N.L.R.B. v. H & H Pretzel Co.

• Citation: 831 F.2d 650
• Decision Date: 19 October 1987
• Docket Number: 86-5210,I,Nos. 86-5182,No. 52,52,s. 86-5182
• Parties: 126 L.R.R.M. (BNA) 2712, 107 Lab.Cas. P 10,202 NATIONAL LABOR RELATIONS BOARD, Petitioner, Respondent, v. H & H PRETZEL COMPANY, Respondent, Bakery Drivers Union Localnternational Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Petitioner.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 650

831 F.2d 650

126 L.R.R.M. (BNA) 2712, 107 Lab.Cas. P 10,202

NATIONAL LABOR RELATIONS BOARD, Petitioner, Respondent, v. H & H PRETZEL COMPANY, Respondent, Bakery Drivers Union

Local No. 52, International Brotherhood of

Teamsters, Chauffeurs, Warehousemen and

Helpers of America, Petitioner.

Nos. 86-5182, 86-5210.

United States Court of Appeals,

Sixth Circuit.

Argued March 23, 1987.

Decided Oct. 19, 1987.

George H. Faulkner (argued), Faulkner and Riordan, Cleveland, Ohio, for Bakery Drivers Union et al.

Elliott Moore (argued), Deputy Associate General Counsel, N.L.R.B., Washington, D.C., for N.L.R.B.

Charles W. Lazzaro (argued), Lazzaro, Giusto and Lazzaro, Cleveland, Ohio, for H & H Pretzel Co.

Before KENNEDY, RYAN and NORRIS, Circuit Judges.

RYAN, Circuit Judge.

This is a labor dispute in which the NLRB seeks to enforce an order issued against H & H Pretzel Company (H & H), and the petitioner Bakery Drivers Union Local No. 52, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (the union) seeks to set aside one portion of the order (No. 86-5210). Respondent H & H (in No. 86-5182) resists enforcement by contesting the remainder of the order. We conclude that there was substantial evidence to support the NLRB's determinations and therefore enforce the order.

I.

H & H, a distributor of pretzels and other snacks, had ten successive collective bargaining agreements with the union, beginning in 1953. These agreements covered H & H's driver-salesmen, who drove the trucks which delivered H & H products in the Cleveland area. The last of the agreements, effective from July 1, 1979, to July 2, 1982, provided for a four-day work week, base pay of $210 per week, a twelve percent commission, pension and health and welfare coverage, and certain other protections for employees.

On March 22, 1982, the union wrote to H & H to propose a meeting to renegotiate the collective bargaining agreement. On May 18, 1982, the union wrote again, to the same effect. Through its attorney, H & H responded to this second letter as follows:

Pursuant to our telephone conversation approximately one month ago, I advised you that the above-captioned H & H Pretzel Company, upon expiration of their agreement with you commencing July 1, 1979 and terminating on July 2, 1982, would not be renegotiated. I further advised you that it was my client's intention to either sell or lease the vehicles to the drivers, and assign them specific routes so that they would become independent contractors under the terms of an agreement to be presented to each of them. I was advised by you at that time to wait a few weeks until such time as you would make a proposal regarding a new agreement. To date, you have not done that, and the time is drawing near for the present contract to terminate.

I wish to further advise you that it is still my client's intention to sell or lease the vehicles and assign routes on a first-come, first-serve basis, with preferences and priority given to the present employees. Inasmuch as my client is still bound by your agreement and your union is bargaining agent for them, I would expect you to fully represent them until July 2, 1982, when the present contract expires. I trust that you will meet with your members and discuss this matter with them. Failure to hear from you and/or the present employees by June 1, 1982 will be taken to mean a lack of interest on your part and also on the part of your present members.

My client will advertise for drivers and take applications starting June 2, 1982 for all routes except for those which the present employees have made application.

On June 3, 1982, a negotiation session was held. The union presented a proposal calling for increased driver base pay, commissions, and benefit contributions. H & H responded by presenting a proposed agreement to be entered into with all drivers individually, which provided in part that:

The relationship of Dealer to Distributor shall be that of independent contractor, and the employees or agents of one party shall not be the employees or agents of the other party.

No substantive discussions were held at this session. After the meeting, the union presented the "independent contractor" agreement to the drivers, who rejected it. As the May 18 letter from H & H had promised, soon after June 2, H & H began advertising and taking applications for "independent contractors."

After learning that the drivers had rejected the "independent contractor" agreement presented through their union, the H & H attorney wrote two separate letters, one to the union president and the other to the union's attorney, both dated June 17, 1982. To the union president, he expressed distress at their failure to communicate at the June 3 meeting, stating at one point:

I tried to explain that it was an economic impossibility to continue under the terms of the existing contract, and that the terms of your new proposal would be devastating to the company. You showed no interest in our plight, nor did you make any attempt to understand.

To the union's attorney, he wrote in part:

Enclosed you will find the gross sales, wages, fringes, net profit and net profit percent of gross sales for the years 1974 through 1981. The figures submitted were taken from tax returns filed with the Internal Revenue Service, and you are welcome to any and all company records if you care to substantiate same.

When I left the meeting of June 3, 1982, it was my understanding that there would be further negotiations on the part of the employer and employees. It is apparent from the actions taken that I was in error. I might further state that the following accounts of the employer, to-wit: Fisher Foods, Lawsons, and Pic-n-Pay, have shown a steady decrease in their volume as pertains to purchases from the company. There is no indication that this trend will be reversed. The new proposal submitted by Local 52 increases the costs of the company in the face of declining gross sales, and inasmuch as the company lost money in 1981, acceptance of your new proposal would prove to be disastrous. I would be most happy to meet with you at any time to explain to you the economics involved, and so stated to you at our meeting on June 3.

The letter went on to offer access to "any other documentation that you would need in order to fully appreciate the financial condition of the employer."

An unproductive meeting was held on June 23, at which the parties agreed only to submit revised proposals. Evidently, it was not until the next day that the union president first received a copy of the financial information sent to the union's attorney. He responded with calculations challenging the accuracy of the company's figures, and a new contract proposal moderating the union's demands for higher pay.

On the following day, June 25, H & H distributed employment applications to all of the drivers, stating that all those who wished to stay on with the company as "independent contractors" must return the applications by June 28.

On June 28, H & H submitted a counterproposal, offering for the first time to continue the employer-employee relationship essential to the continuance of union representation of the drivers, but also setting forth significant concessions for the drivers: an increase in the work week from four days to five (without a raise in base pay), a decrease in the commission percentage, and elimination of all benefit contributions by the employer.

The parties met for the third and final time on June 29. H & H rejected the union's proposal out-of-hand as too expensive, but there was some discussion of the counterproposal, which the union agreed to submit to its membership. The (ALJ) found that this counterproposal "put the employees in just about the same position insofar as earnings [are] concerned" as the "independent contractor" agreement would have. All the parties to this appeal agree that both proposals called for economic concessions from the drivers of approximately thirty percent. On the next day, June 30, the membership rejected the counterproposal.

The following day, July 1, the union president had a letter hand-delivered to the H & H attorney, notifying him of the vote and requesting another bargaining session. On the same day, that company attorney mailed a letter to the union, stating that the union's status as sole bargaining agent for the H & H drivers would terminate on July 2, along with the last collective bargaining agreement, and that even if the drivers continued to be employees after their nominal transformation into "independent contractors," those employees would not be represented by the union unless they acted to reinstate the union as their representative.

This letter was received by the union president on July 2. He sought to contact the H & H attorney by telephone that day, without success, and tried to visit the H & H terminal, but could not get in. In a letter dated July 14, 1982, H & H stated that the union did not represent any of its employees and denied that it any longer had any driver-salesmen employees.

Three of the twelve drivers in the union signed the "independent contractor" agreement and were kept on by H & H as such, beginning July 6. The other nine drivers were replaced with new hires.

Under the new agreements, the drivers lease their trucks from a company owned by the owner of H & H, and the drivers' work is extensively controlled by H & H. H & H sets the work week, the frequency of calls on customers, the color and design of trucks, the cleanliness of drivers and trucks, and the qualifications of anyone hired by the drivers. H & H also apportions customers among the drivers and supplies much of the equipment used by them.

The union filed an unfair labor practice complaint against H & H, charging that the company violated Sec. 8(a)(3), (5) and (1) of the Labor Management Relations Act (LMRA) by withdrawing recognition...