National Labor Relations Board v. Steinberg

• Decision Date: 17 July 1950
• Docket Number: No. 12814.,12814.
• Citation: 182 F.2d 850
• Parties: NATIONAL LABOR RELATIONS BOARD v. STEINBERG et al.
• Court: U.S. Court of Appeals — Fifth Circuit

182 F.2d 850 (1950)

NATIONAL LABOR RELATIONS BOARD v. STEINBERG et al.

No. 12814.

United States Court of Appeals Fifth Circuit.

June 7, 1950.

Rehearing Denied July 17, 1950.

C. Paul Barker, Special Counsel, National Labor Relations Bd., New Orleans, La., David P. Findling, Associate Gen. Counsel, A. Norman Somers, Assistant Gen. Counsel, National Labor Relations Board, Washington, D. C., for petitioner.

Haywood H. Hillyer, Jr., New Orleans, La., for respondent.

Before HOLMES, McCORD and BORAH, Circuit Judges.

BORAH, Circuit Judge.

The question here is whether certain named fur trappers are employees of respondents within the meaning of the National Labor Relations Act. This question arises upon a petition of the Labor Board¹ for enforcement of its order issued against respondents on July 14, 1948, following the usual proceedings in accordance with Section 10 of the Act. The Board, one member dissenting, found the trappers to be employees and further found that the employer interfered with, restrained, and coerced its employees in violation of Section 8(a) (1) of the Act and discharged and refused to hire employees because of their union membership in violation of Section 8(a) (3) of the Act. Accordingly, the Board ordered respondents to cease and desist not only from the unfair labor practices found but also from in any manner interfering with, restraining, or coercing their employees in the exercise of the rights guaranteed in Section 7 of the amended Act. In addition, the Board ordered the employer (1) to offer employment and reinstatement to those ten named trappers unlawfully discriminated against; (2) to make the trappers whole; and (3) to post the usual appropriate notices. Denying the commission of the charged unfair labor practices and reurging their motion to dismiss the charges for lack of jurisdiction, respondents insist that the trappers herein involved are not employees within the meaning of the Act but are independent contractors and sublessees to whom the coverage of the Act does not extend.

The substance of the evidence was as follows: The low swamp and marsh lands of Southwestern Louisiana stretching from the delta lands of the Mississippi river westward along the Gulf of Mexico to the State of Texas is a natural habitat for the muskrat and other fur-bearing animals. Prior to World War I a system of "free-trapping" prevailed in this area, and under this system the trappers went upon the land and staked out desirable trapping lands for the season, and held it by force, if they were able, against the claims of others. This system continued until around 1918 or 1919, when the demand for muskrat pelts and the corresponding increase in their value prompted landowners to take advantage of this source of revenue by leasing their lands for trapping purposes. This leasing system prevails to the present day and one such lessee is Steinberg and Company.

The respondents, Morris Steinberg and Julian Leslie Steinberg, a Louisiana partnership doing business as Steinberg and Company, are engaged in the business of buying and selling raw furs² and in leasing and subleasing of lands for trapping purposes. At the time of the hearing in this case, respondents had approximately one million acres of trapping lands under lease from large landowners. The leases held by respondents gave them only the right to take from the lands the fur-bearing animals ensnared thereon and the consideration therefor was either a cash rental, or a rental based upon a percentage of the proceeds of the sale of the pelts taken from the lands, subject to a guaranty of a minimum amount. Several of the leases require that the lands be sublet to trappers in such manner as to enable respondents to secure the possession for sale of the furs captured, unless, with the lessor's consent, a different arrangement is necessitated by physical location of any of said lands, or for other reasons.

The respondents enter into agreements with parties called agents, or fur-buyers, under the terms of which these agents, in the area to which they are assigned in the field, are given the authority to sublease these lands to trappers. In addition, the agents, who are licensed fur-buyers under State law, patrol the lands to prevent trespass and perform such other duties as are hereinafter stated. The subleases which the agents negotiate with the trappers are in writing and are limited to one trapping season which is normally of seventy-five days duration, and this form of agreement has been used generally by respondents since 1933. Prior to that time contracts containing language of employment were used, and the Board found that the change in the form of the instruments to lease agreements was not occasioned by any improper motive. This conclusion was fully warranted because all private landowners and school boards were at that time customarily using the lease form of agreement in Louisiana. The record also shows that there was no fixed manner or method of issuing the written subleases to the trappers; some were issued before the trapper went on the land, other agreements were received by the trapper in the marsh, and some were even issued after the trapping season had begun.

A few weeks before the trapping season opens, the trapper commences to gather his equipment together. He cleans up his camp boat and such floating equipment as he possesses, lays in a supply of food, fuel, traps, and other necessities, and then, accompanied by his family, he starts out for the marsh lands. Much of the trapping land is many miles from any highway or road and the sole means of communication is by boat. Upon arrival at his trapping grounds and after setting up his camp, the trapper burns off the dead marsh grass, primarily so that he can get around over the land and run his trap lines. The burning also facilitates the growth of the young three-cornered grass, the roots of which are the principal food of the muskrat. The trapper also cleans out ditches and drains to enable him to travel in his pirogue without hindrance. Having in the exercise of his own judgment and without compensation completed such preliminary preparations as he deems necessary, the trapper is now ready to go to work. At the opening of the season he set his traps along the "rat runs" and at other places where his experience has taught him that the muskrats are likely to be. Each morning he is up at dawn, removing the trapped muskrats and resetting the traps. Insofar as the actual trapping operation is concerned the trapper is left entirely to his own devices. The trapper is assisted in his work by his family, with his wife and children taking an active part in running the traps, skinning the muskrats and in caring for the pelts.

Respondents' agents visit the camps periodically³ to grade, pay for, and pick up the furs that have been prepared for market. When the agent calls at the camp, either the trapper or his wife or some relative is generally present to deliver the furs to the agent. The agent then examines the furs and separates them into various piles according to their grade. Having determined the number of pelts in each grade, he then calculates their total value according to a price list furnished him each week by respondents.⁴ From the total value, the agent subtracts the thirty-five percent rental due respondents and issues to the trapper a draft on Steinberg and Company for the sixty-five percent balance, which represents the trapper's gross profits for the period.

As previously stated, the trapper furnishes all of his own equipment and supplies, and such investment, exclusive of the value of his camping quarters and boats, may amount to as much as three hundred dollars for the seventy-five day season.⁵ Some of the trappers make but little profit, some lose money, and some make in excess of four thousand dollars during the short seventy-five day season. The amount of profit, of course, is directly related to the productivity of the land, the industry, skill and ingenuity of the trapper and the amount of assistance he obtains from his family and others during the season. After the trapping season is over, the trappers pursue other occupations, such as fishing, boat rental, painting, carpentry, and the like. It also appears from the evidence before the Board that respondents were advised by the proper authorities that they were not obligated to pay, and in consequence they do not pay Social Security or Unemployment Insurance taxes nor deduct withholding taxes.

Respondents contend that the trappers in the present case are sublessees under Louisiana law. The Board, however, is unwilling to concede the existence of this relationship and seemingly attaches considerable importance to the fact that the lands, the boundaries of which are well known to the parties, are not always accurately described in the contracts,⁶ and they point out that some of the leases were not properly signed and authenticated by the lessee. We think that these irregularities are of no great importance because under local law such leases may be oral.⁷ Article 2670 of the Civil Code of Louisiana provides that in the contract of lease three things are necessary: the thing, the price and the consent; and Article 2671 provides that the price may consist of a portion of the fruits yielded by the thing leased. It is also the law of Louisiana that trapping privileges may be the subject of a valid lease.⁸ The contention that there is no fixed price or rental stipulated in the present lease is without merit. The price is specified in the agreements and is in strict accordance with the requirements of Louisiana Act No. 193 of 1940.⁹ The contracts here purport to be subleases and the agreements being susceptible of that construction, the court should be slow to assign any other term to the relationship resulting from the contracts, unless it clearly appears that this relationship must be rejected in favor of definitions...