Okeh Caterers

National Labor Relations Board - Board Decisions

Nov 7, 1969

179 N.L.R.B. 535 (N.L.R.B. 1969)

OKEH CATERERS
Okeh Caterers ; Jameson, Inc.; and Frumento, Inc.'
and Produce, Refrigerated & Processed Foods and
Industrial Workers, Local Union No. 630,
International Brotherhood of Teamsters,
Chauffeurs , Warehousemen & Helpers of America,
Petitioner . Case 21-RC-1 1130
November 7, 1969
DECISION AND DIRECTION OF
ELECTION
BY MEMBERS FANNING, BROWN, AND ZAGORIA
Upon a petition duly filed under Section 9(c) of
the National Labor Relations Act, as amended, a
hearing was held before Leonard N. Cohen, Hearing
Officer of the National Relations Board. The
Employers and the Petitioner filed briefs which have
been considered by the Board in making its decision
in this case.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
powers in connection with this case to a three-
member panel.
The Board has reviewed the Hearing Officer's
rulings made at the hearing and finds that they are
free from prejudicial error. They are hereby
affirmed. 3
Upon the entire record in this case,' the Board
finds:
1. Okeh Caterers' is a corporation which is
engaged in the manufacture and sale of packaged
food products and the providing of industrial
catering services to its customers. Okeh's business
offices and its principal facility are located in Bell,
California,' Jameson, Inc.,' and Frumento, Inc.' also
provide industrial catering services for customers
and operate their trucks out of Okeh's Bell location'
Petitioner contends that Okeh, Jameson, and
Frumento operate as a single-integrated enterprise
out of Okeh's Bell facility and that accordingly, the
Board should find them to be point employers for
'During the hearing, Petitioner amended its petition to include Jameson,
Inc and Frumento , Inc as joint employers with Okeh Caterers While the
hearing was still in progress , appearances were entered on behalf of
Jameson, Inc and Frumento, Inc
'We find no merit in the Employers ' contention that the Hearing Officer
committed prejudicial error by denying the Employers' motion to strike
from the record certain remarks of Petitioner 's counsel which allegedly are
abusive, intemperate and scandalous in nature The Hearing Officer acted
within his discretion in denying this Motion and, we can perceive no basis
upon which it could be said that the ruling was prejudicial to the
Employers' case
'The Employers have moved to correct the transcript in certain respects
In the absence of any opposition thereto, the Motion is hereby granted
'Hereinafter referred to as Okeh
'Okeh also maintains smaller facilities in Anaheim and Burbank,
California
'Hereinafter referred to as Jameson
'Hereinafter referred to as Frumento
'Jameson owns 34 trucks, 31 of which operate out of Okeh's Bell
facility Frumento owns 5 trucks , 3 of which use the Bell property
535
purposes of jurisdiction and unit. The Employer
argues that the operations of the three corporations
are separate and distinct and therefore no joint
employer finding would be justified.
With respect to this issue, the record evidence
establishes that although Okeh, Jameson, and
Frumento are separately owned,' they represent
themselves to the public as a single enterprise. All
three corporations list Okeh's Bell facility as their
business address and Okeh provides rent free offices
for Jameson and Frumento and allows them the
complete use of its facilities. The trucks owned by
Jameson and Frumento display the sign, "Okeh
Caterers" on the door and are otherwise
indistinguishable from the trucks operated by Okeh.
Jameson and Frumento trucks are repaired and
serviced at Okeh's garage for which service a fee is
charged. A common insurance policy covering
liability and damage to both Okeh and Jameson's
trucks' ° is maintained by Okeh which monthly bills
Jameson for its share of the premiums. Okeh also
has an arrangement with Jameson and Frumento
whereby Jameson and Frumento are given a rebate
on the amount of food products purchased from
Okeh by Jameson and Frumento drivers. Finally,
the integrated nature of the operation is
demonstrated by the working relationship between
the corporations and their respective lessee drivers.
Although each corporation contracts separately for
its own route drivers, all three corporations use
identical lease forms, and it appears that all three
corporations enter into the same type of contractual
arrangement with their drivers. Also, the individual
driver may be in some cases responsible to the
management personnel of a corporation other than
the one with which he has contractual relations, for,
as Curtis Hoffman, the Employer's principal witness
testified, the district managers and supervisors fill in
for one another among the three corporations."
On the basis of the foregoing, and the entire
record, we find that Okeh, Jameson, and Frumento
are joint employers engaged in a single integrated
enterprise and that the combined total of their
operations should be considered for jurisdictional
purposes.'
At the hearing, it was stipulated that Okeh is a
California corporation which is engaged in the
manufacture and sale of food products at wholesale
and that such sales exceed $500,000 annually. It was
further stipulated that Okeh annually _purchases
products valued in excess of $50,000 from firms
'Mr Edward Jameson and Mrs Josephine Frumento are the sole owners
and shareholders in their respective corporation and both Mr Jameson and
Mrs Frumento are minority shareholders in Okeh In addition, Mr
Jameson is the secretary-treasurer of Okeh and a member of its board of
directors
"Frumento 's trucks are covered by a separate insurance policy
"At a later point in this testimony, Hoffman explained that because
Frumento has only one operating manager, it does not assume
responsibility for the operation or control of Okeh or Jameson drivers
"City Cab Company , 167 NLRB No 97, compare International Union
of Operating Engineers . 169 NLRB No 30
179 NLRB No. 84
536 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
directly outside the State of California. No
jurisdictional information was presented with respect
to Jameson and Frumento. However based upon the
foregoing stipulation and our finding that the three
corporations are joint employers, we find that Okeh,
Jameson, and Frumento are employers engaged in
commerce within the meaning of the Act, and that it
will effectuate the purposes of the Act to assert
jurisdiction herein.
2. The labor organization involved claims to
represent certain employees of the Employers.
3. A question affecting commerce exists
concerning the representation of certain employees
of the Employers within the meaning of Section
9(c)(1) and Section 2(6) and (7) of the Act
4. Petitioner has requested a unit of all the
catering truckdrivers employed by Okeh, Jameson,
and Frumento at their Bell, California, facility. The
Employers" contend that the catering truckdrivers
are independent contractors and not employees.
Concerning this issue, the record shows that the
catering truckdrivers operate under lease
arrangements with their respective Employer.' 4 The
lease agreement which as previously noted is the
same for all three Employers provides, inter alia,
that the lessor will furnish to the lessee a catering
truck and customer route in consideration for which
the lessee agrees to pay a daily rental fee to the
lessor. The lease, which is in force on a month to
month basis but may be terminated by either party
at any time for cause, also provides that the
customer stops supplied by the lessor remain its
property and by an addendum to the agreement, the
lessee agrees that any customers solicited by him
also become the property of the lessor. Although the
lease agreement provides a fixed method of
determining the lessee's rental fee, no effect is given
to this provision. Instead, the lessor determines the
daily rental based upon a variety of factors and the
lessor may raise or lower the lessee's rental fee when
in its judgment circumstances so warrant.
By way of initial investment, the catering
truckdriver is required to furnish very little. He
must post a $200 cash bond to protect the Employer
against future liability and he must also have
sufficient funds to purchase his first day's inventory
and to make change for customers, a total
investment of approximately $175. Thereafter, the
catering truckdriver is billed on a daily basis for his
previous day's purchase of food products from
Okeh, his daily rental fee, and miscellaneous
expenses such as ice and truck lubrication charges.
Although there is a conflict in the testimony as to
the extent to which the catering truckdrivers are
required to purchase their inventory from Okeh, all
"For the reasons previously expressed, we find Okeh, Jameson, and
Frumento to be joint employers for purposes of unit as well as jurisdiction
"Okeh does not have signed lease agreements with all of its catering
truckdrivers because several of these individuals were operating under
leases with companies which were later absorbed by Okeh and they were
not required by Okeh to enter into a new lease agreement
drivers purchase at least a portion of their supplies
from Okeh and as Okeh's vice president and general
manager Curtis Hoffman admitted, when a driver
buys more than 30 percent of his inventory from
outside sources, the route is no longer profitable to
Okeh. In situations where the particular driver's
"buying out" practices become excessive,15 he will be
requested to increase his order with Okeh, and in
the event such persuasion fails, the driver may find
that his rental fee has been increased.
Certain of the characteristics usually found in an
independent contractor relationship are present here.
For example, the driver in most instances
determines the retail price of the items he sells to
customers,16 and hence, his margin of profit is
determined by price he receives for his products less
expenses. The driver also bears the loss for items he
is unable to sell as well as the losses which might be
occasioned by theft, damage to his products," or
debts owed to him by customers to whom he has
determined to extend credit. In addition as a cost of
doing business, the driver may be required to
purchase a health permit and business licenses by
State and local authorities. Drivers can and do
solicit new business and on occasion, they swap or
trade customer stops with other drivers. Also the
catering truck leased by the driver is completely at
his disposal at all times. 18 He may keep the vehicle
at the Bell location or elsewhere, and when the
driver is not servicing regular route customers, he
can, if he so desires, perform catering services on his
own behalf without payment of any additional
charge to his Employer. The drivers also do not
share in the benefits Okeh provides for its
employees, such as vacation time, pension benefits,
and health and welfare coverage. Further, no
deductions are made from the drivers' earnings for
purposes of tax withholding, disability insurance,
unemployment compensation, and social security
coverage.
From the foregoing, it cannot be disputed that the
drivers exercise a considerable degree of
independence in their operations, and the business
acumen of the particular driver will have a direct
bearing upon the earnings he will derive from such
activity. However, it is also clear that the ultimate
and effective control over the relationship resides
with the Employers. As indicated earlier, the driver
has no substantial investment in the equipment" or
"Almost all drivers purchase at least a portion of their supplies from
sources other than Okeh
"In some cases, Okeh negotiates an arrangement with the customer
whereby in return for the right to service the customer stop, Okeh agrees
to provide a menu list of items at fixed prices for a period of usually I
year
"Because the catering trucks remain the property of the Employers,
collision and liability insurance coverage is carried by the Employers
However, the driver is responsible for the first $100 of a liability claim
"in the event the driver experiences a breakdown while servicing the
route, the Employers will provide free towing service and will make a
substitute truck available
"The value of a catering truck will range from $5,200 to $6,500
OKEH CATERERS 537
route he services, both of which remain the property
of the Employer. His arrangement with his
Employer can be terminated for cause at any time
by the Employer and in such an event, the only
obligation incurred by the Employer is its agreement
to purchase the driver's inventory and compensate
him for any equipment he had added to the catering
truck. Also as the rental fee charged to the driver is
subject to change at any time, the Employers at
least have it within their power to limit the driver's
profit by demanding a higher rental fee Likewise,
although the driver is not theoretically required to
purchase his supplies from Okeh, the driver can be
discouraged from engaging in excessive "buy out"
practices by increasing the rental fee.20 In these
circumstances, we do not believe it can properly be
said that the driver exercises the type of control
characteristic of an independent contractor.
Accordingly on the basis of the foregoing and the
entire record, we conclude that the Employers have
reserved the right to control the manner and means
as well as indirectly the result of the work
performed by the catering truckdrivers, and that
these drivers are therefore employees of the
Employers and not independent contractors.21
As an alternative position, the Employers contend
that if the catering truckdrivers are not found to be
independent contractors, the Board should conclude
that the catering truckdrivers are supervisors within
the meaning of the Act and dismiss the petition on
this basis. With respect to this issue, the record
shows that most of the catering truckdrivers use the
services of "load boys" who clean the truck and
assist the driver in the early morning by performing
such functions as loading ice on the truck, starting
the coffee, firing the truck with butane and starting
the ovens. The driver determines himself whether or
not to use the services of a load boy and the
compensation to be paid. However, load boys
usually receive between $1.50 and $2 per day for
their services. Some of the drivers also use helpers
"in order for the route to be profitable to the Employer , the driver must
purchase a certain percentage of his inventory from Okeh
"Cf Mister Softee of Indiana, Inc. 162 NLRB 354
to watch for theft at certain customer stops or to
assist the driver in servicing the customers at a stop
where the volume of business is heavy. As with the
load boys, the driver determines whether or not a
helper is required and for what purpose. The record
shows that often the helper is one of the driver's
customers and that the payment for such services is
in the form of free food items, although the helper
may in some instances receive a cash payment for
his services.
The driver alone makes the decision whether or
not to use the services of load boys and/or helpers
and it is conceded that under no circumstances are
such individuals considered to be employees of the
Employers. We find that the catering truckdrivers
exercise no supervisory authority over employees of
the Employers, or "in the interest of the Employer"
and, we conclude that they are not supervisors
within the meaning of the Act.22
On the basis of the foregoing, and the entire
record, we find that a unit of the following
employees is appropriate for the purposes of
collective bargaining within the meaning of Section
9(b) of the Act.
All catering truckdrivers employed by Okeh
Caterers, Jameson, Inc., and Frumento, Inc. at their
Bell California location, excluding all other
employees, guards and all supervisors as defined in
the Act.
[Direction of Election23 omitted from publication.]
"See El Monte Hay Market, Inc, 173 NLRB No 170, Newsday Inc,
171 NLRB No 184
"In order to assure that all eligible voters may have the opportunity to
be informed of the issues in the exercise of their statutory right to vote, all
parties to the election should have access to a list of voters and their
addresses which may be used to communicate with them Excelsior
Underwear Inc, 156 NLRB 1236, N L R B v Wyman -Gordon Company,
394 U S 759 Accordingly, it is hereby directed that an election eligibility
list, containing the names and addresses of all the eligible voters , must be
filed by the Employer with the Regional Director for Region 21 within 7
days of the date of this Decision and Direction of Election The Regional
Director shall make the list available to all parties to the election No
extension of time to file this list shall be granted by the Regional Director
except in extraordinary circumstances Failure to comply with this
requirement shall be grounds for setting aside the election whenever proper
objections are filed