Orange Belt District Council of Painters No. 48

National Labor Relations Board - Board Decisions

Jul 1, 1965

153 N.L.R.B. 1196 (N.L.R.B. 1965)

1196 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
partitions on the Lincoln Towers and Federal Center jobs, and on all
other jobs being performed by, or which may be awarded to, the
Employer in Denver, Colorado, and vicinity.
Orange Belt District Council of Painters #48, AFL-CIO, its af-
filated Local Unions, and its Agents and Calhoun Drywall
Company
Building and Construction Trades Council of San Bernardino
and Riverside Counties , AFL-CIO and Calhoun Drywall Com-
pany. Cases Nos. 21-CC-449-1 and 21-CC-449-2. Judy 1, 1965
SUPPLEMENTAL DECISION AND ORDER
On October 23, 1962, the National Labor Relations Board issued a
Decision and Order in the above-entitled proceeding,' finding, inter
alia, that the Respondent Orange Belt District Council of Painters
#48, AFL-CIO, its affiliated Local Unions, and its Agents (herein
called the Respondent Painters) and the Respondent Building and
Construction Trades Council of San Bernardino and Riverside Coun-
ties, AFL-CIO (herein called the Respondent Council) had engaged in
certain conduct in violation of Section 8 (b) (4) (ii) (B) of the National
Labor Relations Act, as amended, and ordering them to cease and
desist therefrom and to take certain affirmative action, as set forth
herein. Thereafter, pursuant to its Decision of January 30, 1964,
the United States Court of Appeals for the District of Columbia
Circuit vacated the Board's Order and remanded the case to the
Board for the purpose of supplementing the record with additional
evidence .2 On April 28, 1964, the Board issued an Order reopening
the record in this case and directing that a further hearing be held
for the purpose of receiving further evidence in conformity with the
court's remand.
On November 4, 1964, Trial Examiner James R. Hemingway issued
a Supplemental Decision in the above-entitled proceeding, finding that
the Respondents had engaged in unfair labor practices in violation
of Section 8(b) (4) (ii) (B) and recommending that the Board's Order
that they cease and desist therefrom and take certain affirmative action
be reaffirmed and enforced, as set forth in the attached Trial Exam-
iner's Supplemental Decision. Thereafter, the Respondents filed
exceptions to the Trial Examiner's Supplemental Decision and a brief
in support thereof. After the transfer of the case to the Board, the
=139 NLRB 383.
z 328 F. 2d 534.
153 NLRB No. 80.
ORANGE BELT DISTRICT COUNCIL OF PAINTERS NO. 48 1197
parties entered into a stipulation of facts in which they agreed that
the record may be reopened for the limited purpose of the Board's
receiving in evidence the stipulation of the parties.
Pursuant to the provisions of Section 3 (b) of the Act, the Board has
delegated its powers in connection with this case to a three-member
panel [Chairman McCulloch and Members Fanning and Brown].
The Board has reviewed the rulings made by the Trial Examiner at
the reopened hearing and finds that no prejudicial error was commit-
ted. The rulings are hereby affirmed. The Board has considered the
Supplemental Decision, the exceptions and brief, and the entire record
in this case, including the foregoing stipulation of facts, and hereby
adopts the findings, conclusions, and recommendations of the Trial
Examiner with the following additions and modifications.
G. Oberman Company (herein called Oberman), with its principal
place of business and office at Los Angeles, California, is engaged as
a general contractor in the building and construction industry. At all
relevant times herein, Oberman and various building and construction
trades councils, including the Respondent Council, were parties to a
bargaining agreement .3 Paragraphs IV and V of this agreement pro-
vide as follows : 4
IV.
The EMPLOYER agrees that if he shall subcontract any work,
provision shall be made in such subcontract for all of the work per-
formed by said subcontractor coming under the jurisdiction of any
union affiliated with said COUNCILS, to be performed pursuant
to an executed current agreement with the appropriate union hav-
ing work and territorial jurisdiction, affiliated with the COUN-
CIL in which area the work is performed.
V.
The EMPLOYER agrees that in the event he subcontracts any
work and the subcontractor fails to pay the wages or fringe bene-
fits provided under the appropriate agreement with the union
affiliated with the COUNCIL that the EMPLOYER shall become
personally liable for such sums and such sums shall immediately
become due and payable by the EMPLOYER.
Calhoun Drywall Company ( herein called Calhoun ) is a drywall con-
tractor engaged in business in San Bernardino County, California.
On June 7, 1961 , Oberman subcontracted to Calhoun the performance
of certain drywall construction work , requiring work by painters and
3 The Respondent Council comprises all affiliated building trades unions within River-
side and San Bernardino Counties in California. The Respondent Painters is one of the
unions affiliated with the Respondent Council.
4 In the original Board Decision, the text of these clauses was not in evidence ; however,
pursuant to the court's remand, the contract between Oberman and the various councils
was received in evidence at the reopened hearing.
1198 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tapers,5 at a shopping center construction project in San Bernardino
County, California. Although this drywall construction work was
within the "territorial" and "work" jurisdiction of the Respondent
Painters, Calhoun admittedly was not party to a contract with the
Respondent Council, the Respondent Painters, or with any other union
affiliated with the Respondent Council. On or about October 5, 1961,
the Respondents sent a letter to Oberman stating in substance that since
Oberman had subcontracted work to Calhoun, a contractor which had
no agreement with a union affiliated with the Respondent Council, it
would file suit against Oberman for breach of paragraph IV ; and that
since Calhoun had failed to pay the fringe benefits provided under
the "appropriate" agreement with the union affiliated with the
Respondent Council, the Respondent would, unless Oberman made
such payments, picket to enforce paragraph V of the agreement.
In its original Decision, the Board found that paragraphs IV and
V were inseparably linked, paragraph V being "in effect a penalty"
on the contractor for failure to comply with the provisions of para-
graph IV, which was admittedly a hot cargo provision; that the
Respondents' threat to picket Oberman was therefore necessarily
aimed at enforcement of paragraph IV through enforcement of the
"penalty" provided in paragraph V; and accordingly, that by threat-
ening to enforce paragraph V by picketing, the Respondents violated
Section 8(b) (4) (ii) (B) .6 In its consideration of the case, the Court
of Appeals for the District of Columbia Circuit, after restating its
views regarding the scope of permissive primary activity by a union,
noted that the text of paragraphs IV and V was not before it, and that
it was therefore impossible for it to appraise the positions of the various
parties. The court accordingly remanded the matter to the Board to
supplement the record with "the text and details of paragraphs IV and
V plus additional evidence concerning `the employees covered by the
contract' and the specific facts surrounding any contemplated payments
under paragraph V, including who will receive them and to whose
benefit they are to inure." At the reopened hearing, the Trial Exam-
iner received additional evidence, including the text of the contract
between Oberman and the Respondent Council, the text of various
agreements and declarations of trust establishing the Respondent
Painters' vacation and insurance trust funds, and the text of the agree-
ment between the Respondent Painters and the Painters and Deco-
rators Association covering employees of the Association members and
5 The work of tapers consists of taping, with cement and other taping materials, the
joints of wallboards and of preparing the surfaces for painting.
9 The Board therefore found it unnecessary to decide whether , as contended by the Gen-
eral Counsel , paragraph V standing alone was "a hot cargo clause in the construction in-
dustry." The Board also found it unnecessary to decide whether, as found by the Trial
Examiner, the Respondents' threat of court action to enforce paragraph IV was not un-
lawful as the General Counsel did not allege a violation on that basis.
ORANGE BELT DISTRICT COUNCIL OF PAINTERS NO. 48 1199
requiring payments into the foregoing funds. No evidence was
adduced at the hearing as to whether Oberman employed any employ-
ees on this or other jobs and, if so, whether such employees were cov-
ered by bargaining agreements between Oberman and any labor orga-
nizations. However, subsequent to the reopened hearing, the parties
stipulated that Oberman did not at any time have any agreement with
the Respondent Painters and that Oberman did not at any time employ
painters or tapers on the project involved in this proceeding.
In determining the issue before us on remand, which is whether in
these circumstances the above-described conduct of the Respondent
violated Section 8(b) (4) (ii) (B), we note initially that a clause out-
side the scope of Section 8 (e) is primary, and may lawfully be enforced
by means of economic action ; a clause which would otherwise be within
the ambit of Section 8 (e) but which is removed therefrom by virtue
of the construction industry proviso, may be enforced only through
lawsuits and not through economic action.? On the question whether
a given clause is outside the scope of Section 8(e) and therefore pri-
mary, or within the scope of Section 8 (e) and therefore secondary, the
Court of Appeals stated in the instant case (328 F. 2d 534, 538) :
The test as to the "primary" nature of a subcontractor clause in
an agreement with a general contractor has been phrased by schol-
ars as whether it "will directly benefit employees covered thereby,"
and "seeks to protect the wages and job opportunities of the
employees covered by the contract." We have phrased the test as
whether the clauses are "germane to the economic integrity of the
principal work unit," and seek "to protect and preserve the work
and standards [the union] has bargained for," or instead "extend
beyond the [the contracting] employer and are aimed really at
the union's difference with another employer." [Footnotes
omitted.]
Similarly, in Meat and Highway Drivers, etc., Local No. 710, etc. v.
N.L.R.B. (Wilson d Co.)," the court said :
Resolution of the difficult issue of primary versus secondary activ-
ity, as it relates to this case, involves consideration of two factors :
(1) jobs fairly claimable by the bargaining unit, (2) preservation
of those jobs for the bargaining unit. If the jobs are fairly claim-
able by the unit, they may, without violating either Section 8 (e)
or Section 8(b) (4) (A) or (B), be protected by provision for, and
implementation of, no subcontracting or union standards clauses
7 See the court 's opinion in the instant case Orange Belt District Council of Painters
#48, et al. (Calhoun Drywall Company ) V. N.L.R.B., 328 F. 2d 534; Northeastern Indiana
Building and Construction Trades Council ( Centlivre Village Apartments ), 148 NLRB
854; Muskegon Bricklayers Union #5, etc . ( Greater Muskegon General Contractors Asso-
ciation ), 152 NLRB 360 ( Member Fanning dissenting on other grounds).
8335 F. 2d 709, 713-714 (C.A.D.C.).
1200 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
in the bargaining agreements. Activity and agreement which
directly protect fairly claimable jobs are primary under the Act.
Incidental secondary effects of such activity and agreement do not
render them illegal. Thus the "cease doing business" language
in Section 8(e) cannot be read literally because inherent in all
subcontracting clauses, even those admittedly primary, is refusal
to deal with at least some contractors. [Footnotes omitted.]
The Respondents here claim in effect that paragraph V of the agree-
ment between Oberman and the Respondent Council was a "union
standards" clause outside the scope of Section 8 (e) ; that the threat to
picket was directed only to paragraph V; and, therefore, their conduct
was lawful primary activity. In agreement with the Trial Examiner,
we find no merit in this contention.
In the first place, even assuming, as the Respondents contend, that
their threat to picket was directed only to paragraph V, we find no
merit in the Respondents' argument that in attempting to force Ober-
man to pay fringe benefits on behalf of Calhoun's unrepresented
employees, it was engaged in lawful primary activity designed to pro-
tect the "work standards" of members of the Respondent Painters for
the following reasons. First, both the Board 9 and the Court of
Appeals for the District of Columbia Circuit 10 have rejected the argu-
ment that a union may lawfully engage in conduct aimed at aiding
union members generally. In any event, in agreement with the Trial
Examiner, and essentially for the reasons stated by him, we find that
the Respondents' conduct could not have been designed to force Ober-
man to pay fringe benefits on behalf of Calhoun's employees. Thus, as
described more fully in the Trial Examiner's Supplemental Decision,
under the provisions of the relevant agreements, the trustees of the
Respondent Painters' vacation and insurance trust funds were author-
ized to pay premiums and to provide protection only for employees
of employers signatory to a contract with the Respondent Painters.
Indeed, Cox, executive secretary of the Respondent Painters and a
trustee of the funds, testified at the reopened hearing that since Cal-
houn was not signatory to an agreement with the Respondent Paint-
ers, the trustees would not have accepted payments into the funds by
Calhoun to provide fringe benefits for Calhoun's employees under the
trust agreements. It is therefore apparent that the object of the
Respondent's conduct could not have been to compel Oberman to pay
fringe benefits on behalf of Calhoun's employees because such pay-
ments would not have been utilized by the trustees to pay premiums on
0 Greater Muskegon Contractors Association , supra.
10 Meat & Highway Drivers Local No. 710 v. N.L.R.B., supra. District No. 9, Interna-
tional Association of Machinists v. N.L.R.B. ( Greater St. Louis Automatic Trimmers &
Upholsterers Assn.), 315 F. 2d 33 (C.A.D.C.).
ORANGE BELT DISTRICT COUNCIL OF PAINTERS NO. 48 1201
behalf of Calhoun's employees." Accordingly, if such payments would
have been made by Oberman, they would have been as the Trial Exam-
iner found, "strictly a penalty" imposed on Oberman for failing to
subcontract to a union subcontractor.
We further find that the Respondents' threat to picket to enforce
paragraph V was not lawful primary action designed to protect the
"work standards" of unit employees. As stated above, a union engages
in lawful primary activity if it seeks by economic means "to protect
the wages and job opportunities of the employees covered by the con-
tract." In the instant case, the Respondents threatened to enforce
paragraph V in connection with Oberman's having subcontracted dry-
wall construction work to Calhoun. It is therefore apparent that if the
Respondents' conduct were to be held lawful, it would have to be on the
theory that it was designed to protect wages and job opportunities of
Oberman's employees, represented by the Respondent Painters, who
were engaged in work similar to that done by Calhoun; i.e., drywall
construction work. These employees would constitute the "principal
work unit." But Oberman employed no painters or tapers or any other
employees engaged in drywall construction work on this project; and
at no time did Oberman have a contract with the Respondent Painters.
Moreover, Oberman's contract with the Respondent Council neither
defines a bargaining unit nor establishes any terms and conditions of
employment for painters or tapers or indeed for any other employ-
ees.12 In these circumstances, we find that the Respondents' conduct
in seeking to enforce paragraph V by economic action could not have
been designed to protect "work standards" of employees in the princi-
pal work unit.
In view of the foregoing, and the record as a whole, we find that an
object of the Respondents' threat to Oberman was to compel Oberman
to cease doing business with Calhoun because it was not signatory to
a contract with the Respondent Painters; and, accordingly, that by
such conduct the Respondents violated Section 8 (h) (4) (ii) (B).
ORDER
Pursuant to Section 10(c) of the National Labor Relations Act, as
amended, the National Labor Relations Board hereby orders that :
n Cox testified at the reopened hearing that if Oberman had made fringe benefit pay-
ments as demanded by the Respondents , such payments would have been accepted by the
trustees and utilized to pay premiums on behalf of Calhoun 's employees . However, Cox
did not testify that in fact any premiums had ever been accepted by the trustees on be-
half of employees of a nonsignatory employer ; moreover, as noted, under the prop isions
of the trust afire: _ents, the trustees had no authority to utilize such money to pay such
premiums . In view of these circumstances , we cannot accept this testimony of Cox as
establishing the fact that such premiums would have been paid
is T :e record does not show whether Oberman employed classifications of employees
other than painters and tapers , and if so, whether Oberman was party to a contract with
any other union affiliated with the Respondent covering such employees.
796-027-66-vol. 153-77
1202 - DECISIONS OF NATIONAL LABOR RELATIONS BOARD
A. The Respondent, Orange Belt District Council of Painters #48,
AFL-CIO, its officers, representatives, agents, successors, and assigns,
shall :
1. Cease and desist from threatening, coercing, or restraining G.
Oberman Company, or any other employer, by a threat to picket, or
other unlawful conduct, where in any case an object thereof is to force
or require said employer to cease doing business with Calhoun Dry-
wall Company.
2. Take the following affirmative action, which the Board finds will
effectuate the purposes of the Act:
(a) Post at the business offices and meeting halls of the Respondent
Painters and its affiliated locals copies of the attached notice marked
"Appendix A." 1,3 Copies of said notice, to be furnished by the
Regional Director for Region 21, shall, after being duly signed by the
authorized representative of the Respondent Painters, be posted by the
Respondent Painters immediately upon receipt thereof, and be main-
tained by it for 60 consecutive days thereafter, in conspicuous places,
including all places where notices to its members are customarily
posted. Reasonable steps shall be taken to insure that said notices are
not altered, defaced, or covered by any other material.
(b) Sign and mail sufficient copies of said notice to the Regional
Director for Region 21, for posting by G. Oberman Company, the Com-
pany willing, at all locations where notices to its employees are cus-
tomarily posted.
(c) Notify the Regional Director for Region 21, in writing, within
10 days from the date of this Order, what steps the Respondent Paint-
ers has taken to comply herewith.
B. The Respondent, Building and Construction Trades Council of
San Bernardino and Riverside Counties, AFL-CIO, its officers, rep-
resentatives, agents, successors, and assigns, shall:
Cease and desist from threatening, coercing, or restraining G.
Oberman Company, or any other employer, by a threat to picket, or
other unlawful conduct, where in any case an object thereof is to force
or require said employer to cease doing business with Calhoun Drywall
Company.
2. Take the following affirmative action, which the Board finds will
effectuate the purposes of the Act:
(a) Post at the Respondent Council's business offices and meeting
halls, copies of the attached notice marked "Appendix B." 14 Copies
13 In the event that this Order is enforced by a decree of a United States Court of
Appeals, there shall be substituted for the words "a Decision and Order" the words "a
Decree of the United States Court of Appeals, Enforcing an Order."
14 See footnote 13.
ORANGE BELT DISTRICT COUNCIL OF PAINTERS NO. 48 1203
of said notice, to be furnished by the Regional Director for Region 21
shall, after being duly signed by the authorized representative of the
Respondent Council, be posted by the Respondent Council immediately
upon receipt thereof, and be maintained by it for 60 consecutive days
thereafter , in conspicuous places , including all places where notices
to its members are customarily posted. Reasonable steps shall be taken
to insure that the notices are not altered, defaced, or covered by any
other material.
(b) Sign and mail sufficient copies of said notice to the Regional
Director for Region 21 for posting by G. Oberman Company, the Com-
pany willing , at all locations where notices to its employees are cus-
tomarily posted.
(c) Notify the Regional Director for Region 21, in writing, within
10 days from the date of this Order, what steps the Respondents have
taken to comply herewith.
APPENDIX A
NOTICE TO ALL OUR MEMBERS AND AGENTS, ALL ATEMBERS OF OUR
AFFILIATED LOCAL UNIONS, AND ALL EMPLOYEES OF
G. OBERMAN COMPANY
Pursuant to a Decision and Order of the National Labor Relations
Board, and in order to effectuate the purposes of the National Labor
Relations Act, as amended , we hereby give notice that :
WE WILL NOT threaten, coerce , or restrain G. Oberman Company
or any other employer by a threat to picket, or other unlawful con-
duct, where in any case an object thereof is to force or require
said employer to cease doing business with Calhoun Drywall
Company.
ORANGE BELT DISTRICT COUNCIL OF
PAINTERS #48, AFL-CIO,
Labor Organization.
Dated---------------- By-------------------------------------
(Representative ) ( Title)
This notice must remain posted for 60 consecutive days from the
date of posting, and must not be altered, defaced, or covered by any
other material.
Employees may communicate directly with the Board's Regional
Office, Eastern Columbia Building, 849 South Broadway, Los Angeles,
California, Telephone No. 688-5229, if they have any question con-
cerning this notice or compliance with its provisions.
1204 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
APPENDIX B
NOTICE TO ALL OUR MEMBERS AND ALL EMPLOYEES
OF G. OBERMAN COMPANY
Pursuant to a Decision and Order of the National Labor Relations
Board, and in order to effectuate the purposes of the National Labor
Relations Act, as amended, we hereby give notice that :
WE WILL NOT threaten, coerce, or restrain G. Oberman Company
or any other employer by a threat to picket, or other unlawful
conduct, where in any case an object thereof is to force or require
said employer to cease doing business with Calhoun Drywall
Company.
BUILDING AND CONSTRUCTION TRADES COUNCIL OF
SAN BERNARDINO AND RIVERSIDE COUNTIES,
AFL-CIO,
Labor Organization.
Dated---------------- By------------------------------------
(Representative ) ( Title)
This notice must remain posted for 60 consecutive days from the
date of posting, and must not be altered, defaced, or covered by any
other material.
Employees may communicate directly with the Board's Regional
Office, Eastern Columbia Building, 849 South Broadway, Los Angeles,
California, Telephone No. 688-5229, if they have any question concern-
ing this notice or compliance with its provisions.
TRIAL EXAMINER'S SUPPLEMENTAL DECISION
STATEMENT OF THE CASE
The Board, on October 23, 1962, issued its Decision and Order in the above entitled
cases, in which it found that Respondents had violated Section 8(b) (4) (ii) (B) of the
Act.' Respondents thereafter petitioned the United States Circuit Court of Appeals
for the District of Columbia for review, and the Board filed a cross-petition for
enforcement. On January 30, 1964, the said court issued its decision,2 found that it
required further evidence, and remanded the case to the Board By order dated
April 28, 1964, the Board reopened the record and remanded the proceedings to the
Regional Director to arrange a further hearing. It further ordered that a Trial
Examiner 's supplemental decision , with recommendations , be issued following such
hearing.
Pursuant to such order of the Board, the Regional Director, on June 23, 1964,
served notice on the parties that a hearing would be held on June 23, 1964. Follow-
ing two reschedulings of the hearing, a further hearing was held before Trial Exam-
iner James R. Hemingway in Los Angeles on September 17, 1964. At this hearing,
the General Counsel and the Respondents were represented by counsel, and the
charging party appeared for himself. The parties each participated in the hearing and
were permitted to adduce evidence within the scope of the remand order.
At the close of the reopened hearing, the parties requested leave to file briefs and
a time was fixed for the filing thereof with me. Briefs were thereafter received from
the Respondent and from the General Counsel.
i 139 NLRB 383.
2 328 F. 2d 534.
ORANGE BELT DISTRICT COUNCIL OF PAINTERS NO. 48 1205
From the testimony of the witnesses and the documentary evidence adduced, I
make the following:
SUPPLEMENTAL FINDINGS OF FACT
I. THE CONTRACT PROVISIONS
The court, in remanding the case to the Board, expressed a need (in addition to
other evidence) for the language of the contract involved other than the mere sum-
mary of two paragraphs thereof given in a letter from Respondent Council to the
general contractor, Oberman. Because the meaning and application of these para-
graphs depend to some extent on the language contained in a contract of Respondent
Painters and in the latter's trust fund agreements, evidence was taken on both con-
tracts and on the various trust funds.
Respondent Council, along with various trade councils of other counties, on Au-
gust 1, 1958, adopted a written form agreement designed to be signed by individual
contractors.3 Oberman signed such an agreement on a date not disclosed by the
record, as found by the Board. Oberman was bound by such contract at all times
material to the issues here involved. This contract with Respondent Council contained
the following provisions, among others:
1.
The EMPLOYER [Oberman] agrees that all work performed under the juris-
diction of any union affiliated with the COUNCILS shall be performed pursuant
to an executed current agreement with the appropriate union having work and
territorial jurisdiction and affiliated with the COUNCIL [Respondent Council]
in the area in which the work is performed, .. .
IV.
The Employer agrees that if he shall subcontract any work , provision shall be
made in such subcontract for all of the work performed by said contractor
coming under the jurisdiction of any union affiliated with said COUNCILS, to
be performed pursuant to an executed current agreement with the appropriate
union having work and territorial jurisdiction , affiliated with the COUNCIL in
which area the work is performed.
V.
The EMPLOYER agrees that in the event he subcontracts any work and the
subcontractor fails to pay the wages or fringe benefits provided under the appro-
priate agreement with the union affiliated with the COUNCIL, that the
EMPLOYER shall become personally liable for such sums, and such sums shall
immediately become due and payable by the EMPLOYER.
VI.
In the event that the EMPLOYER or any of his subcontractors fails to execute
a current agreement with the appropriate union, as herein above provided, the
EMPLOYER shall be liable for wages of all work performed by mechanics and
laborers employed, computed at wage rates not less than those certified by the
Secretary of Labor under the Davis-Bacon Act.
IX.
In the event that the EMPLOYER violates any provision of this agreement or
fails to abide by a decision of the National Joint Board, as provided in Para-
graph VIII, or in the event that any Subcontractor fails to abide by the provi-
sions of the appropriate amendment, it will not be a violation of this agreement
for the COUNCILS, individually or collectively, to place said EMPLOYER on
the "unfair list" of the COUNCIL or COUNCILS. In the event that any
EMPLOYER or Subcontractor is placed on the unfair list, it shall not be a vio-
lation of this agreement for any employee to refuse to perform any work or
enter upon the premises of the EMPLOYER, nor shall it be a violation for any
one to induce said employee to refuse to perform any work or enter upon the
premises of the EMPLOYER.4 Employees who refuse to perform any work
or enter upon the premises under the circumstances shall not be subject to dis-
charge or any other disciplinary action ...
s This form may originally have been an agreement between Respondent Council and
an employers' association, but this is not established by the evidence.
* This provision cannot, of course, legalize conduct prohibited under Section 8 (b) (4)
of the Act.
1206 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The "appropriate agreement " mentioned in the foregoing provisions refers, as
applied to the facts of this case , to an agreement dated July 1 , 1960, entered into
between Respondent Painters and various painting contractors ' associations for a 3-
year term , which contract was open for signing by additional employers desiring to
become parties thereafter . This agreement , among other provisions , contained a
union-shop clause requiring employees of signatories to become members of Respond-
ent Painters "not more than 7 days" after date of employment ; 5 a provision prohibit-
ing any member of Respondent Painters from working for any employer who has not
fulfilled his financial obligations to employees under this agreement or who has not
a current "Shop Card" 6 or does not comply with regulations governing employers
under this agreement ; provisions covering wage rates , hours of employment, and
working conditions ; and provisions for payment by employers of sums of money for
the Respondent Painters ' health and welfare plan , vacation fund, and contract admin-
istration fund in the amounts stated in Respondent Council's letter to Oberman on
October 5, 1961.
Respondent Painters had set up trust funds into which the fringe benefit payments
made by contracting employers were deposited and were administered . A Tri-County
Joint Committee ( incorporated in 1949 as a nonprofit corporation ) was established to
receive and administer that portion of the contributions of signatory employers going
to the Contract Administration Fund under the contract between Respondent Painters
and the various chapters of the aforesaid employers ' association . The purposes stated
in the articles of incorporation of the Tri -County Joint Committee were to act as
enforcing agent for the agreement between the several contractors and local unions,
to do field work in acquiring new members , settling disputes , making inspections,
investigating complaints by contractors, union, or public , and reporting thereon. All
the moneys received as contributions were expected to be used to cover expenses of
the committee . In the event of dissolution , any property of the Tri -County Joint
Committee was to be prorated between the Contractors ' Association and the local
unions in proportion to assessments paid.
Although Oberman had signed the contract with Respondent Council, he had not
become a signatory to Respondent Painters ' contract and he had not required the
charging party to become a signatory to the latter contract.
II. THE TRUST FUNDS
Because the court, in its remand to the Board , sought information not only on the
language of the contract provisions but also concerning "the employees covered by
the contract" and the specific facts surrounding any contemplated payments under
paragraph V, including who will receive them and to whose benefit they are to inure,
evidence was taken concerning the functioning of the trust funds and concerning
the employees eligible to receive payments therefrom.
A. The health and welfare fund
In 1959 an agreement and declaration of trust was made by and between the
P D.C.A. chapters "within the jurisdiction of District Council No . 48, subscribing
hereto, hereinafter called the `Employer ,' " Respondent Painters and affiliated locals
"subscribing hereto ," and the trustees of the Orange Belt Painters ' Insurance Trust
Fund . "Employer" as used in this agreement is defined as "any present or future
member of a P.D.C.A. Chapter who by reason of such membership is or shall be
subject to and bound by the terms of this agreement , and such other individual, part-
nership or corporation who is or who may hereafter become a signatory party to the
prevailing collective bargaining agreement or agreements referred to hereinafter ....
[and] any individual , partnership or corporation that is signed to a maintenance agree-
ment or a production agreement with District Council No . 48." This trust fund
agreement defines "employee" as "any person employed by an Employer subject to
this agreement , who is covered by the prevailing collective bargaining agreement
referred to hereinafter [the prevailing collective -bargaining agreement between
P.D C.A . chapters (within the jurisdiction of Respondent Painters ) and the Respond-
ent Painters] " The trustees of the Insurance Trust Fund are authorized to determine
the eligibility requirements for benefits Under the title, "Application of the Trust
Fund," the trustees are to pay or provide for the payment of premiums on policies or
The legality of this clause is not In issue In this case. See J . W. Bateson Company,
Inc.. 134 NLRB 1654.
6 This Is a serially numbered card issued by Respondent Painters free to association
member signatories ($120 per year to non -member signatories ) honored only at locations
listed on the card, which is valid during the term of the agreement unless earlier revoked
for cause.
ORANGE BELT DISTRICT COUNCIL OF PAINTERS NO. 48 1207
group insurance to provide protection for the following individuals and their depend-
ents: "Union Members, Employers, Signatories, and certain full time employees of
the Employer and Union Signatories as authorized by the Trustees."
B. The vacation fund
The vacation fund was established by an agreement and declaration of trust dated
February 17, 1961, by and between the Respondent Painters and certain P.D.C.A.
chapters, including that in the county where the work involved herein was performed.
Herein, likewise, the term "employer" is limited to a signatory to an agreement with
Respondent Painters and "employee" is limited to employees of an employer who is
subject to such agreement. The trustees of the vacation fund have full authority to
determine eligibility requirements. Although the vacation benefits are not limited to
members of Respondent Painters, they are limited to employees of signatory employ-
ers contributing to the fund. The employees benefited would, therefore, be either
members of Respondent Painters or nonmembers who, by the terms of their employ-
ers' agreement with the Respondent Painters were obliged to join the Respondent
Painters within 7 days after the date of their employment.
C. Calhoun's employees as possible beneficiaries
Respondent contends that if Oberman had made the required payments on behalf
of Calhoun's employees, Respondent Painters would have made every effort to locate
such employees to provide them the benefits to which they were entitled under the
trust funds. However, this hypothesis must necessarily assume that Calhoun would
be a signatory to a current contract with Respondent Painters which required con-
tribution to the various funds, for there is no provision in the trust agreements
for receiving funds from a nonsignatory employer or for paying benefits to any
employee of a nonsignatory employer. But at the date of the threat to picket,
October 5, 1961, neither Oberman nor Calhoun was a signatory to any agreement
with the Respondent Painters which required them to make contributions to any of
the several funds or which permitted the Respondent Painters to demand such contri-
butions. Perhaps if, after October 5, 1961, when Respondent Council delivered to
Oberman the letter demanding payment of the amount which was allegedly due under
paragraph V of Oberman's agreement with Respondent Council, Calhoun had exe-
cuted a current agreement with Respondent Painters, ex post facto, the trustees
might then have received the contributions and applied them under the provisions
of such agreement and the provision of the trust fund agreements. But unless
Calhoun was willing to sign the current agreement with Respondent Painters, the
trustees could not, within the terms of the trust agreements, have accepted the pay-
ments and applied them to the benefit of Calhoun's employees.
III. ARGUMENTS AND CONCLUSIONS
Respondent argues that paragraph V of Respondent Council's contract, in requiring
the general contractor to pay the fringe benefits not paid by his subcontractor, operates
as a work-standards clause within the meaning of the court's decision in Truck
Drivers Local No. 413, etc. (Patton Warehouse, Inc., et al.) v. N.L.R.B, 334 F. 2d
539 (C.A.D.C.). The language involved in that case, however, was not interpreted
as a "union signatory clause," which the court differentiated.? Here the contract did
require subcontractors to be signatories to agreements with affiliates of Respondent
Council. The subcontractor had to sign a current contract with the union having
jurisdiction, a contract which included the union-security provision above described.
This goes far beyond a union-standards provision.
Paragraph V of the contract between Oberman and Respondent Council cannot
reasonably be construed as a union-standards clause. It contains no language to
show that the parties had any expectation that the subcontractor mentioned in para-
graph IV would fail to have a contract obligating him to make contributions to the
several funds of the Respondent Painters. Such language could easily have been
included, as it was in paragraph VI, where there is express provision for liability of
the employer for Walsh-Healy rates "in the event that the Employer [Oberman] or
any of his subcontractors fails to execute a current agreement with the appropriate
union .. " However, no such intention was expressed in paragraph V. The latter
paragraph makes the general contractor a guarantor of the payment of fringe benefits
for which the subcontractor, under his agreement with the Respondent Painters, is
primarily obligated. The general contractor is not, in terms, made liable for fringe
benefits when he subcontracts to a subcontractor who is not a signatory to Respondent
7 And see Building and Construction Trades Council of San Bernardino and Riverside
Counties, et at. (Gordon Fields) v. N.L R.B., 32'8 F. 2d 540 (CA D.C.).
1208 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Painters contract. There would be no purpose in making him so liable, because the
employees of nonsignatory employers are not covered by the trust funds. Paragraph
V is, therefore, inextricably linked to paragraph IV and both would have to be en-
forced together, not separately. To the extent that Respondent Council threatened
to enforce paragraph V by picketing, it was pro tan to seeking to enforce paragraph
IV, for, as pointed out before, Calhoun's employees could benefit from the Respond-
ent Painters trust funds only if Calhoun were a signatory to a current contract with
Respondent Painters. Oberman, to avoid picketing, would have had only two pos-
sible courses of action-to get Calhoun to sign the contract of Respondent Painters
or to get another subcontractor who was signatory to the contract of Respondent
Painters. If he made a money payment without getting Calhoun to sign a contract
with Respondent Painters, he would have been paying strictly a penalty for not getting
Calhoun to sign that contract, since no one but Respondents or present or expected
members thereof could have benefited from Oberman's payment.
In view of my finding that trust-fund benefits would inure only to employees of
signatories to a contract with Respondent Painters, it is unnecessary to determine
the extent to which Calhoun's employees might have benefited by a payment of the
amount which the Respondent Council was demanding of Oberman, but it is obvious
that they could not in any event have benefited from the 2-cent per hour contribution
to the Contract Administration Fund so long as Calhoun was not a signatory to the
contract of Respondent Painters, and considering the fact that further contributions
to the insurance and vacation funds on their behalf were not to be anticipated, it is
doubtful that the minimum qualifying amount would have been paid on behalf of
any of them.8
Respondents adduced evidence tending to prove that: nonunion contractors do not
pay the fringe benefits or wage rates paid by union contractors; 75 percent of the
total overhead of painting contractors is in labor costs, the ability to perform work
at lesser cost is largely dependent on the rate for which labor can be hired, by not
paying fringe benefits, Calhoun was able to underbid the majority of unionized con-
tractors; such competitive disadvantage caused hardship upon these business con-
cerns, and a consequent diminution of job opportunities as to Respondent Painters'
present and prospective membership covered under the contract; the nonunion sub-
standard business concerns cause a tendency toward widespread payment of cheaper
rates for labor and causes a general breakdown of the conditions contained in
Respondent Painters' contract.9 From this, Respondents argue, their basic interest
was not to penalize Oberman for his use of Calhoun, nor to bring about a cessation
of dealing, but to enforce the standards of its agreement in a uniform fashion so that
the work involved was not done more cheaply than could be done under unionized
rates. In essence, this argument is the same as the one rejected by the Board in
Raymond O. Lewis, et al., UMW 148 NLRB 249. As meritorious as Respondent's
avowed objective of maintaining a fair standard for workmen may be, Respondents
may not reach such objective by use of prohibited means. The contract clauses here
involved are clearly designed to prevent Oberman from dealing with Calhoun so long
as Calhoun is not bound by a contract with Respondent Painters. Although in the
construction business such clauses are excepted from the prohibitions of Section 8(e)
of the Act and are in themselves lawful,1° they may not be enforced by means of
strikes or picketing or threats thereof in violation of the provisions of Section
8(b) (4) (ii) (B) of the Act 11
SUPPLEMENTAL CONCLUSIONS OF LAW
1. One of the objects of Respondents' threat of October 5, 1961, to picket Oberman
was to force or require Oberman to cease doing business with Calhoun because
Calhoun had no agreement with Respondent Painters.
8 In order to be eligible for benefits from the health and welfare fund an employee of a
signatory employer would be obliged to work a minimum of 210 hours in a consecutive
3-month period, with payments on his behalf of 14 cents an hour. If he worked less than
that, he would receive no benefits, but the moneys paid on his behalf would revert to the
general fund for the benefit of qualifying employees. In order to qualify for vacation
benefits, an employee would have to work at least 50 hours during the current year for
which payments of 10 cents an hour are made on his behalf.
8 Since Respondent Council did not claim the existence of any obligation by Oberman
under paragraph 6 of their contract, as above quoted, it is not to be inferred that Calhoun
was paying his employees less than the rates certified by the Secretary of Labor under
the Davis-Bacon Act.
10 Northeastern Indiana Building and Construction Trades Council, et at. (Centltvre
Village Apartments), 148 NLRB 854
11 Ibid.
GEORGE E. LIGHT BOAT STORAGE, INC. 1209
2. By such threat, Respondents have engaged in conduct violative of Section
8(b) (4) (ii) (B) of the Act.
RECOMMENDED ORDER
I recommend that the Board 's Order be reaffirmed and enforced.
George E . Light Boat Storage , Inc. and Inland Boatmen's Union
of the Seafarers' International Union of North America, Atlan-
tic, Gulf, Lakes, and Inland Waters District, AFL-CIO. Case
No. p33--CA-1919. July 2,1965
DECISION AND ORDER
On May 5, 1965, Trial Examiner James V. Constantine issued his
Decision in the above-entitled proceeding, finding that the Respond-
ent has engaged in and is engaging in certain unfair labor practices
and recommending that it cease and desist therefrom and take certain
affirmative action, as set forth in the attached Trial Examiner's Deci-
sion. The Trial Examiner further found that the Respondent had not
engaged in certain other unfair labor practices alleged in the com-
plaint and recommended that the complaint be dismissed as to them.
Thereafter, both the Respondent and the General Counsel filed excep-
tions to the Trial Examiner's Decision, and the General Counsel filed
a brief in support of his exceptions.
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 [Chairman McCulloch and Members Fanning and Jenkins].
The Board has reviewed the rulings of the Trial Examiner made at
the hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. The Board has considered the Trial
Examiner's Decision, the exceptions and briefs, and the entire record
in this case, and hereby adopts the findings, conclusions, and recom-
mendations of the Trial Examiner except as modified herein.'
1 We disagree with the Trial Examiner's dismissal of the 8( a) (5) allegation based on
Respondent 's refusal to continue making payments to the Seafarers ' welfare plan as re-
quired by its contract with the Union . The Trial Examiner found that the refusal was
not an unfair labor practice but a breach of contract which should be remedied in another
forum. However , where an employer refuses to continue to make payments to such a
plan in derogation of an existing contract , he in effect unilaterally changes the wages of
-his employees who are the beneficiaries of that plan, and thus violates Section 8(a) (5)
of the Act. See, e.g., Toffenetti Restaurant Company, Inc ., 136 NLRB 1156, affd. 311
F. 2d 219 (C.A. 2) ; The Crestline Company, 133 NLRB 256; Cascade Employers Associa-
tion, Inc., 126 NLRB 1014 , reversed on other grounds 296 F. 2d 42 (C.A. 9). Where
the breach of the contract is also an unfair labor practice, both the Board and the courts
have jurisdiction to remedy the wrong that has been done. See, e . g., Section 10(a) of
the National Labor Relations Act, and Smith v. Evening News Association , 371 U.S. 195.
In agreeing that the Respondent violated Section 8 ( a) (1) and (5) of the Act , as alleged,
we find it unnecessary to consider or pass upon the Trial Examiner 's dictum as to the
requirements of mid-term notice under Section 8 (d).
153 NLRB No. 96.