Allen Milk Co.

National Labor Relations Board - Board Decisions

Apr 21, 1966

158 N.L.R.B. 285 (N.L.R.B. 1966)

ALLEN MILK COMPANY 285
APPENDIX
NOTICE TO ALL MEMBERS OF LOCAL UNIONS AFFILIATED WITH CARPENTERS
DISTRICT COUNCIL OF KANSAS CITY AND VICINITY, AFL-CIO
Pursuant to a Recommended Order of a Trial Examiner of the National Labor
Relations Board, and in order to effectuate the policies of the National Labor Rela-
tions Act, as amended, we hereby notify you that
WE WILL NOT engage in, or induce or encourage employees of J E Dunn
Construction Co , or any other person , to engage in strikes or concerted refusals
in the course of their employment to perform any services , nor threaten , coerce,
or restrain J E Dunn Construction Co, or any other person , where in either
case an object thereof is to force J E Dunn Construction Co, or any other
person, to cease doing business with Kaaz Miliworking Company, Inc
CARPENTERS DISTRICT COUNCIL OF KAN SAS CITY
AND VICINITY, 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
If members have any question concerning this notice or compliance with its provi-
sions, they may communicate directly with the Board 's Regional Office, 1200 Rialto
Building, 906 Grand Avenue , Kansas City , Missouri , Telephone No 221-2732
Allen Milk Company and Dairy, Bakery and Food Workers Union,
Local 379, Retail, Wholesale and Department Store Union.
AFL-CIO. Case No 9-CA-3382 April 21,1966
DECISION AND ORDER
On February 2, 1966, Trial Examiner Jerry B Stone issued his
Decision in the above-entitled proceeding, finding that the Respond-
ent had engaged in certain unfair labor practices and recommending
that it cease and desist therefrom and take certain affirmative action,
as set forth in the attached Tiial Examiner's Decision Theieafter,
the Respondent filed exceptions to the Tiial Examiner's Decision and
a supporting brief
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 Jenkins and Zagoria]
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 the brief, and the entire
record in the case, and hereby adopts the findings, conclusions, and
recommendations of the Trial Examiner
[The Board adopted the Trial Examiner's Recommended Order )
158 NLRB No 38
286 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
Upon a charge filed on November 16, 1964, by Dairy, Bakery and Food Workers
Union, Local 379, Retail, Wholesale and Department Store Union, AFL-CIO (herein
sometimes called the Charging Party or Union), the General Counsel of the National
Labor Relations Board, by the Regional Director for Region 9 (Cincinnati, Ohio),
issued his complaint dated May 21, 1965, against Allen Milk Company ( herein some-
times called the Respondent, Company, or Employer) Respondent's answer (dated
July 14, 1965) admitted some of the facts alleged in the aforedescribed complaint
but denied other facts and denied the commission of unfair labor practices
Pursuant to appropriate notice, a hearing in this matter was held on July 19, 1965,
before Trial Examiner Jerry B Stone All parties were represented at and partici-
pated in the hearing, and were afforded the right to present evidence, to examine
and cross examine witnesses, to offer oral arguments, and to file briefs Briefs were
filed by the Charging Party (Union) and the Respondent (Company or Employer)
and have been considered
The facts are clear and undisputed that the Union made a timely demand that the
Respondent bargain over the terms and conditions of employment of certain indi-
viduals who operated milk routes under lease agreements with the Respondent, and
that the Respondent refused to bargain with the Union as to the referred individuals
on the basis that they were not employees within the meaning of the Act The cru-
cial issue herein is whether the referred-to individuals are employees within the
meaning of the Act or are independent contractors l
Upon the entire record in this case and from my observation of the witnesses, the
following findings of fact, conclusions of law, and recommendations are made 2
FINDINGS OF FACT AND CONCLUSIONS OF LAW
I THE BUSINESS OF THE EMPLOYER INVOLVED
The facts pertaining to the business of the Employer are based on the pleadings
and the admissions therein
Allen Milk Company is an Ohio corporation engaged in the processing, distribu-
tion, and sale of milk and dairy products, through its retail and wholesale routes,
from its plant located in Franklin County, Ohio During the year ending Decem-
ber 31, 1964, which is a representative period, Allen Milk Company had an indirect
inflow of goods and commodities, in interstate commerce, valued in excess of $50,000,
which were purchased and received from enterprises located in the State of Ohio
which, in turn, had purchased and received said goods and commodities directly
from points outside the State of Ohio During the year ending December 31, 1964,
Allen Milk Company's gross sales were in excess of $500,000
As conceded by the Respondent, it is concluded and found from the foregoing
facts that the Respondent is, and has been, an employer as defined in Section 2(2)
of the Act, engaged in commerce and in operations affecting commerce as defined
in Section 2 (6) and (7) of the Act
II THE LABOR ORGANIZATION INVOLVED
Based on the pleadings and admissions therein , it is found and concluded that
Dairy , Bakery and Food Workers Union , Local 379, Retail, Wholesale and Depart-
ment Store Union , AFL-CIO, is now, and has been at all times material herein, a
labor organization within the meaning of Section 2 (5) of the Act
1 The record in this rase indicates that a prior unfair labor practice charge concerning
the alleged subcontracting of bargaining unit work was withdrawn because such subcon
tracting as had occurred , occurred more than 6 months prior to said charge Apparently
the foregoing was postulated on an assumption that the subcontracting accomplished the
legal effect of making the broker operators into independent contractors The issue herein
is different and presents the question of whether the lease arrangements and practices
constituted the lessees involved as independent contractors or as employees
2 All credibility resolutions made herein are based on a composite evaluation of the
demeanor of the witnesses and the probabilities of the evidence as a whole
ALLEN MILK COMPANY
III THE UNFAIR LABOR PRACTICES
287
Background Events Prior to Certification of the Union 3
W H Allen became connected with the Respondent as its general manager in
1960 At that time Respondent was in financial difficulty and Allen contemplated
operational changes involving bookkeeping methods and the leasing of retail and
wholesale routes In June 1961, Allen informed employee drivers of his proposed
changes in methods of operating the driver routes but told the drivers that they
would not be placed in effect until October 1961, that at that time either the then
current method of compensating the driver-salesmen or the proposed changes would
be utilized depending on which would provide the most earnings for the driver-
salesmen Allen's proposed changes in the operation of the driver routes contem-
plated a continuation of an employer employee relationship
Apparently after being told by Allen of his proposed change s, the employees
involved contacted the Union and as a result of utilization of the Board's procedures,
the Union was certified as the bargaining agent of Respondent' s employees in a
designated appropriate unit on August 7, 1961
Prior to the advent of the Union the Respondent had operated its driver wholesale
and retail routes by employees However the Respondent, under verbal agreements,
also sold milk to two independent contractors-Ray Moore and Roe Raider 4 The
Moore Dairy had four or five routes and around five employees The Raider Dairy
had one route The referred-to independent contractors owned their own trucks and
essentially the arrangement with Respondent con,isted of Respondent' s selling milk
products to the two independent contractors Each of the referred-to independent
contractors maintained their own route books There is no contention that either the
Moore Dairy or the Raider Dairy arrangements constituted other than a genuine
independent contractor relationship
Sometime after the certification of the Union the Respondent purchased the routes
of the Moore Dairy and the Raider Dairy The Moore Dairy from that time and
up to the time of the hearing in this matter operated a route described as a "school
route" for the Respondent and apparently the Raider Dairy route is now a standard
employee route There is no evidence to reveal whether the Moore Dairy route is
operated now pursuant to written or oral arrangements It would appear that the
General Counsel is not contending that the Moore Dairy route arrangement consti-
tutes an employer employee relationship If, however, the Gener it Counsel's state-
ment of contention in this respect was intended to relate only to the facts relating to
the Moore Dairy as of 1961, it would appear consistent with the facts and recom-
mendations hereinafter, that if, in fact, the Moore Dairy route is operated on a
similar bisis to the described broker routes that this matter can be disposed of in
the compliance stage of this proceeding
The Appropriate Bargaining Unit
All production and maintenance employees and driver- salesmen at the Allen Milk
Company's plant, excluding all managers, owners, dairy store employees, and all
guards, professional employees, and supervisors as defined in the Act constitute a
unit appropriate for the purposes of collective bargaining within the meaning of
Section 9(b) of the Act It is so concluded and found
Certified Status of the Union S
On or about July 28, 1961, a majority of the employees of Respondent, in the
unit described above, by a secret ballot election conducted under the supervision of
the Regional Director for Region 9 of the National Labor Relations Board, selected
the Union as their representative for the purposes of collective bargaining with
Allen Milk Company, and on or about August 7, 1961, said Regional Director certi-
fied the Union as the exclusive collective bargaining representative of the employees
in said unit
a The facts relating to the background events are based on uncontradicted credited testa
mony of W H Allen and stipulation of the parties
* For convenience in understanding, the Ray Moore" routes will be sometimes de-
scribed herein as the Moore Dairy and the "Raider" routes will be dead abed as the Raider
Dairy
5 The facts pertaining to the appropriate unit and to the certified status of the Union
are based on the pleadings and admissions therein
288 DECISIONS OF NATIONAL LABOR ,hLATIONS BOARD
Based on the foregoing, the certification, the bargaining contracts between the
Union and the Respondent, and the entire record in this case, I conclude and find
that the Union is now, and has been at all times material herein, the exclusive
collective-bargaining representative of all the employees in the certified appropriate
bargaining unit within the meaning of the Act
The Initial Bargaining Contract and Lease Arrangements
Subsequent to the certification of the Union, described above, the parties com-
menced negotiations for a contract During the negotiation period the Respondent
discussed with the Union its (Respondent's) desire to set up a lease arrangement for
the operation of a route The parties negotiated and agreed on contract terms for
the bargaining unit and on a provision in the contract which provided that the
Respondent could contract with others to perform part of the work needed to be
done on or with company products The negotiated agreement with the foregoing
provision was effective as of October 23, 1961, and for 1 year thereafter
Within a day or two after the parties had negotiated their initial bargaining con-
tract, the Respondent entered into a lease arrangement with an individual named
Ekers This lease agreement is revealed in effect by the following copy of a similar
lease made between Respondent and Richard Gearry and referred to herein as Lease
Agreement Form A 0
AGREEMENT OF LEASE
This is an agreement made at Columbus, Ohio, this 12th day of April, 1962,
between ALLEN MILK COMPANY, hereinafter called the "Lessor", and Mr
Richard Lee Gearry, 1770 Kermit Ave, Columbus 7, Ohio hereinafter called
the "Lessee"
Recitals
1 The Lessor is engaged in the business of processing, distributing and mar-
keting dairy products in and around Columbus, Ohio
2 Lessee desires to purchase from the Lessor the right and franchise to
market the product of the Lessor in an exclusive area under the trade name of
the Lessor
Covenants
NOW, THEREFORE, each in consideration of the promises of the other
hereinafter set forth, the parties agree as follows
1 The Lessor hereby leases to the Lessee all that certain milk route owned
by the Lessor and known and designated as Route No 9, and being more fully
described in a certain route book bearing that number to which reference is
hereby made (Said route as it now exists or as the same may be hereafter
increased or expanded shall be referred to herein as the "Route" ) Lessor
grants to the Lessee the exclusive right to offer for sale dairy prooducts bearing
the brand name of the Allen Milk Company to wholesale and retail customers
along said route
2 Lessor hereby agrees to assign to Lessee the accounts receivable shown
on the said route book and the purchase price which Lessee agrees to pay for
said accounts receivable shall be equal to the gross value of them as shown on
said book as of the close of business on April 12, 1962 The Lessor also sells
the truck described in Exhibit "A" attached hereto and made a part hereof
The purchase price for the truck shall be $2,196 60, and at the time of purchase,
the Lessee shall deliver to the Lessor a chattel mortgage on the truck, in form
satisfactory to the Lessor, as security for the payment of the unpaid portion of
the purchase price due Lessor
3 Lessee shall pay to the Lessor $ -0- as a downpayment on the total pur-
chase price of all property purchased and shall deliver to the Lessor his cognovit
promissory note for the balance of the purchase price Such note shall be
payable on demand, but the Lessor agrees not to ask for full payment thereof
so long as payments are made as herein provided The balance of the purchase
price represented by the note shall be paid in installments, with interest at the
rate of per cent per annum, the first payment being due on the first Wednes-
6 The lease set forth was a form lease-requiring completion by filling in certain blanks
etc It is noted that No 3 of the covenants on the form stops after the word "full" in
the following sentence "Said payment shall continue until the original purchase price
together with interest, is paid in full " In the excerpted lease the patties typed in a pro
vision relating to a 6 percent Interest charge
ALLEN MILK COMPANY 289
day after the date of this agreement and every Wednesday thereafter. Each
payment shall be in an amount equal to one cent per point (a point generally
being one quart of fluid milk), on the volume of fluid milk and other dairy
products sold to Lessee daily as of the date of this agreement on said route.
Said payment shall continue until the original purchase price, together with
interest, is paid in full. There will be a 6% interest charge on past due install-
ments of the promissory note.
Paragraph 2 continued: Effective date of transfer of truck title shall be
March 31, 1963. In the meanwhile said truck will be rented from Lessor at a
price to be agreed upon.
4. Lessee agrees that, during the term of this agreement, he will devote sub-
stantially full time to the marketing of the products for which the franchise
herein granted is given and will not sell or distribute any products other than
those furnished by the Lessor without Lessor's written consent.
5. Lessor will sell all products produced by Lessor, including fluid milk, at
a discount of -20- per cent below the Company's current retail price. Other
products sold by Lessor, such as eggs, butter, oleo, etc., not produced by it, shall
be sold to Lessee by Lessor at a price to be agreed upon from time to time by
the parties. Lessee shall receive a cash discount of five per cent for all purchases
of items produced by Lessor for which he pays Lessor within the week following
the week of purchase. Items which are the subject of special sales promotion
by Lessor will be sold to Lessee at discounts to be agreed upon by both parties
from time to time.
6. Lessor agrees to furnish Lessee from time to time with such advertising
material, supplies, equipment, and other items as Lessee may deem necessary
for the conduct of Lessee's business pursuant to this agreement, the same to be
furnished at the Lessor's cost, and the Lessee agrees to pay for the same
promptly upon receipt of Lessee's billing.
7. Lessor agrees to furnish such bottles, cases, other returnable containers,
and like items necessary and proper to the business of distributing dairy prod-
ucts as shall be necessary, charging the cost of the same to the Lessee as such
items are furnished and crediting the cost of said items to Lessee's account as
said items are returned. Lessor may charge Lessee for all such items as shall
be unaccounted for.
8. It is mutually understood and agreed that this agreement shall not be con-
strued to make Lessee an agent , servant, representative, or employee of the
Lessor for any purpose whatsoever, and the Lessee is not granted any right or
authority to assume or create any obligation or responsibility, express or implied,
on behalf of or in the name of the Lessor or to bind the Lessor in any manner
or thing whatsoever. Lessee shall identify the truck or trucks used to distribute
Lessor's product with the sign "The Allen Milk Company, Richard L. Gearry,
Distributor".
9. Lessee agrees that he will procure, at his own cost, all licenses required by
any duly constituted public authority with reference to his business and that he
will pay all taxes, including income taxes, withholding taxes, social security
taxes, unemployment and workmen's compensation taxes or contributions, per-
sonal property taxes, sales or use taxes, and franchise or excise taxes which may
be assessed against Lessee, his business hereunder or as a result of his sale of the
Lessor's products. Lessee further agrees to pay all debts and liabilities of any
kind whatsoever incurred by him in the course or conduct of his business here-
under and to keep adequate and proper records evidencing such payments and
all other records or accounts as may be required by any governmental or public
authority, or as may be required from time to time by the Lessor.
10. Lessee covenants and agrees that,he will provide, at his own expense,
public liability and product liability insurance with limitations of $100,000.00
for each person and $300,000.00 for all persons involved in the same claim for
-liability and $25,000.00 property damage. Said insurance is to cover all aspects
of the business operated hereunder and Lessee further covenants and agrees
that he will hold the Lessor harmless and indemnify it from and against any
and all-claims; damages- or- suits of any person arising in any way out of the
operation of-Lessee's business.
11. Lessee agfe'es twfurnish'all employees, trucks and other equipment neces-
sary for the operation, of said route and to bear all the expenses of the operation
of said route without any cost or charge to the Lessor. Lessor may, upon
221-731-67-vol. 158--20
290 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
request of the Lessee, furnish a relief man, who shall act as the agent of the
Lessee, to operate said route on any day Lessee is required to be absent Such
relief man shall be an employee of the Lessee during such time Compensation
shall be agreed upon by Lessor and Lessee at such time
12 Lessor shall exercise no control over Lessee of the manner in which he
distributes and sells his milk products Lessor shall not establish days of work,
starting times, or hours of work Lessee may charge prices for Lessor's products
as he sees fit
13 Lessor shall reimburse Lessee for any milk or milk products sold to him
by Lessor which prove to be defective or unsalable bec ause of improper
processing
14 This agreement shall be for an indefinite period, but may be terminated
by either party giving to the other party thirty days written notice of its or his
intention to terminate If terminated in this manner, then the Lessor shall
have the right to accompany the Lessee along said route during the thirty day
period and take full control of all route books and money, crediting Lessee with
his profits and Lessee agrees to give Lessor every assistance and cooperation
during said time This agreement may be terminated by the Lessor immedi-
ately upon default by the Lessee in any of his covenants or agreements con-
tained herein, or, at the option of the Lessee, immediately, on violation by the
Lessor of any of its covenants contained herein This agrc ement shall termi-
nate automatically upon the death, bankruptcy, or other act of insolvency by
the Lessee or upon the Lessee being adjudged incompetent
15 Upon the termination of the agreement, Lessor may forthwith take pos-
session of said route and Lessee shall deliver to Lessor, upon request, any and
all route books and records pertaining to the operation of the route and shall
forthwith discontinue any use of the name Allen Milk Company Upon termi-
nation Lessor shall be required to repurchase from the Lessee any trucks sold
it by Lessor at the price paid by Lessee, less accrued depreciation, plus the value
of all accounts receivable on the route at the time it is taken over by Lessor
Said re purchase price shall be paid in the form of negotiable promissory note
signed by Lessor payable in equal monthly payments in not more than six
months
16 The rights of the Lessee herein granted shall not be assigned without the
written consent of the Lessor
17 In the event of termination of this agreement, the Lessee agrees that he
will not, under any circumstances or conditions whatsoevei, for himself or in
behalf of any other company, sell or deliver any dairy products or solicit any
trade for dairy products to or from any customer served puisuant to this agree-
ment or solicit or attempt to take away such customers from the Lessor within
the territory hereinabove described for a period of one year following the date
of termination
18 Lessor agrees to guarantee the accounts receivable purchased by Lessee
as specified in paragraph 2 and Lessee agrees to guarantee any accounts receiv-
able repurchased by Lessor as specified in paragraph 15
19 In the event of flood, fire, strikes, or other emergencies beyond the con-
trol of Lessor the Lessee shall be allocated his prorata share of products pro-
duced by Lessee Also, at such times Lessee may obtain hip requirements from
another supplier until Lessor is again in a position to meet his needs
20 It is mutually understood and agreed that this contract shall be inter-
preted and construed pursuant to the laws of the State of Ohio, that this agree-
ment contains all oral and written agreements, representations, and agreed
arrangements between the parties hereto, and no representations or warranties
are made or implied other than as herein set forth, and that this agreement shall
be binding upon the heirs, executors, successors and assigns of each of the
parties hereto
ALLEN MILK COMPANY
By --------------------------------
Wn.LIAM H ALLEN, General Manager
LESSEE
BY
-
- ----------------
RIcsAPm LEE GEARRY
1770 Kermit Ave
Columbus 7, Ohio
ALLEN MILK COMPANY 291
Ekers commenced operating the leased route.? Later the Respondent entered into
similar lease arrangements with other individuals including men named Elliott and
Gearry. In October 1962 the parties entered into a new bargaining contract which
again provided that the Company could contract with others to perform part of the
work needed to be done on or with company products. This contract was for a term
ending in October 1964. Apparently by early 1963 the Respondent had encountered
trouble in repossessing the trucks involved in the lease arrangements when the above-
type leases were terminated and decided to utilize a different type lease for its
broker 8 routes. Several routes were leased during 1963 to individuals for operation
as broker routes under the new type lease arrangements. The form of this lease
arrangement referred to herein as Lease Agreement Form B is herein set out.
LEASE AGREEMENT
This Agreement made at Columbus, Ohio, this -___ day of ------------
19--, between ALLEN MILK COMPANY, hereinafter called the "Lessor" and
------------------------------ whose address is ---------------------
------------------------------- hereinafter called the "Lessee."
Recitals
1. The Lessor is engaged in the business of processing, distributing and mar-
keting dairy products in and around Columbus, Ohio, and
2. The Lessee desires to lease from the Lessor the right and franchise to
market the products of the Lessor in an exclusive area under the trade name
of the Lessor.
Covenants
NOW THEREFORE, in consideration of the above recitals and of the mutual
agreements hereinafter set forth, the parties agree as follows:
1. DELIVERY ROUTE. The Lessor hereby' leases to the Lessee a certain
milk and dairy route owned by the Lessor, known and designated as Route
No. _-______, and being more fully described as follows:
Said Route as it now exists or as the same may hereafter be expanded shall be
referred to herein as the "Route." The Lessor grants to the Lessee the exclusive
right to sell and offer for sale, products bearing the brand name of the Allen
Milk Company to wholesale and retail customers along said route within the
area designated above.
2. ACCOUNTS RECEIVABLE. The Lessor hereby sells, transfers and
assigns to the Lessee, without recourse, the outstanding accounts receivable on
the above route as of the above date, a list of which are attached hereto and
marked "Exhibit A". The Lessee, concurrent with the signing of this Agree-
ment, shall pay the Lessor the sum of Eight Hundred Dollars ($800.00) and
shall deliver to the Lessor the promissory note of the Lessee, in the sum of
___________------------- Dollars ($-------------- ), as consideration for
said accounts receivable.
3. DELIVERY TRUCK. The Lessor agrees to make a delivery truck avail-
able to the Lessee for servicing the Route. The Lessee shall pay the Lessor
seven dollars ($7.00) per week for the use of said truck. The Lessee shall pay
the Lessor twenty dollars ($20.00) per week for any new truck assigned to the
Route and said sum shall be payable over the useful life of the truck and so long
as the truck is operated on the Lessee's Route. The Lessor shall pay all costs
and expenses in conjunction with the operation, maintenance and servicing of
said delivery truck with the exception of gasoline , which shall be an expense
of the Lessee.
4. SALES LIMITATIONS. The Lessee agrees that, during the term of this
Agreement, he shall devote substantially full time to the marketing of the prod-
ucts for which the franchise herein granted is given and shall not sell or dis-
tribute any products other than those furnished by the Lessor without the
Lessor's written consent.
5. DISCOUNTS. The Lessor shall sell all products produced by the Lessor
to the Lessee, including fluid milk, at a discount of ------ per cent (------ %)
below the Lessor's current retail price . Other products sold by the Lessor, such
T In the testimony the leased routes were described as broker operated routes.
8 To avoid confusion the term broker routes will be used to describe the leased routes,
and the routes admittedly operated by the company employees will be described as driver-
salesmen routes.
292 DECISIONS OF NATIONAL LABOR RELATIONS ]BOARD
as eggs, butter, oleo and like products, not produced by it, shall be sold to the
Lessee at a price controlled by the prevailing market and to be agreed upon
from time to time by the parties Items which are the subject of special sales
promotion by the Lessor will be sold to the Lessee at discounts to be agreed
upon by both parties from time to time
The Lessee will receive a cash discount of five percent (5%) for all purchases
of items produced by the Lessor for which he pays the Lessor within the week
following the week of purchase
6 SETTLEMENT OF ACCOUNT There shall be a weekly settlement of
the Lessor-Lessee account Settlement shall be made at the end of each week
for the sales of the preceding weekly period (Monday through Saturday) The
Lessor, at its discretion, shall allow cash dr iws by the Lessee against his account
in the event that the Lessee's product purchases are paid on a current basis
7 CONTAINERS The Lessor agrees to furnish such bottles, cases, other
returnable containers, and like items necessary and proper to the business of
distributing dairy products, charging the costs of the same to the Lessee as
such items are furnished and crediting the cost of said items to the Lessee's
Account as said items are returned The Lessor may charge the Lessee for all
such items as are unaccounted for
8 RELATIONSHIP OF PARTIES It is mutually understood and agreed
that this agreement shall not be construed to make the Lessee an agent, servant,
representative, or employee of the Lessor for any purpose whatsoever, and the
Lessee is not granted any right or authority to assume or create any obligation
or responsibility, express or implied, on behalf of or in the name of the Lessor
or to bind the Lessor in any manner or thing whatsoever
9 TAXES, LICENSES, AND KEEPING OF RECORDS The Lessee
agrees that he will procure , at his own cost , all licenses required by any duly
constituted public authority with reference to his business and that he will pay
all taxes, including income taxes, withholding taxes, social security taxes, unem-
ployment and workmen's compensation taxes or contributions, personal prop-
erty taxes, sales or use taxes, and franchise or excise taxes which may be
assessed against the Lessee or his business or as a result of his sale of the
Lessor's products The Lessee further agrees to pay all debts and liabilities of
any kind whatsoever incurred by him in the course or conduct of his business
hereunder and to keep adequate and proper records evidencing such payments
and all other records or accounts as may be required by any governmental or
public authority, or as may be required from time to time by the Lessor
10 RELIEF MAN The Lessor may, upon request of the Lessee, furnish
a relief man, who will act as the agent of the Lessee for purposes of servicing
the Route on any day that the Lessee is absent Such relief man shall be an
employee of the Lessee during such time The Lessee shall pay the Lessor
twenty dollars ($20 00) per day for the services of said relies man
11 LESSEE INDEPENDENT OF LESSOR The Lessor will exercise no
control over the Lessee or the manner in which he distributes and sells his
products The Lessor will not establish days of work, starting time, or hours
of work The Lessee may charge prices for the Lessor's products as he sees fit
12 RETURNS The Lessor shall reimburse the Lessee for any products
sold to him by the Lessor which prove to be defective or unsaleable because
of improper processing
13 TERMINATION This Agreement shall continue for one year from the
date first above written except as follows
(a) In the absence of a written notice to the contrary served on the Lessee
at least thirty (30) days before expiration date, this Agreement is automatically
renewed for the ensuing year If this Agreement is terminated in this manner,
the personnel of the Lessor shall have the right to accompany the Lessee along
the Route during said thirty (30) day period and to take full control of all route
books and money, crediting the Lessee with his profits The Lessee agrees to
cooperate with and assist the Lessor during this change-over period
(b) This Agreement may be terminated by the Lessor or Lessee upon the
giving of thirty (30) days notice of intention to terminate to the other party to
this Agreement
(c) This Agreement may be terminated by the Lessor at any time for failure
of the Lessee to serve customers properly, failure to pay for products in accord-
ance with the terms established by the Lessor, failure to pei mit the Lessor to
examine the Lessee's route book when requested at reasonable intervals, or failure
of the Lessee to perform any of the covenants herein contained
ALLEN MILK COMPANY 293
(d) This Agreement shall terminate automatically upon the death, bank-
ruptcy or other act of unsolvency by the Lessee or upon the incompentency of the
Lessee.
14. SURRENDER OF ROUTE. Upon the termination of this Agreement,
the Lessor may take possession of the Route and the Lessee shall deliver to the
Lessor, upon request, any and all route books and records pertaining to the opera-
tion of the Route and the Lessee shall discontinue the use of the name "Allen
Milk Company". Upon termination of this Agreement, the Lessor shall pur-
chase outstanding accounts receivable on the Route from the Lessee at face
value. Amounts payable for said accounts receivable shall be first applied to the
payment of any sums owning to the Lessor from the Lessee and the balance shall
be paid to the Lessee within ninety (90) days following termination. At the end
of thirty (30) days following the date of termination of this Agreement, the
Lessor will turn over to the Lessee all accounts which it believes not to be col-
lectable and the total of these accounts shall be deducted from the price otherwise
payable by the Lessor for said accounts receivable.
15. RESTRICTION ON ASSIGNMENT. The rights of the Lessee herein
granted shall not be assigned without the written consent of the Lessor.
16. NO COMPETITION CLA USE. Upon termination of this Agreement
the Lessee shall not, directly or indirectly, or through any corporation, firm or
individual, or through any member of his family, sell, take away or attempt to
take away any customers of the Lessor, or sell, solicit, or deliver milk, cream, or
other dairy products, or otherwise engage in the dairy business within the limits
of the territory described in paragraph 1 of these covenants, for a period of two
years after the day first above written.
17. PROPERTY BOND. The Lessee shall furnish the Lessor with a property
bond in the sum of EIGHT HUNDRED DOLLARS ($800.00) conditioned upon
the Lessee's performance under the terms of this Agreement.
18. SCOPE OF LEASE AGREEMENT. It is mutually understood and
agreed that this Agreement shall be interpreted and construed pursuant to the
laws of the State of Ohio; that this Agreement contains all oral and written
agreements, representations and agreed arrangements between the parties hereto,
and no representations or warranties are made or implied other than as herein
set forth, and that this Agreement shall be binding upon the heirs, executors,
successors and assigns of each of the parties hereto.
Signed and acknowledged in
the presence of:
ALLEN MILK COMPANY
By: ----------------------------
LESSOR
By: ------------------- ------
LESSEE
STATE OF OHIO
COUNTY OF FRANKLIN SS:
Before me, at Notary Public in and for said county, personally appeared the
above named Allen Milk Company, by ---------------------------------
and ______-_____ ___, who acknowledged that they did sign
the foregoing instrument, and that the same is their free act and deed.
--------------------------------
Notary Public
The Respondent has continued to renew Lease Arrangement Form A with certain
of the individuals who operated under such leases . Thus as of the hearing in this
matter the Respondent operated some routes pursuant to Lease Arrangement Form A
and Lease Arrangement Form B-as well as some driver -salesmen operated routes.
There is no evidence to indicate union dissatisfaction with the Respondent's broker
operated routes until the summer of 1963. Apparently by the summer of 1963 the
Respondent was operating 12 broker lease type routes and 2 or 3 driver-salesmen
operated routes. In the summer of 1963 a new international representative com-
menced representing the Union and filed unfair labor practice charges relating to
alleged subcontracting of bargaining unit work by the Respondents Being advised
91 credit Clark's testimony relating to the filing of the unfair labor practice charges
and the actions thereafter . To the extent that Allen 's testimony to the effect that the
November 1964 demand for bargaining as to the brokers was the first expression of union
dissatisfaction I discredit such testimony . I believe that Allen unintentionally over-
looked the filing of the unfair labor practice charges referred to.
294 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
by a Board representative that the Respondent had not made such changes in the unit
work within 6 months preceding the unfair labor practice charge, the union repre-
sentative withdrew his charge. From that point in time the Respondent has not ini-
tiated any new broker routes but has, in fact, converted two broker routes back to
driver-salesmen operated company routes. Shortly before the hearing in this matter
three broker routes were terminated, reverted to driver-salesmen routes, and at the
time of the hearing were being operated by driver-salesmen of the Respondent.
Apparently at the time of the hearing Respondent has seven routes operated as broker
routes and six or seven routes operated as driver-salesmen routes.
The Demand for Bargaining as to the Brokers ; the Refusal to Bargain
as to the Brokers 10
In November 1964 the Union transmitted to the Respondent proposed amendments
to the contract. Among the Union's proposals was one to the effect that "All con-
tractual benefits, including the salesmen wage programs shall apply to alleged broker
salesmen ." On November 10, 1964, the Respondent notified the Union by memo-
randum that "We note that you have included our independent brokers in your
proposed amendments. Your certification from the National Labor Relations Board
does not authorize you to represent them. Since they are outside the scope of the
contract, the company does not intend to bargain with the Union concerning our
relationship with them." The Company indicated willingness to otherwise negotiate
a new contract.
On December 8, 1964, the parties discussed terms for a new contract and dis-
cussed the broker issue. The parties' positions on December 8, 1964, were similar to
their written position reflected above. As a result of the evidence and the stipula-
tions of the parties, it is clear that Respondent's refusal to bargain as to the brokers
was because it contends that the brokers are not employees within the meaning of the
Act. In the meantime the parties have entered into a new contract reserving the
disposition of the inclusion or exclusion from the contract of the brokers in accord-
ance with the determination in this proceeding.
Comparison of Brokers and Driver-Salesmen
The facts relating to the brokers and driver-salesmen are virtually without dispute
except as to whether the brokers are required to do acts or perform in a manner
required by the Respondent 11
Commencement Relationship with Respondent
Prospective brokers from outside the employment ranks of the employer and
prospective driver-salesmen are similarly interviewed and processed as regards appli-
cation for employment. Prospective brokers from outside the employment ranks of
the employer, if considered by the Respondent as potential brokers, are hired by the
Respondent and trained for servicing a route prior to their obtaining a leased route.12
Newly hired prospective driver-salesmen are similarly trained. Some brokers are
obtained directly from the ranks of the Company's employee driver-salesmen.
Working of Routes
Driver-salesmen work their designated routes on Monday, Tuesday, Wednesday,
Thursday, Friday, and Saturday, and do not work Sunday (a nonworking day).
Driver-salesmen work for 14 of the aforedescribed workdays and have 2 days off at
that point. Brokers are required by their lease arrangement to devote substantially
full time to the operation of their designated routes. Brokers work their designated
routes on Monday, Tuesday, Wednesday, Thursday, Friday, and Saturday, and do not
work on Sunday (a nonworking day). Driver-salesmen and brokers work around 40
'hours a week on their designated routes. '
'()The facts as to the Union's demand for bargaining as to the brokers and the Re-
spondent's refusal to bargain 'as to the brokers are based on stipulations of the parties,
exhibits, and the credited testimony' of Clark.
n Excepting for the printed lease and some fragments of testimony the details as to
brokers primarily related to brokers who leased their trucks from the Company under
`Lease Form B. Allen testified, in effect, that arrangements as to "Lease Form B brokers"
were substantially similar to the arrangements as to "Lease Form A brokers."
12 Leased routes when not leased revert
,
to company routes operated by driver -salesmen.
ALLEN MILK COMPANY 295
The Loading of Trucks; the Hours and Time of Work of
Brokers and Driver-Salesmen
Some of the driver-salesmen and some of the brokers load their respective trucks
with products for servicing their routes in the afternoon or evening prior to servicing
their routes the next day. Some of the driver-salesmen and some of the brokers do
some loading of their trucks with products just prior to commencement of the servicing
of their routes and after 6 a.m. when the Company opens its loading dock. Driver-
salesmen and brokers generally leave the company premises for servicing their routes
around 6 a-.m., either shortly before or after the said time 13
Trucks Utilized-Brokers and Driver-Salesmen
Brokers and driver-salesmen utilize trucks for the transportation of products to
the individual customers on their routes. Lease Form A sets forth that the truck
utilized by the broker shall be identified with a sign on it "The Allen Milk Company
(name of broker), Distributor." 14 No evidence was adduced to reveal whether
brokers under Lease Form A arrangements so identified their trucks. Lease Form B
brokers utilized trucks (leased for $7 per week) and were responsible for gasoline
costs but no other costs relating to the trucks.
At some time in the past brokers under Lease Form B arrangements were respon-
sible for gasoline and oil as to the rented trucks. Apparently because some of the
brokers were not propei ly keeping the trucks oiled, the Respondent commenced taking
care of the oiling of the trucks and so provided in the lease arrangements.
Driver-salesmen and Lease Form A and Lease Form B brokers utilized trucks
similarly painted and identified by signs as Allen Mik Company. The Company has
been responsible for all costs relating to trucks operated by driver-salesmen.
The Routes
Brokers and driver-salesmen are given route books by the Company which lay out
designated routes showing the beginning, the customer points thereafter, and the
ending of the route. The facts reveal, for practical purposes, that brokers and driver-
salesmen operate and have operated their routes along the designated routes set forth
in the book. At some time in the past a broker, who is no longer under lease agree-
ment with the Company, deviated and operated his route area with a different route
as to point of beginning, points thereafter, and the ending of the route. _ The aforesaid
broker was not reprimanded or criticized for such deviation on his route.
Miscellaneous Route Work
Brokers and driver-salesmen deliver their products to customers on their routes,
receive orders, solicit customers, receive payments, maintain the status of their route
books,15 pick up empties. and deliver company advertisements.16
18 Redifer , a driver-salesman , testified credibly to the effect that he started his days'
work at 5: 30 a.m. Holley, a broker, testified credibly to the effect that lie started his
days' work at 5 : 45 a m. DeBord , a broker, testified credibly to the effect that his starting
time varied, that he started generally at 5: 30 a.m., and that the morning of the hearing
in this matter he had started work on his route at 4 a.in. Allen credibly testified to the
effect that the Company preferred that the brokers and driver-salesmen arrive at the
Company by 6 a.m. or shortly thereafter and be started on the routes between 6 and 7 a.m.
Allen credibly testified that some brokers, no longer with the Company, had on numerous
occasions arrived as late as 7 and 9 a.m. to load.- Allen credibly testified to the effect
that Holley and DeBord left the premises earlier than preferred. I note however, that
the facts reveal that Redifer, a driver-salesman, left usually around the same time as
Holley, and DeBord. The facts as a whole reveal that the Company did not insist on a.
precise time of starting on the routes for either driver-salesmen or brokers.
14 Under Lease Form A the broker purchased his truck from the Company and was
responsible for all costs relating to ownership, maintenance, and operation of the truck..
There is no evidence to reveal that this was not the practice of such brokers.
16 It appears that brokers and driver- salesmen generally post their route book customer
account status either while on their route or at the end of the day
1°Although brokers generally carry out such advertising, they do not always do so, and
do not always deliver such advertising to all customers
296 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Utilization of Forms
When brokers and driver-salesmen return to the plant at the end of their routes,
they complete substantially similar forms as to orders for the next day and the turning
in of money collected on the particular day. Driver-salesmen complete and turn in to
the Company an adjustment sheet relative to their collections and status of customer
accounts. The brokers do not complete or turn in to the Company an "adjustment"
sheet. Brokers and driver-salesmen similarly list checks received from customers
and made out to Allen Milk Company and place checks and cash in similar envelopes
which are turned into the Company for bank depositing.
As indicated previously, the brokers and driver-salesmen generally, after filling out
load sheets (orders for the next day), load their respective trucks_ (sometimes helping
each other to load trucks), and then park their trucks at the copany plant prior to
going home at the end of the day.
The Company furnishes to the brokers and driver-salesmen substantially similar
forms as to pricelists, order sheets, statements, etc. Brokers and driver-salesmen
utilize the forms furnished by the Company in their necessary reports, etc. Brokers
are furnished pricelists showing broker, wholesale, and retail prices, and driver-
salesmen are furnished pricelists showing wholesale and retail prices. Brokers receive
a statement form tailored to reflect the broker's account with the Company including
broker's notes payable, etc. As indicated previously, driver-salesmen receive an
adjustment sheet form not furnished brokers.
Facilities Utilized
Brokers and driver-salesmen use the same facilities of the employer including the
drivers' room, toilet, parking lot, bulletin board, route board, and pigeonholes (appar-
ently places for leaving written communications for the individual brokers and retail
drivers).
Employment of Relief Drivers
On the days that driver-salesmen are not present to operate their routes when
scheduled, the Company furnishes a relief driver. On the days that brokers are not
present to operate their routes, the lease provides that the broker can furnish his own
relief driver or that the lessor at the lessee's request will furnish a relief driver for the
broker (to work as an employee of the lessee) at agreed-upon compensation between
the Company and the broker in the Lease Form A arrangement, and on the payment
of $20 to the Company by the broker (Lease Form B) for services of the relief driver.
In practice the Company obtains the relief driver for the broker and pursuant to the
lease agreement pays the amount of compensation agreed on or the $20 as referred to,
and then charges the compensation amount against the broker's account.
The Extension of Credit to Customers
Driver-salesmen cannot extend and do not extend credit to customers for products
sold unless approved by the Company. Brokers, by the lease arrangement and in
practice, have the apparent authority to extend credit to customers. The Company,
however, informs the brokers of bad credit areas and risks as to customers.
Collections
Driver-salesmen and brokers collect from customers cash and checks . In practice
such checks are made out to Allen Milk Company.
Sales Meetings
The Company has sales meetings at various times during the year. Brokers and
driver-salesmen are all notified about the time and place of such meetings. Some
of the sales meetings are held at dinnertime and at a restaurant with the Company
paying the costs of the dinner for the brokers and driver-salesmen. In connection
with the sales meeting, it may be stated that the Company has sales contests in which
both brokers and driver-salesmen participate. The standings of the brokers and
driver-salesmen in such contests are shown by posted graphs showing route sales fig-
ures. The facts reveal that a driver-salesman who at some time preceding the hear-
ing missed four sales meetings received a reprimand slip concerning the same. A
broker who, at some time preceding the hearing, missed a sales meeting was told by
the Company to let them know when he would miss a sales meeting in order that
ALLEN MILK COMPANY 297
they would not order and pay for a dinner for him at such meeting. Another broker
who attends a school of a religious nature on occasions missed sales meetings and re-
ceived no criticism for such absences by the Company.
Advertising Matter
The Company furnishes advertising matter to brokers and to driver-salesmen for
disposition on their routes. It is noted that the written lease for brokers operating
under Lease Form A provides that the Company will provide advertising matter if
requested by the broker and bill the broker for the costs of the same. It is noted
that Lease Form B for brokers is silent as to advertising, etc. No evidence was
adduced as to whether the brokers under Lease Form A had requested or were
billed for advertising matter. Brokers, under Lease Form B, apparently received
advertising matter given them by the Company at no costs.17 The facts reveal that
brokers and driver-salesmen generally distribute advertising matter given them by
the Company. Some of the brokers however, on occasion , do not distribute advertis-
ing matter, and on occasion distributed such advertising matter to some of their
customers but not to all of their customers. The overall facts reveal that the Com-
pany knows that the brokers do not always distribute the advertising matter given to
them and that the Company has not criticized the brokers for their failure to deliver
the advertising matter. The Company, on occasions, mails advertising matter con-
cerning special sales, etc., to customers on the routes of brokers and driver- salesmen.
Fringe Benefits
Driver-salesmen received fringe benefits as employees pursuant to the terms of the
collective-bargaining agreement between the Union and the Company. Such benefits
include vacations with pay, holidays, and premium pay under conditions. Brokers
do not receive such benefits as a practice or pursuant to their lease agreement with
the Respondent.
Licenses, Etc.
The lease agreements between the Company and the brokers require the brokers
to secure necessary licenses such as vendor licenses, etc., and pay all taxes including
income taxes, withholding taxes, social security taxes, unemployment and workmen's
compensation taxes or contributions, personal property taxes, sales and use taxes,
and franchise or excise taxes. The evidence reveals that the Company does not with-
hold or deduct such aforesaid taxes, etc. The Company deducts social security with-
holding and city taxes from driver-salesman pay, and makes necessary tax payment
on its own to ensure that driver-salesmen are coveted by unemployment and work-
men's compensation provisions.
Holley, a broker, testified credibly that he had not purchased vendor's licenses for
his route.
Uniforms
As best as can be gathered from the testimony and the exhibits, the Company's
expressed policy is to require driver-salesmen to wear winter uniforms and the Com-
pany pays part of the costs of the same. In practice some of the driver-salesmen
wear the winter uniform and others do not. Brokers do not wear a uniform as
such but some wear clothes that appear similar to a uniform.
Complaints
Customers on broker and driver-salesman routes make verbal complaints to said
brokers and drivei-salesmen. On occasions customers on broker and driver-salesman
routes complain directly to the Company. On such occasions written slips of the
complaint are given to the brokers and to the driver-salesmen.
Compensation, Pricing of Goods, Etc.
Driver-salesmen are compensated for their employment by a guaranteed wage of
$325 a month and a commission arrangement involving commissions of 123/4 percent
of the collections on their route the preceding week.
The lease arrangements between the brokers and the Company in effect provide
that brokers' compensation would be dependent on the difference between their
17 The evidence is silent as to whether the brokers ever requested advertising materials.
'298 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
collections on goods sold and their costs of operations (cost of products purchased
from the Company plus truck costs-Lease Arrangement A, truck rental cost and
gas; Lease Arrangement B, helper's cost).18
The price of the goods "sold" by the Respondent to the brokers is set approximately
24 percent under the suggested retail price of the Respondent for the goods. On the
occasions that the Respondent quotes a lower price to prospective customers, the
broker does not receive a lower adjustment. On the occasions that the Respondent
,runs "specials," an adjustment is made in the price charged to brokers and driver-
salesmen.19
The Company furnishes its driver-salesmen with "wholesale" and "retail" price-
lists. In practice, the driver-salesmen follow the company pricelists in their sale
prices to customers. The Company furnishes its brokers with "wholesale," "broker,"
-and "retail" pricelists. In practice, the brokers generally follow the Company's
suggested "retail prices" in their sale prices to customers. Driver-salesmen secure
approval, either before or immediately after a sale, for selling products below the
'company-suggested prices. Brokers, without securing approval, sell products on
occasion or as to certain items both above and below the Company's suggested
price lists.
On occasion the Company has quoted prices to customers of both the brokers and
driver-salesmen. In practice, generally speaking, brokers and driver-salesmen have
furnished the products at the price quoted to customers. DeBord, one of the brokers,
-on one occasion expressed strong opposition to the Company to furnishing milk
products to the Desert Inn at the price quoted by the Company. The Company insist-
ently suggested that the customer ought to be served at the price quoted in order to
-secure the cuss )mer.
At times the Company runs "special prices" on products. In practice, the brokers
.and driver-salesmen follow the suggested special prices. Some of the brokers do
not in total effect follow the suggested prices. As an-example some of the brokers
•do not follow the suggested price as to customers who have a large outstanding bal-
ance (money) due the broker. Redifer, one of the driver-salesmen, does not always
,follow the suggested special price because he said it affected his commissions.
In substantial practice the compensation of the brokers has largely been a com-
posite of collection moneys withheld, advances charged to the broker's account and
described as a draw, and a "bookkeeping" accounting between the Company and the
.brokers with the broker's account reflecting either a decrease balance as to his debt
for the route or an increase in balance due the Company resulting from failure of
collections minus the draw or withholding of moneys by the broker to even out with
the cost of goods purchased from the Company and truck rental.
In practice, most of the brokers up to or around March 1965, turned in all of
their collections daily 20 and received "draws" of $75 or $90 per week from the
'Company which were charged to their accounts. Around March 1965, at a time
when the Union and the Company were arguing about the status of the brokers and
,at a time when the costs of products sold and billed to the brokers was exceeding,
in instances, the amount of brokers' collections turned in, the brokers were informed
,that the draw was being terminated and that they should withhold the moneys that
they needed.21
Allen credibly testified to the effect that the draw was instituted because the Internal
Revenue Service had indicated that if all collections were turned in daily, records
-of collections could be utilized for income tax purposes. Although the withholding
-of gas expenses would reveal that such collection records would not be "penny per-
28 The Company bears the cost of normal breakage as to containers and related material
for driver-salesmen if the damaged item is turned in. The lease arrangements provide
that the Company may charge the brokers if such items are not returned. The evidence
-does not reveal the practice as to charges concerning breakage to brokers.
101 credit Allen 's testimony to the effect that brokers' prices were adjusted when
"specials" were run. Holley testified to the effect that brokers' prices were not adjusted
.as to specials . Considering his testimony on direct and cross-examination on this point,
I was impressed by his unsureness and unreliability on this point and discredit his testi-
mony in this regard. Allen's testimony appeared sure, forthright , and truthful on this
-point and is credited.
OD Some brokers withheld gas expenses . Some of the brokers, but not many, withheld
other moneys.
91 Holley , a broker, credibly testified that he was told by Supervisor Myers, around
'March 1965, to start withholding $90 from his collections that he normally turned in to
.the Company as the $90 draw was being terminated.
ALLEN MILK COMPANY 299
feet ," I am convinced that utilization of such records in such a manner could be
proper with a reasonable estimate of gas expenses added, or actual gas expenses
.added to the total of the collections to arrive at the necessary sales figures . Consider-
ing Allen 's testimony to the above effect and the broker witnesses ' testimony to the
effect that they substantially turned in all collections , I am convinced that the
evidence reveals that the brokers turned in substantially all of their collections to the
Company prior to or around March 1965. 1 also note that Allen credibly testified to
the effect that driver-salesmen were supposed to turn in all of their collections, and
that one driver-salesman habitually did not turn in all of his collections and that
-such shortage was taken care of by deducting the same from his wages or commis-
sions due.
Route Books
The Company furnishes route books to both driver-salesmen and brokers . In gen-
eral practice both driver-salesmen and brokers keep the route book as to sales and
collections . Every 2 months, old route books are turned in and the driver-salesmen
and brokers get new route books. Allen credibly testified that as to a route book of
an ex-broker that the ex-broker had not properly filled out his route book.
The Company maintains sticker plates for use in running off new route books.
Both brokers and driver-salesmen can pull sticker plates from the files of ex-customers
who owe nothing to the brokers or Company. It is clear that driver-salesmen cannot
pull sticker plates of ex -customers who owe money to the Company. There is no
evidence that brokers have pulled sticker plates of ex-customers who still owe money
on their account . It is noted , in any event , that the lease agreements provide for
the keeping of necessary records as follows:
Lessee agrees that he will procure , at his own cost, all licenses required by,
any duly constituted public authority with reference to his business and that he
will pay all taxes, including income taxes , withholding taxes, social security
taxes, unemployment and workmen 's compensation taxes or contributions, per-
sonal property taxes, sales or use taxes , and franchise or excise taxes which
may be assessed against Lessee , his business hereunder or as a result of his
sale of the Lessor's products. Lessee further agrees to pay all debts and liabilities
of any kind whatsoever incurred by him in the course or conduct of his business
hereunder and to keep adequate and proper records evidencing such payments
and all other records or accounts as may be required by any governmental
or public authority , or as may be required from time to time by the Lessor.
Selling of Routes by Brokers
The lease arrangements provide that : "The rights of the Lessee herein granted
shall not be assigned without the written consent of the Lessor ." Thus the broker
( lessee ) cannot sell "his" route without the written consent of the Company.
Excepting for an instance involving the broker route of Jay DeBord , there is no
evidence of a broker attempting to get permission to let someone else have his
route. After the Company had entered into a lease agreement with Jay DeBord,
DeBord asked Allen for permission to cut up part of his route and to put his son
to work for 3 days a week . DeBord's son was interviewed by the Respondent, com-
pleted a job application form , and commenced servicing a portion of his father 's leased
route. The Respondent negotiated with DeBord's son a compensation arrangement
at the rate of $12 per day. The Respondent paid Debord 's son for work by company
,check and charged the amount of compensation against DeBord 's bill.
Broker's Full-Time Devotion to Route ; Restriction on
Sale of Other Products
The lease arrangements provide that : "The lessee agrees that , during the term of
this Agreement , he shall devote substantially full time to the marketing of the prod-
ucts for which the franchise herein granted is given and shall not sell or distribute any
products other than those furnished by the Lessor without the Lessor 's written con-
sent." Thus the broker ( lessee ) cannot sell or distribute any products other than
those furnished by the Company without the Company's written consent.
Conclusions
The terms of the lease agreements between the Respondent and the brokers have
been set forth in detail previously . In my opinion the agreements concerning the
sale and repurchase of accounts receivable and the sale and repurchase of trucks
300 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
reveal that, in practical effect, no monetary value was placed on existing good will
or acquisition of customers. Simply speaking, the agreements were to the' effect that
the broker, without any monetary payment for the right to service customers, could
operate the routes under the terms of the agreements.
Under Lease Form A the Respondent guaranteed the accounts receivable sold the
broker. Such an arrangement in practical effect, is tantamount to an agreement to
have the broker collect the accounts receivable for the Respondent. Under Lease
Form B the Respondent did not guarantee the accounts receivable sold the broker
and the broker stood to lose such accounts receivable as were bad.
As to some , but not all, of the lease agreements , it appears that interest-bearing
notes were required in connection with the sale of accounts receivable and trucks.
Similarly the Respondent required in some, but not all, of the lease agreements cash
downpayments in connection with the sale of accounts receivable, etc.
The facts are undisputed that at the termination of some of the broker leases, some
of the brokers' accounts when balanced reflected a sum of money due the Respondent.
The Respondent has attempted to collect and has collected such moneys due it from
some of the ex-brokers. As to others the Respondent has not appeared to pursue with
great emphasis the collection of moneys due it. I credit Allen's statement to the
effect that such failure to push for collection moneys due was because of various
humane considerations.22
The facts reveal that the Respondent, in the control and exercise of authority over
its driver-salesmen , acts in a tolerant and somewhat lenient manner. The facts also
reveal that Respondent has worded its remarks to its brokers as to various aspects of
the brokers' operation in the terms of suggestions . Its suggestions to the brokers may
be summarized in part as follows: (1) By the designated route books, the Respondent
suggests the route to be followed; (2) the Respondent suggests prices by its pricelists
and its quotation of prices to customers; (3) the Respondent suggests attendance at
sales meetings ; (4) the Respondent makes suggestions as to credit; (5) the Respond-
ent suggests collection emphasis (Respondent's agent rides with the broker on occa-
sion ); (6) the Respondent, by initially training the broker in an employee status,
suggests conformance to the Respondent's method of operation; (7) the Respondent,
by providing necessary forms, suggests usage of the same; and (8) the Respondent
suggests acquisition of customers at reduced prices.
The instant case, like many cases involving the question of whether individuals
designated as "brokers," "independent contractors," or others are employees within
the meaning of the Act, has indicia pointing both toward "employee status" and to
"independent contractor" status. The determination of the status of the disputed
brokers in this case ultimately depends on whether the totality of the evidence reveals
that the Respondent controls the method of work of the brokers.
The Respondent would contend that its involvement in the brokers' operation was
merely that of suggestion or cooperation The Respondent contends that the lease
agreements contain a paragraph which reads as follows:
Lessor shall exercise no control over Lessee of the manner in which he dis-
tributes and sells his milk products. Lessor shall not establish days of work,
starting times, or hours of work. Lessee may charge prices for Lessor's products
as he see fit.
The Respondent would contend that the forementioned paragraph reveals that the
brokers, in affect, have complete freedom from control by the Respondent.
The General Counsel and the Charging Party contend that the overall evidence as
to the lease agreements and practices as regards the brokers reveal Respondent's con-
trol of the brokers as employees. In this regard the manner in which the lease agree-
ments may be terminated has a bearing on the meaning of the brokers' operations
of the routes.
In the Lease Form A arrangements the Respondent, by virtue of the termination
rights therein (30 days' notice), could terminate the agreement with the broker and
immediately have the right to accompany the lessee along said route and take full
control of all route books and money.23 In the Lease Form B arrangements the
221 am convinced from all of the evidence that Respondent has operated its plant and
conducted itself toward both driver-salesmen and brokers in a relatively lenient manner.
I credit Allen's testimony to the effect indicated because of his demeanor as a forthright
and truthful witness while testifying to this effect.
23 See Lease Form A Agreement under section entitled "The Initial Bargaining Contract
and the Initial Lease Arrangements."
ALLEN MILK COMPANY 301
Respondent, by virtue of the termination rights therein (30 days' notice before the
end of the agreement), could terminate the agreement with the broker and immedi-
ately have the right to accompany the lessee along said route and take full control
of all route books and money In the Lease Form B agreement, the Respondent
could terminate the agreement at any time for failure of the broker to serve cus-
tomers properly and for other stated reasons 24
Considering the facts as a whole, I am convinced that the Respondent's extensive
use of suggestions coupled with the power of practical instantano ous termination of
the leases reveal, in fact, that Respondent exercised control over the work of the
brokers That Respondent intended that its suggestions be considered as direction by
it when it so desired is illustrated by Respondent's insistent suggi stion to Debord to
service the Desert Inn at a lower price for the products than Debord told Respondent
he thought was proper I am convinced from all the facts that Respondent exercises
control over and directs the working of the brokers as employees 25 Thus the brokers
or lease drivers of the Respondent are driver salesmen and employees within the mean-
ing of the certified appropriate unit and the Act I so conclude and find
Accordingly, the Respondent, by its actions on November 10, 1964, and thereafter,
in refusing to bargain concerning the brokers as employees in the appropriate bargain-
ing unit has violated Section 8(a) (1) and (5) of the Act I so conclude and find
IV THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the Respondent seL forth in section III, above, occurring in con
nection with the operations of the Respondent described in section I, above, 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 of commerce
V THE REMEDY
Having found that the Respondent has engaged in unfair labor practices, it will be
recommended that Respondent cease and desist therefrom, and takf certain affirmative
action to effectuate the policies of the Act
It has been found that the Respondent has refused to bargain collectively with the
Union as the exclusive representative of the employees in the appropriate unit It
will, therefore, be recommended that the Respondent, on request, bargain collectively
with the Union as such representative, and in the event that an understanding is
reached, embody such understanding in a signed agreement
The Charging Party requests a remedy placing the brokers under the terms and con-
ditions of the current collective bargaining agreement with full retroactivity of all
such rights While it may appear that this might, to a substantial degree, be accom-
plished, the differences, although not necessarily substantial, as to compensation under
the various arrangements present problems which would be best solved by the parties
pursuant to a standard bargaining order in the compliance stage of this proceeding
Upon the basis of the foregoing findings of fact, and upon the i ntire record in the
case, I make the following
CONCLUSIONS OF LAW
1 Dairy, Bakery and Food Workers Union, Local 379, Retail, Wholesale and
Department Store Union, AFL-CIO, is a labor organization within the meaning of
Section 2(5) of the Act
2 Allen Milk Company is an employer engaged in commerce within the meaning
of Section 2(6) and (7) of the Act
3 (a) All production and maintenance employees and driver-salesmen at the
Allen Milk Company's plant, excluding all managers , owners, dairy store employees,
and all guards, professional employees, and supervisors as defined in the Act, con-
stitute a unit appropuate for the purpose of collective bargaining within the meaning
of Section 9(b) of the Act
21 See Lease Form B Agreement under section entitled "The Initial Bargaining Contract
and the Initial Lease Arrangements "
115 Site Ott Company of Missouri, 187 NLRB 1274 , I have considered all of the cages cited
by the parties and am persuaded that the Board s Decision in the case cited heiein sets
forth the applicable piinclple for this case
302 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(b) Allen Milk Company's lease drivers (brokers) are driver-salesmen and employ-
ees within the meaning of the certified appropriate unit and the Act.
4. Dairy, Bakery and Food Workers Union, Local 379, Retail, Wholesale and
Department Store Union, AFL-CIO, has been since duly 28, 1961, was on Novem-
ber 10, 1964, and at all times since has been the exclusive representative of all employ-
ees in the aforesaid appropriate unit for the purpose of collective bargaining within
the meaning of the Act.
5. By refusing on November 10, 1964, and thereafter, to bargain collectively with
the above-named Union as to the terms and conditions of employment of the brokers.
or lease drivers, the Respondent has engaged in unfair labor practices within the mean-
ing of Section 8(a) (5) and (1) of the Act.
6.. By the foregoing, the Respondent has interfered with, restrained, and coerced its,
employees in the exercise of the rights guaranteed in Section 7 of the Act, and has
thereby engaged in and is engaging in unfair labor practices within the meaning of
Section 8(a) (1) of the Act.
7. The aforesaid unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2(6) and (7) of the Act.
RECOMMENDED ORDER
Upon the basis of the foregoing findings of fact and conclusions of law and on the
entire record in this case, I recommend that Respondent, Allen Milk Company, its
officers, agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Refusing to bargain collectively with Dairy, Bakery and Food Workers Union,
Local 379, Retail, Wholesale and Department Store Union, AFL-CIO, as the exclu-
sive representative of all its employees in the appropriate unit with respect to the rates.
of pay, wages, hours of employment, and other terms and conditions of employment.
The appropriate unit is: All production and maintenance employees and driver-
salesmen at the Allen Milk Company's plant, excluding all managers, owners, dairy
store employees, and all guards, professional employees, and supervisors as defined'
in the Act. Allen Milk Company's lease drivers (brokers) are driver-salesmen and'
employees within the meaning of the certified appropriate unit and the Act.
(b) In any like or related manner interfering with, restraining, or coercing employ-
ees in the exercise of their rights guaranteed in Section 7 of the Act except to the
extent that such rights may be affected by an agreement requiring membership in a.
labor organization as a condition of employment, as authorized in Section 8(a) (3) of
the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959-
2. Take the following affirmative actions which I find will effectuate the policies
of the Act:
(a) Upon request, bargain collectively with Dairy, Bakery and Food Workers
Union, Local 379, Retail, Wholesale and Department Store Union, AFL-CIO, as the
exclusive representative of all the employees in the appropriate bargaining unit, and
embody any understanding reached in a signed contract.
(b) Post at its plant in Columbus, Ohio, copies of the attached notice marked
"Appendix." 26 Copies of said notice, to be furnished by the Regional Director for
Region 9, shall, after being signed by an authorized representative of the Respondent,
be posted by the Respondent immediately upon receipt thereof, and be maintained by
it for 60 consecutive days thereafter, in conspicuous places, including all places where
notices to employees are customarily posted. Reasonable steps shall be taken by the
Respondent to insure that said notices are not altered, defaced, or covered by any
other material.
(c) Notify the Regional Director for Region 9, in writing, within 20 days from the
receipt of this Recommended Order, what steps the Respondent has taken to comply
herewith.27
w In the event that this Recommended Order be adopted by the Board , the words "a
Decision and Order" shall be substituted for the words "a Recommended Order of a Trial
Examiner" in the notice. In the further event that the Board 's Order be enforced by a
decree of a United States Court of Appeals , the words "a Decree of the United States
Court of Appeals , Enforcing an Order" shall be substituted for the words "a Decision
and Order."
271n the event that this Recommended Order be adopted by the Board , this provision
shall be modified to read : "Notify said Regional Director , in writing , within 10 days from.
the date of this Order , what steps the Respondent has taken to comply herewith.
S. CALIF. DISTRICT COUNCIL OF HOD CARRIERS, ET AL. 303..
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to a Recommended Order of a Trial Examiner of the National Labor
Relations Board, and in order to effectuate the policies of the National Labor Rela-
tions Act, as amended, we hereby notify our employees that:
WE WILL NOT refuse to bargain collectively with Dairy, Bakery and Food'
Workers Union, Local 379, Retail, Wholesale, and Department Store Union,
AFL-CIO, as the exclusive representative of all our employees in the appropriate-
unit described below.
WE WILL NOT in any like or related manner interfere with, restrain, or coerce:
employees in the exercise of their rights guaranteed in Section 7 of the Act except
to the extent that such rights may be affected by an agreement requiring member-
ship in a labor organization as a condition of employment, as authorized in Sec-
tion 8(a)(3) of the Act, as modified by the Labor-Management Reporting and:
Disclosure Act of 1959.
WE WILL bargain collectively, upon request, with the Dairy, Bakery and Food
Workers Union, Local 379, Retail, Wholesale and Department Store Union,.
AFL-CIO, as the exclusive bargaining representative of all our employees in the
appropriate unit described below with respect to rates of pay, wages, hours of
employment, and other terms and conditions of employment, and, if an agree-
ment is reached, embody such understanding in a signed contract.
The appropriate unit is:
All production and maintenance employees and driver-salesmen at the.-
Allen Milk Company's plant, excluding all managers, owners, dairy store
employees, and all guards, professional employees, and supervisors as.
defined in the Act. Allen Milk Company's lease drivers (brokers) are
driver-salesmen and employees within the meaning of the certified appro-
priate unit and the Act.
ALLEN MILK COMPANY,
Employer.
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.
If employees have any question concerning this notice or compliance with its provi-
sions, they may communicate directly with the Board's Regional Office, Room 2023„
Federal Office Building, 550 Main Street, Cincinnati, Ohio, Telephone No. 684-3627.-
Southern California District Council of Hod Carriers and:
Laborers, and Gunite Workers Local No. 345 and Its Representa
tive, Mr. Frank Saver, Secretary-Treasurer [Swimming Poor
Gunite Contractors Group and all of its Members] and Golding
and Jones, Inc., for the Association and all its Members. Cases:
Nos. 21-CB-1938 and 21-CC-541. April 21,1966
SUPPLEMENTAL DECISION AND ORDER
On October 8, 1963, the Board issued a Decision and Order in the-
above-entitled proceeding," finding that the Respondents had violated
Section 8(b) (4) (ii) (A) and (3) of the National Labor Relations,
Act, as amended. The Board initially found that paragraphs IB and
i 144 NLRB 978, Members Fanning and Jenkins not participating.
158 NLRB No. 28.