondence but shows an intent on the part of the

company to discriminate against our members for their

strike activities. Since the National Labor Relations

Board has viewed our strike as an economic strike, the

company has a duty to reinstate the employees once

they have conditionally (sic) agreed to return to work.

NLRB v. Fleetwood Trailer Co. 289 US, 375, 378, 66

LRRM 2727 (1967) and our striking members retain

their employee status pursuant to 2(3) of the National

Labor Relations Act while on strike. Neither Team-

sters Local 41 nor the striking employees have been

advised by the company that they have been perman-

ently replaced... (Emphasis supplied.)

This questioned document referred to above has not been

placed in evidence by any party. With reference to prior

Regional Director dimissal letter of 21 May 1989, copy

(then) supplied to Amato, LeVota further related:

the Regional Director had indicated at that time

that it did not appear that Land Air had hired any

employees since our unconditional offer to return to

work on April 9, 1985.) Information however has come

to Local 41 since Mr. Hendrix’s letter of May 21, 1985

in which the company has added additional independ-

ent contracters or in the alternative the independent

coutractors have added additional employees and/or

sib-contractors. fll of this however establishes a pat-

fern of conduct on the part of the company flat is

calculated to unlawfully and unilaterally do away with

the certified bargaining unit by wmealaterally sub-con-

tracting bargaining unit work without first bargain-

ing with Teamsters Local tt. Our specific informa-

tion ix that there has been a significant Increase in

work since April 9, 1985, especially in the Johuson

County, Kansas area. We have been advised that the

following individuals at the designated addresses are

now performing work previously performed by our

bargaining unit and these individuals were not asso-

ciated with the company prior to April 9, 1985, to-wit :

(Emphasis supplied.)

Name Address

1. Roger Williams — P.O. Box 529, Platte City, MO 64079

2. Jack Wright 1205 Main, Oswatomie, KS 66064

3. Dave Anderson 401 North Washington, Spring Hili, KS

Hb6863

4. Don Fowler 1254 Lowell, Kansas City, KS

». Tom Pope 902 NW. Waukomis, Kansas City, MO

6. Joe Peterson 21270 S. Clair, Spring Hill, KS 66083

7. Weith (last name unknown )

8. |. Smith

9. Terry MeDonald

We have also been advised by Emery Air Freight

that Land Atr Delivery, Inc. will also take on the addi-

tional responsibility of all dock work for Emery Air

Freight, Ine. and given this inerease work force, we

see no practical reason precluding our members from

being reinstated to their positions with the company.

We are also advised that Terry MeDonald, listed above,

who was previously a dock worker for Emery has left

the employment of Emery Air Freight and is now act-

Ing as an independent contractor for the Company.

Le Vota specifically requested a written position, pertinently

as lo:

a. The employment statuts of our members per our

letter of July 16, 1985:

—66

e Our request for service Jetters pursuant to

290.140 R.S.Mo. 1982;

d. Whether the draft letter of April 9, 1989. cor-

rectly states the company’s position that our members

will only be offered reinstatement as independent con-

tractors ;

e. Whether additional independent contractors or

additional employees of tdepe vdent contractors are

performing the work previously done by our bargaining

vwnit; (emphasis supplied)

f. Why Land Air Delivery, Inc. continues to refuse

to reinstate the striking employees and the specific

circumstances under times, dates and places under

which our members’ jobs will be reinstated; and

e, What specifie time, place and date the company

proposes to meet to resume collective bargaiming.

Finally, LeVota’s letter advised of the prospect of new

charges:

Beeause of this new information that shows the sig-

nificant hiring of independent contracts to perform our

bargaining unit’s work and because of the now 4-month

delay since our members have continually offered to

return to work, we consider your company’s present

refusal to reinstate our members as a violation of

S(.A)(3) of the NLRA by discriminating against our

members for their union activity associated with their

economic strike. Since there was an indication of a

potential willingness to resume bargaining we feH in

vood faith that we should allow your and your company

the opportunity to clarify your position before return.

ing to the National Labor Relations Board for appro-

priate action; however, unless you clarify your posi-

tion within ten (10) days from the date of this letter,

we shall return to the National Labor Relations Board

with our new information to file unfair labor charges

for the reasons previously discussed,

While the Union clearly in this letter of 16 August 1985

had raised a concern about Employer's subcontracting and

made request for information thereon in general form, the

concerns expressed were about information indicating, in

contrast with Regional Director earlier determination that

Kmployer had not hired employees after 9 April, that there

were now specific indications Mmployer had thereafter

added contractors, or its contractors had added employees,

with the specifies of the latter presented by Union for Em-

ployer clarification. Significantly, Union pointed out that

neither it, or employees had been theretofore advised by

Kmployer that the strikers had been permanently replaced,

By letter of 22 August attorney Amato replied to at-

torney LeVota, as follows:

With regard to the employment status of the mem-

bers T can only state to vou the facts as they occurred

but as far as putting a label on their status your guess

is as good as mine. The facts are that on November

15, 1954 the members went out on strike in an attempt

to impose economic sanctions against the company for

its refusal to process further a deadlocked grievance.

This was in accordance with an addendum to the Agree-

ment between the company and Loeal 41. The strikers

were notified to return to work and failed to do so. The

company hired some additional employees as replace-

ments and continued to conduct business as it formerly

did prior to the strike. On April 9, 1985 the members

offered to return to work “unconditionally” and were

advised that there were no positions available. Sub-

sequently, a charge was filed with the N.L.R.B, C.A-

12564 and after an investigation the Regional Director,

on May 21, 1985 declined to issue a complaint. No

’

appeal was taken from this decision. On or about June

92. 1985 members of Local 41 again began picketing

the Emery facility on Prarie View Road with a sign

that reads, ‘On Strike—Teamsters Local 41—Land Air

Delivery—Unfair Labor Practice’. This picketing has

continued up to and including this date. (imphasis

supplied.)

Not only did Employer not inform the Union that all

striking union employees had been replaced by permanent

subcontract, Employer specifically disavowed the employees

were terminated. Thus after responding to certain union

claims made in regard to vacation and sick leave benefits,

not deemed further material herein, Amato additionally

responded :

In regard to item ¢. of your letter Iam unable to

see that the Missouri statute you refer to is pertinent

or relevant to this situation. The company did not

dismiss any of the members and to the contrary re-

quested that they return to work. In view of the facts

as T have stated them above your position of requesting

a letter of dismissal pursuant to the Missouri statute

cited appears totally inconsistent.

As to the draft of a letter referred to in your item

d., L would first of all like to know how that document

came into your possession. As you may or may not

know, since it Was prior to your representation of

Local 41, there have been numerous company records,

letters, ete. that have mysteriously appeared in the

possession of officials of Local 41. In fact the theft

of these documents is presently part of a legal action

pending in the U.S. District Court in’ Kansas City

which is the reason for my inquiry as to how this letter

came into vour possession. Nevertheless, it is not now,

nor has is ever been the position or intention of the

company to offer reinstatement to the members on the

condition that they become independent contractors.

The draft letter, as you know, was never signed nor

sent and does not even purport to say that such would

be a condition of reinstatement. I sincerely question

your good faith efforts to resolve these important is-

sues for the members in view of the totally erroneous

characterization of the language in the referred to

draft letter.

Item 3.; Land Air has continued to conduct its

business in the same manner and method as it did fol-

lowing the strike on November 13, 1984. No new con-

tractors or employees have been added since April 9,

1985.

Item f.; Land Air has not refused to reinstate any

of the members and does not know at this time when

additional employees will be required.

With respect to the names and addresses of the per-

sons you list on page two of your letter, two of the

individuals, Don Fowler and Tom Pope, are Land Air

Independent Contractors and the rest are employees of

Land Air Independent Contractors. All of these per-

sons, with the exception of Terry McDonald, became

associated with Land Air or one of its contractors

prior to April 9, 1985. Tam advised that Mr. MeDonald

was hired by one of the contractors to replace a driver

that quit who had been working prior to April 9th.

Employer did not definitively advise the Union that

Fowler and Pope had entered subcontracts on 20 Febru-

ary along with the others (Benefield and Ken Horton, and

supervisor Mawby on 1 March 1985), let alone that all unit

work had been permanently subcontracted out since that

time. In contrast, in regard to those specifically inquired

about and addressed by Amato and or whose circumstances

have been earlier addressed (viz. Roger Williams, Fowler,

Pope and Terry McDonald), G.C. Ex. 6 series reflects An-

derson and Wright as Rinehart associated drivers since

(at least) early December, 1984; Peterson at least sinee

20 February 1984; Keith similarly (at least) as of 29 March

1985; and C. Smith similarly (at least) as of 8 April 1985.

In final correspondence (of record), by letter dated 5

September 1985 Conder responded to Amato’s 1 July let-

ter, confirming desire to meet in Kansas City, providing

the Union’s proposal, and requesting Amato call Conder.

The Union proposal submitted was a one sheet document

proposing the new NMEA recently negotiated for period

1 April through 31 March 1988, but with copies of changes

enclosed. Conder’s letter, though indicating the Union

preferred the NMEA also related:

we recognize tht (sic) if you desire to Nego-

tiate an Agreement other than one involving a Multi-

Employer Unit we must and will accommodate that

desire. This proposal is in no way intended to require

you to join or becone (sic) a part of any Multi-lm-

plover Umt or Group.

The Union reserves the right to add to, delete, or

otherwise modify thid (sie) proposal at any time dur-

ing negotiations.

a. Kinery dock work takeover

It may be observed that the Amato 22 August letter

did not specifically address union assertions as to the

claimed significant Increased work generally and/or spe-

cifically in the Johnson County, Kansas area; nor did it

directly address Land Air’s taking on the dockwork for

Emery. As to the latter, president Schneller has testified

that in July, 1985, Land Air started to do all of Emery’s

dockwork. However, Schneller explained that prior to this

Kmery picked up their freight at tie airplane, and sorted

the freight at the dock. Although Schneller initially said

he didn’t really know, Schneller thereafter stated. that

Kmery basically had a crew of part-timers in the morning,

and a crew in the evening; and Schneller guessed there

were about 8-10 employees. Schneller further explained

however that when Emery came to Land Air-to take over,

Emery had streamlined the business, and had done away

with most of the freight handling on the dock. What ever

was left, Emery wanted Land Air to do. Moreover, Schnel-

ler testified that there was no additional compensation

granted Land Air for its performance of this new work;

and Land Air had to absorb it. According to Schneller,

Land Air thus could not afford to hire any new dockwork

employees. Land Air in turn foreed this work upon the

contractors. President Schneller also testified that. this

work had never been done by bargaining unit people; it had

never been done by anyone (with Land Air) before. (There

is no specific complaint allegation as to Respondent Km-

ployer’s failure to reinstate strikers for the above dock

work. However, there is general allegation that Respond-

ent Employer has refused, and continued to refuse to rein-

state strikers.) The Company urges that it (ack of Emery

compensation for the work) was further evidence why the

Company could not recall any employees to perform this

work.

h. Tnereased contractor work

With regard to contractors being given increased work,

Schneller testified only generally. Land Air is provided

manifests from Emery computers. Supervisor dispatcher

Mawby hands the manifests out to the contractors. They

break the freight out; and each contractor takes what goes

(Pp

to him. President Schneller initially testified that Mawby

doesn't decide how much work he is going to give con-

tractors, that the work is broken into geographical areas.

Some Land Air contractors don’t have any employees, some

one, and some more than one. President Schneller testi-

fied that there is no set pattern to the work. President

Schneller also testified that it was primarily, Michalski

who had made the decision on the hire of additional con-

tractors, and/or the arrangements that were made with the

contractors on geographical areas, or what work they were

to be assigned. However, Schneller later acknowledged

that Mawby does it now; and that Mawby makes any ad-

justments in the work of contractors as required at any

given time. Mawby has radio contaet with the contractors

and their drivers, though contractors/drivers usually call

Mawby. Schneller did not know if the contractors had

hired additional employees after 9 April 1985. Mawby did

not testify.

General Counsel introduced a 21-page exhibit (G.C. Ex.

6) as a document prepared by Land Air personnel and re-

flecting the number of pickups and deliveries on the date(s)

indicated on the document(s) made by Land Air personnel

on behalf of Emery. Respondent Imployer expressed no

objection; indeed expressed willingness to stipulate the

documents (making up the exhibit) were prepared in the

ordinary course of business; and while reserving only exact

accuracy, agreed that for all practical purposes they ac-

curately refleet what happened. The documents cover 21

dates, inclusive of the date before and day of strike (though

driver identity on these days was coded for asserted se-

curity purposes), the first day following apparent making

of the above independent contractor contracts, the day be-

fore and day of Union's unconditional offer, and various

other dates extending over a year. General Counsel’s pur-

pose in offering the exhibit as stated at the proffered time

was to give an idea, over time, as to how much business

Land Air did for Mimery, because that is the bulk of the

work that was performed by the unit. To the extent Re-

spondent would object to any appropriate probative force

being given to this Exhibit in assertion made in brief that

KXmployer is not sure what the exhibit proves, that asser-

tion, if intended as an objection to be placed now, e.g. on

exhibit inadequacy for purpose offered, in my view comes

too late. T shall view the exhibit as appropriately refleet-

ing material dates; and overall, as an adequate random

sampling of the business records of Respondent, and cer-

tainly for the explicitly stated purpose when offered, with-

out objection. Respondent Employer otherwise, in brief,

would itself have the gross revenues observed, with asser-

tion that though fluctuating, the revenues remained in $4000

to $5000 range. This will be done.' Pickups and deliveries

are thus shown under heading “P D> and revenues in

combined (and rounded) dollars under caption “Rev.”,

The same may then be portrayed as follows:

‘Any totals on the exhibit placed in evidence are not legible,

nor has Employer supplied its contended summations. Nonethe-

less the individuals’ revenues are presented, and they have been

totalled for the purpose.

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It is readily apparent from the above that Kmployer

has had more pickups and deliveries in the last 10 days

(starting 9 April 1985 and extending over a 7-month pe-

riod) than it did in the prior 11 days (starting the day be-

fore the strike and extending through 5-month strike pe-

riod). There were 3,435 pickups and 4,081 deliveries in

the first 11 days, or an average of 311 pickups to 371 de-

liveries, per day. In the last 10 days there were 4,506

pickups and 4,689 deliveries, or an average of 430 pickups

to 469 deliveries, per day. In short, in the 10 days starting

9 April 1985 the average of total pickups per day had in-

creased 38% (119 increase divided by 311 base), and the

average of total deliveries had inereased 26% (9% in-

crease divided by 371 base). Moreover, contrary to Km-

ployer urging, it is as obvious that gross revenues on the

average had similarly increased. The gross volumes for

the first 11 days presented was in total £44,698, or an aver-

age of $4063 gross revenue per day. The gross revenues

for the last 10 days presented was $47,603, or an average

of $4760 per day. The difference was an increase in aver-

age gross revenues per day of $697, or 170 (697 increase

divided by $4063 base). Moreover the increase toward

9000 level is discernibly more pronounced at the end of

the second period. New names compatibly begin appear-

ing on GC, Ex. 6 for the first time in the same period

see e.g. Bob (and or Rob), John, Fred and Gary Sloan;

Terry Mawby and Gary Mawby; and individuals Carl,

Steve, Eddie, Donna, and Gribble on Rinehart. T eredit

Speak (at least) that he began seeing new faces following

union and employee strike return on 22. June.

10.) Further contentions and offered evidence on

failure to reinstate

Speak testified that Land Air has not to date reinstated

any striking employee. Speak testified that Employer has

not notified him they had replaced any unit employee.

Land Air is still engaged in the pickup and delivery work

for Emery. Speak also testified that from observance of

the dock there is no way to tell if drivers are employees of

Land Air or subcontractors. All bargaining unit employees

wore Emery uniforms. After the strike, although not

necessarily immediately, according to Speak, all the indi-

viduals who performed the work previously performed by

bargaining unit employees, eventually did wear Emery

uniforms.

On cross-examination, Speak acknowledged that in 1982

when Speak first began policing the agreement, and prior

to negotiation of the 1982-1985 agreement there were then

about 12 employees in the bargaining unit; and Speak’s

recollection was that there were about 25 people working

on some kind of contact at that time. He was aware of the

prior unit clarification, though before his time, and of the

fact thet Employer was subcontracting even at that time.

Speak did not know the current (ast two months) number,

but acknowledged it was probably true there are now ap-

proximately 25; but he testified that he had personal be-

lief, that there’s more contractors and contractor helpers

now than when he first came with the unit,

Respondent establishes that in prier affidavit of 1 May

1985, Speak had then stated, “Since that time by 1982 we

had about 12 employees on the seniority list and approxi-

mately 25 independent contractors.” Speak acknowledged

that therein he had also stated “I have no idea how many

people are currently working for Land Air, probably 25.”

At hearing, he testified that he didi’t know if all of them

were contractors or not. Ile further testified im explana-

tion of the references to 25 contractors of some kind, that

to the best of his ability and knowledge they (Land Air)

had hired several people just as employees,

On other occasion Speak referred to the 25 as extra

people working there that he referred to as contractors,

other than bargaining unit employees. On later occasion

he also said he would say it was approximately the same

number in April 1985 but didwt have any way of keeping

up with exact numbers. He didw’t have access to the books.

Respondent urges, aid relies heavily on asserted Speak ad-

mission that the number of contractors now are the same

as they were before the strike,

Contentions of the parties

General Counsel observes correctly that Respondent has

admitted that Mmployer had subcontracted all the unit work

since at least Mareh 1985; that all strikers were perma-

nently replaced; and that Employer acknowledged that

Employer had not given earlicr notice to, or bargained with

the Union concerning its decision to subcontract part, and

then the entirety of the unit work. General Counsel asserts

that Respondent sees its past practice in subcontracting

as privileging its unilateral (subcontracting) actions during

the strike. However, General Counsel sees the subcontract-

Ing issues as essentially threefold: (1) does an employer

have the right to permanently sabcontraet unit work dur-

ing a strike without notice to, or bargaining with the Union:

(2) is the decision to subcontract work in this ease a man-

datory subject of bargaining under the Board’s decision

In Otis Plerator, 269 NERB SOL (1984): and did the Union

Waive its right to bargain about unilateral subcontracting

of unit work, On the latter point, on this record. it could

not be clearer in background that the Union did not waive

its right to bargain about subcontracting of unit work. In-

deed Employer does not contend it did; but (seemingly)

only that the parties have had dispute over application to

prior subcontracting,

General Counsel's basic argument essentially proceeds

as follows: Subcontracting as an issue of bargaining nor-

mally arises where, as here, it,“ . . will effect some change

in the terms and conditions of employment of the employ-

ees involved.” Westinghouse Electric Cerp., 108 NLRB

443, 446 (1965). An employer's subcontracting that effee-

tively eliminates the work of an entire unit of employees,

but substituies a performance of the same work for the

employer by a contractor, even when motivated by economic

considerations alone, is a mandatory subject of bargaining,

Fibreboard Peper Products, Corp., 379 U.S, 205, 214-215

(1964). In strike circumstances, the Board has previously

held that permanent replacement by subcontracting is sim-

larly a mandatory subject of bargaining where the effect

of a permanent replacement of strikers by subeontract is

essentially an abolition of all unit positions, Alerander

Linn Hospital Association, 244 NLRB 387, 390 (1979),

enf’d. 106 LRRM 2546 (3rd Cir. 1980). Indeed the Gen-

eral Counsel has contended that the Board has long re-

quired an employer to bargain about subcontracting when

the subcontraet is intended to be permanent, and thus will

impair the status of the Union, Southern California Sta-

tioners, 162 NLRB 1517, 1533-34, 1539-42 (1967). Perma-

nent subcontracting is to be distinguished from nonper-

manent, stopgap or temporary measures designed by an

employer to continue serving its enstomers during the

strike, Minpire Terminal Warehouse Co,, 1091 NLRB 1359,

1964-1265 (1965). General Counsel concedes that an em-

ployer is not under a dity to bargain over temporary sub-

contracting necessitated by a strike where such subcon-

tracting does not transcend reasonable measures necessary

in order to maintain operations in strike circumstances,

with acknowledement that subcontracting prohibition with-

out bargaining are not hard and fast rules nor to be me-

chanically applied, Shell Oi Co, 149 NLRB 305, 307 (1964)

(adequate notice of transfer of work, willingness to confer

and minimal effect on unit); and Shell Oil Co., 149 NLRB

298, 300 (1964) (temporary subcontracts limited in dura-

tion to economic strike; and with Board approval of the

exercise of right to maintain established practices not pre-

cluded by contract with respect to subcontracting during

period between contracts).

General Counsel thus readily has viewed as distin-

guishable varying case circumstances where an employer

may subcontract as a femporary measure to aid the em-

ployer to keep its operations intact during a strike, and

where the subcontracting during a strike does not exceed

what is necessary for that purpose, e.g., as here, to reason-

ably ensure deliveries to the employer's customers, Empire

Terminal, supra, 191 NLRB at 1365; and Shell Oil Co..

supra 149 NLRB at 300-301 (1964), (but notably in the lat-

ter, with an issue of any erpanded subcontracting practices

reserved.) General Counsel furthermore acknowledges the

appropriate temporary character exists, even if the sub-

contract period extends beyond the strike, provided the

subcontracts when entered are of reasonable duration, and

initially dictated by exigencies of the strike, or because

of threat of imminent strike, Elliot River Tours, Inc., 246

NLRB 935 (1979).

Kmplover correctly observes that it is axiomatic that

permanent replacement of striking employees for ceonomic

reasons during an economic strike dees not eonstitute a

violation of the Aet, MAR. ve MacKay Radio, 304 U.S.

O80 (1938). KMmplover then centrally defends that. the

strike which commenced on 13 November 1984 was an eco-

nomic strike; that Emplover’s permanent replacement. of

economic strikers with contractors rather than employees

was for equally elear economic reason, namely to enable

it to continue to meet its contractual obligations to Emery;

and (it asserts) permanent replacement by subeontract is

noi a violation of the Act. Employer thus contends the

economic strikers here were consequently entitled to rein-

statement only when, and if work was available. Km-

ployer contends the record shows that work was not avail-

able on 9 April 1985, and thereafter. mployer further

asserts in the latter regard that the record shows no in-

crease in Employment subcontracting since the end of the

strike on 9 April 198».

The Respondent would basically rely on Arthur Corp.,

246 NLRB 1183 (1979) urging it as a case in which the

Board has affirmed an administrative law judge holding

that an employer who (essentially permanently) subcon-

tracted bargaining unit work during a strike did not violate

the Act when the Employer refused to reinstate economic

strikers who had unconditionally offered to return to work.

It was there found that the offer came after subcontract re-

placements were told and they understood they were to com-

plete the pending work. It seems to me that the A rthur case

supra is distinguishable on two counts. First, the complaint

did not allege a violation of Section S(a) (5); and accord-

ingly it does not address any employer related bargaining

obligation under the Act, even in absence of discriminatory

motive. A second distinction even on 8(a)(3) and S(a) (1)

violation is that in Arthur, as General Counsel correctly

observes, the decision to close the affected operation had

clearly preceded any union activity, and it was occasioned

for clear economic reason. However, Employer has also

urged as of particular relevance in the Arthur case that the

administrative law judge had cited and relied upon the de-

cision of the Ninth Circuit Court of Appeals in Taiwan Meat

Co. v. N.L.R.B., 321 F.2d 397 (9th Cir. 1965), wherein the

Court had held that an employer’s permanent replacement

of striking employees with subcontractors was not a viola-

tion of the Act, if done for economic reasons. The Mawar

Meut case did involve Section S(a) (5). The trial examiner

however had found, and the Board affirmed in the under-

lying case, Hawaii Meat Co., 139 NLRB 966 (1962), that the

employer was obligated to bargain with the Union about its

decision to subcontract out its delivery work, with reliance

on its (then) recent Town & Country Mfg. case, 136 NLRB

1022 (1962), enf’d. 316 F.2d 846, 847 (Sth Cir. 1963). The

Board also in Hawaii Meats specifically expressed the view

that NLRB. vy. Mackay Radio, 304 U.S. 333 (1988) was not

dispositive. The Board acknowledged that Mackay held

that an employer is justified, in attempting to keep his plant

in operation, to hire new employees as replacements for

economic strikers. However the Board noted the employer

was obligated to continue to bargain with the union after

a strike occurred; and it thereafter ruled in Maieaii Meats,

supra, 139 NLRB at 969, “The elimination of unit jobs (and

the consequent erosion of the bargaining representative’s

status) is, we are satisfied a mandatory subject for bargain-

ing, even though the employer may seek to justify his action

in terms of the replacement of economic strikers.” Notably

the Board therein also held, id. page 969 “In this ease, in-

dividual strikers are not being replaced by other employees,

but instead, the positions they held before the strike have

been eliminated so that no replacement is being substituted

for the striker.” The Board also observed thereafter the

“very existence of the certified unit was at stake.” Em-

ployer nonetheless urges as language particularly appli-

cable, the Court’s asserted comparison of permanent. re-

placement of striking employees with employees, to per-

manent replacement of employees with subcontractors, 321

KF. 2d at 400, to wit:

We think it no more proper for the Board to in-

trude upon the decision of the employer in a strike

sifuation to keep going by subcontracting, than to in-

trude upon a decision to replace, premanently, indi-

vidual strikers. This, we think, is consistent with

82 y

the philosophy expressed by the Supreme Court in

N.L.R.B. v. Insurance Agents’ Union, 1960, 361 US.

477, 488-498.

Employer argues the above Hawaii Meats (Court) de-

cision was cited by the administrative law judge, in the

Arthur ease which (Employer asserts) was then affirmed

by the Board. I do not agree, To the contrary it appears

to me that what Employer would rely upon as such was

actually but the administrative law judge’s recitation of

that employer’s particular contention or urging; and that

the judge made it clear in the following paragraph the dis-

positive rationale was otherwise, viz., “The applicable legal

principles covering this case are set forth in N.D.R.B. v.

Townhouse T.V. & Appliances, Inc., 531 F, 2d 826, 828-829

(7th Cir. 1976) .. .,” a case in which the Seventh Circuit

enforced in pertinent part the Board's determination that

an employer had subcontracted out its delivery unit work

to avoid recognition of the Union.’ The short answer in

the ixsue presented here, mm any event, is that the very

argument sought to be raised by Employer herein has pre-

viously been raised before other administrative law judges,

been duly considered, and rejected as inconsistent with

existing Board precedent, and with those repeated rulings

thereafter approved by the Board, Alexander Linn ITospital

Association, 244 NLRB 387, 390, and fn. 2 (1979): South-

ern California Stationers, 162 NLRB 1517, 1542 (1967).

Contrary to urging by Employer in its bricf, the breakdown

in attempted analogy of striker employee replacement by

employee, and unit displacement by subcontract has been

clearly exposed, and flaw explieated, American Cyanamid

Co.. 235 NLRB 1316, 1323 (1978), enf?d, 592 F. 2d 356, 398

(1979). IT am bound by existing Board precedent, not

: }

5Townhouse T.V. & Appliances, 213 NLRB 716, 723A (1974).

clearly reversed by the Supreme Court, ov the Board. Lowa

Beef Packers, Inc., 144 NLRB 615 (1963).

Employer has itself otherwise raised as salient the

Board’s ruling in Elliott River Tours, Inc., 246 NLRB 935

(1979), overruling an administrative law judge, and _ find-

ing an employer did not violate the Act in subcontracting

an employer’s commercial river trips for 1978 and 1979 to

other outfitters when the employer was presented with an

imminent strike threat from the entire unit of Oregon

river guides. The Board specifically held the employer

in such cireumstances was rightly concerned that its cus-

tomers not face an abrupt cancellation of their trips after

coming long distances; and the subcontractor outfitter

there conditioned its acceptance of providing the 1978 serv-

ice on the contractor’s inclusion of the 1979 season. The

subcontracting of 1978 and 1979 trips could thus be, and

was considered an economic and business necessity faced by

the Employer. I am persuaded that the Elliot River Tours

vase is, as General Counsel contends it to be, a case of

permissible temporary subcontracting, with the expanded

length of contract reasonably warranted on the particular

circumstances of that case, circumstances that are demon-

strably inapposite to those presented here, as discussed

further ifra,

To the extent Employer would rely on other Board hold-

ings, e.g., in Precision Castings Co., 223 NLRB 183 (1977),

and The Emporium, 221 NILRB 1211 (1975), the reliance is

misplaced. It is clear those cases are Inapposite on their

facts in that in Precision Castings there were no discern-

ible adverse effects on the unit occasioned by subeontract-

ing, 233 NLRB at 210; and in the /mportum case, a clear

prior opportunity had been provided the Union to bargain

about the contracting because of Employer's timely notice

to Union of prospective cessation of unit tailoring work

and subcontract of it to independent contractor, a condition

oS)

also clearly lacking here. Moreover it is clear, 7d. fn. 1,

that the Board relicd on Westinghouse Electric Corp., Bet-

tis Atomic Power Laboratory, 153 NURB 443 (1965) where

at 446 it reviewed its clarification of holdings on subcon-

tracting noting particularly there is no violation where

there is no “significant detriment” to employees in the unit.

Clearly such is inapposite here. As it is not the effeet of

a contractual prohibition of subcontracting during a strike

that is of controlling consideration, Employer’s relianee on

Pittsburg Die Striker’s Lodge No. 50 v. Pittsburg Forgings

Co., 255 F. Supp. 142 (W.D. Pa. 1966) that an employer

can subcontract in a strike, cannot cause Employer to

prevail.

In summary then, the record before me, considered in

its entirety, makes it appear sufficiently clear that soon

after the strike had commenced on 13 November 1984, Em-

ployer had been able to make its required deliveries for

Emery by an initial and changing mix of use of its em-

ployees from other locations, its contractors and contrac-

tor drivers, newly-hired employees and use of its own office

staff and or supervisors, and various relatives and spouses

of the above. Respondent's general summary that “it

wasn’t easy” to hire drivers when the strike began must be

viewed in that light, aud it does not reasonably extend to

buttress February-March contracts. After the first week

or so of the strike Employer setuled in, meeting its service

deliveries essentially with a mix of contractors and con-

tractors’ drivers, newly-hired employees, and continued use

of its supervisors, e.g., Schneller, Jr., Mawby and Lynch.

There is simply no evidence offered by Employer that is

persuasive that in late February or early March, 1985, that

Kmployer was acting out of business necessity in entering

contracts for the first time with Benefield, Fowler, Horton,

Pope and supervisor Mawby.

Respondent’s bare assertion, subsequently revealed to

be uncorroborated hearsay at that, that these employees

“would rather work as contractors” does not suffice to estab-

lish these employees had demanded as a condition for their

continued service, that they be made contractors. Certainly

the same does not excuse or justify Respondent’s act at

that time entering subcontracts with not just the five,

but all of its contractors, and in substance and effect there-

by permanently eliminating all unit work for employees,

without prior notice to the Union, or Employer bargaining

thereon. Whatever may or may not be the merits of the

disputes between the parties over use of its contractors

prior to the strike, none of its contractors before the strike

are shown to have performed the unit work specifically

performed by these 18 unit employees. The 5 contracts

entered for the first time by their terms put into Employ-

er’s service 7 pieces of equipment; and they alone thus

affected half of the units’ work, despite the fact that Re-

spondent by this time was experiencing no difficulty in

meeting its deliveries otherwise, e.g. by employee and su-

pervisor service as drivers. Although Employer did net

join in the informal settlement of its charge, the Employer

was certainly aware the Union had entered the settlement

agreement in early February, and it was aware of the terms

of the agreement under which the Union had agreed, and

was to notify its employee-members, that the Union would

not in the future engage in unlawful local or ambulatory

picketing, or other specifically described unlawful conduct.

In agreement with General Counsel contention, I conclude

and find, ivfra Part II, that there was no evidence offered of

any strike violence, or threat of same, by anyone after 4

February when the Union entered this agreement. The Gen-

eral Counsel contends not just the five (or seven) positions

filled by the five new contractors but all unit positions were

effectively extinguished by the Employer’s treatment of its

February-March contracts as permanent replacement of

unit employees. I agree, at least as to 12 of the unit em-

plovees. (One position, that servicing General Motors’

Leeds facility, would on the face of this record appear

potentially permanently lost to Employer's competitor,

Shock Transfer.) I further find myself in agreement with

General Counsel’s contention that by the above acts of per-

manent subcontracting Employer has violated Section

8(a)(5) and (1), unless the matter is to be deemed not such

for some other reason.

Certain generally applicable principles are clear. An

employer may not make unilateral changes in mandatory

subjects of bargaining prior to a good faith impasse in

bargaining, Milwaukee Spring Division, 268 NLRB 601

(1984); nor make changes in mandatory terms and condi-

tions of employment contained in an existing contract, with-

out union consent, Brown Co., 278 NLRB No. 118 (1986) ;

Section 8(d) of the Act. Mere good faith and willingness

to bargain is no defense for an Employer who in fact makes

unilateral changes in working conditions during a period

of negotiations, NLRB v. Katz, 869 U.S. 736, 743° (1962).

An employer also has a statutory obligation to continue

to follow the established terms and conditions of an expired

contract as to the employer-employee relationship pending

negotiations and until it has bargained to impasse with

their exclusive representative, ef. Richmond Recording

Corp., 280 NLRB No. 77, Slip Op. (24 June 1986), ALJ

Dee. pg. 52.

Here the contract terminated on 31 March 1985, dur-

ing an ongoing strike. However, the permanent subcon-

tract of all the unit work had already substantially oe-

curred, in late February, and it was completed in early

Mareh, thus during the life of the contract, and accom-

plished without notice to the Union, let alone with its con-

sent. While the contract had terminated on 31 Mareh 1985,

thus before the Union’s unconditional offer to return made

on behalf of all employees, the only prior notice the Em-

ployer had given the Union on the course of future bar-

gaining, was of its timely withdrawal from the multi-em-

ployer association, and its determination not to be bound

by any contract that association might negotiate. Em-

ployer did not withdraw recognition from the Union. Its

obligation was to continue to negotiate with the Union as

the representative of its employees, upon demand. The

fact the Union continued on strike after termination of the

prior agreement did not serve to extinguish Hmployer’s

obligation to bargain with the Union about any Emplover

desired changes albeit on its desired individual Employer

basis.

Employer did not give notice to the Union of its action,

or intention with regard to a permanent subcontracting of

all unit positions, neither in February-March, nor at time

of actual termination of the agreement: and not even at

time of Union’s unconditional offer to return to work made

on behalf of all striking employees. Tam not persuaded

there is any efficacy to that end, in Michalski surprise of

an interest by employees in a return to employment (as

opposed to when they returned), where the strike of em-

ployees had continued unabated at Employer's entrance.

T am wholly persuaded that Employer's intended perman-

ency of the prior subcontracts is sufficiently made evident

from the continued use of subcontract drivers (certainly

beyond the contractual 50-day required notice of termina-

tion provision), and the Empolyer’s continued failure to

recall the available employees. But the Union was not

made aware of any of this. It is one thing for an employer

to (essentially) indicate to the Union and employees that

as a result of their economic strike and the employer's

coneurrent determination to, and = suecessful conduct of

operations, employees have been replaced in’ their indi-

ms 88

vidual positions, and resultingly there are presently no

open unit positions then available for the formerly strik-

ing emplovees to return to. It is quite another, for the

formerly striking employees and their representative to

have not been consulted, and to be kept ignorant of the

accomplished fact that the very unit positions, previously

occupied by the striking employees, and as to which the

Union has bargaining status in represcuting employees,

have been unilaterally and permanently contracted away

by their employer to others, without any notice to the em-

ployees, or opportunity for their exclusive representative

to have bargained on their behalf with Employer thereon.

Any subsequent offer to bargain generally, so long as the

facts of permanent subcontracting remained undisclosed,

absolves Employer of nothing. The only remaining sub-

stantive issue on Enmplover’s initial failure to bargain with

the Union over subcontracting is thus whether Employer's

decision made unilateraily to permanent subcontract to

independent contractors was a decision made unilaterally

ona mandatory subject of bargaining in the circumstances

of this case.

On this issue of Employer's decision to permanently

subeontract unit work to independent contractors as an

issue of a decision on a mandatory subject of bargaining,

General Counsel correctly observes we look to the Board’s

ruling in Ofis Llevator, 269 NLRB sol (1984), where, at

page $92, the Board stated:

the critical factor to a determination whether the

decision is subject to mandatory bargaining is the es-

sence of the decision itself, ie., whether it turns upon

a change in nature of the business, or turns on labor

costs.

The facts supportive and warranting the ready conclusion

that Mmplover’s subcontracting did not effect a change in

the nature of the business are fully set forth above in de-

tail and need not be repeated beyond brief summary here

that it is obvious that Employer provides the same services

to Emery, continues to conduct its business at the same

locations and facilities, did so with the same supervisors ;

and conducts essentially the same pickup and delivery

operations. The only thing that has changed is that con-

tractors and their employee drivers now perform all the

bargaining unit work previously performed by the unit

employees, Circumstances essentially much akin to those

presented in the Fibreboard Products case, supra. The

above is hardly indicative of a fundamental change in di-

rection of the business. Ner do T conclude it has been

made so by Employer's (arguably) concurrent sale of cer-

tain van (and truek) equipment, where some has been sold

to the same independent contractors, and some retained

for continued use of supe visors on bargaining unit work,

and for (spare) use by contractors in the same work, or

junked for obsolescence that would be present in any case,

albeit some has also been sold to truck dealer in unspeci-

fied amount. In my view this is not the type of, or ade-

quate showing made of withdrawal of capital, that the

Board has previously considered as portryaing a substan-

tive redirection of enterprise. There was also no showing

made by Employer of any business need for speed, or con-

fidentiality, or “unencumbered decision making” in’ such

action.

To the extent the Employer has advanced contention

that the Company’s business has taken on a new direction

and undergone a change in nature by virtue of Mmery’s

imposition of certain dockwork on Land Air in the summer

of 1985, apart from Employer's urging the same work was

much reduced by Emery, the shorter answer is that that

later business condition can afford no support or justifi-

eation for Emplover’s action in permanently subcontracting

3 or 4 months earlier in the year. (For the same reason

I do not rely on General Counsel's labor cost saving argu-

ments based on that same period.) Moreover their appears

to be no evidentiary warrant in this record to conclude that

had Employer allowed former striking employees to timely

return, they would not have been able to assimilate these

new dock duties, just as well, at that time.

The General Counsel has not sought to show, or if so,

has not successfully shown that independent contractor

base (75% of gross) effected direct labor cost savings to

Employer over its prior costs generated from payment of

unit employee wages and benetits, ete. General Counsel's

arguments appear to certrally rest on the prior Board

holdings prohibition an Employer's permanent subcontract

of the unit work in strike circumstances, because of its

destruction of unit positions, and union representation

status, as noted earlier. Neither has Employer addressed

that consideration.

Employer has argued in brief that the use of employee

drivers with its own equipment, stored at the Land Air

(Emery) facilities had cost the Company considerable sums

of money, which were expended to provide security for its

equipment, and to repair vehicles because of patterns of

vandalism, and violence. Whatever might have been the

efficacy of such an argument if applicable to period and

cireumstances prevalent carly on in the strike, see related

discussion Part IT iufra, it has much less convincing fac-

tual base and support in explaining late February early

March subcontracts, particularly where also following un-

ion entry of settlement agreement on + February 1989, and

related union pledge not to engage in certain such acts;

and where there are no such acts thereafter reported for

at least some two weeks before Employer permanently

subcontracts the unit work away. The absence of a con-

vincing justification being advanced, and Employer's con-

cealment from the Union, strongly indieate other reason,

an unlawful discriminatory one. Moreover, even if to be

construed otherwise, the Board must deal with industrial

reality. [It seems to me that an employer's labor costs also

realistically extends to costs associated with labor unrest,

including any inefficiencies in costs of operations resulting

from its emplovees engagement ina lawful strike. To the

extent unlawful conduct results in additional financial loss

through damage to property, ete. and is traceable to Union,

or employees as agents of the Union, such conduet is un-

lawful and can be remedied in other forum, ef. Construction

Workers v. Laburniwm Constr. Corp., 347 US. 656 (1964).

If the conduct a union is shown to have been egregious, the

Board may impose a forfeiture of bargaining order, Lavra

Modes Co., 144 NLRB 1592 (1963). It is not however to

be remedied by an Employer's own unilateral action of

seeretively subcontracting away all unit positions, and a

related concealed practical destruction of the Union's repre-

sentative status. The subject of discriminatorily moti

vated contracting Was specificnty

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