Local 814, IBT

276 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Local 814, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of Ameri- ca (Molloy Brothers Moving and Storage, Inc.) and Lloyd Townsend. Case 29-CC-344 January 9, 1974 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS FANNING AND PENELLO On April 30, 1973, Administrative Law Judge Sidney Sherman issued the attached Decision in this proceeding. Thereafter, the Charging Party filed exceptions 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 authority in this proceeding to a three-member panel. The Board has considered the record and the attached Decision 'n light of the exceptions and brief and has decided to affirm the rulings, findings, and conclusions of the Administrative Law Judge and to adopt his recommended Order. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the recommend- ed Order of the Administrative Law Judge and hereby orders that '.he complaint be, and it hereby is, dismissed in its entirety. DECISION SIDNEY SIIERMAN, Administrative Law Judge: The insi int charge was served on Respondent on November 17, 1972,1 the complaint issued on December 8, and the case was heard on January 10 and 11 and February 21 and 22, 1973. The only issue litigated was whether Respondent violated Section 8(b)(4)(i) and (ii)(A) by coercing certain individuals to become members of Respondent. Briefs were filed by the General Counsel and Respondent. Upon the entire record, 2 the following findings and recommendations are made: 1. RESPONDENT Local 814, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, herein called Respondent. is a labor organization under the Act. It. JURISDICTION Molloy Brothers Moving and Storage, Inc., hereinafter called Molloy, is a corporation under New York law, with All dates herein are in 1972, unless otherwise indicated 2 For corrections of the transcript sec the order of April 18. 1973 a principal office at Rockville Center, New York. At that location and others in the New York City area it is engaged in the business of transporting household goods in interstate commerce. Its annual gross revenues exceed $500,000, of which more than $50,000 is derived from the transportation of articles in interstate commerce. Molloy is engaged in commerce within the meaning of Sections 2(6) and 8(b)(4)(ii) of the Act. Molloy has lease arrangements with certain "owner- operators," pursuant to which they lease to Molloy tractors owned by them and operate them in the transportation of goods in interstate commerce. It is found that they are persons engaged in commerce within the meaning of Section 8(b)(4)(ii) of the Act. Whether they are employees or independent contractors is a separate question, which will be considered below. III. THE MERITS The pleadings raise the following issue : Whether Respondent violated Section 8(b)(4)(i) and (ii)(A) by various acts designed to coerce owner-operators of tractors leased by them to Molloy to become members of Respondent. A. Sequence of Events Molloy is engaged in the transportation of household goods and other commodities throughout the United States as an affiliate of Allied Van Lines, Inc., hereinafter called Allied. Its hauling operations are conducted under an ICC certificate issued to Allied. Generally speaking, for trips up to 300 miles Molloy uses hourly paid employees who are members of Respondent, and for longer trips it uses the "owner-operators," hereinafter called "owners," who drive their own tractors under a contractual arrangement with Molloy and are paid a percentage of the revenue received by it for their services. A few of them lease to the Company a second tractor, which is operated by another driver. For some years Molloy has had contracts with Respon- dent but only for its hourly employees. In April 1971, Molloy and Respondent executed a 3-year contract which provided, inter a/ia, for the application to the owners of certain provisions, including a union-security clause, requiring them as a condition of employment to become members of Respondent upon the expiration of the statutory grace period. In June 1972, none of the owners having as yet joined it, Respondent launched a campaign to secure compliance with the foregoing membership requirement by addressing to Molloy various appeals and demands. When those proved unavailing Respondent, in October, established a picket line at all Molloy locations, which resulted in a stoppage of operations, until Molloy turned over to Respondent signed applications for mem- bership in Respondent from the bulk of its owners. However, Molloy has not otherwise complied with the provisions of the collective-bargaining contract applicable to the owners. 208 NLRB No. 43 LOCAL 814, IBT 277 B. Discussion Status of the Owner-Operators The General Counsel contends that the owners are not employees but sel:-employed individuals, and that, by coercing them to join it, Respondent violated the prohib- ition in Section 8(b)(4)(i) and (ii)(A) of the Act against engaging in the acts described therein with an object of "forcing or requiring any employer or self-employed person to join any labor . . . organization ... . Respondent rejoins, inter alia, that the owners are not self- employed but are employees of Molloy, and as such might properly be required to join Respondent pursuant to the union-security clause in the current collective contract. As noted above, Molloy conducts its hauling operations under the certificate of Allied and the record shows that the owners receive from Molloy all long-haul shipments originating in the New York City area . At their out-of-state destination they received from Allied return loads. Howev- er, the owners' contract is only with Molloy . The contract fixes the compensation of the owners for each shipment as a percentage of the amount charged by Molloy to the shipper. The contract imposes on each owner responsibility for all expenses relating to the operation and maintenance of his tractor and for the wages of his helpers and the various payroll taxes, wage withholdings, and workmen's compensation coverage applicable to them . The owner also agrees to indemnify Molloy against any claims for cargo damage pertaining to shipments handled by him, to buy appropriate public liability insurance , to submit his trip logs to Molloy or Allied, and to collect, and promptly remit, all monies due Molloy on C.O.D. shipments. In addition, the contract establishes a profit-sharing plan for the owners, whereby they are credited by Respondent with 4 percent of their share of gross revenues attributable to their services, provided that such revenues exceed $40,000 a year; and under the contract Respondent assumes the cost of health insurance coverage for the owners. The record shows further that Molloy alone bears the risk of any default by a customer in the payment of charges for services rendered by an owner-operator, and that it advances trip expenses to owners and has made loans to them for other purposes in substantial amounts. While granting to the owners the right to select their routes of travel, rest stops and service stops, and the right to hire, direct the work of, and fix the compensation of their helpers, the contracts impose various restrictions on their mode of operation. which will be discussed in detail below. As evidence of the owners' independent contractor status, the General Counsel relies on the following: (1) Their ownership of their tractors, which represent a substantial capital investment. (2) Their liability for the expense of operating and maintaining their tractors. (3) Their authority over their helpers. (4) Their freedom to select their routes, rest stops, and service stops. (5) The fact that they are paid on a per -trip basis. (6) The fact that Molloy does not withhold state or Federal income taxes or social security taxes from their earnings. (7) The fact that, except for health insurance, they do not receive any of the fringe benefits enjoyed by Molloy's hourly paid employees. In opposition to the foregoing, Respondent contends that the following factors establish an employer-employee relationship: (1) The extensive control exercised by Molloy over their mode of operation. (2) The fact that they are all paid the same percentage of the proceeds of a shipment, which percentage is predeter- mined by Molloy. (3) The fact that they are covered by a profit -sharing plan established by Molloy and by a group health insurance policy paid for by Molloy. (4) The exclusivity of their services for Molloy. (5) Molloy's assumption of the risk of loss due to nonpayment by a shipper. (6) The fact that Molloy makes advances to them for trip expenses and for personal reasons. The "Control" Issue In determining whether owner-operators who, as here, drive under lease arrangements with common carriers, are employees or independent contractors , the Board has uniformly held to be crucial the extent to which they are subject to the control of the carrier, not only with respect to the result to be achieved, but also with respect to the means to be used in achieving that result .3 Accordingly, consideration will first be given here to the degree of control reserved or exercised by Molloy or by Allied through Molloy over the operating methods of the owner- operators. With regard to this matter there was extensive evidence in the record, consisting of contracts, and the practice of the parties thereunder, regulations of the Department of Transportation (hereinafter "DOT") instructions and directives promulgated by Allied, and disciplinary action taken against owners. Analysis of the contracts, themselves, is complicated by the fact that two somewhat different contract forms have been used since 1968. These forms will be referred to hereinafter as Form A and Form B. Form A (Resp. Exh. 28) is the earlier of the two and has ostensibly been superseded by Form B (G. C. Exh. 2) at least since early in 1968.4 However, that Form A was still being used at least as late as September 1971, is apparent from the fact that a random examination of Molloy's records brought to light a Form A contract signed in that month . The following provisions are common to both forms: 1. That, while hauling for Allied, the owners' vehicles will meet the requirements and painting specifications of Allied. 2. That they will at all times maintain their tractors in a E.g, The Aetna Freight Lines, Incorporated, 194 NLRB 740 4 The only specimen of Form B in the record (Townsend's Contract) was executed in May 1968 278 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the condition required by the safety rules of regulatory bodies. 3. That, in performing their hauling and related services, they will meet the standards established by appropriate governmental authority. 4. That they will not, without the consent of the shippers or consignees, disclose any information about a shipment that will be prejudicial to their interests. 5. That they will prepare and submit all logs and daily reports required by the ICC. 6. That they will make daily inspections of their equipment with regard to specified items. 7. That, except for helpers, they will not carry any passengers other than those authorized by Molloy and Allied. In addition, the following appears in Form A: That, in pei forming his hauling and delivery services, the owner will comply with "all of the By-Laws, Rules and Regulations, Drivers' Manual and instructions" of Allied and with "all the rules and regulations and instructions" of Molloy. It is apparent from the foregoing that under Form B, in performing their services, the owners are required to comply only with governmental regulations, whereas Form A required that they comply also with regulations and instructions issued by Allied and Molloy. While the record shows that the governmental regula- tions applicable to the owners, consisting of nearly 100 pages,5 strictly circumscribe nearly every phase of their work, including maintenance of equipment, hours of service, observance of safety standards, and the keeping of detailed records, the General Counsel appears to contend that such governmental controls are less significant than would be the reservation by Molloy of the right to control work of the owners by rules and directions originating with it. In support of this contention the General Counsel cites Fleet Transport Company, Inc., 196 NLRB 436, and Conley Motor Express, Inc., 197 NLRB 624. Although a different view seems to have been taken in The Aetna Freight Lines, Incorporated, supra, and Deaton Truck Lines, 187 NLRB 780, it will be assumed for the purpose of this discussion that no weight may be assigned to the authority of Molloy (or Allied) to enforce compliance by the owners with governmental requirements. With regard to other require- ments, the record shows that, although Form B, as already noted, has eliminated the obligation of owners to comply with rules and instructions originating with Molloy and Allied, in actual practice those carriers continue to promulgate, and insist upon compliance by the owners with, various directives, bulletins, and instructions, many of which relate to matters beyond the ambit of governmen- tal controls, and to discipline owners for noncompliance therewith. Thus, it was conceded that the owners are still required to attend training classes held by Allied, where they use as a text a 102-page drivers manuals That manual is a compilation of rules governing many phases of the owners' operations which have no counterpart in DOT 5GCExh6 6 This requirement originates with Allied and Molloy secures compliance therewith by its owners 7 Resp Exh 14 Note that in another bulletin Allied affirmed its policy regulations. These include procedures For loading and unloading freight, progress reports to be made during the course of a trip, and relations with customers. With regard to the last item, the manual contains such rules of personal conduct as the following- Never argue with shippers Never smoke in residence or van Do not ask shipper to bring food or drinks Do not discuss length of time away from home or any family problem. The foregoing manual contains a list of infractions that are subject to disciplinary action, including discharge. This list includes the following matters which do not involve violations of governmental regulations: Preventable accidents Failing to check out with the Allied dispatcher Failure to report to the Allied agent at destination Refusal to load Misconduct Dishonesty As for the enforcement of the foregoing "extra-govern- mental" requirements, the record shows that even after the adoption of Form B owners have been threatened with, and subjected to, disciplinary action by Molloy at the instance of Allied for the following: Failure to attend Allied's training classes Improper handling of freight at the point of delivery Involvement in a preventable accident Failure to file a state use tax return It is clear from the foregoing that, despite the absence from Form B of any specific requirement that the owner comply with rules other than those of regulatory agencies, Allied and Molloy have promulgated to the owners instructions and requirements that reach into areas not covered by such rules, and have warned of, and imposed, discipline for derelictions within those areas. Moreover, even within the areas covered by regulatory bodies, Allied has in many instances filled in matters of detail. Thus, the DOT rule prohibiting any driver to transport any person without authorization from the motor carrier he is serving gives Allied and Molloy wide discretion as to what persons, other than a helper, may accompany a driver, and in the exercise of that discretion Allied has announced a policy of permitting a driver's wife to accompany him under certain circumstances.7 Another striking instance of this is an Allied bulletin (Resp. Exh. 11) which, after enumerating 8 parts of his vehicle which a driver is required by DOT rules to inspect before beginning a trip, appends a list of 21 instructions describing in minute detail how such inspection is to be performed. It is concluded that the operating procedures of the owners are subject to a myriad of restrictions consisting of of prohibiting the transportation of pets Resp Exh l3 This is another instance of reaching into matters beyond the area of governmental regulation, there being no like restriction in DOT rules LOCAL 814, IBT (a) governmental regulations , (b) interpretation and ampli- fications of such regulations by Allied, and (c) require- ments originating with Allied alone. It should be pointed out, also, that, while Form B authorizes immediate cancellation of ar. owner's contract for a material breach thereof, it also provides for cancellation "at any time" by either party upon giving specified , advance notice, without any apparent limitation as to the reason therefore .8 In view of such apparently unlimited authority to terminate on the part of Molloy, the owner is in no position to resist any demand by it that he comply with its requirements by relying on such a legalistic ground as the absence of any basis therefore in DOT regulations. Exclusivity of Services Although stressing the importance of the "right to control" test in the present context, the Board seems to have given some consideration to the exclusive nature of an owner-operator's services for a particular carrier. Here, Form A was explicit in that regard, requiring that any tractor furnished by an owner be devoted exclusively to the service of Molloy and that the performance of hauling services by the owner for anyone other than Molloy would be ground for cancellation of the contract. Form B is somewhat more roundabout. It provides that the owner will furnish a tractor to Molloy "for its service from time to time, and for the service of [Allied] at all necessary times as made known" by Allied to Molloy; that, upon being offered a shipment by Molloy or Allied, he furnish a tractor and perform all necessary services; that, while he may refuse a particular load offered by Molloy, he will thereby lose his place in the rotation; that he will accept all freight offered him by Allied, except that in case of an unprofitable shipment or "unreasonable dispatch" Molloy may attempt to arrange with Allied for a different assignment; and teat, if Molloy is not able to provide the owner with work at a particular time, he may serve another carver, but may not work for a competitor of Molloy or Allied without their consent. Townsend, an owner, was admittedly susperded for refusing a return load offered him by Allied. It appears therefore that even under Form B s Form I appears to have a smular blanket, cancellation provision. In addition, that form specifies that sufficient cause for termination is afforded by an c •vner's failure to comply fully with "the Driver's Manual and instructicns of Allied Van Lines, inc., in the operation of the tractor and the performance of all scrvi-es covered in the agree.nent " 9 Florida Texas Freight. Inc., 197 NLRB 976: Aetna Freight Lines, supra, Deacon, Inc., supra, PoTe Trucking, Inc., 198 NLRB No. 59 In view of the extensive participation by Allied in the direction of the work of the owners, thm record warrants a finding that Allied and Molloy are joint employers of the owners Whether their authonty over their helpers requires a finding that the owners are supervisors is a matter which need not 279 the owners are precluded from performing services for others at such times as Molloy and Allied have work for them and that, when there is no such work available, they are limited as to what other carriers they may work for. Coverage of other Laws The General Counsel contends that weight should be given to the fact that the owners are not treated by Molloy as employees for purposes of income tax withholding, social security taxes, and State workmen's compensation and unemployment compensation laws. This is consistent with the various declarations in Form B that the owners are independent contractors. However, neither such self- serving declarations nor any legal conclusions reached by Molloy as to the applicability to the owners of other statutes are entitled to much weight in the present inquiry. Even if, contrary to the fact, it were shown that such conclusions are based on rulings by competent authority, they would not be binding on the Board with respect to the status of the owners under the instant Act. To sum up, the record shows that Allied and Molloy exercise pervasive control over the owners' mode of operation, particularly their on-the-job training, their procedures in loading and unloading cargo, their dealings with customers, and maintenance of their equipment, and that such control exceeds governmental requirements to a significant degree . It is found, therefore, that the owners are not independent contractors but employees under the Act,9 and that Respondent did not violate Section 8(b)(4)(i) or (ii)(A) by such pressures as it may have exerted to induce them to become members of Respondent. It will accordingly be recommended that the complaint be dismissed. Upon the above findings of fact, conclusions of law, and the entire record in the case, and pursuant to Section 10(c) of the Act, there is issued the following: RECOMMENDED ORDERio The complaint herein is dismissed in its entirety. here by resolved The only issues litigated were whether the owners were employed, or self-employed , individuals within the meaning of Sec 8(b)(4)(i) and (ii)(A) and whether Respondent violated those subsections by its efforts to secure their compliance with the contract's union shop clause. iO In the event no exceptions are filed as provided by Sec 102 46 of the Rules and Regulations of the National Labor Relations Board , the findings, conclusion, and recommended Order herein shall, as provided in Sec. 102.48 of the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes.