Checker Cab Association, Inc.

182 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Checker Cab Association, Inc.' and Organization of Baltimore Cab Drivers, Inc.' and Taxicab Drivers & Garage Employees Local No. 426 International Brotherhood of Teamsters, Chauffeurs, Warehouse- men & Helpers of America, Intervenor. Case 5- RC-6654 August 27, 1970 DECISION AND DIRECTION OF ELECTION BY CHAIRMAN MILLER AND MEMBERS MCCULLOCH, BROWN , AND JENKINS Upon a petition duly filed under Section 9(c) of the National Labor Relations Act, as amended, a hearing was held before Hearing Officer August A. Denhard, Jr., of the National Labor Relations Board.' After the close of the hearing the Checker Cab Associ- ation, Inc., Petitioner and Intervenor filed briefs with the Board. The Board has reviewed the Hearing Officer's rul- ings made at the hearing and finds they are free from prejudicial error. They are hereby affirmed. Upon the entire record in this case the Board finds: The Employer is engaged in interstate commerce within the meaning of the Act.' The record discloses that the gross business of all members of the Association was in the aggregate in excess of $500,000 for the year preceding the hearing herein and that purchases from outside the State of Maryland were in excess of $50,000 for this same period. We find it appropriate for jurisdic- tional purposes to combine the gross revenues of all members of the Association and, as legal junsdic- tion is present, we further find it will effectuate the policies of the Act to assert jurisdiction herein.' Petitioner and Intervenor seek a unit of all full- time and part-time taxicab dnvers allegedly in the employ of the Checker Cab Association, Inc., herein- after Checker Cab or Association.' The name of the Association as amended at the hearing without conceding it was an employer The name of Petitioner as amended at the hearing After a hearing and pursuant to Sec 102 67 of the National Labor Relations Board Rules and Regulations, Series 8, as amended, the Regional Director issued an order transferring the case to the National Labor Relations Board for decision On the basis of the record and stipulation therein we find that the Petitioner and Intervenor are labor organizations within the meaning of the Act See Transportation Promotions, Inc, et a!, 173 NLRB No 114, and Central Taxi Service, 173 NLRB No 116 The parties stipulated that the following unit would be appropriate should the Board order an election herein All regular drivers, owner drivers who employ no other drivers and regular part-time drivers excluding The Association alleges that the taxicab drivers for whom Petitioner and Intervenor seek representa- tion by their petitions are in fact independent contrac- tors and therefore the petitions should be dismissed.' Checker Cab Association was formed in 1958 as a result of an order of the Maryland Public Service Commission (PSC) requiring all taxicab owners in the Baltimore area to belong to an Association, in order to improve taxi service in Baltimore. Pursuant to such order Checker operates under a franchise in the metropolitan area of Baltimore, Maryland. All of the stock of the Association is owned by Yellow Cab Company of Baltimore. In subsequent years additional cab owners joined the Association in order to meet the PSC requirement. The Association does not own any cabs. It has, however, approximately 98 members who own approximately 277 cabs. These owners are individuals, partnerships, and corporate entities. Pursuant to a contract between the Association and its members all cabs put in service must assume the name, color, and distinctive markings of the Asso- ciation and have the phone number of the Association painted on the door. In addition, under PSC regula- tions the name of the actual owner must be painted on each side of the taxicab. Membership by cab-owners in the Association is on a year-to-year basis and is automatically renewable until terminated by either party. The owner-members pay no dues to the Association. The Association's revenue is derived largely from the sale of gasoline, at a premium price, to owner-operators and lessee drivers! In addition, the Association receives one- half the income derived from the advertising each cab is required by the Association to carry. The other half of this latter income goes to the owners. The Association provides the following benefits and service to its members at no additional cost: The use of a two-way radio dispatch system, repair service for the radio, a telephone service, facilities for garaging the cabs, a towing service, instructions to owners and lessees on operation of radio and meter equipment, the services of a safety director, furnishing daily mani- garagemen, mechanics, dispatchers, office clerical employees, guards and supervisors as defined in the Act ' Sec 2(3) of the National Labor Relations Act provides, in relevant part, that the term "employer" shall not include "any individual having the status of independent contractor " In enacting this provision Congress did not define the status, but intended, as stated by the US Supreme Court, that in each case the issue should be determined by general agency principles (NL R B v United Insurance Co, 390 U S 254, 256 ) The record shows that two owner-members, Belle Isle Cab Co and the I K Edelstein family own approximately 130 cabs of the approxi- mate total of 212 Checker Cabs operated in Baltimore All of these cabs are leased by the Association to individual operators with the exception of about 39 cabs operated by owners themselves who utilize no other drivers 185 NLRB No. 59 CHECKER CAB ASSOCIATION, INC fest sheets required by PSC of all drivers, clerical services including bookkeeping, securing renewal of leases, and permits and tags for vehicles, a Blue Cross Plan for owners the premium for which is paid by the Association, securing and processing leases for lessors with lessees, and representing the owners at PSC hearings. In addition, the Association arranges for owners the following: liability insurance, tire rental, repair service, a discount price on painting, assistance in financing new cabs, and a group life insurance policy. The Association acting as agent for the owners operates a system of cab leasing9 and in its leasing operation the Association uses a standard form of lease agreement with a lessee. This lease provides, inter alra: (1) The lessee agrees to lease a taxicab which he shall operate as a lessee or independent contractor on a self employed basis; (2) the lessee agrees to pay all tax liabilities, Federal and State, and agrees he is not covered by the State Unemployment Insur- ance Law; (3) the lessee agrees to operate taxicab in accordance with rules and regulations of lessor Association and the PSC, and will observe State laws and Baltimore City laws and ordinances; (4) the lessor will carry and pay for all required public liability and property damage insurance; (5) the lessee will pay the agreed fixed rental and buy all his gasoline at a specified price, with the lessee to retain all of his receipts over and above fixed rental fee, gasoline and State sales taxes; (6) the taxicab shall be used only for fare paying passengers, and the lessee shall keep proper manifests as required by PSC and file them with the lessor; the record, however, shows that manifests were filed only with Association; (7) the lessee agrees to pay for all damages resulting from his negligence; (8) the lessee shall charge passen- gers only rates shown on the meter; (9) the lessor may cancel the lease anytime for failure of the lessee to keep and observe agreements made by him in the lease, or for violation of any PSC regulation, state law, or insurance carrier's rules. An applicant for a driver's lease must have a chauf- feur's license and may make application only at either of the Association's garages where he is interviewed by the garage manager who may make an independent investigation of the applicant. The applicant, if approved by the garage manager, is then sent to the main office of the Association where he is instruct- ' Prior to the adoption of the leasing system it was found necessary to seek a change in Maryland law which prohibited taxidrivers from working under any system other than salary or commission Pursuant to petition of the Maryland Public Utilities Commission and cab owners the statute was amended in 1964 authorizing the leasing of cabs in Baltimore 183 ed in PSC regulations, insurance company rules, and the operation of a meter. He also is given an eye examination and a driving test. If successful the appli- cant returns to the garage, signs a standard lease, and selects his shift arrangement and hours. The lessee may select from a number of different work schedules. However, regardless of which sched- ule or shift he selects he must report to the garage to pick up his cab and daily manifest, as required by PSC regulations. When the driver returns his cab, as he must do at the end of his shift, he must turn in his manifest to the Association on which he has recorded the time and point of picking up passengers, the time and point of destination, the number of passengers and fare charges. From the manifest the Association determines whether the lessee has worked within the PSC 12-hour limitation. The Association then fills the cab with gasoline and the cost of the gasoline, priced at 42 cents per gallon, together with the rental fee plus state tax, are paid by the lessee. The balance of receipts, plus tips, is kept by the lessee as his earnings. No deductions are made for Federal or State income taxes or unem- ployment compensation. All lessees, however, are cov- ered by workmen's compensation, the premium for which is paid by the owner. Owner-drivers, of whom there are 39, operate only out of the Association garage and must follow the same daily procedure as lessees, except that when they turn in their daily manifest they do not pay a daily rental fee, and are billed weekly by the Associa- tion for gasoline or other charges. We have consistently held that the Act requires the application of the "right to control" test in deter- mining the status of persons alleged to be independent contractors. When the person for whom the services are performed retains the right to control the manner and means by which the result is accomplished, the relationship is one of employment, while, on the other hand, where control is reserved only as to the result sought, the relationship is that of independ- ent contractor. The resolution of this question depends on the facts of each case, and no one factor is determinative. Thus, here the lease is not negotiated, but its terms are set unilaterally by the Association and the drivers must take it or leave it. If they take it, the terms and conditions of their work are prescribed within close limits. The cabs must carry advertising contract- ed for by the Association. Drivers are required by the Association to purchase all gasoline from the Association at a price approximately 50 percent above the retail price. Although the driver signs a lease with one owner, the Association treats such lease in effect as though it applies to all owner-members. 184 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Drivers may be assigned to drive any cab of an Association member. Regardless of a driver's change of shifts he signs only one lease. Owners rarely know who the drivers of their cabs are. A lessee failing to report for, his shift may be charged for a full day's rental, or a prorated rental if another driver takes the cab out. A lessee may be excused from the latter payment on producing a doctor's certificate verifying his illness, or the performance of jury duty, or attendance at a funeral. A lessee must check in and out at the beginning and end of each shift and at the end of the shift file his manifest showing all details of his day's operation. This manifest is checked by the Association for compliance with regu- lations and gas purchases. The Association maintains at the respective garages a personnel file which con- tains his lease, complaints from customers, and notices from the Public Safety Commissioner, as well as an accident file. The garage managers discuss the consequences with a- driver of his accident, record, his difficulties with the PSC, or his being subject to customer's complaints. All lessees must attend the Association-conducted safety classes and any safe- ty refresher classes that the Safety Director for the Association or garage manager may require. All lessees are entitled to a week's vacation. Some lessees operat- ing cabs for the Edelstein interests are given a week's vacation with pay. The Association arranges for and makes available tire rental, repair services, financing, painting, and group life insurance, and arranges for owner's insurance. The Association argues that the foregoing elements of control of the details of operating the cabs is more than offset by the facts, that (a) the Association has promulgated no rules and regulations applicable to the driving of the cabs, and does not discipline the drivers, (b) once the cab is on the streets, the driver is not required to report his location or respond to radio dispatches, (c) the drivers enjoy no fringe benefits, and (d) the Association does not withhold income taxes for the drivers." For these reasons, the Association would distinguish recent Board deci- sions finding that lessee drivers and owner drivers were employees within the meaning of the Act." We accord little weight to the Association's lack of separate rules and regulations of its own. The PSC and insurance carriers prescribe regulations and standards governing the operation of the cabs in all pertinent details. The Association in its lease 10 The Association makes additional arguments, but they are largely conclusionary or rephrasmgs, derivative from the facts set forth in the text " Miami Beach Yellow Cab, 173 NLRB No 116, Central Taxi Service, 173 NLRB No 115, Transportation Promotions, Inc, supra, Mound City Yellow Cab Co, 132 NLRB 484 requires the observance of all such rules, examines and discusses with the drivers their compliance, with or breach of such rules, and may and does discharge the driver by canceling his lease for breach of such rules. In such circumstances there is no discernible need for any separate or additional rules to be issued by the Association in order to exercise effective control over operations of the cabs. As to fringe benefits, their presence may indicate an employment relation, but since there is a large volume of employment without such benefits, their absence is of little proba- tive value; the record discloses that fringe benefits are present here, in that the drivers receive a week's vacation, and some of those driving Edelstein cabs receive pay for the vacation period., Nonwithholding of income taxes has, because of its somewhat self- serving character, been regarded by us as of some, but not controlling, significance, and in all the circum- stances of this case we so regard it here." Its signifi- cance is further offset substantially by the fact that the cabowners pay workmen's compensation premi- ums. This leaves, as the principal basis for the independ- ent contractor contention, the Association's argument that the cabdrivers are on their own once they leave the garage, and need not report their locations nor answer radio dispatches. That is to say, the driver is free to prospect for fares when and where he chooses. This is, however, inherent in the character of the work, much as the choice of a route to cover several delivery destinations lies with a truckdriver, or the choice between a saw, chisel, and plane lies with a carpenter. Such choices are largely routine, dictated rather closely by circumstances, and offer little scope for independent judgement and initiative. And the asserted freedom of the drivers from respond- ing to the, Association's radio dispatches appears to us not to be clearly established." The substantial degree of control over the drivers exercised by the Association, its substantive and detailed assistance to them in matters which. ordinarily would be left entirely to an independent contractor " We note that the Internal Revenue Service granted the Association exemption from withholding income taxes on the ground, inter aka, "that he [the driver] will accept all calls for service given by your dispatcher," a representation contrary to the one made here by the Association See In 13, infra. " In addition to the Association's contrary representation to the Internal Revenue Service, fn 12, supra, membership in the Association is a requirement imposed by the PSC in order to improve cab service in the area, and regulations of the PSC specify that "drivers of taxicabs shall be required to make maximum use of service communications with their switchboard operators or dispatchers in order to keep their cabs available for reiponcevu calls (Emphasis supplied ) As we have earlier mentioned, drivers may be and are discharged by the Association for breach of PSC regulations. Failure by the Association to discipline the drivers appropriately for such breach would place the Association or member owners in jeopardy of loss of permits CHECKER CAB ASSOCIATION, INC to perform for himself, and the minimal latitude allowed the driver for the exercise of his independent judgement all lead us to conclude, from the entire record, that the lessee drivers are employees rather than independent contractors. Since the only difference in these respects between owner-drivers and lessee- drivers is that the owners garage their cabs at home instead of at the Association garage, we find them also to be employees and shall include them in the unit. Accordingly, we shall direct an election in the following unit, which we find and the parties have agreed to be appropriate: All full-time and regular part-time taxicab driv- ers, including owner-drivers who do not hire others employed by the Checker Cab Association, Inc., as agent for owner-members of the Associa- tion, in Baltimore, Maryland, excluding garage men, mechanics, dispatchers, office clerical employees, guards and supervisors as defined in the Act. [Direction of Election14 11 omitted from publication.] CHAIRMAN MILLER, dissenting: Considering this record in its entirely, I am unable to find those indicia of employer control upon which we customarily base a finding that an employment relationship exists." The following factors, adduced from the testimony at the hearing, persuade me that the lessees are inde- pendent contractors; lessees receive neither life insur- ance nor other fringe benefits generally associated with employment status;" there is no withholding for any Federal or state taxes; lessees are subject only to the rules promulgated by the Maryland Public " In order to assure that all eligible voters may have the opportunity to be informed of the issues in the exercise of their statutory right to vote, all parties to the election should have access to a list of voters and their addresses which may be used to communicate with them. Excelsior Underwear Inc, 156 NLRB 1236, N.L.R B v Wyman-Gordon Company, 394 U S 759 Accordingly, it is hereby directed that an 185 Service Commission and insurance carriers; lessees are not disciplined by the Association and a lease is terminated only if the lessee is disqualified by action of the Public Service Commission or if requested by the insurance carrier; lessees are free to go wherever they please after they have picked up their manifests and have no set geographical boundaries or locations; lessees are not, in fact, required to answer radio calls, to bid on radio dispatch calls, or to notify the dispatcher of their whereabouts; lessees may choose any 12-hour shift they want and may work as many days as they want or as many hours during a shift, provided that they pay their rental fee; lessees are not required to service Association stands; lessees may be held liable to the lessor for damages to the cab arising through their own neglect; and, finally, the record shows that the Association does not receive gross receipts or pay any moneys to lessees, who pay over to the Association only rental fees and gasoline charges plus State sales tax on the rental charges. I would dismiss the petition. election eligibility list, containing the names and addresses of all the eligible voters, must be filed by the Employer with the Regional Director for Region 5 within 7 days of the date of this Decision and Direction of Election The Regional Director shall make the list available to all parties to the election No extension of time shall be granted by the Regional Director except in extraordinary circumstances Failure to comply with this requirement shall be grounds for setting aside the election whenever proper objections are filed " The parties stipulated that the following taxicab dnvers would be eligible to vote All regular drivers, owner-drivers who employ no other drivers and regular part-time drivers who have worked at lease 2 days per week in 4 of the 6 full weeks immediately preceding the date of the Notice of the Direction of the Election or have worked at least 1 day per week in 13 of the full 16 weeks preceding the Notice of the Direction of Election 16 See Transportation Promotions Inc., 173 NLRB No 114, Miami Beach Yellow Cab, 173 NLRB No 116 17 Some longtime lessees who were in the employment of the Edelstein interests from the time that the cabs were operated on 'a commission basis are given a week off with compensation This compensation is roughly equivalent to the lease fee for a week All other lessees, after a stated period of continuous leasing, may take a week's leave without pay