Petition — Local 814, International Brotherhood of Teamsters v. National Labor Relations Board
Supreme Court brief1977
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_ §upreme Coue, U. S.
BRPILEDS
| APR 13 1977
In The | MICHAEL | en
—_—---
October Term, 1976
No 26-1415
LOCAL 814, INTERNATIONAL BROTHERHOOD OF TEAM.
STERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS
OF AMERICA,
Petitioner,
—against—
NATIONAL LABOR RELATIONS BOARD, et al.,
Respondents.
PETITION FOR WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR
THE DISTRICT OF COLUMBIA CIRCUIT
SAMUEL J. COHEN
Attorney for Petitioner
605 Third Avenue
New York, New York 10016
Tel. No. (212) 682-6077
Of Counsel:
COHEN, WEISS and SIMON
BRUCE H. SIMON
MICHAEL E. ABRAM
¢.. Printinghouse Pres — Bar Ass'n Steno Serv. (Appeals Section) 212-687-0904
i
TABLE OF CONTENTS
PAGE
OPINIONS BELOW. .......cccssccscceees l
Fc ccc ccccccccccccccescces 2
QUESTIONS PRESENTED.............+.: 3
SEs co ccccsccccecccecccccccccccs 4
SE c cccceccccececceccocccoeece 4
B. POBCEIES. cccccccccccccscccesceces 4
b. Santini's Operations............ 4
c. Santini's Long-Haul Operation... 5
rr mh 8
1. Ownership of Tractors........ 5
2. Compensation. .....ccccccccces 6
3. Costs of Operation........... 6
4. Control Over the Operation... 7
. The Union's Effort to Preserve
Long Distance Driving Work
BD GO Bec ccccccceseseseee ©
. Board Proceedings..............-. 10
. Court of Appeals Proceedings... .11l
. Board Proceedings on Remand..... 13
. Supplemental Court of Appeals
PUOSSOEER cs ccccccccccccccesccces 14
REASONS FOR GRANTING THE WRIT....... 16
ii
PAGE iii
— PAGE
ARGUMENT :
. Backgr d of Conflictin
I. THE "CONFLICTING DECISIONS" IN Seaael Peecedees......... Soci
SANTINI AND MOLLOY ILLUSTRATE
; CKSAND" II. ARTICLE 24 IS A LAWFUL WORK
THE BOARD'S TREATMENT OF THE PRESERVATION CLAUSE UNDER
OWNER-DRIVER ISSUE. THEY "EXIST THE BOARD'S OWN DECISIONS......... 28
Ace fade ranetneaes MESSE
oo SDAP ne oe 30
tor hovibe ttEasOMES nats 0 an
} R
ITS DECISIONS REGARDING THE GF goes. “sa°garsmme
DEFINITION OF ‘EMPLOYEE. '" ,ic,l¢,id,
THE COURT SHOULD REVIEW THE
DECISIONS BELOW iN ORDER TO
RESOLVE THE CONFLICT BETWEEN
DECISIONS OF THE BOARD AND TO
SETTLE AN IMPORTANT QUESTION
OF FEDERAL LAW WHICH IS OF
PERVASIVE SIGNIFICANCE IN
THE TRUCKING INDUSTRY............. 19
A. Statutory Framework;
Standards for Review.......... 19
B. The Board Clearly Erred in
Classifying Santini's Long-
Haul Drivers as Independent
Contractors, in light of
Supreme Court Precedent and
Board Precedent, Including
the Molloy DEER, cndbces ces 21
1. The Board's Decision in
Santini Conflicts with
Supreme Court Precedent...... 21
2. The Conflict Between Santini
iv
TABLE OF AUTHORITIES
Court Decisions PAGE
Ace Doran Hauling & ategtng
Co. v. N.L.R.B.,462 F.2
190 (6th Cir. 1972), affirming in
part, 191 NLRB 428 rr 2s et seq.
orsee YsaNneEe eae OF Link:
N.L.R.B. v. United Insurance Co.
of America, 390 U.S.254 (1968)...21 et seq.
National Woodwork Manufacturers
Ass'n v. NLRB, 386 U.S. 612
CEOGTD cccceceseueseueeeeneneseen 28
Administrative Decisions
a Motor suereee. Inc., 197
WELRD 626 C1IOTSZ) .ccccccccececeses 27
Deaton, Inc., 187 NLRB 780 (1971),
affirmed, 502 F.2d 1221 (5th Cir.
T9974), cert. den. ,422 U.S. 1047..27
Florida-Texas Freight, Inc.,
197 NLRB 976 (1972) .....0 ee eeeees 27
George Transfer & Ri Cy, Co.,
Inc., 208 NLRB 494° 19 BD sccccese 27
Molloy Bros. eeeae and Storage,
Inc., 208 NLRB 276 (1974)....... 8, passin
Perkins Motor Transport, Inc.,
222 NLRB 423 (1976) ....- eee eeeues 27
Vv
PAGE
v7 Trucking, Inc., 198 NLRB 686
(1972), affirmed, 486 F.2d 1039
i a a 27
Portage Transfer Co., Inc., 204
es ke ke eee ce 27
Statute
National Labor Relations Act,
as amended, 29 U.S.C. §151
DT TTtb sb escevcecececcccccs 4
- Section 2(3), 29 U.S.C.
Di ee ee kena geeeeeeee 0c 20
- Section 8(b) (4) (i) (ii) (A)
(B), 29 U.S.C. §158(b) (4)
ee oo. ence eeeee ee 10
- Section 8(e), 29 U.S.C.
CC EE ee 10,28
Code of Federal Regulations
EEE ee 7
IN THE
SUPREME COURT OF THE UNITED STATES
October Term, 1976
No.
LOCAL 814, INTERNATIONAL BROTHERHOOD
OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN
AND HELPERS OF AMF’.ICA,
Petitioner,
-~against-
NATIONAL LABOR RELATIONS BOARD, et al.,
Respondents.
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Local 814, International Brotherhood of
Teamsters, Chauffeurs, Warehousmen and *
Helpers of America ("Local 814" or the
"Union") respectfully prays that a writ of
certiorari issue to review the decision
and supplemental decision of the United
States Court of Appeals for the District of
Columbia Circuit entered in this proceeding.
QPINIONS BELOW
The ai Labor Decision and Order of the
National r Relations Board in this
proceeding sapeanes at 208 NLRB 184 (1974)
and set out _* dix included with
this petition (App. la). The initial
-2-
decision of the United States Court of
Appeals for the District of Columbia Circuit
(Tamm and Robb, Circuit Judges; Bazelon,
Chief Judge, dissenting in part and concurring
in part) denying enforcement and remanding
the record, is reported at 167 App. D.C.
387, 512 F.2d 564 (1975) and set out at
App. 1b. The Supplemental Decision and
Order of the Board is reported at 223 NLRB
No. 121 (1976) and set out at App. lc. The
Supplemental Opinion of the Court of Appeals
(Bazelon, Chief Judge, dissenting) is un-
officially reported at 93 LRRM 2305 and
2800 (1976) and is set out at App. ld.
The initial decisions of the Board and Court
of Appeals will sometimes be referred to
herein as “Santini I"; the decisions following
remand will sometimes be identified as
“Santini II."
JURISDICTION
The decision of the Court of Appeals
enforcing the order of the Board —A was
dated September 17, 1976; the judgment was
entered on November 9, 1976. The order of
the Court of eals denying the Union's
petition for rehearing was entered on Jan-
uary 13, 1977 (App. le). This Court has
jurisdiction to review the judgment in ques-
tion by writ of certiorari under 29 U.S.C.
§160(e) and (f) and 28 U.S.C. §1254(1).
oe
UESTIONS PRESENTED
1. Did the Court of als clearly err
in enforcing the Board's dings that long-
haul drivers engaged by an authorized house-
hold moving company were independent con-
tractors, where the drivers, although owning
their tractors, lease them to the carrier's
exclusive use, utilize carrier-owned trailers,
are an integral part of the carrier's house-
hold moving business, have little control
over their own earnings, and are subject to
the carrier's control and right of control
over the manner and means of carrying out
their work?
2. Did the Court of Appeals clearly err
in enforcing the Board's order in this case
in light of the conflict between the Board's
finding that l haul owner-drivers in this
case are independent contractors and the
finding in a related case involving essen-
tially the same circumstances that the
owner-drivers in that case were employees?
3. Did the Court clearly err in enforc-
ing the Board's order where the Board has
failed to give the stion of loyee
status for owner-drivers a “hard look" and
has created a “doctrinal quicksand" without
consistent standards for decision?
4. Did the Court erroneously affirm the
Board's finding that a work preservation
clause in the applicable collective bar-
gaining agreement constituted an unlawful
union signatory clause?
ehe
STATUTES
The pertinent provisions of the National
Labor Relations Act, as amended (61 Stat.
136, 73 Stat. 519, 29 U.S.C. §151 et seq.)
are set forth at App. lf.
STATEMENT
a. Parties
The Union represents local and long dis-
tance drivers, warehousemen and helpers
employed in the Moving and Storage Industry
of New York, New York (the “"Industry"),
an area-wide multi-employer a.
association. Respondent Santini Brothers,
Inc. ("Santini"™ or the “company") is an
employer member of the Industry and a party
to the Industry-wide collective bargaining
agreement (the "Contract™) with the Union.
b. Santini's Operations
This case raises critical issues concern-
ing the employment status of long distance
moving drivers engaged by employers within
the Industry and the efforts of the
Union to preserve for the collective
bargaining unit the work of long distance
driving within the Industry.
Santini engages in the business of local,
commercial and household moving and long
distance household moving. Santini's local
moving operation is conducted by drivers
who are members of Local 814, and who operate
company-owned trucks, truck tractors, and
trailers. Until the early 1960's the company's
“oe distance household operation was similarly
u
conducted through employees represented by
oSe
the Union, in company-owned vehicles. At
that time, Santini, joining a number of
other carriers within the Industry, commenced
replacing bargaining unit drivers in long
distance work by “owner-operators", also
known as "contract drivers." By the late
1960's Santini completed the replacement
process and operated its long distance
moving entirely through a crew of . wre
mately twenty-four owner-drivers. t is
the Union's position that the owner-drivers
in Santini's service are clearly employees
within the meaning of Section 2(3) of the
Act (App. 1f), and that the Board's con-
trary finding was inconsistent with Supreme
Court and Board precedent.
c. Santini's Long-Haul Operation
The details of Santini's long-haul opera-
tion _ y owner-drivers are spelled
out in the opinions of Chief Judge Bazelon,
dissenting in part and concurring in part in
Santini I CApP 12b); the opinion of Board
Members Fanning and Jenkins, dissenting in
astint Uy (App. 8c ), and the findings of
the nistrative Law Judge below (App.29a).
The following is a brief description of
the germane aspects:
1. Ownership of Tractors. Santini's
long-haul drivers haul goods in tractor-
trailer units. The drivers are owners of
tractors but not the trailers; they are
required to lease the tractors to exclusively
Santini and the driver has no right to use
it on jobs other than with Santini (App. 13b
and 13b, n.6). Both tractors and trailers
are painted with the name and colors of
Santini or its contract associate, United
Van Lines, Inc. ("United"). Goods are
hauled only under Santini or United bills of
ote
lading. "The 24 drivers who constitute
Santini's long-haul household movers
operate under identical agreements whose
terms and conditions are prescribed by
Santini." CApP llc). Santini may terminate
the lease on thirty days' notice.
2. Compensation. Santini on its own
authority and as a representative of United
makes contracts with shippers to transport
oods in interstate commerce; the long-haul
rivers do not heey tea in generating
business. The charge for the move is
established by ICC rates; the drivers
receive a percentage of the charge as
established by Santini Sopenenng on the
type of we pt (APP 13b). Under the
older forms of leases between Santini and
the drivers, some of which were still in
effect during this proceeding, the "owner-
operator was subject to termination for
driving for another carrier." (App. 13b,
n.6). Under newer agreements covering some
drivers, the owner-driver "is required to
operate his own vehicle and is also required
to notify Santini of any carrier business
[he] discovers and to permit Santini to
have the right of first refusal..." (Ibid.).
3. Costs of Operation.
Out of their commissions drivers pay the
expenses of loading and unloading, including
compensation for helpers, tractor maintenance,
and fuel. Santini pays for license plates
in operating states outside the driver's
base state, and for public liability and
property damage insurance on the operation
of the combined tractor-trailer. ‘Over 90
percent of Santini's household moving is
carried out on a C.0.D. basis and the driver
ote
is required at destination to collect
payment from the shipper and promptly
account for pa ts to the carrier."
(App. llc). Santini requires drivers
to carry liability and damage insurance
on the operation of the unhooked tractor.
(App. 39a). Santini assumes most of the
liability for damages to goods in transit
except for a of fragile items
negligently packed or unpacked. (App. 39a).
4. Control Over the Operation.
Regulations of the ICC and Department of
Transportation require Santini to strictly
control the operation of vehicles in their
service regardless of ownership. 49 CFR
1057.4(a) permits an authorized carrier to
perform transportation with equipment he
does not own, provided that the lease for
use of the equipment
eneinett provide for the
exclusive possession, control,
and use of the equipment, and
for the complete assumption of
oe niga ag in respect
thereto, by the lessee for
the duration of said contract,
lease or other arrangement,
except [in circumstances not
relevant here]."
The applicable regulations further require
Santini to exercise control over details of
the operations. The regulations,
“consisting of nearly 100
pages, strictly circumscribe
nearly every phase of their
work, including maintenance
of equipment, hours of service,
observance of safety standards,
and the keeping of detailed
records." Local 814, 1I.B.T.
(Molloy Bros. Moving and Storage
Ine.) 208 NIRE 276, 278 (1974).
Shipments are inspected, estimated, written
up, and arranged for the pickup date by
employees of Santini without driver partici-
om. (App. lle). The driver arranges
or packing, loading, and unloading. App.
36a, 37a). The driver generally selects
routes but ogg 1 time is established by
Santini. (App. 14b). Drivers may be sus-
pended or terminated when Santini or United
are dissatisfied with their performance.
(App. 4la, 42a). It is sopasene that United
Van Lines through Santini has the right to
control the manner and means of peesranene
the operation when the drivers are operating
on United shipments. (App. 15b, n.7).
d. The Union's Effort to Preserve
Long Distance Driving Work
In the Industry.
With the advent of owner-drivers, the
Industry members generally took the position
that the owner-drivers were independent
contractors rather than employees covered
by che Local 814 Contract. In the 1968
collective bargaining negotiations between
the Union and Industry, including Santini,
Local 814 sought unsuccessfully to obtain
a contract clause which would preserve
long distance driving work for
the bargaining unit. In 1972 the Union and
Industry negotiated a new clause in the
=
Contract Article 24, which provides in part:
“Article 24-Contract Employees
A.1. All persons performing
long distance driving under
contract to an employer
covered by this agreement
(whether as ‘owner-operator,'
‘owner-driver,' ‘percentage
driver,’ ‘commission driver,’
or otherwise) shall be covered
oy this agreement as employees
(hereinafter referred to as
contract employees).
"2. Contract employees shall
be covered by this contract
limited to those provisions set
forth in this section and
including the Union Security,
Pension and Welfare provisions,
aoe Separability, No-Strike,
Grievance and Arbitration
clauses and Union Check-Off.
ke
"4. The employer specifically
reserves the right, consistent
with its Agency Van Line Agree-
ment, to control the manner and
means and details of and by
which contract employees perform
services as well as the ends to
be accomplished. All other
details and economic arrangements
shall be the subject of a contract
between the owner of the vehicle
and the employer party to this
agreement provided that they shall
not conflict with the provisions
-10-
of this article 24.***" (App.
22a-24a).
In the summer and fall of 1972 the Union
sought to enforce Article 24 of the Contract
with respect to Santini's long haul drivers.
A charge was filed with the Board on behalf
of three owner-drivers, and a complaint
issued apesnet the Union and Santini in
January 1973. The complaint alleged that
Article 24 violated Section 8(e) of the
Act, the so-called hot-cargo provisions,
and that the Union's efforts to enforce
the clause violated Section 8(b)(4) of the
Act - the "secondary boycott” provisions.
The theory of the complaint was that
Article 24 did not constitute a permissible
work preservation” or “recapture” clause,
or an attempt to apply union standards to
long distance driving, but constituted an
effort to require "independent contractors"
to become members of Local 814.
At approximately the same time a complaint
was issued against the Union in an adjacent
Re ional Office of the Board, involving the
Union's efforts to enforce Article 24 with
respect to the owner-drivers in the service
of another member of the New York City
Industry - Molloy Brothers Moving and Storage,
Inc. SB ney | E The Molloy complaint
similarly alleged violations of Sections
8(e) and 8(b)(4) of the Act.
e. Board Proceedings.
The Santini complaint was referred to
Administrative Law Judge Herzel Plaine.
Molloy was referred to ALJ Sidney Sherman.
Following separate trials in the two actions,
eile
Judge Sherman in the Molloy case found
that the long distance Owner-drivers in
the service of Molloy were employees within
the meaning of the Act, rather t independ-
ent contractors, and recommended dismissal
of the complaint. Local 814, I.B.T. (Mollo
Bros. Mov and Storage
or
; y thereafter, Judge
Plaine in the Santini ee found that
the owner-drivers in the service of Santini
were independent contractors and that
Article 24 was not a lawful work preserva-
tion clause. (App. 82a).
Both cases were brought to the Board for
review. On January 8, 1974, a Board panel
consisting of Chairman Miller, and Members
Kennedy and Penello, affirmed Judge Plaine's
findings and conclusions, without comment.
The next day, a Board panel consisting of
Miller, Penello and Member Fanning adopted
without comment the findings and conclusions
ose Sherman in Molloy. 208 NLRB 276
f. ‘Court of Appeals Proceedings.
The Union petitioned for review of the
Santini decision and the Board cross-applied
for enforcement; no r+ was filed in
Molloy. In April 1975 the Court of Appeals
dented enforcement in Santini and remanded
the record to the Board on the question of
the independent contractor status of Santini's
owner-drivers. (App. 9b). On this issue
the Court found that the twin decisions of
the Board in Santini and Molloy were "fact-
ually similar and ostensibly neonsistent";
"Tblecause the Board has not explained its
reasons for reaching different results,"
-12<
the Court ordered the record remanded "for
clarification." (App. 8b). The Court added,
"If the Board finds the two
sae Seengeeneeee, it should so
inform the Court." Ibid.
inion of Chief Judge Bazelon. In his
separate opinion, e ge Bazelon agreed
that there was "no soenens distinction
between Molloy and the case sub ice"
and that the decisions were "conflicting."
(App. 19b, 22b). He added,
"[T]he extent of Molloy's
right of control was no larger
than Santini's and both extended
well beyond the requirements of
government regulation through
use of drivers’ manuals." (App.
19b-20b).
Chief Judge Bazelon concluded however that
the defects in the Board's decision were
broader than the conflict between Santini
and Molloy. He observed that this conflict
existed against a "background of barely
reconcilable precedents and of a failure
of the Labor Board to provide a reasoned
basis for its decisions regarding the
definition of 'employee.'" (App. 22b).
He further noted,
"This case in my view presents
a classic example of where a
diligent reviewing court could
determine through a variety of
factors that the agency had not
iven the problem a ‘hard look.'"
App. 23b).
-13-
Cautioning that in this context a “remand
of the record alone can produce only a
rationalization of the inconsistency
es lloy and this case," Chief Judge
Bazelon concluded that the Board should
reversed and the case remanded “for a thorough
reconsideration of the doctrinal quicksand
in this area." (App. 24b).
g: Board Proceedings on Remand.
In il 1976, nearly a year after the
mat yt order, the Board* issued a
Supplemental Decision and Order which
affirmed the original Santini decision by
a three/two majority p. lc), on the
basis of a short list of asserted fact
differences between Molloy and Santini.
The Board refused to engage in discussion
of the standards for determining aayeves
status, stating that they were wel
settled and need not be debated." (App.
7c, n.9).
Unlike the original Santini decision, the
remand was processed by the full Board
membership. However, two of the three
members of the onerase Board panel -
Chairman Miller and Member Kennedy - were
no longer on the Board at the decision on
remand. The Board majority on the second
decision consisted of Chairman Murphy and
Members Penello and Walther; Members
Fanning and Jenkins dissented.
sin
In their dissenting opinion, Members
Fanning and Jenkins found:
"In our view, the basic and
significant aspects of the
relationship between the
carriers and the long-haul
drivers are identical in both
Molloy and Santini. The
erences in control relied
upon by the majority, if they
exist, are too inconsequential
to warrant the conclusion that
the long-haul drivers are
employees in Molloy and
independent contractors in
Santini.” (App.8c-9c).
h. Supplemental Court of Appeals
Proceedings.
In cynn subsequent to remand; the
Court of Appeals (Tamm and Robb, Circuit
Judges; Bazelon, Chief Judge, dissenting),
enforced the Board's order, finding that
the Board had “clarified the basis for its
different results." Son. Se
Dissenting, Chief Judge elon concluded
in part:
"I dissented from the initial
decision to remand the record
for clarification. Having
concluded from a variety of
factors that the Board had failed
to give the cases under consider-
ation the necessary ‘hard look,’
I recommended a broader remand
to enable the Board to reconsider
‘the doctrinal quicksand’ in the
-15-
entire area. 512 F.2d at 572.
Secondarily, I hoped to persuade
the Board to avoid the temptation
of offering a sterile post hoc
rationalization. Unfortunate! ;
my hopes appear not to have been
realized.
eke
"Here, even though a majority
of the Board found seven factual
distinctions between Molloy and
Santini, there is no reasoned
discussion as to why the distinctions
are significant. Board does
suggest that in Molloy, unlike
in tini, there was a ‘layer of
carrier regulation put upon the
[owner-operators] beyond what
was required by government
regulation.' (Supp. order p.3).
However, the Board never explains
how substantial this layer must
be in order for drivers to be
considered employees rather than
‘independent contractors or, in
fact, why the extra layer imposed
in Molloy distinguishes tnat case
from Santini in ht of their
numerous Similarities. Nor does
the Board attempt to gusesey its
results in terms of t licies
of the National Labor Relations Act.
“kek
"In sum, I do not believe the Board's
cuppleneatel order should be affirmed.
No two snowflakes are identical,
but for most purposes are considered
ne ee
oi4-
indistinguishable. Here the
Board distinguishes two snow-
flakes without explaining in
terms of the policies of the
Labor Act why it has done so.
Because other companies concerned
about whether their drivers are
employees or independent con-
tractors will find no guidance
in the Board's decisions, I
would, as I said before, remand
the record ‘for a thor
reconsideration of the doctrinal
quicksand in this area.'" (App.
7d-9d).
Thereafter the Court denied the Union's
petition for rehearing in banc.
REASONS FOR GRANTING THE WRIT
Owner-driver loyment within the
trucking industry bes assumed increasing
importance. The labor law status of owner-
drivers who operate exclusively for par-
ticular carriers and who are integral parts
of the carrier's business, is of wide
significance to employers, drivers, labor
organizations and the public. Numerous
cases have come before the Board raising
the issue of whether long-haul drivers who
own the tractors which they lease to the
carrier are employees or independent con-
tractors. Yet, as found by Chief Judge
Bazelon, the Board has not given this
problem a “hard look." (App. 23b). The
decision in this case “exists against a
background of barely reconcilable precedents
and of a failure of the Labor Board to
provide a reasoned basis for its decisions
regarding the definition of ‘employee'".
re
-17-
(App. 22b). The Board's decisions show
that the Board has been generally content
to e in the “counting” of factors for
and against employee status without analysis
of the relative significance of the factors
which are listed. The result has been a
“doctrinal quicksand" of “barely reconcil-
able” and actually "conflicting" precedents
in this field.
The Board's refusal to give this problem
a “hard look" was most apparent in the
present proceedings. Here the Board has
reached opposite conclusions as to employee
status of owner-drivers in two carriers
within the same Industry, operating under
overwhelmingly similar circumstances. What
is more, although the Board was clearly
right in Molloy in finding employee status,
its decision that Santini’s owner-drivers
are independent contractors not only con-
flicted with Molloy but also with applicable
Supreme Court precedent. In addition the
facts in Santini were similar to the facts
in other recent precedents where the Board
found employee status. Looking at the
essence of the relationship, rather than
peripheral factors lacking significance,
the long-haul drivers in Santini's service
are clearly not independent contractors.
The remand by the Court of Appeals offered
the full Board the opportunity to give this
area a “hard look" and to articulate con-
sistent principles which are based on the
actualities of the shetionste and not on
minor variations in the basic fact pattern.
The Board declined this opportunity. The
Union urges this Court to accept the case
for review; hold that Santini’s owner-
drivers are employees under the Act and
-18-
articulate for this problem principles of
law capable of consistent application in
future Board cases.*
*¥In Point II of the Argument, we also urge
the Court to review the decision below that
Article 24 constitutes an unlawful "union
signatory” clause.
———
EE EEE ae mk
-19-
-I.
THE "CONFLICTING DECISIONS" IN
SANTINI AND MOLLOY ILLUSTRATE THE
"DOCTRINAL QUICKSAND" IN THE BOARD'S
TREATMENT OF THE OWNER-DRIVER ISSUE.
THEY "EXIST AGAINST A BACKGROUND OF
BARELY RECONCILABLE PRECEDENTS AND OF
A FAILURE OF THE LABOR BOARD TO PROVIDE
A REASONED BASIS FOR ITS DECISIONS
REGARDING THE DEFINITION OF ‘EMPLOYEE. '"
THE COURT SHOULD REVIEW THE DECISIONS
BELOW IN ORDER TO RESOLVE THE CONFLICT
BETWEEN DECISIONS OF THE BOARD AND TO
SETTLE AN IMPORTANT QUESTION OF FEDERAL
LAW WHICH IS OF PERVASIVE SIGNIFICANCE
IN THE TRUCKING INDUSTRY.
A. Statutory Framework; Standards for
Review.
The Board and Court of Appeals held that
Article 24 of the Contract was an unlawful
"union signatory clause” rather than a
lawful "work recapture" clause and that the
Article and its enforcement violated
Sections 8(e) and 8(b)(4) of the Act unless
the owner-drivers in Santini's service are
employees within the meaning of the Act.
The Union considers that the Board's con-
clusion that Article 24 is a union signatory
clause was in error and should be
reviewed by this Court. See Point II below.
However, we address ourselves at this point
to the conclusion that Santini's owner-
drivers are not employees and to the state
of conflict and confusion which describes
the Board's decisions on the status of
owner-drivers in long-distance trucking.
-20-
Section 2(3) of the Act provides in
relevant part,
"The term ‘employee’ shall
include any employee...but
shall not include...any
individual having the status
of an independent contractor...."
As to the broad outlines for determining
employee status there is apparently no
dispute in this case with the statement
of Chief Judge Bazelon (App. 10b),
“Congress has quite clearl
commanded that the common =
definition of ‘independent
contractor’ be the basic guide
for distinguishi between
‘employees’ and ‘independent
contractors.’ This does not
mean that considerations of
labor policy are irrelevant
but that they be considered in
light of the common law test
of ‘control.'" (Footnotes
omitted).
Further defining the control test, the Court
of Appeals in Grace v. Magruder, 80 U.S.
App. D.C. 53, I48-F.2a 676 SBT (1945),
stated:
"The vital element which negates
such independence in the relation
between employer and employee, is
the oe to control the employee,
not only as to final result, but
in the performance of the task
itself. And, it is the right to
a SS a 2 —e
-2l1-
control or supervision itself,
which is most important."
However, as stated by Chief Judge Bazelon,
“How great a degree of control
must exist, how that control
is to be quantified and how
various incidents of control are
to be weighed compartively are
vestions left unanswered by
ress and the Board in its
various efforts in this area."
(App. 1lb-12b).
Nor is it disputed that a degree of
deference toward the Board's choice of
competing consideration is required. But
that deference was overplayed , a
majority in this case, for the Board has
not fulfilled the requirement of reasoned
decisionmaking, reconciled its precedents,
or avoided inconsistent decisions.
B. The Board Clearly Erred in Classifying
Santini's Long-Haul Drivers as
Independent Contractors,in light of
Supreme Court Precedent and Board
Precedent, Including the Molloy Decision.
1. The Board's Decision in Santini
Conflicts with Supreme Court
Precedent.
In N.L.R.B. v. United Insurance Co. of
America, 390 U.S. 254 (1968), a case arising
under the Act, this Court affirmed the order
of the Board finding that United's "debit
agents" were loyees and not independent
contractors. e Court recognized that the
debit agents "perform their work pecgess*y
away from the company's offices and fix their
o23<
part of Santini's beng -Ghosanes - — pe
v moving business,” (App.l0c), “lack any
own hours of work and work days" (390 U.S. wren Be proprietary interest in [this]
at 258) - similarly to the Santini long-haul business,” and lack “any real opportunity
ya pee (who must, however, meet set for entrepreneurial decisions by which [they]
elivery times). But the Court disregarded can measurably influence" their earnings.
pore ae - — epeceees paseeee = basic (App. 13c). Moreover, as found by Members
) e relationship between the compan
and agents, such as these factors: — TEENS GSS SonEES.
-22-
“pursuant to the peguletions <6
tate Commerce Commission
own independent businesses, but a re of Transportation
perform functions that are an with which carriers are required
essential part of the company's | to comply, Santini strictly
normal operations"; | A. nearly every phase a
- rk of the drivers, includin
b. "They do business in the company's ee of equipment, hours P
name with considerable assistance | of service, observance of safety
from the company and its managerial standards, and the keeping of
a. "The agents do not operate their
2 —— a ee
perecanes and sell only the company's | detailed records. The control
policies '; | over the drivers, which re ~ a.
" ' , : | every significant aspect of the
c. — Agent's Commission Plan’... | sents ond means of their perfor-
s — ated and changed — mance of the long-distance havling,
unilaterally by the company"; is no less because it is exercise
- ursuant to governmental direction.
d. "The agents account to the company regulations are imposed upon
for the funds they collect under | the carriers and, to remain in
an elorgee and regular reporting business, they are required to
procedure ; control the manner and means of
. erformance by the drivers.
e. "The agents have a permanent Sevestals Santini's responsibility
:
working arrangement with the
to third persons for damages
company under which they may | soculting fzen any breach of these
continue as long as their | standards would be no less because
performance is satisfactory. they are Government imposed. This
lo t
As found by Members Fanning and Jenkins, . is the essence of the
“comparable factors indicative of an |
employment eclgasonents are present here."
(App. 10 c ). Indeed, it is clear that the
Santini long haul drivers “are an integral
2b-
2. The Conflict Between Santini
and Molloy.
— The ny: A ay ee in Santini and
Oy were clearly inconsistent; the Court
below committed double error by remanding
the Santini record for "clarification" and
then affirming the Board'
a & s Supplemental
Molloy and Santini are both members of
the New York City Sane speustey who engage
owner-drivers for 1 ul operations
virtually identiesl elecunstences. —
essence of the work activity, method of
compensation, form of operation, and carrier
control in the two cases was nearly the same.
The Board's st hoc list of
factors, aside from Bm my
Fanning and Jenkins (App.
nee (App. 18c), the Board
“erroneous standards and this
is evidenced by the inconsequential
factors upon which it relies to
justify reaching a different result
in this case from that in Molloy.
It applies standards of contro
which touch only peripheral
aspects and do not go to the essence
of the relationship. Testing the
employment relationship by the
standards we have set forth above,
on the undisputed facts, precludes
a finding that the long-haul
drivers are independent contractors."
In sum, as stated by Chief Judge Bazel
aA. snowflakes are identical. but ed
purposes are considered indisti sh-
able. (App. 9d). Since the a
ing inaccurate ,
was at best peripheral. As stated b ‘eubece’
—- —— oe ae
Se ee
-25-
this case attempted to distinguish ‘two
snowflakes without explaining in terms of
the policies of the Labor Act why it has
done so," (ibid.) review of the decisions
below is clearly indicated.
C. Background of Conflicting Board
Precedent.
The conflict between Santini and appli-
cable Supreme Court precedent, and between
Santini and Molloy, alone requires review of
this case. ere is added the additional
fact that Santini is inconsistent with other
Board precedent, and that, overall, as found
by Chief = Bazelon, the Santini and
Molloy decisions “exist against a 1 am
of barely reconcilable precedent and of a
failure of the Labor Board to provide a
reasoned basis for its decisions regarding
the definition of employee.” (App. ;'
For example, in Ace Doran Hauling & Riggin
1972). Serie 51 WLRB 428 (1971), tt
, a ng, , the
following factors were present:
(1) The carrier was authorized to
operate pursuant to an ICC certificate and
abided by the extensive ICC regulations
affecting its relationship with the single
sunerodstvess |
(2) a clause in the lease agreement
between the carrier and its single owner-
drivers provided that the relationship
between the parties is that of independent
contractor;
(3) the single owner-drivers were
compensated according to a rental percen-
tage unilaterally determined by the carrier
~26-
on the basis of a predetermined revenue
schedule;
(4) the single owner-drivers were
required to pay for "bob-tail" insurance;
(5) the carrier paid for all public
liability, property damage, and cargo
insurance;
(6) the single owner-drivers paid
operational expenses, maintenance expenses,
and for damage caused by their negligence;
(7) the single owner-drivers agreed to
conform their equipment to all law and
regulations;
(8) the carrier occasionally advanced
money to the owner-drivers, required
periodic inspections, and conducted road
checks;
(9) the carrier's dispatchers coordinated
the movement of the. owner-driver's loads;
(10) the owner-drivers selected
routes and could refuse loads; oe
(11) the owner-drivers had no regular
schedule and might take time off at their
discretion;
(12) the carrier might cause the dis-
cipline of owner-drivers for being involved
C
in accidents or in violati
rules; and aac ans
(13) the carrier asserted control
the owner-drivers in excess of that —
dated by law.
o27-
462 F.2d at 191-192.
With minor exceptions, all of the above
factors are present in the Santini case.
In Ace Doran, the single owner-drivers were
f ° loyees. See also, in
addition to Molloy and Ace Doran: Deaton
Inc., 187 (1971), aktiemed. 502"
F.2d 1221 (5th Cir. 1974); Florida-Texas
ight, Inc., 197 NLRB 976 (19772); Pony
nme., 198 NLRB 686 (1972),
a 24 1039 (6th Cir. 1973).
In the following recent cases the Board
found that long-haul drivers were independ-
ent contractors on the basis of fact
pa — s ar AY ae -
° status t the facts in Mo =
e to} ess, Inc., 197
Inc., 204 NLRB
787
Inc., 208 ; an
Motor Transport, Inc., 222 NLRB 4273 (1976).
Dissimilarities in outcome of similar
cases would be less disturbing if the
Board had developed standards for weighing
the various factors which are listed in
all of the cases. This the Board has not
done. Lists are made; cases are distin-
guished, but nowhere does the Board as a
whole seek to grapple with the problem of
defining and making law in this field. No
attempt is even made to determine the
relative weight which should be assigned to
the different factors.
The question of employee status under the
Act is pervasive, fundamental and juris-
dictional. Yet the Board seems unwilli
or unable to confront it. What the Boar
EE
-28-
has offered in this case is its conclusion
that the carrier In one case exerts more
control over drivers than a carrier in
another case, without any indication why
the controls in the latter do not them-
selves establish employee status. Review
of this case is clearly indicated to rectify
this “doctrinal quicksand" and establish
consistent standards for decision.
Il.
ARTICLE 24 IS A LAWFUL WORK
PRESERVATION CLAUSE UNDER THE
BOARD'S OWN DECISIONS
In National Woodwork Manufacturers Ass'n
Vv. . >. , this
held that a collective bargaining agreement
which preserves for unit members work which
they have “traditionally performed" is
t f
eS Sues COsserns 8(e) and 8(b)(4)(B) of
The Court below affirmed the findings of
the Board that Article 24 was not a lawful
work preservation clause but rather an
unlawful “union signato eement ."
(App. 6b). odiews
Contrary to the Court's view, Article 24
assures that the Union's economic standards
will be applied to the work of 1 distance
hauling by confi the status of the
— rivers | emp sess when in the
oyer's service. In Teamsters
(S & © Mecormick, Inc}. eattal
the rd appr a clause virtually
identical to Article 24 in its function of
-29-
requiring the carrier to confirm contract
drivers as employees while in the carrier's
service. The Board stated:
“The legitimacy of the Unions’
objective in requiring all
drivers performing unit work
to be unit ' loyees' subject
to the applicable collective-
bargaining agreements while
performing such work is not
converted into an unlawful
‘cease do business’ one
within the intent of Section 8(e)
simply because, as an incident
to their unit employee status,
the drivers are required to
comply with all terms and con-
ditions of the > con-
tract, including the union-
securit y requirement.” 159
NLRB at 101.
The McCormick decision was vacated and
remanded sub nom. A. Duie Pyle Inc. v.
NLRB, 383 F.2d 772 r. . ,
denied, 390 U.S. 905, on the ground that
@ clause in question constituted a union
signatory clause. However, on the remand,
the Board refused to adopt the Third Circuit
analysis except as it constituted the law
of the case.
It is clear that the sounder reasoning
was supplied by the Board's original
decision in McCormick. If a union may law-
fully require that Sergeining unit work be
per forme | by employees in the unit,
and may lawfully require the employer to
terminate business relationships with other
-30-
persons as a direct result thereof, it
appears a fortiori that the union may
impose a less draconian solution and permit
the other persons to continue to perform
the work upon becoming employees within
the unit.
CONCLUSION
For the above reasons, it is respect-
fully urged that the Supreme Court issue
a writ of certiorari to review the decision
of the United States Court of Appeals for
the District of Columbia Circuit.
Respectfully submitted,
SAMUEL J. COHEN
Attorney for Petitioner
605 Third Avenue
New York, New York 10016
Tel. No. (212)682-6077
Of Counsel:
COHEN, WEISS and SIMON
BRUCE H. SIMON
MICHAEL E. ABRAM
April 12, 1977
APPENDIX A
INITIAL DECISION OF THE
NLRB AND ADMINISTRATIVE
LAW JUDGE
a
la
Local 814, International Brotherhood of
Teamsters Chauffeurs, Warehousmen and
Local 814, International Brotherhood of
Teamsters, Chautteurs, Warehousemen and
Telpers o rica and Santini Brothers,
Inc. and Karl Leib, Jr., ESq. cases 2-CC-
January 8, 1974
DECISION AND ORDER
By Chairman Miller and Members
Kennedy and Penello
On June 29, 1973, Administrative Law Judge
ilerzel H. E. Plaine issued the attached
Necision in this proceeding. Thereafter,
Respondent Union filed exceptions and a
supporting brief, the ee Party filed a
brief, and the General Counsel filed a brief
and a reply brief.
Pursuant to the provisions of Section 3(b)
of the National Labor Relations Act, as
amended, the National Labor Relations Board
has delegated its authority in this pro-
ceeding to a three-member panel.!
I. As the Board deems it unnecessary that
all five of its Members decided the issues
involved herein, the Charging Party's
motion to that effect is hereby denied.
2a
The Board has considered the record and
the attached Decision in light of the
exceptions and briefs and has decided to
affirm the rulings, findings, and con-
clusions of the Administrative Law Judge
and to adopt his recommended Order. 2
ORDER
Pursuant to Section 10(c) of the
National Labor Relations Act, as amended,
the National Labor Relations Board adopts
as its Order the recommended Order of the
Administrative Law Judge and hereby orders
that Respondent Union, Local 814, Inter-
national Brotherhood of Teamsters, Chauf-
feurs, Warehousemen and Helpers of America,
its officers, agents, and representa-
tives; and Respondent Company, Santini
Brothers, Inc., New York, New York, its
officers, agents, successors, and assigns,
shall take the action set forth in said
recommended Order.
DECISION
Herzel H. E. Plaine Administrative paw
Judge: The case involves the so-calle
"secondary boycott" and “hot cargo"
provisions of the National Labor Relations
Act (the Act).
2. The request of the Charging Party and
Respondent Union for oral argument is
hereby denied as the record, exceptions,
and briefs adequately present the issues
and positions of the parties.
3a
Santini Brothers, Inc. (Santini) with its
principal base in New York City, is engaged
in the local and long distance moving of
household goods, and in the local moving
of office furniture and equipment, called
commercial a For its local house-
hold and commercial moving, Santini uses
its own moving vans--tractor-trailers and
trucks--and its own employees including
drivers who are members of the Union,
under a union contract with an Associa-
tion of New York City moving companies
of which Santini is one. For its long
distance household moving, Santini has
contracted individually with a number of
owner operators of tractors who, using
mostly Santini-owned trailers, perform
the service of loading, hauling, and un-
loading the household goods of each of
the shippers from the household of origin
to the household of destination for a
percentage of the moving charges, estab-
lished under interstate Commerce Conm-
mission (ICC) tariffs, paid by the ship-
per to the ICC authorized carrier, Santini.
Under article 24 of its current collec-
tive-bargaining contract (1971-74) with
the association of the moving companies,
the Union has taken the position that the
long distance owner-operators are employ-
ees, called contract employees in the
article, required under the union-security
clause to become and remain union members.
When, in the fall of 1972, none of the
owner-operators had joined the Union and
Santini had taken no measures to compel
them to join, the Union caused a wor
stoppage at Santini's New York facilities
on October 30, 1972. The work stoppage
4a
was lifted on agreement of Santini to
undertake to obtain signed union member-
ship applications from the owner-operators
and to refuse to “load” those who did not
sign, on Union threat to further work
stoppages if Santini did not comply. Some
owner-operators signed up; but others
refused to join the Union, and Santini in
turn refused to allow them to load in New
York.
Unfair labor practice charges were filed
with the Board on November 8, 1972, on
behalf of several of the owner-operators
based in Florida, and a complaint issued
January 31, 1973.1
T. On January 22, 1973, the Regional
Director petitioned the United States
District Court for the Southern District
Court for the Southern District of New
York for an injunction under Sec. 10 (1)
of the Act to restrain the Union and
Santini from, among other things, compel-
ling owner-operators to become union
members as a condition for hauling goods
from and to New York City, and to other-
wise maintain the status quo ante.
‘Following the tak of testimony on
February 7, 9, and 14, 1973, and oral
argument, the court issued a temporary
injunction on March 22, 1973, pending dis-
iti of the instant case,
'~ al , 73 Civ. 325
v.
(Ward J., March 22, 1973).
5a
The complaint charges (1) that, in viola-
tion of Section 8 (ep of the Act (text
infra), the Union coerced Santini to enter
into, and that both the Union and Santini
maintained, an unlawful (hot cargo) agree-
ment to force independent contractors,
namely the owner-operators, to become and
remain members of the Union, and to require
Santini to cease doing business with the
owner-operators who would not join; and
(2) that in violation of Section 8 (b) (4)
(i) and (ii)(A) and (B) (the secondary
boycott provisions, text infra), the Union
induced and encouraged employees of Santini
to engage in a work stoppage on October 30,
1972, and threatened to cause additional
work stoppages, in order to force Santini
to enter and give effect to the unlawful
agreement prohibited by Section 8 (e) of
the Act, to force the independent con-
tractors to become and remain members of
the Union, and to force Santini to cease
doing business with the independent con-
tractors who would not join the Union.
The Union's defense is that, contrary to
the position of General Counsel, Santini,
and the Charging Party,2 the owner opera-
tors are not independent contractors but
are employees of Santini, required by the
union-security clause of the union con-
tract to become and remain members of the
Union as a condition of employment with
2. The complaint erroneously spells the
Charging Party's name "Lieb."
6a
Santini, and subject to discharge for fail-
ure to join the Union .and pay dues.3 The
Union claims that the additional relation-
ship between the owner-operators and United
Van Lines, Inc., an ICC authorized nation-
wide carrier, for whom the owner-operators
also perform household moving services
under contract between Santini and United
Van Lines, Inc., provides added evidence
of the employee status of the owner-opera-
tors. If the owner-operators are employ-
ees of Santini, then the Union committed
no hot cargo or secondary boycott viola-
tions respecting them.
However, the Union further argues, if the
owner-operators are not employees, the
Union's conduct through contract and work
stoppage, was lawful primary action to
recapture work of the bargaining unit
employees lost (the Union claims) to the
independent contractors, and not unlawful
secondary action under the secondary boy-
cott and hot cargo provisions of the Act.
The defense has framed the two principal
issues to be decided, namely, are the con-
tracting owner-operators independent con-
tractors or employees of Santini; and, if
they are independent contractors, is the
Union nevertheless free to take contract
and strike actions directed at Santini, to
compel the independent contractors to join
3. In this connection, following the fil-
ing of the unfair labor practice charges,
the Union requested Santini that it "dis-
charge" 13 named owner-operators who had
failed to pay union dues. Santini did not
terminate its contracts with these (cont.)
7a
the Union or require Santini to cease doing
business with them if they refuse, as a
means of recapturing for the bargaining
unit employees work allegedly lost to the
independent contractors.
The case was tried in New York City,
March 22, 23, and 24, 1973. By agreement
of the parties, the record includes the 3
days’ testimony in February 1973 before the
United States District Court, see fn. l,
supra. Also, with agreement of the par-
ties, the Union was permitted to include
in the record, after the trial concluded
March 24, 1973, additional documents from
the files of United Van Lines, Inc.
(United), which documents were not avail-
able at trial. In response to a subpoena
by the Union, United had representatives
at the trial, one of whom testified at
length and produced various documents, but
United was not a party to the case.
General Counsel, the Union, and the
Charging Party have filed briefs. Santini
has not filed a brief, but orally stated
its views at the opening of the trial, to
wit, the owner-operators are independent
contractors and not Santini employees,
and that Santini was taking no position on
the alleged violations of the Act.
3. (cont.) 13 owner-operators.
Upon the entire record in the case,‘ in-
cluding my observation of the witnesses and
consideration of the briefs, I make the
following:
FINDINGS OF FACT
I. JURISDICTION
Santini is a New York corporation with
offices and places of business in the city
and State of New York, Miami, Florida, and
Chicago, Illinois, engaged in providing
local and interstate moving services and
related services.
In the representative period of a year to
the filing of the complaint, Santini _—
formed services valued in excess of $
million, of which services valued in ex-
cess of $50,000 were derived from its
interstate trucking operstions.
As it admits, Santini is an employer
engaged in commerce within the meaning of
Section 2 (2), (6), and (7) of the Act.
ae
Z. General Counsel has moved, on notice
to the parties, for several transcript
corrections, which have not been objected
to and which are in order. While there
are a number of other corrections that
might have been suggested on all sides,
since the correct intendment of the lag-
guage is fairly ascertainable from the
context in which the errors appear, I
have limited the corrections to these
poupeces by General Counsel. (Corrections
ere a forth are omitted from publica-
tion.
9a
The Union is a labor organization within
the meaning of Section 2 (5) of the Act,
as the parties admit.
II. THE UNFAIR LABOR PRACTICES
A. The Business of Santini
Santini is in the business of movi
household goods, moving office Gemaddhtens
and equipment call<d commercial moving,
and of providing packing and related
— for foreign shipment or export of
goods.
Santini's base is New York City. It has
an office and terminal on Jerome Avenue
and a fine arts division on 49th Street.
Its export division is in Maspeth, New
York; and, principally for the promotion
of its long distance moving to and from
New York and other parts of the country,
Santini has established branch offices
in Miami, Florida, and Chicago, Illinois.
In terms of hauling, the moving industry
of metropolitan New York City has devel-
oped three operational categories: (1)
local, comprising New York City and a
distance outside within a (rough) radius
of 100 miles; (2) short haul or local
short haul, comprising between 100 and 500
miles of New York City; and (3) long
distance, all hauling beyond 500 miles of
New York City.
Santini which is one of the larger, if
not largest, of the New York City moving
c ies, es in all three categories
of as a h it does very little
short hau work. According to Leo
10a
Santini, executive vice president for
domestic operations, the company's local
household moving in the 10-year period
1962-72 declined greatly to the point of
producing only about $100,000 to $200,000
annual revenue; whereas local commercial
moving multiplied 50 times or better in
Be Eevee period, producing $2 million
in :
The local moving, both household and
commercial, is done by direct employees of
Santini. The drivers and helpers are
members of the Union.
Santini's revenue from long distance
moving of household goods has also ex-
perienced a dramatic growth since 1962,
according to Vice President Santini, from
a position of come money on long distance
— prior to 1962. In that year, San-
tini began contracting as an experiment
with owner operators of tractors for the
loading and hauling of household goods in
Santini trailers and delivery to the house-
helds at the long distance destinations.
According to Vice President Santini, their
New York competitors had already been doing
this profitably, and Santini was the last
major New York company to enter into such
contracts.
The 1962 experiment was successful, said
Vice President Santini, and the company
increased its contracting until by the
beginning of 1967 all long distance moving
was done for Santini by contractors. Vice
President Santini testified that the
changeover in the 1962-66 period came
about easily, and involved no company
lla
pressure, because, earlier, drivers had
left Santini to go into contracting with.
competitors, and other drivers were eager
to try, since the contractors made more
money (out of the commissions or percent-
ages of moving charges even though paying
expenses) than employees (on hourly
po ge In addition, among older drivers
and some others, there was a reluctance to
continue or to begin to engage in over-
the-road driving that meant absences from
home, and among some there was a desire to
get out of driving altogether; and for
these employees, new jobs with Santini
opened up in ghe growing field of commer-
cial moving.
5. Vice President Santini testified that,
at the start of 1962, Santini gave some
financial assistance in the form of loans
to enable a few of its drivers to purchase
equipment to convert to contracting; but
that such assistance was limited to former
loyees, and involved help in financing
only 5 or 6 tractors out of the total
equipment owned by the 55 to 60 contract-
ors with whom Santini has dealt since 1962.
At the time of the trial, he said, all
loans for equipment has been paid off by
the contractors involved.
6. An interesting example was the Union's
secretary-treasurer, Charles Martelli, who
became a full-time union official in 1965.
Previously, for 14 years he had been a
Santini employee. By his own account, in
the period 1951-56 he was a helper and
local driver; in the period 1956-62, he
drove long distance; and in 1962, and
continuing until he became a (cont.)
l2a
The period 1962-72 showed a big growth
in long distance — revenues for
Santini, particularly in the second half,
1967-72. Prior to 1956 Santini did all of
its booking of moves at the New York
office and got little return haulage to
New York, or elsewhere, compared to what
it carried from New York to one of its
most important long distance destinations,
Florida. In 1956, Santini opened a branch
office in Miami seeking to improve its
return we The going was slow at
the start, said Vice President Santini.
Revenue in long distance moving from
Florida in 1956 totalled only $6,000.
However, he said it caught on after a time,
and the growth was dramatic (his language).
In 1962, long distance moving revenue from
Florida rose to $51,000, 1966 produced
$302,000, and 1972 went to $820,000.
Other revenue was generated, mostly at-
tributable to the ong distance moving, /7
so that the 1966 carrier operation from
Florida produced a total of $483,000 or
about one-fifth of the total New York-
Florida revenue of $2,523,000, and the
6. (Ccont.) union official in 1965, he
became a layout man and a foreman in
commercial moving.
7. Vice President Santini noted a study
showing that every $100 of long distance
line haulage generated $40 of accessorial
revenue--in packing, unpacking, storage,
etc.
13a |
1972 carrier operation from Florida rose
to $1,381,000 or almost two-fifths of the
total 1972 New York-Florida revenue of
$3,608,000.
Vice President Santini testified that
Santini is an interstate carrier that has
operating rates authorized by the Inter-
state Commerce Commission (ICC) for 28
states. It does not operate as Santini
outside those 28 states. When its vans
go beyond the 28 states, they do so in
relationship and pursuant to contract
arrangements with the national carrier,
United, which enjoys nationwide authoriza-
tion from ICC for carriage of household
goods. Santini, like several hundred
other moving companies throughout the
country, is an agent or franchise rep-
resentative of United, booking long
distance moving business, providing local
services of packing and storage, and pro-
viding the equipment and personnel for
loading, hauling, and unloading the house-
hold goods. Santini provides the moving
equipment and personnel by making avail-
able to United, under lease arrangements,
the equipment and +e services that
Santini has contracted for from its con-
tractors. The leases (designated
"permanent" for year round, "master" for
intermittent, and "peak" for seasonal),
though they differ as to the degree o
use of the equipment on United's papers,
do not indicate or contemplate any change
in relationship between Santini and its
contractors or between Santini and its
employees, and expressly declare that
any personnel provided by the franchise
representative (Santini) shall not be
l4a
considered employees of United (Exhs. U-3
and -4).
In this connection, as testified to by
Earl Freitag, United's vice president for
eduintoveetion. United has no direct
employees who are drivers for it. Apart
from about 28 to 30 contractor drivers who
have contracts directly with United,
according to Freitag, the bulk of drivers
are the owner operators of the oeapet
contracted to Santini and other franchise
representatives and leased by them to
United. (In some instances where a con-
tractor owns more than one tractor, or is
not driving what he owns, the driver is a
person or persons loyed by him--see
testimony of Thomas Wolfe regarding his
relationship to contractor Earl Harris.)
In no case, said Freitag, does the owner-
operator of driver under contract with
Santini have any contract directly with
United.
Santini hauls (always by its contract-
ors) throughout the United States for .
United, said Vice President Santini. It
also books moves for United, some of which
is hauled by other United agents. San-
tini's New York office was the No. 2
booker in 1972 (it previously had been
No. 1) of the 500-600 offices in the
country that book for United, and San-
tini's Miami and Chicago offices also
account for substantial bookings. In 1972,
out of Santini's total revenues of $9
million, about $1 million was derived from
bookings and haulings for United (approx-
imately half from haulings, and the other
half from bookings and related sources) .8
l5a
As already indicated, since 1972 Santini
has performed all of its long distance
novia (either on Santini or United bills
of lading) through the instrumentality of
the owner-operators or owner-drivers or
contract drivers (as they are variously
called) of the power equipment (tractors)
leased by them to Santini. In 1972-73,
according to Vice President Santini,
there were 24 such owner-operators or
drivers under contract with Santini.
While, based on bookings, Santini was
entitled to have had 9 or 10 vans,
operated by such contract drivers, under
permanent lease to United, meaning con-
tinuously in United's operation through-
out the year, Santini was 2 or 3 short and
had only 6 or 7 under permanent lease.
The remainer of the long distance equip-
ment and drivers were under master Teobe
arrangements (except for a few who moved
only intra-Florida), which allowed for an
occasional United haul, usually a one-way
outgoing or back haul, and some few were
under peak load lease which called for
continuous use on United bills of lading
in a peak period.
8. Vice President Santini testified that
on United bookings for which Santini acts
as haulin ss Santini receives 70 per-
cent of the hauling revenue (out of which
come the contractors’ percentages for
their work). For bookings which it does
not haul, Santini receives a 20 percent
booking commission, and if the order it
places did not originate with Santini it
splits part of the booking commission with
the originator. In addition there are some
revenues derived by Santini from (cont.)
l6a
B. Union Relationships
Santini is one of about 300 moving and
storage companies of greater New York City
who comprise 6 trade associations known
collectively as the Moving and Storage
soauatey of New York, N.Y. industry).
Since the 1930's, the Industry has bar-
gained for the employer members as a whole
with the Union, and entered into suc-
cessive contracts which have provided the
continuing contract relationships between
the Union and the employer members of the
association.
According to Herman Bader, president of
Bader Brothers Van Lines, an independent
interstate carrier (independent meaning
not an agent for a national van line such
as United), and a member of the Industry
negotiating committee for the past 18
years, there are about 20 companies among
the approximately 300, who do any signif-
icant amount of long distance moving out
of or into New York City. These 20
companies are among the largest of the
New York companies and all have contracted
their long distance moving to owner-
operators. 9
8. (cont.) United shipments that may come
into or through Santini's warehouse.
9. Bader testified that, apart from the
20 companies +e in the long distance
moving, there are a few smaller companies
that go into New England, within a 500-
mile radius of New York City, the so-
called short haul. These companies, said
Barder, are not geared up for the real
17a
Bader Brothers was one of the first of
the approximately 20 New York moving com-
panies who are in long distance moving to
use contractors for its long distance
moving, starting in 1948, and Santini was
the last of these New York comparies to
convert to the ee method, startin
in 1962, completed in 1967. At the time o
the 1971 union contract negotiations,
ee to President Bader, there were
(and still are ) a total of between 250-300
owner drivers who had contracted with New
York City moving companies for long distance
moving. In contrast, for the total industry
there were (and still are) about 1,800 regu-
lar full-time employees, and an additional
1,200 part-time employees, the latter fact
attributed to the seasonal nature of the
moving business. Of the 1,800 regular full-
time employees, approximately 1,000 are
employed by the handful of the largest com-
eee of which Santini is one, among the
00 companies who comprise the Industry.
5. cont.) long distance work (beyond 500
miles of New York City) and use employees*
under the union contract for short haul.
They seldom go beyond the 500-mile range,
he said. Contract drivers, on the other
hand, according to Santini's Traffic Manager
Sclafani, do not like and frequently reject
short haul moving because it is not lucrative
for them. When Santini finds it necessary,
on occasion, to ask a contract driver to
handle a short haul move, Santini will pay
him more than the standard 50 percent haulage
commission, and pays from 60 percent to 70
percent of the haulage charge.
18a
The Union's concern about use of the
owner-operator method of moving first
became visible in the 1962-65 contract
between the Union and the Industry (Exh.
GC-3). Article 12 (g) of that contract
provided that the owner-operator commis-
sion or percentage method of operation
would not be practiced on local work; that
the percentage or commission method of
operation would not be poseesese on long
distance movi (by employees); and that
the Union and Industry would designate
representatives to explore jointly the
effects of the owner-operator operation
on long distance moving.
In the 1965-68 union-industry contract
(Exh. GC-4), article 12 (g) of the 1962
contract was repeated in an article 23,
entitled "Owner-Operators," including a
reference for study of the owner-operator
operation on long distance moving to a
joint labor management board. A new
article 26, entitled PD nnn gees a
appeared in the 1965-68 contract. t
provided that no employer may subcontract
all or part of the work or services it
contracts for, except with union approval;
and that in the event of such contracting
all loyees pees 7 both the prime
and subcontractor shall be on the pay-
roll of the prime contractor, who shall
be liable for the wages, fringe benefits,
and other conditions provided by the union-
industry contract.
In the 1968-71 union-industry contract
(Exh. GC-5), the "Owner-Operators”
article 23 of the a contract (Exh.
GC-4) became new article 24, again re-
19a
iterating the intention of study of the
subject; and the previous "Subcontracting"
article 26 (of Exh. GC-4) became new
article 23 (of Exh. GC-5) with added
language stressing negotiation with the
Union as well as consent.
In the current 1971-74 union-industry
contract (Exh. GC-6), the previous "Sub-
contracting" article 23 (of Exh. GC-5)
was repeated, again as article 23 (of Exh.
GC-6). President Bader testified, without
contradiction, that the "Subcontracting"
article was regarded as having to do with
local, and not with long distance, moving;
and that neither his company, which has
subcontracted long distance moving con-
tinuously since 1948, nor any other
member of the Industry has been the sub-
ject of a union claim that subcontracting
of long distance moving (that has been
done without requesting its consent) was
a breach of article 23 on subcontracting. 1°
10. In corroboration, Vice President
Santini noted, without contradiction, that
the Union has never claimed that Santini
breached the article on subcontracting,
since the time Santini began converting in
1962, without requesting union negotiation
or consent, to owner operator contracting
for long distance ~ tig > and that in the
1972 discussions Union Secretary-Treasurer
Martelli had with him, looking to compel
’ Santini's coverage of the owner-operators
as employees under the union contract,
there was no mention of a claimed breach
of art. 23 on subcontracting.
20a
Notwithstanding the expressions of
intention in three collective-bargaining
contracts, from 1962 to 1971, to jointly
study the matter of owner-operator opera-
tion in long distance moving, there was no
study, sooner President Bader. Nonethe-
less, in the 1971 negotiations for the the
current contract, according to Bader, the
Union brought in a demand that the concept
and method of operation by independent
contractors had to go and that all who
drove or worked on the +. distance
moving vans would have to he considered
employees of the moving companies. The
demand was presented, said Bader, in a
manner indicating that, unless the
Industry agreed, no drivers would be avail-
able for any purpose.
The positions of the two negotiatin
parties, as described by President Bader
(and there was no other testimony on the
subject), was the following:
1. The Industry negotiators were of the
veiw that the owner-operators were
independent businessmen, third parties for
whom the union-industry negotiators’ could
not negotiate, and not under the control
of the few New York City moving companies
with whom some 250-300 of them has con-
tracted. The bulk of the long distance
van line business was carried on by major
companies outside New York City, all o
whom utilized owner operators; and the
member companies of the New York City
Industry should not now be subject to a
different mode of operation, that was
imposed by a New York City union local
who could not impose its views or control
outside New York, and that would take
2la
the member companies out of competition
for the long distance hauling.
2. The union negotiators’ position was
that they didn't want to know of owner-
operators or independent contractors, that
all doing work for company members of the
ae ag should be defined as employees
under the union contract. Bader empha-
sized that the union negotiators did not
say they wanted to displace the contract
drivers with employees, and they did not
ask or suggest that the existing group of
owner-operators be physically Gesieees
by another group of persons to do the
work. Bader noted that one of the union
negotiators, Attorney Simon, said the
Union wanted to recapture the long
distance hauling lost over the years to
the owner-drivers.
President Bader testified that there
were no employee drivers available then,
and there were none available at the time
of trial, for long distance driving; that
the Union has a problem a P and pro-
viding any men for any kind of work in
the busy season; and that the Union did
not express the view at the 1971 negotia-
tions that it wanted the owner-operators
to cease doing the long distance work
because regular employees would do the
work if the owner-operators were not
doing it. 11
Il. As indicated by Bader, and noted
supra, there were a few companies that
did some short haul moving (100-500 miles
from New York City) and an occasional long
distance move (beyond 500 miles) (cont.)
22a
According to President Bader, the In-
dustry negotiators analyzed their situa-
tion and recognizing that, of the 300
companies represented, the great majority
had no concern with long distance moving,
and that the Industry as a whole did not
want a strikel2or an end of the contract
negotiations on the long distance moving
issue, agreed to accept the Union's demand.
This became article 24 of the current
1971-74 contract (Exh. GC-6), and provides
as follows:
"Article 24--Contract Employees
A.1 All persons performing long distance
driving under contract to an —e
covered by this agreement (whether as
“owner-operator,” “owner driver," "“per-
centage driver," “commission driver," or
otherwise) shall be covered by this agree-
ment as employees (hereinafter referred to
as contract employees).
2. Contract loyees shall be covered
by this contract limited to those pro-
visions set forth in this section and
including the Union Security, Penison and
Welfare provisions, Legal or ree me
No-Strike, Grievance, and Arbitration
clauses and Union Check-Off.
II. (Cont.) with employees; and, said
Bader, a provision relating to them came
into the current contract, Exh. GC-6
art. 11(1), recognizing entitlement of
such a driver, has been away from
home for 5 consecutive days or more to 2
days leave without Pay for personal
business. (Footnote 12 is on next page).
23a
3. The employer shall make appropriate
provisions for Contract Employees as
employees under Social Security Workmens
Compensation and Unemployment Insurance
benefits.
4. The employer specifically reserves
the right consistent with its Agency Van
Line Agreement, to control the manner and
means and details of and by which Contract
employees perform services as well as the
ends to be accomplished. All other details
and economic arrangements shall be the sub-
ject of a contract between the owner of
the vehicle and the employer party to this
agreement provided that they shall not con-
oe with the provisions of this article
5. Contract employees shall be compensa-
ted under a “Separate Check" system, and
other compensation and benefits under this
agreement shall be separately compensated.
6. This agreement shall not be used to
deplete the number of regular long
distance drivers (other than Contract
employees) presently employed by employers
covered by this agreement.
IZ. Contemporaneously, there was a 3-
week strike before negotiations were
completed over the industry wage offer.
24a
7. The employers shall in the assign-
ment of work opportunities to Contract
employees adhere to, as far as is
practicable in the efficient operation of
the employers business, assign work and
attempt to equally distribute earning
opportunities in a manner consistent with
said employees qualifications, length of
service with the employer, earning
opportunities of said employees, equip-
ment capabilities and aes van line
reement. (First in first out dispatch
shall not be considered a violation of
the equal earning opportunity.)
8. The foregoing agreement with respect
to contract employees shall automatically
be renewed upon the expiration of this
agreement and renewals thereafter, and
shall be — 9 only upon the conclusion
of a national agreement with the major
van lines covering Contract employees on
a national basis.
B. All loading and unloading of trucks
apowenee by Contract employees covered by
this Agreement, within metropolitan
district, shall a ay by employees
of the + er. ese employees shall be
from the oyer's seniority list if
available. loyees laid off shall be
deemed available, and shall be recalled
by the Employer in seniority order."
The union-security article, incorpora-
ted by paragraph A,2 of article 24, is
article 13, a typical union-security
provision requiring employees (after 31
days, etc.) to become and remain members
of the Union or (on notice) suffer dis-
25a
charge from employment.
President Bader testified that none of
the owner-operators were invited to partici-
pate in the union-industry contract nego-
tiations and no one appeared on their behalf.
C. Union and Santini Action
Vice President Santini testified that in
May 1972 the Union requested a list of San-
tini's contractors, and that it was supplied
to the Union on May 24, 1972.
On August 14, 1972, Union Secretary-
Treasurer Martelli sent Santini a letter
(Exh. GC-10) stating that Santini had vio-
lated article 24 of the union contract (Exh.
GC-6) by failing to adjust operations to
conform with its “contract employees” -
visions. Two weeks later, on August 28,
Martelli dispatched a letter to each of the
Santini contractors (Exh. GC-11), including
a copy of the union contract and a union
membership application, and suggesting among
other things that it was necessary as well
as desirable that they join the Union.
Also in August or September 1972, Martelli
came to see Vice-President Santini and they
discussed the effect of Article 24. Vice
President Santini expressed concern that a
change in status from contractor to employee
would be prohibitive in additional costs to
the Company and to the contractors. He
supplied some figures, indicated that the
margin of operation would not allow the
Company to ee up the extra cost, and
stated his belief that the contractors
26a
could not afford and would not pay the
extra cost to them, and that the Company
would lose its contractors. Among other
things, Vice President Santini noted that
the change in status of the contractors
to employees would make Santini responsible
for the contractors’ hired help, with re-
sponsibility for workmen's compensation
insurance, tax peg ee | and other
costs. Union Agent Martelli replied it
was not the Union's intent to saddle
Santini with these costs, to which Vice
President Santini replied it would leg-
ally follow from the change of contractor
status to employee stutus. Martelli said
he would check with his lawyers. Martelli
made no suggestion that Santini use its
hourly wage employees to do the —._
distance moving, according to Vice Presi-
dent Santini, but he did say Santini would
have to use the long distance contract
drivers in accordance with the union con-
tract and if they were not covered in as
"employees," Santini could not use them.
There may have been another later dis-
cussion with Martelli, said Vice President
Santini, but in any event on September 26,
1972, Santini sent a letter to each of its
contractors (Exh. GC-12) noting that each
had Leen sent the Union's letter of August
28 telling them of their obligation to
join the Union, under the union contract,
and that the Union had now set a deadline
of September 29. The letter continued,
that because the union contract also re-
quired Santini to make contributions on
their behalf to the union welfare and
pension funds and created other costs,
Santini was requesting a renegotiation
27a
of .e A contract with each of
them. On the following day, September 27,
Santini sent the Union a copy of the
Santini September 26 letter to its con-
tractors, with an updated list of the con-
tractors (Exh. GC-13).
Neither the Union letters, nor the San-
tini letters, to the contractors appeared
to have induced any action by them to
affiliate with the Union.
On October 30, 1972, according to both
Vice President Santini and Santini's
traffic manager, Sclafani ( and as
stipulated by the parties), the Union
caused a wor stoppase at Santini's
Jerome Avenue facility. Sclafani testi-
fied that the employees were outside and
three union officials were present when
he arrived in the morning. Sclafani and
the company safety director met with the
three union officials and the shop
steward. The union officials made clear,
said Sclafani, that the time had come for
owner-drivers to start joining the Union,
and, as Union Agent Bracco said, unless
the applications started coming in now
there would be continued work stoppage
and possibly work stoppages at Santini's
export division in Maspeth and at is
fine arts division on 49th Street.
Union Agent Bracco submitted a time-
table, said Traffic Manager Sclafani,
that in 20 days Santini would have been
in touch with all of its owner-drivers,
and by that time only those who had sub-
mitted membership applications to the
Union would be permitted to load or un-
load in the metropolitan district (of
28a
New York City) and anyone who had not
submitted a membership application would
not be permitted to load or unload.
Traffic Manager Sclafani testified that
ne agreed to the Union's proposition,
feeling sure that management would _~
with him to end the work stoppage. e
strike ended about 4 or 5 hours after it
began, with Sclafani's agreement to get
signed membership applications of the
contract drivers to the union representa-
tives as he obtained them, to refuse to
allow nonsigners to load or unload, and to
pay the employees for the loss of time in-
volved in the work stoppage.
After ng oe the subject with Presi-
dent Godfrey Santini, Traffic Manager
Sclafani spoke, he testified, to each
owner-driver present or reporting into the
New York area. Sclafani told each owner
driver of the October 30 work stoppage, and
of the Company's dilemma if he did not join
the Union. Sclafani claimed he made no
"“specific,requests" for the contract
drivers to sign; nevertheless, he obtained
a number of signed applications and turned
them over to the Union, permitting the
signers to load and unload in New York.
Some contract drivers refused to join the
Union, said Sclafani, and Santini would not
allow them to load or unload in New York.
Under date of November 10, 1972, the
Union dispatched to Santini requests that
it discharge, pursuant to union-security
article 13 of the union contract, 13
named contract drivers who had not joined
the Union and paid union dues (Exh.GC-14).
29a
Santini did not terminate its contracts
with these contractors. On November 20,
there was a further work stoppage,
according to Vice President Santini. In
the meantime, the charge against the Union
and Santini was filed with the Board on
November 8, 1972, by Charging Party Leib,
a Florida lawyer representing three of the
Florida based contractors of Santini.
D. Status of Contracting Owner
Operators in Santini's
Long Distance Moving
l. The indicia
From the testimony of Santini's Vice
President Santini and Traffic Manager
Sclafani, United's Vice President Freitag,
and Thomas Hugh Wolfe, who was first an
employee of a contractor with Santini
(commencing in 1967) and later a con-
tractor himself with Santini (commencin
in 1969 and terminating in January 1973);
and from typical contracts between Santini
and its contractors, the contracts between
Santini and United, and related documents,
the indicia for determining whether the
contracting owner operators are indepen-
dent contractors or employees of Santini
have emerged.
Qmership of Power Units Typically,
the owners of the power units or tractors
that pullthe trailers in the long
distance movi are the contractors of
Santini. Santini does not own the
tractors, but in most, though not all,
cases owns the trailers that the con-
tractors haul with their tractors. More
30a
often than not the operator or driver of
the tractor is its owner and the contractor
with Santini, but in some instances the
driver may be an loyee of the con-
tractor. Thomas Wolfe was in that cate-
gory, starting as a codriver with con-
tractor and owner-operator Earl Harris,
and tak over for a period the sole
drivi en Harris was injured and could
not drive. When Harris acquired ownership
of more than one tractor (as has been the
case with some others of the contractors),
Wolfe leased one of the tractors from
Harris (Exh. GC-15) and he (Wolfe)
directly entered into a contract with
Santini making the leased tractor and his
services as contractor available for
Santini business.13 Wolfe's contract
relationship continued even after Harris
had terminated his contract for his other
tractors with Santini.
By the contract arrangement, using the
1971 form’ (Exh. GC-7, Santini-Wolfe
which Vice President Santini said was
basically the same contract as used since
1962 with minor modifications, the con-
tractor undertakes to make his tractor
available during the term of the contract
for the exclusive use of the carrier
(Santini) and to provide the moving
services with the combined tractor-
trailer equipment on the carrier's ship-
ping contracts or bills of lading.14
13. Some of the contractors have in-
corporated, and Vice President Santini
identified several who have done so,
3la
Remuneration: Remuneration from the car-
rier to thé Contractor for all services
performed by his vehicle, himself, and
employees, is computed at various percent-
pe 3 the — oeames that the car-
rier charges the shipper (see, for example,
articles io. 20, and 21 of contracts, Exh.
GC-7, and testimony of Vice President
Santini). The rate schedules are usually
tariff rates approved by the ICC and may
sometimes be carrier bid prices at less
than tariff rates.
IZ. The exclusive use provision stems
from the ICC regulation that permits an
authorized carrier to perform authorized
transportation with equipment he does not
own, provided that the contract or lease
for the equipment gives him the exclusive
possession, control, and use of the equip-
ment, and that he assumes complete respon-
sibility in respect thereto, for the
duration of the contract or lease. In the
case of a long term lease of equipment
entered into by an authorized carrier of
household goods, who wishes to make only
intermittent use of the equipment, such
exclusive use provision need only apply
during the times that the equipment is
operated by or for the carrier. See Exh.
S-l1 containing 49 CFR § 1057.4 (a) (4).
In contrast to the equipment that he
has leased for the exclusive use of the
carrier, the contractor or owner operator
is not subject to any similar “exclusive
use” obligation upon his personal services
by reason of his contract with the car-
rier or ICC regulation. Thus, he may per-
form the services required by (cont.)
32a
While the percentages tend to be similar
for similar work under most contracts,
they also vary for specific or special
circumstances. Thus the usual eager a
of the transportation service charge allow-
ed the contractor is 50 percent on tariff
rates and 53 percent on bid prices at less
than tariff rates. However, some con-
tractors receive 52-1/2 percent for trans-
portation in the summer or peak service
months; two contractors, who own and sup-
ply their own trailers as well as tractors,
receive 65 percent; and for short haul
(between 100 and 500 miles), which is not
as profitable as long distance and which
the contractors tend to reject, and for
certain specific trips, usually in the
summertime, Santini will pay a range of
percentages from 55 percent to 70 percent.
There are certain additional charges for
additional and accessorial services to the
shipper, and, where a percentage is pro-
vided in the contract for the contractor, ~
the remuneration may range as high as 100
percent for handling of bulky items, to
75 percent or 80 percent for packing, to
50 percent for waiting time.
TZ. Ccont.) hiring others, and may him-
self drive other equipment for other
carriers if he has the time and organ-
ization (testimony of Vice President
Santini and contractor Wolfe).
33a
It should be noted that the contractors
have no minimum income guarantee from
Santini, nor are they compensated for over-
time or compensated in any other manner
than by their percentage share of the
allowable charges.
Contractor Control of Operation: The
services for which the contractor is re-
munerated by the carrier (Santini) embrace
execution of the complete order of the
shipper to the carrier to accomplish the
move of the shipper's household goods from
the household of origin to the household
of destimation. The services involve some
preliminary packing or crating
(unless, as in some larger moves, packing
and crating is done preliminarily 4 the
employees of Santini), loading of the
moving van from household of origin,
hauling over-the-road from point of
origin to destination, —— the ship-
pers's goods in the household of destina-
tion, collectin y— from the shipper
at destination 29 percent of Santini's
household moving is c.o.d.), and promptly
accounting for payments to the carrier.
In a typical long distance move, an
estimator (for Santini) goes to the ship-
per's home and leaves or mails an estimate
of cost. An order is written up, including
a pickup date arranged with the shipper by
the Santini sales department (in consul-
tation with the dispatcher). Delivery
time is spread over a period of time,
usually 3 to 8 days after pickup. A call
slip, the order for service, and a bill of
lading are then turned over by the sales
34a
department to the dispatcher.
The dispatcher projects moves chronolog-
ically and geographically, and accumulates
loads of a group of individual moves per
van, going into a particular area, that
are both practical and advantageous for
the contractor drivers to accept. In this
connection the greatest percentage of
Santini's long distance moving on its own
bills of lading is New York-Florida and
New York-Chicago. On moves outside
Santini's certificated territory, United's
dispatching at Fenton, Missouri, will be
alerted by phone or mail and handles the
assigning of loads, —— a suggestion
that 2a Santini contractor is or will be
available in the area will frequently be
followed. Santini contractors haul a
considerable amount of New York-Los Angeles
moving on United bills of lading.
While load assi nts to the contractor
drivers are on a "first come-first served"
basis they are usually being worked out in
advance of arrival by communication
between dispatcher and contract driver,
according to Traffic Manager Sclafani,
because the contractor may refuse a load
without penalty. If he refuses a load he
does not necessarily go to the bottom of
the list, he may even be called next,
depending on the reason for the refusal.
The dispatcher frequently j les orders
to work out an accommodation between
carrier and contractor needs and pre-
ferences, said Sclafani, so that when a
driver comes in the entire load for him
has usually been established and accepted
by him.
a
RR
35a
The dispatcher turns over to the contract
driver the several orders for service and
bills of lading that will comprise the
load, and he proceeds to the homes of the
shippers for pickup of their household
goods. In the course of so proceeding he
will obtain a weight ticket for the un-
loaded (tare) weight of his truck, since
weight of the goods is an ingredient of the
charge for moving, and will pick up helpers
to assist him with the loading. In hiring
loading helpers, the contractors obtain
them where they can, frequently in ware-
houses in various cities. In any event the
contractors make their own arrangements and
pay for the help as their employees (in
eeping with the contract provision with
Santini, see for example arts. 3 and 4 of
contract, Exh. GC-7). In New York City,
since 1971 (because of par. B of disputed
art. 24 of the union contract, Exh. GC-6),
Santini has required its contractors to
select helpers from the Se tini seniority
list of loyees, if available, but if
not available, the contractors are free
to hire whom they wish. If a contractor
takes men who are on the Santini seniority
list, Santini will pay the men but bill the
contractor for the time he uses such men.
The contractor driver proceeds to the
residences of the several shippers, for
loading. This is his first contact with
the shippers and he establishes delivery
contact information with each of them for
several destinations. (Santini has no
procedure on how the contractor must con-
tact the shipper before delivery.) In
each case the contract driver prepares an
inventory (important for inspectional and
claims purposes). Except where prelin-
36a
inary packing of goods has been done for a
large move in advance by Santini employees,
the contractor and his helpers will do
whatever packing and crating is necessary,
using his own materials obtained at his own
expense from whatever source he chooses
(see art. 2 (b) of the contract exh. GC-7).
In loading the moving van, the helpers
usually do the carrying and the contract
driver usually does, or supervises, the
placement of the goods in the van. There |
is no supervision of the move by Santini
personnel. Sclafani testified that Santini
has no posted or mailed rules or regula-
tions for the contract drivers.
Pursuant to ICC regulations, the contract
driver gives the household shipper a copy
of the bill of lading, scale weight
ticket, and inventory (which both sign at
place of origin and destination).
In proceed with the loaded van to its
destination, the contract driver obtains
the scale gross weight. The contractor
hires any helpers and a codriver as his
employees, if he thinks such help is
necessary or desirable, subject only to
the Department of Transportation (LOT)
requirement that the second driver shall
have supplied a completed DOT form, for
the carrier, establishing that he meets
DOT driver qualifications.
The contractor sets his own hours of
work and those of his helpers, subject
only to DOT limitation; and selects his
own routes in mak deliveries, subject
only to the legal limitation that when
operating under Santini bills of lading
—— oe -
Pe et ee a
37a
(as distinguished from United bills of
lading), he may not operate in States for
which Santini has no ICC certification.
Neither Santini nor United conduct any road
surveillance or supervision of the contract
drivers. The contract drivers are not
obliged to call in each day (as salaried
employees had been), said Vice President
Santini, but frequently do call in for avail-
ability of additional tonnage, or for latest
information on location or contracting the
shippers for delivery. Contractor and carrier
are responsible for payment of their own
communications to each other and each must
prepay such communications (art. 17 of con-
tract, Exh. GC-7).
In effecting delivery of the household
goods into the destination households of the
shippers, again the contractor hires, as his
employees, such helpers as he needs from
whatever local source is available, except
that recently in New York City he has been
obliged to use Santini's seniority list of
employees, if any are available under the
disputed union contract art. 24, discussed
supra). Santini exercises no supervision,
through any of its employees, over the un-
loading of the vans and delivery into the
households of the shippers.
After effecting delivery, collecting the
charges, and remitting them, the contract
driver indicates to dispatch his availability
for the next assignment.
Vice President Freitag of United testified
that, for goods moving on its bills of lading,
United does not supervise the contract opera-
tions in any a it loading, unloading,
or hauling--that United has no employees,
program, or directives for seeing these
38a
functions done in a certain way, that it
does no checking of the performance of the
contract drivers and has no directions for
their supervising codrivers, and that it
has no policy or y=: respecting the
type of helpers for loading and unloading.
Bearing in mind that United's lease
arrangements with Santini in effect adopt,
and do not purport to alter, Santini's
contract arrangements with it's con-
tractors, the summary of the operational
practice would indicate that both Santini
and United follow the expressed written
intention of the Santini contracts with
its contractors, that the contractors will
completely direct operations and perfor-
mance of the services, including direction
and control of loyees utilized (art. 5
of the contract, . GC-7), and that the
carrier will not endeavor to control the
manner of prescribe the method of doing
the portion of its business contracted for
by the contractors (art. 22 of the con-
tract, Exh. GC-7).
Costs and Incidents of Operation: The
costs and incidents of operation are borne
by the contractors in a pattern consis-
tent with the operational responsibility
they have assumed. The contractor hires
and pays for his help, and is responsible
for tax and social security withholding,
payments, and reporting affecting then,
and provides his own workmen's compensa-
tion and employer's liability insurance
for them. (In this connection, neither
the contractor nor his loyees are
accounted for on the carrier's books for
tax or social security withholding, etc.,
or for workmen's compensation insurance,
ee a
39a
or for other requirements or benefits
relating to employees of the carrier.)
The contractor pays the operating costs
of the equipment--fuel, oil, garaging,
parking, scales, tolls, ferries, and
road use taxes. He pays for the repairs of
his tractor, and makes his own arrangements
for repairs, fuel, gene ing, and parking.
While the expense o ~~ Rive of
trailers owned by the carrier is borne by
the carrier, nevertheless the contractor
is responsible to maintain the tires and
tubes of the trailer (see arts. 8 and 10
of the contract, Exh. GC-7). The con-
tractor pays for the overnight accomoda-
tions and other living expenses on the
road. He pays for, and arranges pro-
curement of, his own packing materials.
The contractor pays for his base state
license plates, and the carrier pays for
licenses in other states in which it wants
the contractor to operate. The contractor
pays for public lia ility and property
ge insurance on the "bobtail" opera-
tion of the tractor unhooked from the
trailer. As already indicated, the con-
tractor must obtain and pay for workmen's
compensation and employer's liability
insurance for those he employes.
The contractor is responsible for loss of
goods or e in the course of moving the
household goods. For shortages, he must
reimburse the carrier for the actual amowt
paid the claimant. For breakage of fragile
items he must also reimburse the carrier
the actual amount paid the claimant. For
other damage claims a formula has been
established, by which the contractor must
40a
reimburse the carrier $10 per item to a
maximum of $100 per shipment. (See art.
14 or contract, Exh. GC-7.)
All of the enumerated burdens and re-
sponsibilities of the contractor are in
effect whether he is operating on United
or Santini bills of lading.
Contract Provisions and Practices for
Pu er
Iong distance household moving business is
subject to governmental regulation for
protection of the consumer and for high-
way safety, the contracts between carrier
and contractor include provisions directly
required to be included by law, such as the
provision giving exclusive use of leased
equipment to the authorized carrier
(already discussed supra). Other pro-
visions may be included in the contracts
or practices ay tee because governmen-
tal regulation places ultimate respon-
sibility for compliance with certain
requirements upon the carrier, notwith-
ye the delegation of performance of
the moving function by contract.
As the resvlt of several reviews of in-
spection practice by DOT, it was deter-
mined that periodic 60-day vehicle and
equipment inspection was suitable. Such
a provision appears in Santini contracts,
requiring the contractor to have the
inspection required by DOT made every 60
days, with the cost of inspection shared
between the carrier and contractor (art. 9
of contract, Exh. GC-7). Santini re-
quires the contractors to submit those
reports to it and keeps a record of them.
United does not pay or contribute to
Re ee Camu ewe ew
4la
payment for the enapeossens (or necessary
repairs) of such vehicles and equipment
leased to its service, but it does keep a
record of the inspections, since by law it
would be required to stop operation of a
vehicle in its service that was not in-
spected or in proper working condition.
For inspections, the contractors may use
any approved inspection stations.
In the matter of accidents, the Santini
contracts provide that liability for
damage as a result of fault of the con-
tractor shall be upon the contractor
(art. 8 of contract, Exh. GC-7). On
popegsans accidents, Traffic Manager
Sclafani testified that Santini is re-
quired by DOT to report accidents. In
consequence, he said, Santini has re-
quired the contract driver to notify it of
any accidents. Vice President Freitag of
United testified that DOT requires a
periodic review of each driver, hence
United keeps a record of chargeable
(fault of van operator) and nonchargeable
accidents; and if one driving on the
account is involved in too many of too
serious accidents, United's safety depart-
ment may suspend him from United's service
on prior notice to the franchise repre-
sentative with whom the driver is a
contractor or employee of a contractor.
(As the witnesses testified, a suspension
from United's service would not sever the
driver's contract or relationship with
Santini, and he would continue to drive for
Santini so long as his contract was in
force.) Of course the review of drivers’
records is not limited to involvement in
accidents. Thus, violation of DOT rules
on driver use of drugs or alcohol would
42a
also result in suspension; or failure of
the driver to maintain daily logs required
by DOT might also result in suspension
(though not mandatorily).
DOT and ICC have requirements that
drivers keep daily logs, fill out load
manifests, and submit certificates of
pe ry examinations; and both Freitag and
clafani indicated that United and Santini
check on these requirements being met.
In this connection, it is significant
that neither Santini nor United purport
to exercise disciplinary authority over
the contractors (or contractors’ employees)
or to invoke disciplinary penalties or
reprimands; and that the only remedy avail-
able and invoked where there is dissatis-
faction with contract performance
(including the contractor's failure to
comply with government regulations, which
compliance is ar express obligation under
the contract) is termination of the con-
tract in Santini's case, or suspension
(mean elimination) of the contract
driver from United's service in United's
case. For Santini to terminate the con-
tract, it must give 30 days' notice to the
contractor, except that it may terminate
the contract without notice if the con-
tractor has failed to comply with his
obligation to collect and account for
money due on bills of lading of has pare
ticipated in falsification of a weight P
certificate or vehicle load minifest. On
his part, the contractor may terminate
his contract with Santini at any time on
written notice specifying the date of
termination, provided he shall complete
any outstanding work (see art. 25 of
43a
contract, Exh. GC-7). Since the con-
tractor has no separate relationship with
United, even on the permanent (year-round)
lease of his equipment by Santini to
United, he can drop out of United's service
anytime he chooses and go back to Santini,
as Vice President Freitag pointed out. If
he terminates his contract with Santini,
— — owes no separate notice to
United.
Santini requires that each contractor
deposit with it a $3,000 cash reserve, on
which it pays interest, and which it holds
for the final settlement of accounts on
termination of the contract (art. 18 of
contract, exh. GC-7).
During the life of the contract, the con-
tractor will also accumulate credits in a
credit account with Santini as his commis-
sions accrue. Since the contractor needs
cash for current expenses on work to be
performed pending final calculation of
commissions for work done, Santini has
provided a system of cash advances against
credits in the contractor's credit account
(which is a non-interest-bearing account).
For purposes of indentification in opera-
tion, the tractors and trailers nt
under Santini bills of lading are painte
with the Santini colors and lettering.
Only the tractors and trailers on perma-
nent lease to United (operating year
round on United bills of lading) are
painted with the United colors. No United
markings or decals are placed on those
vehicles that are on master (intermittent)
lease to United.
44a
On the other hand, there is no require-
ment that the contract drivers wear a uni-
form, and chere has been no criticism of
contract drivers for not wearing a uniform,
———— to contractor Wolfe. In his own
case, said Wolfe, be bought and put some
Santini patches on some uniforms he wore
for ease of identification with customers.
. Relationship of the United Operation:
Under the preceding headings there has
already been noted aan iP esot most of the
important aspects of the Santini con-
tractors’ participation in United's opera-
tion. As indicated, there is no direct
contract relationship between United and
any of the Santini contractors, and they
end their moving equipment became avail-
able to United to the extent that their
tractors and trailers or Santini trailers
are leased by Santini to United. Even
under the permanent, year-round, lease
arrangement, the tie is nebulous since
the contractor or contract driver may drop
out of United's service anytime he chooses
and go back to Santini service.
While on United's or Santini's service,
as already noted, the contractor is in
oan + ay charge of loading, unloading, and
hau without supervision by United or
Santini personnel; and as it is the case
with Santini, the contractor whether opera-
ting equipment under permanent or master
lease to United, may refuse loads without
penalty.
The Santini contract drivers become
available to United by virtue of the same
process that makes them contract drivers
45a
for Santini, i.e., they are interviewed by
Santini's Traffic Manager Sclafani in con-
nection with agreeing upon a contract with
Santini and the — date. There is no
application form. Usually, said Sclafani,
Santini's contractors have been qualified,
experienced drivers; nevertheless, because of
DOT regulations, each completes a question-
naire covering his ry and physical
status. United is furnished a copy, in
the event the contract driver is to be used
in its work; and if United is satisfied
that the contract driver appears (from
the questionnaire) to meet DOT require-
ments, and registers no objection with
Santini, it is established that the con-
tract driver may haul United tonnage.
However, as already indicated, United may
mot sever a contract driver's contract if
it is dissatisfied with his performance;
it may suggest that the driver not operate
further on United papers and he will go
back to work on Santini papers.
Beginning in 1971, United instituted a
van ny sneseeng geneees Ss perma-
ment lease drivers. e intention to in-
clude master and peak lease drivers was
rescinded, said Vice President Freitag,
although if any of these asks to attend
(or the franchise representative on his
behalf asks) they may attend. The train-
ing consists of an open discussion (among
those attending) on maintenance, a lecture
on safe operation on the highways, and a
question and answer review of DOT and ICC
regulations. United's files indicate that
eight Santini contract drivers have taken
the training program, and there have been
no suspensions of a driver from United's
service for failure to attend.
46a
United has also instituted a performance
awards program under which it awards gifts
for outstanding performance by van opera-
tors, taking into account such things as
revenue hauled and absence of law wiete-
tions or accidents.
Vice President Freitag testified that
United has no system of direct communica-
tions with its van operators, and no
mailing system for their home addresses,
but sends any communications to them
through the franchise representative.
United has prepared an operator's manual
(Ehx. U-10), which is a compilation of
factual and legal data useful to a van
cperator, but copies of it have been sent
to the franchise representative for them
to distribute among contract drivers as
— ap prwe h United does not follow up on
the distribution, said Vice President
Freitag; and Traffic Manager Sclafani
testified that Santini has no a Poe on
distribution of United's manuals and that
no,record is kept on their distribution
to the contractors, and has no policy of
——- for compliance with items in the
manual .
United has also prepared an agency manual
(Exh. U-9) for the franchise representa-
tives themselves but, as Vice President
Freitag testified, United does not send
its representatives around to see to com-
pliance with the provisicus of the manual.
47a
2. Independent contractors
The owner operators of the motorized
equipment who have contracted with the
carrier Santini for long distance moving
of household goods are, in my view,
independent contractors and not employees
of Santini.
Central to this conclusion is the net
total of the evidence that each of the
contractors has within his own control the
means of performing the contracted moving
services and the method of performance,
unsupervised in execution by the carrier
whose business he performs. The restrict-
ions upon him are largely those imposed by
law on ale Gael regulated busi-
ness of household goods by motor
carrier, both * with regard to consumer
protection and highway safety.
The standard applied in differentiating
“employee” from “independent contractor"
under the Act is the common law agency
test, N.L.R.B. v. Unitec Insurance Co. of
America : . This
Was made clear n the Taft-Hart ey amend-
ments (1947) of the Wagner Act. Id.
Earlier, under the Wagner Act, the Board
and the courts had rejected the “power
of control” concept of “economic reality"
in defining “employee” under the Act
N.L.R.B. v. Hearst Publications 322 U. S.
and see furt
xplanation in arrison v. Greyvan aénee
sub nom United States v. Stiky. 3351 U.S.
ngressional
S construction was adverse,
and the 1947 amendment of a "am 2 (3) of
the Act specifically excluded '
48a
individual having the status of independent
contractor” from the definition of employ-
ee. "The obvious se of this amend-
ment was to have the Board and the courts
apply general agency principles in
distinguishing between employees and
independent contractors under the Act."
N.L.R.B. v. United Insurance Co., supra
Thus since Taft-Hartley,"In determining
whether an individual is an employee or an
independent contractor, the Board has con-
sistently applied the common law right-of
control test. Under this test, an employ-
er-employee relationship exists when the
yf reserves the right to control not
only the ends to be achieved, but also the
means to be used in achieving such ends.
On the other hand, where control is re-
served only as to the result sought, an
independent contractor relationship exists.
The resolution of this question depends on
the facts of each case, with no one factor
being determinative." Fleet Transport
Company, Inc., 196 NLRB oe
This history is useful because just prior
to Taft-Hartley, the Supreme Court decided
in Harrison v. Greyvan Lines, supra, that
circumstances similar to those here, with
a carrier like Santini, for the inter-
state moving of household goods, were
independent contractors and not employees
of the carrier. The determination was for
the purpose of deciding whether owner-
drivers were employees under the coverage
of the Social-Security Act of 1935, and in
— its determination the Supreme Court
said it would "follow the same rule that
49a
we applied to the National Labor Relations
Act the Hearst case."
What is significant to the controlling
effect of Greyvan on the case at bar is
that in Greyvan, even though using the
broader "economic reality" test for
ae loyee under the pre-1947
Nationa Labor Relations Act, the Supreme
Court arrived at independent contractor
status for the owner-drivers, which was
the same resuit reached by the circuit and
district courts below, applying the common
law right-of-control-test (331 U.S. at
716-717) that has since turned out to be
the standard for the Board and courts
under the post-1947 Act.
Look more closely at Greyvan, the ICC-
ma? carrier had its th
office in Chicago with agencies in many
cities for soliciting household moving
business, and operated 38 States and
Canada. As early as 1930, before passage
of the Social my Act, the carrier
company had adopted the system of con-
tracts with owner drivers of trucks of its
own, driven by truckmen who were admittedly
company employees. Thus (like Santini in
this case) the company did its moving
business under the two systems, one with
contractor truckmen and the other with
direct employee truckmen. 15
I5. A contract between the company and a
Teamster's local required all truckmen to
be members of the union.
50a
The owner-drivers were required under
their contracts to haul exclusively for
the carrier company, furnishing their own
trucks, equipment, and labor necessary to
ick up, handle, and deliver shipments.
ey were obl to pay all expenses of
operation, including fire, theft, and col-
lision insurance that the might
specify (which turned out to a blanket
company policy for which the owner-drivers
were charged proportionately). The
company carried and paid for cargo insur-
ance. It was the contractors’ responsi-
bility to pay for loss or damage to ship-
ments and to indemnify the company for
loss caused by them or their —~ yo
The company paid for all Federal or state
permits or certificates to operate the
contractors’ vehicles in the company's
service as a motor carrier.
The contractors were obliged to collect
all money due the company for shippers,
to turn such money in at the offices to
which they reported after yet and to
post a $1,000 bond and cash deposit of $250
against final settlement of accounts.
The contractor was required at all times
to personally drive his truck or to be
present on it when a competent relief
driver was driving, except in certain
emergencies; and he was ———— to follow
all rules, regulations, and instructions
of the company. The instructions included
directions as to where and when to load
freight. (These several requirements are
not sed on the Santini contractors.)
Sla
All shipping orders or bills of lading
were to be between the carrier company and
the shipper, and if new freight was tender-
ed to contractor he was to notify the
omer so thatmit could complete the bill
of lading in its name (a requirement
similar to the Santini contracts' provision).
As remuneration, the contractors received
a percentage of the tariff —— to the
shipper by the company varying between 50
percent, and a bonus up to 3 percent for
satisfactory performance.
The contractors were required to paint
the destination “Greyvan Lines" on their
trucks.
Each truckman was obliged to take a short
course of instruction in the company's
methods of doing business before he started
hauling for the company. In addition there
was issued to each a manual detailing the
conduct of truckmen in performance of their
duties. (A y official testified that
the manual was ractical and that no
attempt was made to enforce it.)
The company maintained a staff of dis-
patchers who issued orders for the con-
tractors’ movements, but not the routes to
be used by them. At intervals, the con-
tractors were to report their positions to
the dispatchers.
Each of the contracts was terminable at
any time by either party.
This summary of the Greyvan contracts and
practice (derived from is Supreme Court's
opinion) provides a remarkable likeness to
52a
the Santini contracts and practice; but
with the indication that the carrier
company control over the contractors in
Greyvan was tighter than with Santini and
ts contractors in several respects,
notabl ~~ the contractors to fol-
low all rules, regulations, and instruct-
tions of the company incl directions
on where and when to load freight,
requir the personal driving or super-
vision of the truck by the contractors
at all times, and requiring each of them
to take a course of instruction before
commencing to haul.
Under this set of facts, and recognizing
that the contract truckmen and their
assistants were from one standpoint an
integral part of the Greyvan freight trans-
porting business, the Supreme Court was
nevertheless impressed that the energy,
care, and judgment of the contract truck-
men conserve the equipment they own and
increase their earnings, that they hire
their own assistants, pay their own
expenses with minor exceptions, and depend
upon their own initiative, judgment, and
energy for a lar t of the success,
331 U.S. at 716. ere the arrangements
leave the driver owners so much responsi-
bility for investment and ement as
here, they must be held to be pendent
contractors. (Citations omitted.) These
driver-owners are small businessmen. They
own their own trucks. They hire their own
helpers. In one instance they haul for a
single business,16 in the other for any
16. This is a reference to the contract
truckmen for Greyvan.
53a
customer.17 The distinction, though impor-
tant, is not controlling. It is the total
situation, including the risk undertaken,
the control exercised, the opportunity for
profit from sound management, that marks
these driver-owners as independent con-
tractors.” 331 U.S. at 719.
In my view, the decision in Greyvan is a
persuasive as well as controlling precedent
for finding that the Santini contractors
independent contractors, who by comparison
enjoy greater freedom from the carrier
company's control than did the Greyvan
contractors.
The Board, in more recent times, has
added cvmulative precedents for the same
result.
terminals in New York, New Jersey,
Pennsylvania, and Maryland. The company
was party to a union contract with a
Teamster's union local, on a multiemployer
basis, that covered the company’s 15
“city” drivers based at the Baltimore
terminal, who were admitted employees
engaging strictly in local cartage work
with company equipment in the Baltimore-
Washington area.
I7. This is, a reference to the contract
truckmen in the companion Silk case, who
had an arr ement with Silk, a coal
dealer, for live of coal to his
customers, but tho bed the privilege of
hauling for others.
54a
The Union local sought to include an
over-the-road unit comprising several
owner-drivers of tractors and a non-owner
driver retained by an owner of an addition-
al tractor, who were under contract with
the company to haul company owned or con-
trolled trailers to and from the company's
Baltimore and Pennsauken, New Jersey,
terminals, at night. The ery opposed
the unit on the ground that the owner-
drivers were not its employees but an
employee of an independent contractor.
The Board found that the relation between
the company and the owners of the tractors
was governed by a standard lease (in use
since 1956), for 30 days, automatically
renewed for like periods unless terminated
on 30 davs' notice a7 Somes pee (and
there was evidence that a number of owners
had terminated such leases.)
Under ICC regulations, the tractors were
leased to the company for its exclusive
use. The trailers hauled were sealed and
the drivers did not — e in pickup or
delivery of goods and no contact with
the company's customers. The drivers
received a trip slip and manifest for each
trailer hauled and had to maintain a log
on each trip.
Under the lease the owner of the tractor
undertook to provide the vehicle as the
company required it ee with a com-
petent driver who remained the employee of
the tractor owner, paid by him. Opera-
tional costs of the tractor (gas, oil,
etc.) and maintenance were the tractor
owner's responsibility and he was
responsible for damage to it or the
ee
55a
omne trailer, but the company paid for
public liability and property damage
insurance on the tractor-trailer. The
company paid for licenses, taxes, and
fines assessed against the tractor when in
company use, and the company was responsi-
ble for compliance with ICC safety regula-
tions and requirements for vehicle
identification.
Unlike the city drivers, the owner-
drivers did not participate in any safety
program and were not subject to company
rules that applied to the mg! drivers.
The owner-drivers were governed by the
IcC rules and regulations.
The contractor, of course, purchased and
aid for his tractor and paid for its
icense in the home State, Maryland, but
the company paid for license in other
states. e contractor paid for collision-
file-theft insurance, the company paid for
cargo insurance. While the contractor
would get his tractor maintenance performed
where he chose, the company conducted
periodic inspection of the tractors.
Remuneration to the contractors was $50
per round trip between Baltimore and
Pennsauken, plus tolls, plus $2 per hour
for excess waiting time. There were also
some occasional extra jobs of the usual
run at a fixed fee plus mileage.
Orders were assigned through the
company's central dispatch on call to the
drivers, who were free to refuse a run or
extra job without reprisal. The company
exercised no disciplinary authority over
the contract drivers.
56a
The company did no wamnel cane of income
tax or social security payments from con-
tractors or their drivers and provided no
workmen's compensation or fringe benefit
coverage for them.
The Board held, 143 HLRE at 956-957, that
the owner-drivers were independent contrac-
tors, and not —~ pe ees of the company. The
Board noted particu ost? the bona fide and
absolute ownership of the tractors by the
contractors, which gave rise to an inference
of control over the manner of performance
associated with the status of independent
contractor. It regarded as significant in
demonstrating the entrepreneurial nature of
the contractors the fact that they determined
whether to drive the tractors themselves or
employ others to do so. Additionally, that
the contractors could control, in part, their
profit or loss not only by deciding whether
or not to drive themselves, but also by
diligence and efficiency in the repair and
maintenance of their tractors by persons of
their own choosing. The Board saw sub-
stantial independence in the virtual freedom
of the contractor to decide whether to take
an assignment, and in selecting routes of
travel; and noted the contract expression of
intent to establish an independent contrac-
tor relationship. Lastly, said the Board,
"The control exercised by the Company over
the work of owners and drivers is for the
purpose of complying with the rules and
regulations of the Interstate Commerce
Commission and is not inconsistent with the
independent contractor relationship.” 143
NLRB at 957.
— as
nc. , supr
o tha n
Reisch Trucking, supra The Teamsters
union local was seeking, and the company
resisting, a unit that included tractor
owner-operators, and their nonowner-
drivers, who were under contract to a
motortruck common carrier for, in this
case, the intrastate (Florida only) trans-
portation of petroleum products on behalf
of several large oil companies. The com-
pany operated subject to the regulations
of the Florida Public Service Commission
(FPSC), which had adopted the federal
Department of Transportation (DOT) el
tions with some few modifications. us
the contract driver had the prescribed
duties hee mc among other things, to
submitting daily —- and maintenance and
accident reports, checking apneaans before
operation, providing inspections at regular
intervals, and displaying the company's
name and certificate number on the tractor.
The tractor, leased by the company, could
not under FPSC regulations be simulta-
neously leased to another carrier; but the
owner-operator could lease other tractors
he might own to other carriers and he
could drive for other carriers as well as
for the company (a situation similar to
that of the Santini contractors in the
case at bar).
Without oe here all of the details
of the contract relationship, the Board
concluded that the owner-operators were
independent contractors, that the nonowner-
drivers were cnpeepees of independent con-
tractors, and that neither were employees
of the company and were therefore excluded
from the unit. The Board found that the
58a
contractor, and not the company, determined
what days and hours to work, what routes to
use, where to have repairs made and to
purchase fuel, and where to park his
tractor when not in use. He was free to
refuse loads without penalty and to decide
whether to hire or fire a driver, what work
rules to impose on his drivers, and what
rates to pay and fringe benefits his
drivers would receive. Essentially, said
the Board, the only indicia of control over
the means of delivering the petroleum
retained by the any were those required
by the FPSC. 196 NLRB 436, 439.
The Board makde two additional points in
resolving the issue against a finding of
an employer-employee relationship: a1)
the te tion clause of the lease, which
gave the company an option to terminate by
notice at specified intervals, with
automatic renewal of the lease if the
option were not exercised, is entirely con-
sistent with independent contractor status;
and (2) the fact that the company unilater-
ally determined the rates of commission
paid to the owner-operators, and the terms
of the lease, may s that the company's
bargaining power is vastly superior to
that of the owner-operator, but such in-
equality of bargaining power is not
peculiar to an employer-employee relation-
ship, 196 NLRB at 439, én. 9,
: r e
ques contractors who were
owner-operators of tractors leased by
them to the certificated motor carrier
and the nonowner-drivers of such vehicles,
were properly includable in a unit of
a =
59a
over-the-road truckdrivers. The carrier
company had leased 27 tractors, 25 of which
were owner operated. Two of the owner-
operators leased two tractors each to the
carrier and each supplied a driver for his
second tractor. In addition, the company
leased 10 trailers from the owner-operators
and also had in service 25 of its own
trailers. The contractors and their ~ oe
ment were mainly used for hauling stee
from Pittsburgh area steel mills to co-
signees in five States.
The company also had three tractors of
its own, driven by three salaried employ-
ees, usually on short hauls or for work in
which contractors did not wish to engage.
The Board disagreed with the Regional
Director that the carrier had created an
emp loyer-employee oe my with the
contractors. t noted three factors which
might tend to support the view that they
were employees: (1) the degree of control
over equipment and personnel reserved to
the —_—-, required by and consistent with
state and Federal (ICC and DOT) regula-
tion of motor carriers, (2) the fact that
the company unilaterally set the rates of
compensation for the contractors, and
(3) evidence that the company had liberal
licies on cash advances, interest-free
oans, and free loans of equipment to con-
tractors in emergencies.
However, said the Board, these three
factors alone did not establish that the
company controlled the means by which the
contractors performed their ay a Hy A
transport and delivery duties under the
lease agreements. On the contrary, the
60a
following five factors suggested that the
controls exercised by the company related
solely to results to be achieved under the
leases, and that an employer-employee
relationship had not been established: (1)
the contractors exercised a very sub-
stantial degree of freedom in scheduling
the use of their equipment and in reject-
— loads offered which | considered
undesirable; (2) they were free to trip
lease their equipment to other carriers;
(3) they paid virtually all the costs of
operation and maintenance of their equip-
ment; (4) they were subject to almost no
day-to-day supervision or control by the
company; and (5) there was no pattern of
regular discipline of contract drivers
for acting contrary to any prescribed
means or method of qpeseties designed by
the company. Accord net. the owner-
operators were found to be their emp loy-
ees and not employees of the company.
IS. Note also the consonant holdi in
, Linding ependent contractor
relationship between a bakery and the
owner-operators of trucks distributing the
bakery's products.
There are a number of other Board
decisions in the trucking field where
owner-operators have been held to be
employees rather than independent con-
tractors, such as Deaton 187
740 1971 ; 46 :
J/ NLRB ¥/6 (19/2); Pony trucking, Inc
75 NLRB No. 59 (19/2); and the recen
Jecision of my colleague Administrative
Law Judge Sidney Sherman in a moving
company case, Local 814, (cont.)
6la
The tp examination of these
recedents of independent contractor status
n the moving and trucking industry, from
Greyvan to Reisch to Fleet to Conl
provide over a span of the last 3 years
the - nt of the Supreme Court and the
Board that, even in a governmentally regu-
lated business, arrangement for doing
business, similar to that in this case,
whereby small businessmen undertake per-
formance of part of the principal function
of the larger businessmen, is indeed in-
dependent contracting. Comparing the facts
of the cases, the Santini arrangement
IS. cont.) International Brotherhood of
! Mo rothers ving an 4)
; °.
t, here, to distinguish in
detail the facts and results in those
cases, from the facts and results in the
case at bar and the precedents upon which
I have relied and regard as more etocesy
related. However, I do note one genera
characteristic from reading the cited
decisions that have found an employer-
employee relationship, namely the stress
on a layer of carrier regulations put upon
the contractor beyond what was required by
government regulations, impairing the con-
tractor's independence.
I
This is not the situation in the case at
bar. The evidence indicated conformity
with ICC and DOT requirements--not more--
and the ICC-DOT regulations themselves
are comparable with, and contemplate that
there will be and can be independent con-
tractor as well as employer-employee rela-
tionships in the business of household
moving ~ motor carrier.
62a
appears to make as strong a case, if not
stronger in some respects, for independent
contractor status.
As in the other cases, the Santini con-
tractors have all of the entrepreneurial
indicia of investment in the ownership of
expensive power units, in some cases multi-
ple units and ownership of trailers as
well, and shoulder all of the costs and
arrangements of their operation and main-
tenance and the risks and costs of e,
including loss or breakage of the household
goods in their care.
For their recompense, the contractors
share a portion of the tariff charges that
the carriers are permitted to charge the
shippers. These percentages are prescribed
by the contracts and are generally uniform,
but there appears to have been some
individual bargaining on certain accessori-
al charges and there clearly is Sengetaeng
by the contractors and carrier on the per-
centages for the occasional short haul the
contractors may do. There are no minimum
guaranties of sevaaaes from carrier to
contractor, and to the extent that advances
for cash needs may be made to the contract-
or these are not carrier moneys but come
out of the contractor's own credit for past
earnings with the carrier.
The Santini contractors, who must be and
are qualified to drive under DOT regula-
tions, are not — to drive the equip-
ment they lease to Santini but may hire
and provide others who likewise qualify.
The Santini contractors may refuse, and
sometimes have refused, loads offered to
them without penalty.
63a
Once eepeneessssey to pick up and deliv-
er a load has been accepted from the car-
rier's dispatcher, the contractor is in
full charge from the pickup to pessvesy
The contractor hires as his employees his
own help at the points of origin and
destination to assist in packing, loading,
unloading, and, as in necessary, the over-
the-road driving. He supervises these
tasks and optionally participates in or
assists in their performance. The carrier,
on whose bills of lading the contractor is
working, does not supervise or direct an
portion of the moving operation from pick-
to delivery. The contractor selects
his own routes for delivery, and the hours
of work for himself and his men (within
DOT limitations); and the expenses incident
to effectuating delivery such as fuel,
tolls, overnight accommodations, and com-
munications are his burden.
None of this relationship and its in-
cidents, including freedom from carrier
direction and supervision of peformance,
are altered when the Santini contractor
is moving household goods on the bills of
lading of the national carrier--United.
Santini, to comply with ICC regualtion,
has leased to United, either for year-
round use (permanent lease) or intermit-
tent use (master lease), its right to use
the contractor's = t, but there is
no contractual relationship between
United and the Santini contractor, with
whom United deals and communicates through
Santini. A contract driver may drop out
of United's service anytime he chooses and
revert wholly to Santini service. Neither
Santini nor United purport to have any
system of disciplining contract drivers.
64a
The United training program for operators
of permanent lease vehicles is in essence
a form of refresher for experienced drivers
but even if the program were more than that
it would not be inconsistent with independ-
ent contractor a see Greyvan,
supra. The United awards for perforn-
ance are no more than a bonus in addition
to the agreed remuneration, see Greyvan,
supra.
The requirements on the contract drivers
for physical examinations, keeping of daily
logs, periodic inspections of — t,
and the like are requirements arising from
posconaens regulations which, as the Board
s said more than once, are not inconsis-
tent with the independent contractor rela-
tionship, see Reisch and Fleet, supra.
In all of the transactions and relation-
ships between the contractors, on the one
hand, and the carriers, Santini and United,
on the other, including the performance of
functions, recompense, the keeping of books,
and the accounting to government agencies,
insurance companies, and the like, the con-
tractors are not treated or carrier or
recompensed as employees of the carrier.
On the contrary, the contractors are dealt
with and accounted for as independent con-
tractors of the carrier Santini, and their
contracts with Santini state the intention
to establish that relationship. The total
facts warrant the finding that the con-
tractors are independent contractors.
i
65a
E. 8(e) Violation 19
Article 24 of the union contract (Exh.
GC-6), set out in full under heading B,
above, requires that any person doing
long distance driv under contract with
an employes covered by the union contract,
whether as owner-operator or commission
driver or otherwise, shall be covered by
the union contract as an employee, called
contract employee. However, it is further
provided that, except for the specific pro-
visions of the article, the details of
economic and other a between the
contract employees and the employer shall
be the subject of the individual contracts
between then.
The specific provisions of article 24
make applicable to the contract employees
the union security, union checkoff, pension
and welfare, no-strike, we ye and
arbitration, and separability clauses of
the union contract. However, the employer
IS. Sec. 8(e) of the Act provides, in
pertinent part:
(e) It shall be an unfair labor practice
for any labor organization and any employ-
er to enter into any contract or agreement,
express or implied, whereby such employer
ceases or refrains or agrees to cease or
refrain from handling, using, selling,
transporting or otherwise dealing in any
of the products of any other employer, or
to cease doing busness with any other
person, and any contract or agreement
entered into heretofore or hereafter con-
taining such an agreement shall be to such
extent unenforceable and void.......
66a
is to compensate the contract employees
under a “separate check" system, and is to
provide them social security, workmen's
compensation, and unemployment insurance
benefits under the separate compensation
system. There is reserved for the employer
the right, consistent with its agency van
line agreement, to control the manner of
performance of contract employees, and to
assign work in a way that attempts to
reconcile equal earning opportunity with
seniority, qualifications, equipment cap-
abilities, and agency van line agreement.
First-in-first-out dispatch is stipulated
not to be a violation of equal earni
opportunity. Lastly it is provided that the
agreement (under the article) shall not be
used to deplete the number of regular long
distance employees, as distinguished from
contract loyees, presently employed by
covered employers.
An additional paragraph B, article 24B,
requires that loading and unloading within
the metropolitan district of trucks operated
by contract . yo shall be performed by
employees on the covered employer's seniority
list, if available, including employees in
layoff status.
Except for compliance with article 24B,
Santini did nothing effectual to comply
with article 24 until, under compulsion of
the union demand of October 30, 1972,
accompanied by a work stoppage or strike and
threat of more, Santini s t to require
its contractors to join the Union, and
succeeded with some.
The ae po he then is whether the object
of the Union's conduct and of the agreement
——
67a
respecting the contract drivers (article
24) was “primary"--intended to preserve
fairly claimable unit work to unit members
in the employ of the contracting a
or “secondary"-- aimed at regulating t
labor policies of other employers including
ot ln agar ay persons. If the object was
primary, t reement did not violate
Section 8(e) of the Act, even if its inci-
dental effect caused the employer to cease
doing business with other persons; whereas
if the purpose was secondary, such as
limiting subcontracting to employers who
recognize the union or who are signatory
to a contract with it or who are members of
it, the agreement was unlawful and a viola-
tion of Section 8(e), Retail Clerks Inter-
national Association Loca cke
affd. 0 F.2d 858, 861-862 (C.A.D.C.,
1968), finding violations of Section 8(e)
and 8(b} (4) (4 and (ii) (A), among other
things .<<
20. The same primary vs. secondary object
test applies to determine violations o
Sec. 8(b)(4), since the "hot cargo" pro-
vision. Section 8(e), is a complement of
the "secondary boycott" provisions of
Section 8(b)(4), in effect banning agree-
ments to achieve a secondary boycott in
advance. National Woodwork Manufacturers
Association v. N.L.R.5., 380 U.S. 612, 634-
68a
The circumstances surrounding article 24,
looked at from the situation of Santini
alone or of the Industry (New York City
wal tieupigvere association) as a whole,
indicated<:that over the period 1962
through 1966, Santini converted completely
from employee long distance ng to con-
tractor long distance moving,<<that Santini
was the last of the approximately 20
Industry companies who engage in long
distance moving to so convert, and Bader
Brothers was among the first, starting in
1948. Numerically, most of the Industry
companies have not and do not engage in
long distance moving (except as order
takers from others). A few of the
Industry companies, Santini among them,
have done and do some short haul (100-500
miles of New York City) using employees;
but for Santini this has been a very small
amount of business. Only on rare occa-
sions, usually in an emergency, has a
Santini employee been asked to do a move
over 500 miles, under the conditions
existing in the last several years. On
21. Testimony of Vice President Santini
and Traffic Manager Sclafani of Santini,
Union Secretary-Treasurer Martelli, and
President Bader of Bader Brothers for the
Industry, related portions of which have
already been discussed under headings
A, B, and C, above.
22. Long distance meaning over 500 miles.
The current union contract still carries
over an old definition of long distance as
meaning over 90 miles; but the testimony,
already described under heading A, indica-
ted that this is obsolete, that up to 100
miles of New York City is regarded (cont.)
69a
the other hand, the long distance con-
tractors are not interested in (because
unprofitable for them) and have seldom done
short haul under the conditions existing in
the last several years; when they have done
short haul, usually to meet the carrier's
emergency, they have generall been able to
exact from the carrier a higher percentage
of the hauling revenue than is normally paid
for long distance hauling.
Immediately prior to 1962, Santini did all
of its long distance moving with approximately
12 employees who spent about 65-75 percent of
their time on such york, according to Vice
President Santini.23 Currently, Santini has
24 contractors, who do nothing but long dis-
tance moving on Santini or United bills of
lading, representing an enormous increase in
long distance business, particularly in the
period 1967-72 (see heading A, supra). Nine
of the 24 Santini contractors are based in
Florida. oe Santini's contractors,
there are between 250 and 300 contractors, all
told, +, the long distance moving of the 20
New York City companies so engaged.
22. (cont.) as local, between 100 and 500
miles is short haul, and over 500 miles is
long distance.
23. Union Secretary-Treasurer Martelli thought
the number between 1955 and 1962 was more like
40 employees, but there were comings and goings
in loyment in the 7-year period and he was
not able to establish this as the number of
such employees at a given time. Moreover,
his figure was highly improbable, since Santini
did much less long distance business per year
in the period than it has done in the subsequent
1962-72 period and currently when it now utilizes
24 contractors for its long distance moving.
70a
While there has been practically total
conversion from employee to contractor long
distance moving by the (New York City)
ry | in the period 1948-67, there has not
been a lessening of unit jobs, and there has
been some increase for two reasons: (1) the
increase of long distance Hg has gen-
erated related work, performed by bargaining
unit enptevecs. calculated in revenue at
about 40 percent of the long distance revenue;
and (2) although local household moving bus-
iness has declined, there has been a great
increase in local commercial Bgvins. performed
by bargaining unit employees.
President Bader testified that his company,
and others, have used contractors for long
distance moving continuously since 1948, and
that his company, like others, has no employee
on its payro 1 doing long distance moving.
When the "‘subcontracti article was first
introduced into the 1965-68 union contract
(as article 26), its terms required specific
union apeeores or subcontracting and that
all employees of the subcontractor shal] be
on the payroll of the prime contractor.
24. In this connection, commercial moving
requires about three times more helpers per
driver than household povene. The testimony
indicated that the number of drivers repre-
sented by the Union in 1972-73 was about
the same as in 1962, but the number of
helpers has increased substantially.
25. The article was repeated in the 1968-71
union contract and in the 1971-74 union
contract as art. 23, except that it provided
for negotiating with the Union on the matter
of any subcontract.
—.
7la
Nevertheless, neither then, nor since,
according to Bader, was there any claim by
the Union that his company, or any other
doing long distance 7 by means of
contractors, was in violation of the sub-
contracting article (now article 23), which
he asserted, without contradiction, related
only to local moving business (despite its
more general wording). Vice President
Santini buttressed this view of the situa-
tion with uncontradicted testimiony indica-
ting no complaints from the Union that
Santini violated the subcontracting article
either in the course of effectuating its
changeover in long distance moving from
employees to contractors, or in the 1972
discussions between the union represent-
atives and Santini where the Union took
a — that the contractors must join
the on.
Moreover, according to President Bader,
when the “contract employees" article 24
came into the 1971 negotiations and union
contract, there was no bargaining proposal
that the companies use their employees in
lace of the long distance ett contractors.
or did the Union take the position that it
wanted the moving contractors sepeeees by
bargaining unit employees (notwithstanding
it wanted the contractors defined as employ-
ees), because there were not then and are
not now bargaining unit drivers available
for long distance driving, said Bader. Indeed,
said Bader, the Union has a problem in pro-
viding any additional men. for any kind of
moving, particularly in the busy season,
| |
72a
noting some experiences. 2& Again, Vice
President Santini buttressed this view of
the situation, indicating that in the Union's
1972 discussions with him concerning the con-
tractors joining the Union, there was no
——— that Santini use its hourly
employees to do 1 distance work, or that
such employees would or could do such work.
In sum, apart from talk by a union lawyer
at the Industry-Union negotiation about
seeking to recapture bargaining unit work,
see we B, for a number of years
(since at least there has been no body
of ge unit employees, includi
Santini employees, who have performed long
distance —— or for whom to preserve or
recapture the long distance household moving
business. As developed by the record of
this case, the plain fact is that in New
York City, at least, the moving business has
undergone several =e changes over a
eriod of years and, among these, has turned
or long distance performance to a new breed
of small independent businessmen, frequently
not based in New York, and capable and will-
ing to move constantly about the country
76. Union Secretary-Treasurer Martelli's
assertion that there are many qualified and
willing employees for long distance TEC,
fell rather flat in light of his April 1971
communication to the Industry about the need
for a training program to meet the shortage
of manpower in the whole of the moving
business and his indication at trial that
no progres had been started. Moreover,
Traffic Manager Sclafani testified that the
Union has never come to him to say that
Santini's use of contractors was taking (cont.)
ee
73a
with their own power units. The New York
City Industry eae unit employees
have apparently adjusted to the changes
without econenie loss, acquiring increased
local work (and possibly more desirable
work than long distance hauling from the
standpoint of a local employee).
Against this background, it is useful
to turn to what was said and held by the
Third Circuit Court of appeess in 4, Duis
Pyle, Inc. v. N.L.R.B., 383 F.2d 7/72, -
778 (19675, sent dented 390 U.S, 905 (1968),
concerning the union contract provision that
required
owner operators and fleet owners
to become apeapece and thus to
join the union in order to retain
the work which they have been doing
on subcontract. On their face these
requirements are ogqeneeey in
their purpose as well as their
result. They do not require a
carrier to put an end to subcon-
tracting, but only to terminate
it as to its subcontractees who
refuse to become members of the
union. Thus, their effect is to
76. cont.) work from a Santini employee
driver, or that one of the Santini employee
drivers would like to do 1 distance
moving as an employee. On the contrary,
he said employees have on a number of
occasions come to him asking if they might
become contract drivers.
Fe
74a
make the continuance of the
relationship between the
employer and an independent
contractor depend upon the
latter's decision to become a
member of the union if he is
an owner-operator and to require
his employees as well as him-
self to become members of the
union if he is a fleet-owner.
The requirement therefore makes
the central test of the employer's
continuing to do business wit
such an individual his internal
labor policy and not his main-
tenance of union wage scales
or similar conditions with
otherwise might ecveseety affect
the unit ers. This is
pe pee sr A similar to pro-
visions which permit an loyer
to subcontract only with third
pensses who are unionized.
uch provisions have repeatedly
been struck down under §8(e) as
| ms en illegal secondary
objectives. See, e.g., N.L. :
.. Joint cil of T
oO. .
at & Highwa
Telpers & }
on J. .U, et Vv. N.. .
-2a 709, .¢. is
1964); District No. 9, Inter-
national Association of Machinis 8
v. N.L.R.B. .5. App. D.C.
287, 24 33, 36-37 (1962).
The present provisions, to the
extent that they require the
758
subcontractees to become loyees
and members of the union, there-
fore must also be declared invalid.
As in the case of secondary boy-
cotts generally, a union may not
employ a collective bargaining
agreement with one employer as a
means of effectuating its object
to coerce another employer to
unionize. Nor —_ it by this means
seek to coerce self-employed
ersons to become union members.
ben ress has made this clear by
§8(b) (4) (A) which prohibits second-
ary boycotts with an object of
"forcing or requiring any employer
or self-employed person to join
any labor ...organization....”
The self-employed owner-operator
is as much entitled to protection
from coercion to join a labor
organization as is a fleet-operator
who may have one or even many
employees .27
. 9,
, cited with | eam
in Pyle, ra, the court of appeals struck
down as viet ting Section 8(e) of the Act
27. On eeuane. Hi
, the Board accepted the court's view
of the contract clause as the law of the
case and found that the contract clause
violated Sec. 8(e) of the Act, and that the
union violated Sec. 8(b)(4)(1) and (ii) (A)
of the Act by inducing employees of
McCormick to strike or threaten to (cont.)
hway Truck Drivers
e
76a
a "union signatory clause” under which the
employer engaged to make all effort to sub-
contract with cartage companies who employed
members of the union local, saying that the
clause “requiring or encouraging a boycott
of cartage companies who do not have union
contracts is a violation of Section 8(e).
To make selection of subcontractors turn
upon union approval bears only a tenuous
relation to the legitimate economic concerns
of the employees in the unit, and enables
the union to use secondary pressure in its
dispute with the subcontractors."28
- + soper, tee district of Columbia
reu citin ve. u , with approval,
affirmed the a (LET NERB 817) ts
Retail Clerks Union 88 v. N.L.R.B.,
ras
supra, holding that a clause of the union
27. (cont.) strike and by coercing
McCormick, with an object of forcing .
McCormick to enter the prohibited agreement.
28. The court distinguished and held valid
a “work allocation clause," requiring that
meat deliveries in Chicago be made by local
employees covered by the union contract, on
the ground that it had a og work
preservation objective, that involved
recapture of work (as distinguished from
work acquisition, said the court) which the
local deliverymen had lost when meat packers
moved out of Chicago, 335 F.2d at 712-714.
But note also a distinction placed on this
holding in on No. 2b r
D. Fortuna
e union contract clause
e
violated Sec. 8(e), and union action (cont.)
77a
contract with retail stores, requiring that
demonstrator employees of suppliers of the
stores must comply with the contract and
become union members, was a union signatory
clause in violation of Section 8(e) of the
Act, and that union striking and picketing
to obtain the clause constituted violations
of Section 8(b)(4)(i) amd (ii)(A) and 8(b)
(3) of the Act.
clause o ée union contract with employer
distributors of dairy products required that
all jobbers delivering milk for the dis-
tributors shall be members of the union.
The Board held that the clause violated
Section 8(e) of the Act since it required
the distributors to compel the jobbers, whom
it found to be independent contractors, to
become members of the union. It was found
that the objective of the clause was secondary
in nature - enhancement of the union's
institutional interests - and a means to use
one employer to coerce seif-employed persons
to become union members.
From the Sovegnene, it would therefore
appear that article 24 of the union contract
in this case, requiring the independent
contractors of Santini to become employees
of Santini and members of the Union, in its
~ oy and effect violates Section 8(e) of
the Act.
75. cont.) violated Sec. 8(b)(4)(i) and
(11) (A) (B), because the clause and action
were viewed as an attempt to “recapture”
work not performed by bargaining unit
employees.
78a
Section 8(e) makes it an unfair labor
practice to “enter into" any such forbidden
agreement. Article 24 first came into
being in April 1971. The charges in this
case were filed November 8, 1972. Never-
theless, the violation of “entering into"
the unlawful peas, prohibited by
Section 8(e), is established when a respond-
ent, whether union or employer, reaffirms
the illegal agreement or insists on its
enforcement within the 10(b) period, namely,
within the 6 months prior to the filing of
the charge. Dan McKinney Co., 137
649, 653-657 T1962); MII Drivers and Dair
Sea Local Union No. 537, 147 NLRB
Here, both the Union and Santini
reaffirmed, and thereby entered into, the
unlawful article of the union contract well
within the 6-month period before November
8, 1972, as detailed under heading C above.
Thus, the Union notified both Santini and
its contractors of the necessity to comply
with article 24 in August 1972; warned
Santini to comply in woomee 1973; engaged
in work stoppages and threatened more to
obtain compliance in October and November
1972; and demanded that Santini terminate
the contracts of thirteen contractors
who refused to join and pay dues to the
Union in November 1972. Santini, on its
part, requested the contractors to renego-
tiate their contracts in tember 1972;
agreed with the Union to solicit and
solicited union memberships from its con-
tractors in October and November 1972; and
refused to permit loading or unloading by
contractors who would not join the Union
in October and November 1972. The violation
of Section 8(e), by both the Union and
Santini was established.
79a
F. 8(b) (4) Violations22
For the purposes of this case, Section
8(b) (4) (i) and (1i)(A) forbade the Union
from engaging in or inducing strike action
or threaten or coercing an employer on
two counts: (1) where an object was to
require an employer or self-employed —
son (Santini's contractors) to join the
Union, and (2) where an object was to
require an employer or self-employed person
(Santini) to enter into the “hot cargo
agreement prohibited by Section 8(e); and
Section 8(b)(4)(i) and (ii)(B) forbade the
Union from engaging in action to achieve
the secondary objectives it had sought to
impose in advance through the agreement
that contravened Section 8(e).
29. Section 8(b)(4)(i) and (ii)(A) and (B)
provides as follows:
8(b) It shall be an unfair labor practice
for a labor organization or its agents-
(4) (i) to “- in, or to induce or
encourage any individual employed by any
person engaged in cdmmerce or in an
industry affect commerce to engage in,
a serihe or a — in the course of his
employment to use, manufacture, process,
transport, or otherwise handle or work on any
goods, articles, materials, or commodities
or to perform any services; or (ii) to
threaten, coerce, or restrain any person
aged in commerce or in an industry
affect commerce, where in either case an
7 ; = - a
A orcing or requir
or self-employed person to join any labor
or employer organization or to enter into
any agreement which is prohibited by (cont.)
80a
As noted, under heading E, Supra, in
Pyle and its remand oipoway Truc ivers
cal 107, and in Reta erks a 8,
ere the union in each case engaged in
a strike to obtain a clause forbidden by
Section 8(e) that included compelling self-
employed persons or employees of another
employer to become union members, the Board
and courts found violations of Section 8(b)
(4) (i) amd (11) (A) (as well as violations of
Section 8(e)).
NURB 925 (1961), enfd. 302 F.2d 897 (C.A.D.C.,
1962), the Board and court found violations
of both Section 8(b)(4)(A) and (B). In that
case, Gallagher was a trucking company that
did local cartage in the Philadelphia area
with its wage employees, and longer distance
over-the-road hauling of stell, that included
points in Pennsylvania and New Jersey using
independent contractor owner operators who
were paid on a ton-mile basis. The union
25. Yeont.) section 8(e):
(B) forcing or requiring any person to
cease using, selling, handling, transporting,
or otherwise dealing in the products of any
other producer, processor, or manufacturer,
or to cease doing business with any other
person, or forcing ay any other
employer to recognize or bargain with a labor
organization as the representative of his
employees unless such labor organization has
been certified as the representative of such
employees under the provisions of section 9.
Provided, That nothing contained in this
clause (B) shall be construed to make unlaw-
ful, where not otherwise unlawful, any
primary strike or primary picketing...."
8la
struck for a clause in its contract with
Gallagher which, the Board found, would
curtail deliveries by independent con-
tractors in a 40-mile radius of Philadelphia
and cause Gallagher to cease doinp business
with the independent contractors. The Board
found that the contract provision would con-
travene Section 8(e) of the Act, and that
the strike by the union with an object of
elling inclusion of the provision
violated Section 8(b)(4)(i) and (ii) (A) of
the Act. And, said the Board, since a
further object of the strike necessarily
was the forcing of Gallagher to cease doing
business with the independent contractors,
the union also violated the secondary boy-
cott provsesen in Section 8(b)(4)(i) and
(ii) (B), 131 NLRB at 932.
In the case at bar, the Union has engaged
in work stoppages at sgneens © plese of
business and threatened more, th an object
of forcing the independent contractors o
Santini to join the Union, clearly in viola-
tion of Section 8(b)(4)(i) and (ii) (A).
Likewise, the Union's coercive insistence
on Santini's compliance with the illegal
article 24, including work stoppag
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