Zidell Explorations, Inc.

National Labor Relations Board - Board Decisions

May 8, 1969

175 N.L.R.B. 887 (N.L.R.B. 1969)

ZIDELL EXPLORATIONS
Zidell Explorations , Inc. and R. W. Taylor
Construction Co. and Teamsters ' Local Union No.
148, affiliated with International Brotherhood of
Teamsters , Chauffeurs , Warehousemen and
Helpers of America , Independent and Howard
Holmberg . Cases 19-CA-3417, 19-CA-3418, and
19-CB-1135
May 8, 1969
DECISION AND ORDER
BY CHAIRMAN MCCULLOCH AND MEMBERS
FANNING AND ZAGORIA
On March 10, 1967, Trial Examiner James R.
Webster issued his Decision in the above-entitled
proceeding, finding that the Respondents had
engaged in certain unfair labor practices and
recommending that they cease and desist therefrom
and take certain affirmative action, as set forth in
the attached Trial Examiner's Decision. Thereafter,
General Counsel filed exceptions to the Trial
Examiner's Decision and a supporting brief.
Respondent Zidell Explorations, Inc. and the
Respondent Union jointly filed an answering brief
together with cross-exceptions to the Trial
Examiner's Decision.
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 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, the
cross-exceptions, the briefs, and the entire record in
the case, and hereby adopts the findings,
conclusions, and recommendations of the Trial
Examiner only insofar as they are consistent
herewith.
To clarify the extent and basis of our decision, we
begin with a brief statement of the pertinent facts.
In January 1966, Respondent Zidell contracted with
the U. S. Department of Defense to dismantle a
ballistic missile complex. On February 8, 1966,
Zidell, in a letter of understanding with the
Respondent Union, recognized the Union as the
bargaining representative for all employees to be
engaged in performing the contract and agreed upon
the principal terms and conditions of employment.
About the same time, Zidell entered into a
subcontract with Respondent Taylor calling for the
latter to perform the actual dismantling work. On
February 21, 1966, Taylor and the Union executed a
prehire collective-bargaining agreement covering
Taylor's employees who were to be •engagdd i in such
work. Taylor began operations at the diissile,•site. on
February 21 and continued until ApriF5, 1)966, when
887
its subcontract with Zidell was terminated.
Thereafter, Zidell undertook to complete the project
itself. On April 10, 1966, Zidell and the Union
executed a formal bargaining agreement identical to
the one between Taylor and the Union. Zidell began
its own hiring of employees for the project about
mid-April and carried it on until completion.
Both the Taylor and Zidell labor contracts
contained a 30-day union-shop provision, valid in'
form, and a checkoff clause requiring the employers,
upon written authorization from employees, to
deduct union dues and fees for remittance to the
Union. After Taylor began operations, it required
its employees, who were not already Union
members, to execute at the time of hire Union
membership applications as well as dues checkoff
authorizations. The Union's initiation fee was $75;
its monthly dues, $8. The checkoff authorizations
contained a schedule of deductions, calling for $28
the first week, $21 a week for the next 3 successive
weeks, and $8 monthly thereafter. The first 4
payments defrayed the Union's initiation fee of $75,
which was due on the 31st day following the
beginning of employment, and also included dues for
2 months. The evidence discloses that this
installment method for prepayment of the initiation
fee was designed to relieve employees of the
hardship of paying that fee and current dues in one
lump sum on the 31st day following their
employment, thereby enabling them more readily to
comply with the union-security provision of the
contract. As found by the Trial Examiner, the
Union followed a practice of refunding fees and
dues to employees who had worked less than 30
days. Accordingly, when Zidell took over
completion of the project from Taylor, the parties
arranged for the refunding of dues and initiation
fees to those Taylor employees who had not worked
at least 30 days and were not hired by Zidell. Zidell,
when it took over, required former Taylor
employees as well as new employees whom it hired
to sign checkoff authorizations providing for the
same schedule of deductions as above described, but
former Taylor employees were not required to
duplicate initiation fees already credited to them.
Zidell, unlike Taylor, did not distribute Union
membership applications to nonmember employees
at the time of hire, but waited until several weeks
after they were employed before doing so.
On the foregoing facts, we do not quarrel with so
much of the Trial Examiner's Decision as holds that
Respondent Employers violated the Act by requiring
new employees at the time of hire to execute dues
and initiation checkoff authorizations and - in the
case of Taylor - applications for membership in
Respondent Union, and by deducting such dues and
fees during the initial 30-day period of their
employment. The Trial Examiner' s Decision,
however, goes further and concludes that the
contracts, though valid when made, were thereafter
rendered unlawful nunc pro tunc by reason of the
175 NLRB No. 137
888 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
postcontract employer unfair labor practices in
which Respondent Employers engaged. Our
difference centers about that conclusion, and, as a
corollary, extends also to the sweeping
reimbursement order requiring disgorgement by
Respondents of all initiation fees and dues collected
throughout the life of the contracts from employees
who became members of the Union after execution
of the contracts.
As we find below, both Respondent Employers
were qualified under Section 8(f) of the Act to enter
into lawful prehire agreements with the Union,
contrary to the Trial Examiner we do not read
Section 8(f) as permitting, much less as requiring,
the invalidation of a prehire contract, allowable
under that Section and valid when entered into,
simply because of subsequent acts of unlawful
assistance for which the employer party to the
contract has alone been found responsible. Such a
rule would in effect write a new stricture into
Section 8(f) and would visit upon a union liability
for the unfair labor practice conduct of an
employer, without regard to whether the Union is
found to have participated in, had any control over,
or even been aware of, that conduct.' Such a
construction of 8(t), in our opinion, is not only
unreasonable, but is one which, in the absence of
clear evidence of Congressional intent, should be
eschewed because of the constitutional difficulties it
presents. We find nothing in the language of 8(f), or
in its legislative history, which requires such an
imputation of vicarious liability. Section 8(f), it is
true, imposes as one of its conditions that an
employer may "make" such an agreement only with
a labor organization "not established, maintained,
or assisted by any action defined in Section 8(a) of
the Act as an unfair labor practice." That condition,
however, speaks only as of the time of the making
of the contract and obviously refers to antecedent
unfair labor practices. The same condition,
practically in haec verba, is made applicable to
union-security agreements permitted under the first
proviso to Section 8(a)(3). Yet we are aware of no
case which has held the Section 8(a)(3) proviso
retroactively inoperable to a union-security
agreement lawfully entered into because of
subsequent employer acts of unlawful assistance. To
the contrary, it has long been established by Board
and court cases that employer acts of unlawful
assistance occurring after the execution of a lawful
contract, and during the contract term, do not
justify a remedial order suspending recognition of
the assisted union during the contract term or
directing that the contract be set aside.' Such a
holding in this case would plainly run counter to this
line of authority.'
'In the instant case, the General Counsel made clear at the hearing that
he was asserting no claim that the Respondent Union caused the
Respondent Employers to condition employment upon employees'
executing dues checkoff authorizations and membership applications
'See, e g , Arden Furniture Industries , 164 NLRB No 159 ; Eskin A
It is of course clear that no remedial order can be
rendered against the Union if the contracts are not
found unlawful. Nor, in our opinion, could there
then be any reasonable justification for a broad
reimbursement order even if limited to the Employer
Respondents. The basic compulsion on employees to
join and remain members of the Union, and to pay
union initiation fees and dues, flowed from the
union-security provisions of the contracts. But, if the
contracts were privileged under Section 8(f), this
was a legally permissible form of compulsion. And
the only exactions that could be said to be
attributable to unlawful coercion would be those
deductions, not thereafter remitted, of initiation fees
and dues made from employees who worked less
than 30 days, and deductions of the first month's
dues charged to employees who worked more than
30 days. A reimbursement order so limited is
patently appropriate. A broader order would go
beyond what is necessary to redress the specific
unfair labor practices we are finding, and is to that
extent punitive and unwarranted. See Cadillac Wire
Corp., 128 NLRB 1002, 1006.
In the case of Taylor, we find, like the Trial
Examiner, that the parties to the contract were
qualified under Section 8(f) to enter into a lawful
prehire agreement. We consider that finding
dispositive of the complaint's unfair labor practice
allegations relating to the making and maintenance
of the Taylor contract. Accordingly, we shall
dismiss those allegations of the complaint as to both
the Union and Taylor, and would sustain only the
allegations relating to Taylor's postcontract
violations, but provide therefor only the limited
remedy indicated above.
As to Zidell, contrary to the Trial Examiner, we
also find that it was engaged in the building and
construction industry within the meaning of Section
8(f) during the performance of its Government
contract for dismantling the ballistic missile
complex. Therefore, the preliminary letter of
understanding and the subsequent prehire
comprehensive collective-bargaining agreement
between Zidell and the Union was lawful. We
believe that this conclusion is consistent with the
Son, 135 NLRB 666; Lykes Bros., 128 NLRB 606; N L.R B v. Reliance
Steel Products Co , 322 F 2d 49 (C. A. 5); N L.R B. v. Scullin Steel Co.,
161 F 2d 143 (C A. 8). An exception to this well-settled rule has been
recognized only where it has been found that the unlawful assistance or
domination is of such a character as to render the assisted union unable to
carry out its representative functions in the administration of the contract
without the employer's unlawful support. See, e .g., The Post Publishing
Co, 136 NLRB 272, 273. Obviously, that is not the situation here. As is
clear from his dissenting opinions in Arden Furniture Industries and Eskin
& Sons, Member Fanning takes a somewhat more expansive view of the
Board's authority to order an employer in violation of Sec. 8(a)(2) to
suspend recognition of an incumbent union than did the majority opinions
in those cases . However that may be , he agrees with his colleagues that an
order requiring Respondents to suspend recognition of the Union is not
necessary to remedy the violations found herein.
'Bear Creek Construction Co, 135 NLRB 1285, cited by the Trial
Examiner , is not authority to the contrary, since it appears in that case
that the employer unfair labor practices occurred before the making of the
contract.
ZIDELL EXPLORATIONS 889
legislative history of Section 8(f) and comports with
the purposes of that Section of the Act.
At the outset we note that the Section 8(f) prehire
exemption was enacted for two reasons. First,
Congress recognized that a building contractor had
to know what his labor cost would be before he
could proceed to make the necessary estimates upon
which his bid would be based and, second,
employers in the construction industry needed an
available supply of various types of skilled
craftsmen ready for immediate referral to the
jobsite.' As stated by the House Committee on
Education and Labor ". . . the object of validating
the prehire agreement in the building and
construction industry is sound and [the Committee]
has chosen to accomplish this object by providing
that a prehire agreement in that industry shall not
constitute an unfair labor practice under the Act."'
Applying these guidelines to the facts in this case,
we are persuaded that both the basis for the
exemption and its objective have been met by
Zidell's operations at the missile sites and that our
conclusion is in accord with the intent of Congress
in enacting the exemption.
Thus, Zidell purchased in place (presumably after
a bid) the missile site from the United States
Department of Defense with the view to dismantling
it. In preparing its bid and making this purchase,
Zidell no doubt estimated the labor costs required to
accomplish the dismantling, a function involving
employees engaged in the building and construction
industry, and proceeded to enter into an agreement
with the Union which is a labor organization of
which building and construction employees are
members, to assure that the required supply of the
various skilled craftsmen would be available.'
Plainly, Zidell's operations at the missile site were
no different from those of Taylor during the
relevant time and it would clearly be an anomalous
disposition on our part to find that Taylor in
performing the same work at the same site and with
substantially the same employees was entitled to the
Section 8(f) exemption and Zidell was not.
Although the Trial Examiner found Zidell's
primary field of activity to be shipbuilding, thereby
disqualifying it from the 8(f) exemption, the record
is clear that Zidell's entirely separate operation at
the missile site was consonant with the
Congressional purposes and objectives of the 8(f)
exemption.
The record shows that Zidell commonly
dismantles or wrecks ships, factories or other
structures to obtain salvageable materials which it
then uses for construction purposes. It has built
factories and warehouses as well as barges, ships
and cranes, and has erected a complete plant for the
manufacturing of steel fittings. Thus, it is clear that
Zidell has frequently engaged in transitory on-site
operations in the construction industry similar to
those performed at the missile sites and has
employed the skilled craftsmen and operators
normally associated with the building and
construction industry required to accomplish its
objectives.' Its work on this job was in all
characteristics identical to that performed in the
construction industry despite the fact that some of
Zidell's other projects not discussed here were of a
type unrelated to the construction industry.
Accordingly, we shall dismiss those allegations in
the complaint relating to the Union and Zidell and
only sustain those allegations relative to Zidell's
postcontract violations and provide for the same
remedy as in the case of Taylor.'
CONCLUSIONS OF LAW
1. Respondents Zidell and Taylor are employers
engaged in commerce within the meaning of Section
2(2), (6), and (7) of the Act.
2. Respondent Union is a labor organization
within the meaning of Section 2(5) of the Act.
3. By requiring employees, as a condition of
employment, to join Respondent Union and by
deducting union fees and dues from employees'
wages, at times prior to the 13th day following the
beginning of said employees' employment, and by
directing and requiring employees to sign checkoff
authorizations for Union fees and dues, Respondents
Taylor and Zidell have engaged in unfair labor
practices within the meaning of Section 8(a)(1), (2),
and (3) of the Act.
4. The aforesaid unfair labor practices affect
commerce within the meaning of Section 2(6) and
(7) of the Act.
5. The three Respondents have not engaged in any
other unfair labor practices alleged in the complaint.
THE REMEDY
Having found that Respondents Zidell and Taylor
have engaged in unfair labor practices, we shall
require them to cease and desist therefrom and take
certain affirmative action.
Respondent Taylor will be required to reimburse
those employees of Respondent Taylor, and
Respondent Zidell will be required to reimburse
those employees of Respondent Zidell, who, after
the execution of prehire contracts by said Employers
'S. Rep . No. 187, 86th Cong., 1st Sess . 424 (1959 ); H.R. Rep . No. 741,
86th Cong ., 1st Sess . 777 (1959). (Legislative History. LMRDA, Vol. 1,
pp. 424 and 777, respectively.)
'H. R. Rep . No. 741, 86th Cong., 1st Sess . 777 (1959). (Legislative
History, LMRDA, Vol. 1, p. 777.)
'See the last paragraph of Sec. 111, B, of the Trial Examiner 's Decision
for a description of the equipment required for the dismantling of the sites,
equipment which required an availability of skilled operators or craftsmen.
'Cf. Frick Company , 141 NLRB 1204, 1208 , where the evidence clearly
showed that the employer was a manufacturer of refrigeration equipment
and only incidentally engaged in the installation of such units (less than I
percent of its total gross income ), thereby not falling within the meaning of
Section 8(1).
'Cf. Campbell Soup Company, 152 NLRB 1645, 164849 enfd . 378 F.2d
259 (C.A. 9); cert. denied 389 U . S. 900.
890 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and Respondent Union, were required to become
members of Respondent Union, for moneys paid by
said employees, or that were deducted from their
earnings during their first 30 days of employment,
for initiation fees, dues, and/or assessments on
behalf of said Union, and which have not heretofore
been refunded to them. However, employees who
worked on the project for more than 30 days shall
only be reimbursed for Union dues which were
deducted for the first 30 days of their employment.
Interest on such moneys at 6 percent per annum is
to be paid, in accordance with the Board's decisions
in Isis Plumbing & Heating Co., 138 NLRB 716,
and Seafarers International Union of North
America, Great Lakes District, AFL-CIO, 138
NLRB 1142. Excluded from these remedial
provisions are those employees who were already
members of Respondent Union when hired by
Respondent Taylor or Zidell.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that Respondents,
Zidell Explorations, Inc., Portland, Oregon, and R.
W. Taylor Construction Co., Ogden, Utah, their
officers, agents, successors, and assigns , shall:
1. Cease and desist from:
(a) Assisting and encouraging membership in
Teamsters Local Union No. 148, or any other labor
organization, by directing and requiring employees,
as a condition of employment, to join the labor
organization prior to the time permitted by Section
8(f) of the Act; by directing and requiring employees
to sign checkoff authorizations for union fees and
dues; and by deducting such fees and dues from
employees' wages, prior to the 30th day following
the beginning of the employees' employment or the
effective date of a valid agreement to require
membership in such organization, as provided by
Section 8(f) of the Act.
(b) In any like or related manner, interfering with,
restraining, or coercing employees in the exercise of
their rights to self-organization, to form labor
organizations, to join or not join the above-named
Union, or any other labor organization, to bargain
collectively through representatives of their own
choosing, and to engage in other concerted activities
for the purpose of collective-bargaining or other
mutual aid or protection, and to refrain from any
and all such activities, except to the extent permitted
by Section 8(a)(3) and 8(f) of the Act.
2. Take the following affirmative action which is
designed to effectuate the policies of the Act:
(a) Severally reimburse their employees for
moneys illegally exacted from them, in the manner
and to the extent set forth in the section of this
Decision entitled "The Remedy."
(b) Preserve and, upon request, make available to
the Board or its agents , for examination and
copying, all payroll records, social security payment
records, timecards, personnel records and reports,
and all other records necessary to determine the
amount of the moneys illegally exacted from the
employees involved.
(c) Notify the Regional Director for Region 19, in
writing, within 10 days from the date of the receipt
of this Decision, what steps they have taken to
comply herewith.
IT IS FURTHER ORDERED that the complaint be
dismissed insofar as it alleges violations of the Act
other than those found herein.
TRIAL EXAMINER 'S DECISION
STATEMENT OF THE CASE
JAMES R. WEBSTER, Trial Examiner: This case, with all
parties represented, was heard in Ephrata, Washington, on
November 17, 1966 on a complaint of the General
Counsel and answers of Zidell Explorations, Inc. (herein
called Respondent Zidell), R. W. Taylor Construction Co.
(herein called Respondent Taylor), and Teamsters Local
Union No. 148, affiliated with International Brotherhood
of Teamsters, Chauffeurs, Warehousemen and Helpers of
America, Independent (herein called Respondent Union).
The complaint was issued on September 16, 1966 upon
charges filed on June 6, 1966. The complaint alleges that
Respondent Zidell and Respondent Taylor entered into
prehire contracts with Respondent Union containing
union-shop clauses, and that by the execution and
maintenance of these contracts, the Respondent
Employers engaged in unfair labor practices within the
meaning of Section 8(a)(1), (2), and (3) of the National
Labor Relations Act, herein called the Act, and that
Respondent Union engaged in unfair labor practices
within the meaning of Section 8(b)(1)(A) and (2) of the
Act. The complaint alleges that Respondent Employers
also by other conduct illegally contributed support to the
Union. The Respondents take the position that their
agreements fall within the provisions of Section 8(f) of the
Act.
Briefs have been filed by the General Counsel, by
Respondent Union, and by Respondent Zidell and have
been carefully considered. Upon the entire record and my
observation of the witnesses, I hereby make the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT EMPLOYERS
Respondent Zidell, an Oregon corporation, has its
offices and principal place of business in Portland,
Oregon , where it is engaged in the business of dismantling
ships, wholesaling scrap materials and industrial
machinery , and constructing barges and cranes ; it is also
engaged in the dismantling and construction of plants and
buildings. During the 12-month period ending July 31,
1966, Respondent Zidell purchased and had shipped to its
Portland place of business directly from points outside the
State of Oregon , goods and materials valued in excess of
$50,000 and, during the same period, Respondent Zidell
sold goods to or performed services for customers outside
the State of Oregon of an amount valued in excess of
$50,000.
ZIDELL EXPLORATIONS 891
Respondent Taylor is a Utah corporation with its
principal place of business at Ogden , Utah, and was
organized in November 1965 for the purpose of engaging
in business as a general construction contractor. In
February 1966 Respondent Taylor entered into its first
business contract. This contract was with Respondent
Zidell and was to be performed in the States of
Washington and Oregon. Respondent Taylor has realized
a gross income of $70,000 from its performance on said
contract in 1966,
Respondent Zidell and Respondent Taylor are engaged
in commerce within the meaning of Section 2(6) and (7) of
the Act.
11. THE LABOR ORGANIZATION INVOLVED
Teamsters Local Union No. 148, affiliated with
International Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America, Independent is a
labor organization within the meaning of Section 2(5) of
the Act.
111. THE ALLEGED UNFAIR LABOR PRACTICES
A. Issues
The principal issues in this case are: (1) whether or not
the dismantling operations of Respondent Zidell and
Respondent Taylor at the Titan I missile sites near Larson
Air Force Base, Moses Lake, Washington, were activities
falling within the building and construction industry; (2)
whether or not Respondent Union is a labor organization
of which building and construction employees are
members; (3) whether or not Respondent Zidell and
Respondent Taylor are engaged primarily in the building
and construction industry ; (4) whether or not said
Respondent employers illegally contributed support to the
Union. In other words, did the prehire contracts of the
parties come within the provisions of Section 8(f) of the
Act.
B. Statement of Facts
Respondent Zidell purchased in place from the United
States Department of Defense in -January 1966 the
machinery , equipment and supplies at the Titan I missile
sites near Larson Air Force Base , Moses Lake,
Washington.
On February 8, 1966, Respondent Zidell and
Respondent Union entered into a preliminary agreement
or letter of understanding covering all work connected
with the dismantling and removal of machinery,
equipment and supplies from the said missile sites, except
the operation of cranes of any types or capacity.
In February 1966 Respondent Zidell entered into a
contract with Respondent Taylor providing that'
Respondent Taylor would detach, dismantle and remove
the machinery , equipment and supplies from said missile
sites and transport certain portions thereof to Portland,
Oregon.
On or about February 21, 1966, Respondent Taylor, by
its President and General Manager , Floyd C . John, and
Respondent Union entered into a prehire
collective -bargaining agreement covering Respondent
Taylor' s employees who were to be engaged in the
dismantling operations at said missile sites . This did not
include the operators of heavy construction equipment
who were members of the International Union of
Operating Engineers . Said agreement contained a
union-shop clause with a requirement that each employee,
not then a member of the Union, shall become a member
of said Union not later than the 30th day following the
beginning of his employment, and containing a checkoff
clause whereby the Employer agreed to checkoff the dues,
initiation fees and/or uniform assessments of the Union
and to remit all such deductions to the Union prior to the
end of each month. Written authorizations for said
checkoffs were to be furnished by each employee in the
form prescribed by the Employer.
By letter dated February 21, 1966, Respondent Zidell
guaranteed to Respondent Union "full payment of all
wages, allowances and fringes " in the agreement between
the Union and Taylor.
Prior to the execution of the collective bargaining
agreement with the Respondent Union , Respondent
Taylor had no employees at the missile sites, but had
three or four nonsupervisory employees in Utah who were
to move equipment to the jobsite and would.be employed
there on arrival. Hiring was done by Lloyd C. John,
president of Respondent Taylor, and by S. D. Young,
general foreman. They advised all prospective employees
that the job was under a union contract and that the union
contract provided that they could pay their initiation fees
on an installment basis.
Pursuant to said contract, at time of hire the office
clerk and timekeeper of Respondent Taylor, Theron J.
John, brother of President Lloyd John, gave each
prospective employee, in addition to normal employment
forms, a checkoff form for union initiation fee and dues
and a union application form. The checkoff authorizations
provided that deductions would be made weekly or not
later than 31 days following the first day of employment
as follows: $28 from the first week 's wages, $21, for each
of the next 3 weeks, (constituting $75 for initiation fee and
$16 for dues for 2 months), and thereafter the regular
dues of $8 per month. The employees were directed by the
office clerk to fill out these forms if they wanted
employment. Some of the applicants were already
members of Respondent Union and therefore did not fill
out union application forms.
Respondent Taylor commenced operations at the
missile sites on February 21, 1966, and its contract was
terminated on April 5, 1966. Shortly before April 5,
Respondent Taylor reached its peak of employment which
totaled approximately 75 employees. During this period
Respondent Taylor made deductions of union initiation
fees and dues in accordance with the contract and
checkoff authorizations and transmitted checks covering
said sums to Respondent Union . Respondent Union
cashed only the first of the checks received from
Respondent Taylor and this check was in the amount of
approximately $273 or $283. The remaining checks were
not cashed, as the Union contended they contained errors.
After the contract with Respondent Taylor was
terminated , Respondent Zidell took over the dismantling
operations at the missile sites. Respondent Union turned
over to Respondent Zidell the uncashed checks it had
received from Respondent Taylor and gave Respondent
Zidell credit for the cashed check. This action was taken
so that Zidell could make the corrections due in the
accounting on these sums, could make refund to
employees of Taylor who did not continue to work on the
project as employees of Zidell, and could return to the
Union the initiation fees and dues for those employees
who continued to work on the project. In view of the "30
days" provision of the union-shop clause of the contract,
892 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the Union followed a practice of refunding fees and dues
collected from employees who had worked less than 30
days.
Respondent Zidell and Respondent Union executed on
or about April 10, 1966, a collective-bargaining agreement
containing the same terms and conditions as that executed
by Respondent Taylor. About mid-April Zidell
commenced hiring employees for the project. Some of the
former employees of Respondent Taylor were employed;
there is no evidence as to the number of these employees
among the 70 to 75 employees hired by Respondent
Zidell. All employees hired by Respondent Zidell were
required to execute checkoff authorizations forms at time
of hire. For those who had had their initiation fees and
dues deducted by Respondent Taylor, these sums were not
again deducted. For all new employees Respondent Zidell
commenced deducting union initiation fees from the first
week' s wages in accordance with the terms of the checkoff
authorizations, and these sums were transmitted to the
Union at the end of each month. The union application
forms were not distributed to employees by Respondent
Zidell until after the employee had worked several weeks
for this company, but nonmembers of the Union were
then required by Respondent Zidell to complete these
forms.
The dismantling of the missile sites was completed prior
to the hearing herein.
At the jobsite there were three missile sites set in a
triangle approximately 30 to 40 miles apart. The missiles
and equipment were housed in silos and tunnels below
ground. Large liquid oxygen tanks, 60 feet in length and
15 feet in diameter were buried approximately 30 to 40
feet underground. In order for Respondents Taylor and
Zidell to dismantle the missile sites, it was necessary that
they do some fabricating or constructing at the sites. Such
construction included a hoist system, loading ramps, work
platforms or scaffolds, guard rails , electric power lines,
and pipelines for air operations from air compressors.
Existing water and sewer lines were rerouted. Most of
these items were removed when the dismantling was
completed. Heavy equipment used on the project included
cranes, digging machines, loaders, bulldozers, graders;
these were operated by employees who were members of
the International Union of Operating Engineers,
AFL-CIO. Other equipment used included burning
torches, welders, electric saws, pneumatic tools, and air
tuggers. Some of the equipment, and particularly that
which the Department of Defense desired to retain, had to
be dismantled and removed with special care in order not
to damage it.
C. Conclusions
The execution of a prehire collective bargaining
contract - one granting recognition to a labor
organization without its majority status having been
established under the provisions of Section 9 of the Act -
constitutes unfair labor practices by the participating
union and employer unless they fall within the
qualifications set forth in Section 8(t) of the Act. To
qualify under this section it must be established by the
Respondents ( 1) that the Respondent Employers are
engaged primarily in the building and construction
industry, (2) that the employees to be covered by the
agreement are engaged in the building and construction
industry , and (3 ) that the Respondent Union is a labor
organization in which building and construction employees
are members . If any one of these conditions is not present,
then Section 8(t) does not exempt the prehire contract
from the proscriptions in Section 8(a) and (b) of the Act.
The burden of proof in showing whether the statutory
exception in Section 8(f) applies in a particular case lies
with the party seeking to avail itself of that section.' Also
Section 8(f) does not apply where the labor organization
involved has been established, maintained, or assisted by
an employer unfair labor practice, other than to the extent
permitted by Section 8(f); and membership in a union
cannot be required during the first 7 days of employment
or following the effective date of the agreement, whichever
is later.
Section 8(a)(3), which permits union-shop agreements
requiring employees to become union members on or after
their 30th day of employment under certain
circumstances, does not exempt such agreements from the
proscriptions of the Act where the labor organization
involved has been established, maintained, and assisted by
employer unfair labor practices. Furthermore, Section
8(a)(3) requires that the union be the representative of an
appropriate unit of employees at the time such agreement
is executed.
1. The employees covered by the agreement
The employees covered by the agreements executed
herein were engaged in the dismantling and removal of
structures and materials from missile sites. The
dismantling operation was not done for the purpose of or
incident to the preparation of the area for other
construction. One issue is whether this dismantling
operation is an activity encompassed by the "building and
construction industry."
I find no case where the Board has had occasion to
pass on this specific point. Under the circumstances it is
appropriate to construe the language in Section 8(t) of the
Act in light of the purpose and objectives of Congress in
amending the Act in this respect.
The application to the building and construction
industry of the Taft-Hartley amendments of 1947 gave
rise to serious problems for this industry, as were attested
in hearings before congressional committees in 1959. It
was recognized that the building and construction industry
is markedly different from manufacturing and other types
of enterprise. The occasional nature of employment
relationships, with an individual employee working on jobs
for many employers, and frequently for short periods of
employment are factors generally peculiar to the building
and construction industry. Prehire contracts have been
commonly made in this industry. An employer must be
able to have available a supply of experienced employees
and skilled craftsmen, and it is desirable for him to know
his labor costs before making estimates upon which his
bid will be based. Because of the problems encountered by
this industry from the 1947 amendments to the Act,
Section 8(t) was added to the Act in 1959 to exempt
employers and labor unions in this industry from certain
unfair labor practices defined in Section 8(a) and (b) of
the Act.'
The peculiar nature of the building and construction
industry, the problems that arose from the 1947
amendments to the Act, and the purpose and objectives of
the 1959 amendments to the Act, all apply equally to the
' Indio Paint and Rug Center , 156 NLRB No 97.
'Legislative History of the Labor-Management Reporting and Disclosure
Act of 1959 (U S Government Pnntmg Office , 1959) Vol I, pp. 423-425
and 777-778
ZIDELL EXPLORATIONS 893
"dismantling" of structures as it does to the
"constructing" of structures. The classifications of
employees utilized in the dismantling operations herein are
also used on construction projects. Differences in the two
operations - constructing and dismantling - are (1) in
constructing, materials are combined to make a structure,
and in dismantling, materials are taken apart to void a
structure; and (2) in the latter operation, generally, more
employees in the lesser skilled classifications are
employed.
There is no basis for concluding that the building and
construction industry, that is, the employers and
employees working in this industry, are limited to the
work of "combining materials" to create structure. It is
not infrequent that in the preparation of a building site,
and in the alteration and repair of a structure, dismantling
or demolition operations occur. I, therefore, conclude that
the employees of Respondents Taylor and Zidell engaged
in the dismantling operations involved were engaged in the
"building and construction industry" within the meaning
of the Act.'
2. Building and construction employees are members
of Respondent Union
As to the requirement of Section 8(1) that the labor
organization be one in which building and construction
employees are members, there is no real issue. Respondent
Union admits to membership employees engaged in the
building and construction trades and maintains a division
composed of such employees.
3. Are Respondent Employers engaged primarily in
the building and construction industry
The third qualifying requirement of Section 8(f) is that
the employers involved be engaged primarily in the
building and construction industry. Respondent Zidell is
engaged primarily in the dismantling of ships, the
wholesaling of scrap materials and industrial machinery
and in barge and crane construction. The wholesaling of
materials and the building of barges and cranes are
"fall-offs" of its ship dismantling business. Respondent
Zidell also dismantles plants and buildings and salvages
materials and machinery for resale or use in other
constructions; Respondent Zidell also builds plants and
buildings and plant equipment. Jack Rosenfeld, corporate
secretary of Respondent Zidell, testified to the operations
of this company, but was unable to break down the
volume of business in the various aspects of the company's
operations; but Respondent Zidell's primary field of
activity is the dismantling and construction of ships and
barges - the shipbuilding industry.
An issue is whether or not the shipbuilding industry is a
part of the building and construction industry or whether
it is a separate industry. I find that it is a separate
industry and not a part of the building and construction
industry as the terms are used in Section 8(f) of the Act.
'I am cognizant of the fact that the terms "construction , alteration,
and/or repair," as used in the Davis-Bacon Act, has been construed by the
United States Attorney General as not to include the "demolition of
existing structures ," where nothing more than such activity is involved (38
Op. Atty. Gen. 229, July 2, 1935). The Davis -Bacon Act is one relating to
the rate of wages for laborers and mechanics employed on public buildings
of the United States . Its purpose and objectives are not the same as the
section of the Act involved herein , and the terms used in the Davis-Bacon
Act were construed in reference only to specific job functions , and not as
to the operations of the industry.
A boat is not a structure affixed to the earth, but a
machine and a vehicle. Furthermore, ships are built in the
shipyards of shipbuilders, and are not constructed at
scattered building sites as are factories, homes or roads.
Since the worksite in the shipbuilding industry is more
constant, there is more continuity of employer-employee
relationships than in the building and construction
industry. A large vessel does have, however, many of the
appurtenances of an office building, factory or home, but
this point of similarity does not preponderate over the
distinguishing features of the two industries as mentioned
above. I therefore find that Respondent Zidell is not
engaged primarily in the building and construction
industry.
Respondent Taylor was organized for the purpose of
conducting business as a "general construction
contractor." Since it was recently organized (November,
1965), most of its income as of the date of the hearing
was derived from its dismantling operation at the Titan I
missile sites. It received a gross income of $70,000 on this
project. Its other business activities to date of hearing
consisted of the installation of a conveying system for a
chemical company for approximately $50,000 and the
rendering of consulting services on matter of contract
negotiations. I have previously concluded that the
employees of Respondent Taylor and Respondent Zidell
who were engaged in the dismantling operations at the
Titan I missile sites were engaged in the building and
construction industry. The installation of the conveying
system I find to be in the building and construction
industry. I therefore conclude and find that Respondent
Taylor is engaged primarily in the building and
construction industry.
4. Respondent Employers' assistance to Respondent
Union
There remains for consideration the question as to
whether or not Respondent Union has been established,
maintained or assisted by any actions of Respondents
Zidell and Taylor, (other than by the execution and
maintenance of the prehire contracts) which violate
Section 8(a) of the Act. It so, the exemption of Section
8(1) from certain unfair labor practices is not applicable.
The contracts involved herein granted sole and exclusive
recognition to Respondent Union, required membership in
the Union not later than the 30th day of employment, and
required checkoff of union dues, initiation fees and/or
uniform assessments. Respondent Taylor, however,
required each employee to complete a union membership
form and a checkoff form at time of employment; the first
installment of $28.00, part payment on union initiation
fee, was deducted from each employee's pay at the end of
his first week of employment. All moneys deducted by
Respondent Taylor were turned over to the Union who
later remitted it to Respondent Zidell for accounting and
refund to employees where appropriate.
Respondent Zidell hired some of the employees who
had worked for Taylor on this project. Each of these
employees as well as new employees hired were required
to execute checkoff authorizations at time of employment.
Employees of Taylor whose initiation fees and dues had
already been checked off had no deductions by Zidell on
behalf of the Union until their monthly union dues were
due. As to all others, however, Zidell checked off
initiation fees and dues in accordance with the terms of
the checkoff authorizations. Moneys checked off were not
transmitted to the Union until the end of each month.
894 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Zidell did not require employees to execute union
membership forms at time of hire, but with the execution
of checkoff authorizations and the deductions from wages
for union initiation fees , action toward union membership
was taken during the first week of employment.
Where parties qualify under Section 8(f) of the Act,
their agreement may require as a condition of
employment , membership in a union after the seventh day
of employment or the effective date of the agreement,
whichever is later . If they qualify under Section 8(a)(3) for
a union-shop agreement , they may require as a condition
of employment membership in a union on or after the
13th day of employment or the effective date of such
agreement , whichever is later . The contract terms herein
meet these features of Section 8(f) and 8(a)(3), union
membership not being required until the 30th day of
employment . But, both Respondents Zidell and Taylor
rendered assistance to Respondent Union beyond that
permitted in either Section 8(f) or Section 8(a)(3) of the
Act. Both Respondents Zidell and Taylor directed and
required employees who were not already members of the
Union to execute checkoff authorizations at time of hire,
and deductions for initiation fees were made from their
first week 's wages pursuant to the terms of these
authorizations . Respondent Taylor also directed
employees not already members of the Union to complete
union membership forms at time of hire, whereas
Respondent Zidell did not require it until several weeks
later.
Where prehire or union -shop agreements are executed
in accordance with the requirements of Section 8(f) or
Section 8(a)(3), the employer may certainly inform
employees at time of hire of the terms of the contract, but
the employer may not then or at any time direct or
require employees to become union members , as this
constitutes the assistance to a union that has repeatedly
been held by the Board to violate Section 8 (a) of the Act.
It may seem an anomaly that an employer may not take
action to implement the terms of a binding agreement, but
both Section 8(f) and the proviso to Section 8(a)(3)
exempt from the proscriptions of the Act conduct that
would otherwise constitute unfair labor practices;
therefore, it is strictly construed . Respondents Taylor and
Zidell by directing and requiring employees to join
Respondent Union and to sign checkoff authorizations of
union initiation fees, dues and /or uniform assessments on
behalf of said Union and by deducting union initiation
fees, dues and/or uniform assessments from their wages
pursuant thereto have interfered with , restrained, and
coerced employees in the exercise of rights guaranteed in
Section 7 of the Act, have contributed support to
Respondent Union, and have encouraged membership in
said Union by discriminating against employees in regard
to hire and conditions of employment.'
As Respondent Union has been assisted by unfair labor
practices of both Respondents Taylor and Zidell as
mentioned in the prior paragraph , the prehire contracts
executed herein are not exempt from the proscriptions of
Section 8 (a) and (b) of the Act. Furthermore, having
found that Respondent Zidell is not engaged primarily in
the building and construction industry, the prehire
contract between Respondent Zidell and Respondent
Union fails to meet this qualification for Section 8(f)'s
exemption . Also, the union-shop clause in the parties'
contracts does not meet the requirements of Section
'Bear Creek Construction Co, 135 NLRB 1285, Campbell Soup
Company, 152 NLRB 1645.
8(a)(3) of the Act in that Respondent Union was not the
representative of the employees of Respondents Zidell or
Taylor at the time the agreements were made and in that
Respondent Union has been assisted by employer unfair
labor practices.
I therefore find that by granting exclusive recognition
to Respondent Union, by entering into and maintaining
collective bargaining contracts with said Union when its
majority status had not been established , and by including
in said contracts a union -shop clause , Respondents Zidell
and Taylor have interfered with, restrained and coerced
employees in the exercise of rights guaranteed in Section 7
of the Act, have contributed support to Respondent
Union, and have encouraged membership in said Union
by discriminating against employees in regard to hire and
conditions of employment. Respondent Union, by the
execution and maintenance of said prehire contracts when
its majority status had not been established and by
including in said contracts a union-shop clause, has
thereby restrained and coerced employees in the exercise
of rights guaranteed in Section 7 of the Act and has
caused Respondents Taylor and Zidell to discriminate
against employees in violation of Section 8(a)(3) of the
Act.'
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES
UPON COMMERCE
The activities of Respondents Zidell , Taylor and Union
set forth in section III, occurring in connection with the
operations of Respondent Zidell and Taylor described in
section I, have a close , intimate , and substantial relation
to trade, traffic , and commerce among the several States
and tend to lead to labor disputes burdening and
obstructing commerce and the free flow thereof.
CONCLUSIONS OF LAW
1. Respondents Zidell and Taylor are employers
engaged in commerce within the meaning of Section 2(2),
(6), and (7) of the Act.
2. Respondent Union is a labor organization within the
meaning of Section 2(5) of the Act.
3. By granting exclusive recognition to Respondent
Union and by entering into and maintaining
collective-bargaining contracts with said Union at times
when its majority status had not been established under
the provisions of Section 9 of the Act, and by including in
said contracts a union-shop clause , where all of the
qualifications of Section 8(f) of the Act had not been met,
Respondents Zidell and Taylor have thereby engaged in
unfair labor practices within the meaning of Section
8(a)(1), (2), and (3) of the Act.
4. By directing and requiring employees to join
Respondent Union and to sign checkoff authorizations of
union initiation fees, dues and/or uniform assessments on
behalf of said Union and by deducting union initiation
fees, dues and/or uniform assessments from employees'
wages pursuant thereto, Respondents Taylor and Zidell
have engaged in unfair labor practices within the meaning
of Section 8(a)(1), (2), and (3) of the Act.
5. By entering into and maintaining collective
bargaining agreements with Respondents Zidell and
Taylor at times when its majority status had not been
established under the provisions of Section 9 of the Act,
'Kenrich Petrochemicals, Inc, 149 NLRB 910; Campbell Soup
Company, 152 NLRB 1645.
ZIDELL EXPLORATIONS
and by including in said agreements a union-shop clause,
where all the qualifications of Section 8(f) of the Act had
not been met, Respondent Union has thereby engaged in
unfair labor practices within the meaning of Section
8(b)(1)(A) and 8 (b)(2) of the Act.
6. The aforesaid unfair labor practices affect commerce
within the meaning of Section 2(6) and (7) of the Act.
THE REMEDY
Having found that the Respondents Zidell, Taylor and
Union have engaged in unfair labor practices, it will be
recommended that they be required to cease and desist
therefrom and take certain affirmative action.
It will be recommended that Respondents Taylor,
Zidell and Union be required jointly and severally to
reimburse those employees of Respondent Taylor, and
that Respondents Zidell and Union be required jointly and
severally to reimburse those employees of Respondent
Zidell, who after the execution of prehire contracts by said
employers and Respondent Union, became members of
Respondent Union, for moneys paid by said employees, or
that were deducted from their earnings , for initiation fees,
dues, and/or assessments on behalf of said Union, and
which have not heretofore been refunded to them. Interest
on such moneys at 6 percent per annum is to be paid, in
accordance with the Board ' s decisions in Isis Plumbing &
Heating Co., 138 NLRB 716, and Seafarers International
895
Union of North America , Great Lakes District,
AFL-CIO, 138 NLRB 1142. This excludes those
employees who were already members of Respondent
Union when hired by Respondent Taylor or Zidell, except
those employees who were members of Respondent Union
when hired by Respondent Zidell because they were
required to do so as a condition of employment with
Respondent Taylor.
Based on Respondent Zidell 's letter of understanding
with Respondent Union dated February 8, 1966, providing
that as to all dismantling work to be performed at the
said missile sites , excepting the operation of cranes, there
would be checkoff of union initiation fees and dues, I find
that Respondent Zidell is jointly and severally liable for
unfair labor practices connected with and flowing from the
execution and maintenance of the prehire contract
between Respondents Taylor and Union.
I shall also recommend that Respondent Union post
appropriate notices to members, but in view of the fact
that the dismantling operations at the Titan I missile sites
near Larson Air Force Base have been completed and the
prehire contracts applied only to these operations , I see no
useful purpose in having the Respondent Employers post
notices at other facilities in other states or mail copies to
former employees!
[Recommended Order omitted from publication.]
`Cloverdale Plywood Company , 156 NLRB 819