Midlands Express

MIDLANDS EXPRESS Lincoln Sales & Service, Inc., d/b/a Midlands Ex- press and General Drivers & Helpers Union, Local 554, affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Help- ers of America, Petitioner. Case 17-RC-8363 May 31, 1978 DECISION ON REVIEW BY CHAIRMAN FANNING AND MFMBFRS JENKINS AND MtRPIHY On November 28, 1977, the Regional Director for Region 17 issued a Decision and Direction of Elec- tion in this proceeding in which he found the follow- ing unit appropriate for the purpose of collective bar- gaining: All full-time and regular part-time drivers em- ployed by Lincoln Sales & Service, Inc., d I;b 'a Midlands Express, at its Omaha, Nebraska facil- ity, EXCLUDING office clerical employees, professional employees, guards and supervisory employees as defined in the Act and all other employees. Thereafter, the Petitioner timely filed a request for review, alleging that the Regional Director erred in naming Lincoln Sales & Service, Inc., d 'b, a Mid- lands Express, as the employer of those employees rather than CRST Inc., dc/b/a Midlands Express, the employer named in the representation petition. Lin- coln Sales & Service. Inc., dbl a Midlands Express. filed a statement in opposition to the request for re- view. On January 5, 1978, the Board, Member Murph) dissenting, granted the Petitioner's request. Thereaf- ter, the Petitioner and Lincoln Sales & Service Inc.. d/b/a Midlands Express, filed briefs on review. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the entire record in this case with respect to the issues under review, includ- ing the briefs on review., and makes the following findings: The Petitioner contends that CRST Inc. and I.in- coin Sales & Service, Inc., d b a Midlands Express, are a single integrated enterprise or joint employers of the unit. Lincoln contends that each corporation is a separate legal enterprise, the labor relations of which are controlled by different personnel, and that. therefore, it alone employs the drivers. We agree with the Petitioner. Lincoln Sales & Service, Inc., whose principal place of business is Manchester, Iowa, is engaged in the sale, lease, and maintenance of over-the-road tractors and trailers. Cedar Rapids Steel Transport, Inc., herein CRST, a common carrier which has its headquarters in Ce- dar Rapids, Iowa, operates from terminals it main- tains in various cities under a certificate issued by the Interstate Commerce Commission. To supplement its own equipment and employee drivers, CRST leases equipment and drivers from various fleet contractors, including Midlands Express, a division of Lincoln, which leases to CRST equipment and approximately 13 drivers operating out of CRST's Omaha, Nebras- ka, terminal.' Both Lincoln and CRST are wholly owned by Ha- rold and Miriam Smith and share executive officers, Paul Shawver and his wife, Rebecca. Rebecca is trea- surer of Lincoln and personnel manager of CRST. Paul Shawver is president of Lincoln and vice presi- dent of CRST. He is primarily involved in the opera- tions of CRST and his office is at CRST headquar- ters. but he is involved in Lincoln's major capital decisions: the acquisition of land, terminals, and ma- jor equipment. Lincoln, d/b /a Midlands Express, shares the ad- dress and telephone of CRST's Omaha terminal, for which it pays rent to CRST. Further, Ian Lamphier, CRST's Omaha terminal manager, is employed by Lincoln as the manager of Midlands Express and the person responsible for its day-to-day operations. Despite common ownership and executive officers, and the fact that Lincoln, through Midlands, shares the location and an employee of CRST in Omaha, the two corporations operate as separate financial entities. Each maintains separate headquarters, pay- rolls, and bank accounts. Each files separate tax re- turns and obtains individual operating licenses from appropriate government agencies. The corporations owAn no assets in common nor do they combine funds. The drivers leased through Midlands are paid by Lincoln. and. for Midlands, Lincoln has a sepa- rate Nebraska identification number for withholding and unemployment tax purposes. The leasing arrangement between Lincoln and CRS T began in July 1977 after Lincoln created Mid- lands to replace a fleet contractor which, until June of that year, had provided lease drivers to CRST in Omaha. The lease, which states that the leased driv- ers shall not be construed to be employees of CRST, was negotiated b, Paul Shawver on behalf of Lincoln and by r L arr) Miller, a CRST employee subordinate to Shawver, on behalf of CRST. Since its creation, Nonc of ( RS i ' I)wn drlsrs are bidls in Om aha 236 NLRB No. 69 619 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Midlands has leased solely to CRST in Omaha. Shawver is also involved in Lincoln's operation of Midlands through determining, with lan Lamphier. the wages and benefits of the lease drivers, although Lamphier, as manager, exercises day-to-day control and supervision. Shawver is not involved, however. in CRST's own employee relations which are han- dled by Rebecca Shawver and CRST's operations manager, Larry Fry. Unlike CRST's employee-drivers, drivers leased through Midlands are hired by Lamphier. Neverthe- less, pursuant to Department of Transportation and Interstate Commerce Commission regulations, CRS I requires that all the drivers pass a physical examina- tion. Once hired, the drivers use and are dispatched from CRST terminals, and in the event of an acci- dent are required to notify CRST as well as Lamphi- er. Notification to CRST is also required in the event of a breakdown causing delay in delivery. Midlands drivers must comply with all CRST safety rules and regulations and, while on the road, are subject to in- spections by CRST's safety director. CRST has the authority to refuse to dispatch any lease driver for repeated safety infractions. Apart from the above, CRST personnel have no authority to discharge or discipline leased drivers. Rather, driver misconduct is reported to the appro- priate fleet contractor, which, of course, in the case of drivers leased through Midlands, is Lamphier. 2 Although Lincoln and CRST are operated as sepa- rate financial entities, their operations are clearly integrated through Midlands Express. Midlands shares an address and telephone number with CRST's Omaha terminal. In addition, Lamphier. who, as the CRST terminal manager in Omaha dis- patches both CRST and Midlands' drivers, is manag- 2 Conversely CRST terminal managers, including La.mphier. hiv, no atil- thority to discipline ( RSI drivers, but merely report misconduct to (CRS I headquarters where appropriate action is taken er of Midlands.' Also, it is significant that Lincoln created Midlands as a vehicle to lease drivers and equipment to CRST and Midlands has not leased drivers to any other concern. Moreover, Paul Shaw- ver, who spends most of his time in his duties as a vice president of CRSTI. represented Lincoln in nego- tiating the lease with CRST. While Lamphier, as manager of Midlands, exercises immediate control over the lease drivers. C'RSIT exercis- es control by requiring physical examinations, compli- ance with its safety regulations, and on-the-road safetN inspections by CRST personnel.' Further, the drivers receive all dispatches from CRST terminals. Finally. and most significantly, Paul Shawver directly influenc- es the working condition of the drivers through de- termining their wages and benefits with Lamphier. In light of their common owt nership and execu- tives. their integration of operations through Mid- lands lxpress. the control of the drivers exercised hby CRST through regulations and dispatching. and the fact that personnel of both corporations take part in determining the working conditions of the drivers. we find that ('RST Inc. and incoln Sales & Service. Inc.., d,;bha Midlands Express, are joint employers of the unit. 5 Accordingly. the proceeding is herehb re- manlded to the Regional Director for Region 17 for action consistent hereswith. Ii i[r i c0 I tcleds tI11 1111 [illiim r'S c IitniIllUcd ser./ c ,As mnan licr f ( RSI On)llha terniliL i and 1Midliands' , liiril vi f l pIcC iT hi ermn:li l is tnl II a telpoirlr.s '1ltualtin o t.sIIolneld bh the l;ck Oi f it ,I hich It hid aiilk.hlec for cotnmenclil e.pcit ( t ns as l idi;1t lis iow evscr S c t he it Ihiud sitluation 1ma, he "tcmporirs" does antt Aflect the degree to which the .permlto lLs If ( RS I JInd I.incoln ias. nlclra liitd a the tinle the pelllin wa. tl~cd ' In determiining iheilhei ( RS I I, a olllt enipi.~er ,of the drlici,, e arc coincerTlcl with thie dlegtce d1 *iilltil It clCjcic ' OCI ihenn i lic rc.'ison R' thc i slp,.slltln ,of tiha. ciontrlI, whethc r inspired hi seiirtIllenl rvchulatlons ,)n husilCsS re;l/laSo . io ilITimll'iriill \Ihit hugh, as noted .ihbv. Mclnmhcl MLlrphs discriend Ironl the nlallt of reic. I, n lih}lt of the recoid nl,c hctil tic t ihe B,rd she 1ilns. lth her cil- lci tcs 11 I e ClitI/ thei Rci .1nal I)icct.,r' d, e t i in t[his. cipcct 620