Martin-Marietta Co., 1530 (1962)

DECISION AND ORDER

On April 18, 1961, Trial Examiner Earl S. Bellman issued his Intermediate Report in the above-entitled proceeding, finding that 'After the issuance of the Intermediate Report herein, the Respondent named in the complaint, American Marietta Company merged with the Martin Company Marietta Paint and Color Company, a division of American Marietta Company, was included in this merger The Respondent's motion for substitution of Martin-Marietta Company as the successor to American Marietta Company in this matter is hereby granted 136 NLRB No 130.

MARIETTA PAINT AND COLOR COMPANY, ETC. 1531 the Respondent had not engaged in the unfair labor practices alleged in the complaint and recommending that the complaint be dismissed in its entirety, as set forth in the Intermediate Report attached hereto. Thereafter, the General Counsel and the Charging Union filed exceptions to the Intermediate Report. A supporting brief was also filed by the General Counsel.

The Board has reviewed the rulings made by the Trial Examiner at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Intermediate Report, the exceptions and brief, and the entire record in this proceeding, and, finding merit in the exceptions, hereby adopts the findings, conclusions, and recommendations of the Trial Examiner, only insofar as they are consistent with our Decision and Order.

The complaint alleged that Respondent had violated Section 8(a) (1), (3), and (5) by refusing to bargain with the Charging Union, the incumbent representative of its production and maintenance employees, on behalf of Herman McKenna, and by discharging McKenna because of membership in the Union. The Trial Examiner held that, even if he were to assume that McKerina was an employee of the Respondent, and not an independent contractor as the Respondent contends, McKenna's termination was for sound economic reasons and not in violation of Section 8(a) (3). He also held that Respondent's refusal to bargain with the Union with respect to McKenna was not a violation of Section 8(a) (5) because McKenna's duties and terms and conditions of employment were significantly different from those of employees included in the production and maintenance unit.

Since we regard the central issue to be whether McKenna was an employee or an independent contractor, an issue which the Trial Examiner believed it unnecessary to resolve, we briefly summarize the salient facts which are set out in full detail in the Intermediate Report based mainly on undisputed testimony.

McKenna was an experienced truck mechanic who, before beginning his relationship with Respondent in 1950, had worked for an automobile repair shop where much of his work had been in repairing Respondent's trucks. Respondent's general manager at that time,

Dr. Davis, arranged with McKenna to leave his employment in order to work exclusively on its trucks at Respondent's premises for $120 for each semimonthly period.' Over the years, this was raised to $152. McKenna was guaranteed 40 hours work per week, but was also required to be available at all times for emergency work on Respondent's vehicles, without additional compensation. He was authorized to buy automotive parts and accessories for the account of Respond'Although McKenna's starting rate was stated to he $1 50 an hour, it actually amounted to less since he was paid semimonthly for an amount computed on a biweekly basis ent or, in the case of small purchases, to pay for them himself and to be reimbursed the actual amount expended. McKenna supplied his own hand tools. Certain small items such as bolts, screws, etc., and the use of heavy tools, were furnished to him by the Respondent's maintenance department without charge.

Twice a month he would submit an invoice for the amount agreed upon with a breakdown of his time distributed among individual vehicles, but never exceeding 40 hours and never exceeding the guaranteed lump sum even when the hours actually worked were in excess of 40 per week.

McKenna was paid semimonthly while all other employees were paid weekly. When he was hired in 1950, he was not required to fill out an employment application form or to take the physical examination required of employees. He was not covered by the Respondent's group insurance or pension plan, and no deductions were made from his remuneration for taxes or social security contributions. McKenna worked in a garage partitioned off from one end of a shed on the plant grounds, near the maintenance department. In the case of emergency breakdowns of Respondent's vehicles on the road, he was required to travel to the scene and would then be reimbursed for all his expenses on such trips. While Dr. Davis was general manager of the plant,

McKenna also did some miscellaneous work for him but after his death, 2 years before the hearing, the amount of time spent by McKenna in other than truck repair work was reduced to a minimum.

In 1951 the Union became the exclusive bargaining representative for a unit consisting of all production and maintenance employees including the Respondent's truckdrivers. No job rate for auto mechanic was included in bargaining agreement thereafter, and the Union and Respondent considered him to be outside the unit. This state of events continued until 1960, when the Union obtained a wage increase for the employees whom it represented. Early in June, McKenna asked General Manager Weber for an increase from $1.90, the rate he was getting, to $2.25 an hour. Weber told McKenna that he would take the matter up with his superior in Chicago. A few days later Weber told McKenna that the Chicago office had refused to grant his request for an increase because the sales and earning capacity of the plant would not allow it at that time. In the meantime, McKenna applied for membership in the Union. About 2 weeks thereafter, on June 28, 19601 at a meeting attended by the plant superintendent and the purchasing agent acting for the Respondent, and the Union represented by its business agent, the latter stated that McKenna wanted to be represented by the Union and requested negotiations for a classification and wage rate for him. Respondent's representatives at once stated that McKenna was not an employee but an independent contractor.

The Union took issue with that and the parties agreed to take a short MARIETTA PAINT AND COLOR COMPANY, ETC. 1533 recess so that the superintendent could check the matter with General Manager Weber. Weber then called the Chicago office to obtain advice and immediately thereafter decided to terminate McKenna's relationship. When the meeting resumed, the Respondent's representatives informed the union business agent that they would not discuss bargaining with respect to McKenna since he was a contractor. About 3:30 that afternoon, McKenna was called to Weber's office to be told that their working arrangement was terminated. The next day Respondent started having its automotive equipment repaired by a commercial garage.

The Trial Examiner decided this case without actually determining McKenna's status, but gave it as his opinion that if the 'right to control' test were accorded predominant weight in this matter, he would consider McKenna to be an independent contractor. He came to this conclusion apparently only because McKenna's work was skilled and was performed without close supervision. We believe that the Trial Examiner erred in attaching decisive importance to these factors and' failing to give adequate consideration to other significant elements in the relationship of McKenna and the Respondent. Among these are the Respondent's absolute control over McKenna's livelihood, inherent in the fact that McKenna's investment was limited to his labor, with no opportunity to risk capital or exercise business judgment. He earned a fixed unvarying amount, related to hours worked rather than to a risk undertaken. He could not hire assistants or substitutes. In short, although no one stood at his side and told him how to do his work, the Respondent in fact controlled his activities in the same extent and by the same means which it exercised over admitted employees.' We do not believe that this conclusion requires any qualification or change because McKenna's pay was computed on a basis different from that of other employees, that he was paid at other times or did not share their fringe benefits. Nor can Respondent's good-faith belief that McKenna was not an employee excuse its refusal to bargain with the Union on his behalf once it is determined that McKenna is in an employee status .4

In view of our conclusion that McKenna was not an independent contractor but an employee, it is necessary to pass on the validity of the Trial Examiner's rationale for not finding the violations alleged in the complaint. The Trial Examiner's first reason is that the Respondent acted in good faith in terminating McKenna and refusing to bargain with the Union, as indicated by the fact that no independent violations of Section 8 (a) (1) are alleged, nor did the Respondent 3 US v Silk, doing business as Albert Silk Coal Co, 311 U.S. 704.

4-Cf United Butchers Abattoir, Inc, 123 NLRB 946, and Tom Thumb Stores, Inc, 123 NLRB 833 show any animus against the Union. Although we accept his premises, we do not consider them sufficient to require the conclusion he reached.

The chronology of events, particularly the fact that Respondent decided to terminate McKenna inmmediately after it became aware that he had asked the Union to represent him, is proof of Respondent's intention to discriminate against him because he had joined the Union and to refuse to bargain with the Union as to his conditions of employment.

Secondly, the Trial Examiner relied for his conclusion on the assumption that Respondent was under no obligation to bargain with respect to McKenna because he was not properly part of the appropriate...

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