Daily Express, Inc.

92 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Daily Express, Inc.' and International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Help- ers of America, Petitioner. Case 4-RC-10612 May 31, 1974 DECISION AND ORDER BY MEMBERS FANNING, KENNEDY, AND PENELLO Upon a petition duly filed under Section 9(c) of the National Labor Relations Act, as amended, a hearing was held before Hearing Officer Alexander T. Graham. After the hearing and pursuant to Section 102.67 of the National Labor Relations Board Rules and Regulations, Series 8, as amended, and by direction of the Acting Regional Director for Region 4, this proceeding was transferred to the Board for decision. Thereafter, the Employer and the Petitioner filed briefs in support of their respective positions. 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 reviewed the rulings of the Hearing Officer made at the hearing and finds that they are free from prejudicial error. They are hereby affirmed. Upon the entire record in this proceeding, the Board finds: 1. The Employer is engaged in commerce within the meaning of the Act and it will effectuate the purposes of the Act to assert jurisdiction herein. 2. The labor organization involved claims to represent certain employees of the Employer. 3. No question affecting commerce exists concern- ing the representation of employees of the Employer within the meaning of Sections 9(c)(1) and 2(6) and (7) of the Act. Daily Express is a Pennsylvania corporation with headquarters in Carlisle, Pennsylvania. It is engaged in the business of transporting steel, machinery, and other products by truck in interstate commerce among 48 States under the authority of an Interstate Commerce Commission (I.C.C.) certificate, and is subject to the Interstate Commerce Act and to I.C.C. and Department of Transportation (D.O.T.) regula- tions. The Employer has two divisions, steel and machinery. The latter operates out of Carlisle, the former from New Kensington, Pennsylvania. The Petitioner seeks a unit of all single-owner drivers, nonowner drivers of leased equipment, and direct company drivers employed in either the steel or machinery divisions, excluding, inter alia, multi - pwner operators. Daily contends that the owner- operators are not employees but independent con- tractors, and that operators who drive for them are employees of the independent contractors, not of Daily Express. Additionally it contends that should the Board find that they are employees, then only separate machinery and steel division units would be appropriate. Daily is largely dependent upon equipment leased to it by single- and multi-owner operators. It owns no tractors but does own 452 trailers assigned to its machinery division. The steel division leases both tractors and trailers as a complete unit. At the time of the hearing the machinery division leased 252 tractors: 142 from single owner-operators and the remainder from fleet owners. The steel division leased 149 complete rigs, tractors and trailers: 41 from single-owner operators. Fleet owners hire and pay their own drivers subject to approval by Daily. Owner-operators sign an agreement with either the machinery or steel division. There is little difference between the two agreements. The agreement is for a minimum of 30 days and may be terminated on 30 days' written notice or, by the owner, if Daily fails to pay any amount due within 15 days, violates a substantive provision, or fails to offer a load for 15 consecutive days. Daily may terminate the agree- ment on less than 30 days' notice if the equipment does not comply with D.O.T. safety regulations; if the owner does not provide a competent driver who is qualified under D.O.T. safety regulations; if the owner does not comply with reasonable requests for adjustments of equipment to render useful and efficient service, including providing supplemental equipment; if the owner violates any substantive provision; or if the owner does not offer his services for 15 consecutive days. The agreement also provides, inter alia, that the owner will provide complete transportation service over his choice of legal routes for any load he accepts and, should he be unable to complete, or arrange to complete, delivery, Daily may do so at the owner's expense; that any drivers or helpers shall be controlled and directed solely by the owner and the owner alone shall be responsible for their compensa- tion, taxes, reports, etc.; and that the owner warrants that all drivers meet all applicable safety standards and that he will provide evidence of compliance upon request. The owner is responsible for all vehicle expenses-fuel, oil, maintenance to comply with laws and regulations, etc.-taxes of any kind assessed against the owner, and any tags required by the vehicle's State of domicile. Daily is required to reimburse the owner for the cost of any oversize or I The Employer's name appears as amended at the heanng. 211 NLRB No. 19 DAILY EXPRESS, INC. 93 overweight permits and any ton mile, axle mile, or special fuel taxes-not paid by Daily. The agreement requires the,;, o npr to reimburse Daily for any general fuel- taxes Daily pays because the owner has failed to provide proof of payment. The owner also must provide bobtail insurance and must reimburse Daily for any load damage or other property damage or bodily injury up to $100 in the machinery division and $150 in the steel division per event and $500 in the case of damage to a Daily trailer. The owner assumes full liability if he leases to any other party. The owner also agrees to report any accident, claim, etc., involving vehicles or loads covered by the agreement and to assist in any investigation, litiga- tion, etc., and, on request, submit proof of insurance. The owner is responsible for any fines, costs', etc., arising from his or his employees' failure to abide by any law or regulation. Upon termination of the agreement any compensa- tion due the owner may be withheld and applied against any pending claims or, if no claims are pending, are to be paid within 30 days. In the machinery, division the owner receives 60.2 percent of the revenue, in steel 74 percent; in the event of trip leasing by the owner under the machinery division lease he must pay Daily 10 percent of its revenue, apparently for the use of Daily's trailer. An owner under the steel division lease is not required to pay Daily any portion of the revenue arising from trip leasing. Drivers are required to submit a safety clearance form to Daily listing previous employment, traffic violations, and accidents in the last 5 years and must pass, or have passed within the previous 24 months, a physical examination. The driver also must attend a 1-day orientation course at which time he is given a written examination based on questions provided by the Department of Transportation and a road test. The safety clearance form, physical, orientation program, and written examination are required by Federal regulations . The equipment is inspected to determine if it meets Federal safety regulations, Federal regulations are discussed as required by D.O.T. and I.C.C. regulations, and the driver is familiarized with Daily's operations. If the driver passes the road test and meets all other requirements imposed by the D.O.T. and I.C.C., including an acceptable driving record, the agreement is signed and identification decals are placed on the equip- ment as required by the I.C.C. Thereafter, the equipment is inspected by Daily or its agents at 30- day intervals to comply with D.O.T. requirements for systematic inspections. The cost of any repairs is borne by the owner and repairs may be made wherever he chooses. Daily plays no role in the financial relationship between an owner and any employees he may have, although it will notify the owner if it finds that one of his drivers has become disqualified by violation of any applicable regulations; e.g., convicted of driving while intoxicated. The machinery division pays a bonus of 1 percent of the paid gross revenue to any owner operator who has not had a claim during the month and there is a similar program in the steel division under which green stamps are awarded. It is not entirely clear, however, whether such awards or payments in the case of vehicles which are not driven by the owner are made to the owner or to the driver. Owners and drivers receive no fringe benefits, paid holidays, etc., and although Daily will sell certain equipment-hard hats, tarpaulins, chains, etc.-it is sold at cost and there is no requirement that such items be bought through Daily. Similarly, Daily sells gasoline at cost plus 1 percent to cover slippage or shrinkage. Daily does not aid in the purchase of equipment nor does it make loans, although it will advance up to 50 percent of the gross revenue from any load. If a driver is not speedily loaded or unloaded, Daily will charge "detention time" as provided in the applicable tariff and pay the owner his share. Daily has no rules, employs no inspectors to check up on drivers on the road, and does not penalize owners who refuse to take a load. They are free to accept or reject loads and the right to trip lease is not restricted. The agreement, as noted above, may be terminated if no load is accepted for 15 consecutive days, other than that however, an owner-operator may work as frequently or infrequently as he sees fit, subject, of course, to the Federal maximum. Similar- ly, the owner may transport the load over any legal route and Daily plays no role in his choice of routes. The Daily decals which are placed on the truck are required by Federal regulations and there are no other restrictions or requirements concerning the appearance of the vehicle. However, the machinery division will lease only cab-over trucks because of limitations in certain States on the total length of tractors and trailers permitted on their highways. Daily also provides a Daily shoulder patch which drivers may wear if they wish. The Board has consistently applied the common law right-to-control test to determine whether an individual is an employee or an independent contrac- tor. If the right to control the manner and means to attain a given end is reserved, the relation is one of employer-employee; but if control is reserved only over the desired result than an independent contrac- tor relation exists. The facts in this case are almost identical to those in George Transfer & Rigging Co., Inc., 208 NLRB No. 25 (Members Fanning and Jenkins dissenting), 94 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and Kreitz Motor Express, Inc., 210 NLRB No. 11 (Member Jenkins dissenting), in which the Board held that the owner-operators were independent contractors. We reach the same conclusion here. Although Daily complies with I.C.C. and D.O.T. regulations requiring physical examinations of driv- ers and systematic safety inspections of equipment, will not permit drivers who are disqualified under D.O.T. regulations to operate equipment leased to it, and unilaterally establishes the rate of compensation, apparently governed only by market forces, those factors, in balance, are not sufficient to establish that the relation is that of an employer to its employees, since they fall short of establishing, indeed barely suggest, that Daily controls the manner or means by which the owner-operators perform services for Daily. In contrast, the following factors establish that Daily controls only the end to be achieved, that the owners are subject to typical entrepreneurial risks and profits, and that an independent contractor relation exists : (1) the owner-operators are free to schedule the use of their equipment; they determine what days and hours to work, where to have repairs made (though not always if) and purchase fuel, what legal routes to use, whether to accept or reject loads, and if they will trip lease; (2) the owners retain complete control over any drivers or other employees they may have and are solely responsible for their pay, withholding taxes, etc.; (3) the owner-operators are responsible for the complete transportation of any load they accept and if unable to complete, or arrange for the completion of, the delivery, Daily will do so at the expense of the owner; (4) the owner- operators are not subject to any rules imposed by Daily in their day-to-day operations; (5) owners and drivers receive no fringe benefits from Daily; it will not aid them in the purchase of equipment , nor will it make loans, although it will make an advance of up to 50 percent of the revenue of a shipments and (6) the owner has a substantial capital investment in equipment, which he purchases without any assist- ance from Daily. In view of the foregoing, we conclude that the single- and multi-owner operators are independent contractors, and that the nonowner drivers are employees of the independent contractors rather than Daily. Since Daily has no employees driving directly for it, we shall dismiss the petition. ORDER It is hereby ordered that the petition herein be, and it hereby is dismissed. MEMBER FANNING, dissenting: My colleagues have found that owner-operators who lease equipment to Daily are independent contractors and that nonowner drivers are employees of independent contractors, not of Daily. In George Transfer & Rigging, 208 NLRB No. 25, a majority of the Board held that owners leasing equipment to an I.C.C. certificated carrier were independent contrac- tors over a dissent by Member Jenkins and me. The facts here do not vary significantly from those in George Transfer & Rigging and I would find the owner-operators here to be employees, not independ- ent contractors, for the reasons set forth in the dissent in George.