Columbus Green Cabs, Inc.

COLUMBUS GREEN CABS, INC. Columbus Green Cabs, Inc; Yellow Cabs , Inc; East- side Cab Company, and Radio Cab Company and Teamsters Union, Local No. 413, affiliated with the International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America, Pe- titioner. Case 9-RC-10574 November 7, 1974 DECISION AND ORDER BY MEMBERS FANNING, KENNEDY, AND PENELLO Upon a petition filed under Section 9(c) of the Na- tional Labor Relations Act, as amended, a hearing was held before Hearing Officer Andrew L. Lang. Following the hearing and pursuant to Section 102 .67 of the National Labor Relations Board Rules and Regulations and Statements of Procedure, Series 8, as amended, the case was transferred to the Board for decision. Briefs were filed by the Employer and the Petitioner. 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 reviewed the Hearing Officer's rul- ings made at the hearing and finds that they are free from prejudicial error. They are hereby affirmed. Upon the entire record in this case the Board makes the following findings: 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 rep- resent certain employees of the Employer. 3. The Petitioner seeks to represent a unit of all drivers of Columbus Green Cabs, Inc., Yellow Cabs, Inc., Eastside Cab Company, and Radio Cab Com- pany. The four companies (herein referred to as the Employer, or lessor) operate out of the same Colum- bus, Ohio, office and the parties stipulated that they are joint employers for the purposes of this proceed- ing. The Employer, an Ohio corporation principally lo- cated in Columbus, Ohio, is in the business of leasing taxicabs pursuant to a lease agreement which de- scribes the lessee as an independent contractor. The Petitioner contends that the Employer' has re- ' Prior to February 8, 1974, three of the four companies involved, Colum- bus Green Cabs, Inc, Yellow Cabs, Inc, and Radio Cab Company, paid their drivers on a commission basis and operated the taxicab service in a manner which Petitioner asserts made the drivers "unquestionably employ- ees " In February, these companies significantly changed their business for- mats and taxicabs are now rented to the drivers subject to a lease agree- ment Eastside Cab Company has leased taxicabs since 1961 751 tamed the right to control the manner in which the taxicab service is provided. In Petitioner's view, the drivers are employees within the meaning of Section 2(3) of the Act.2 The Employer contends that the drivers (herein referred to as lessees) are not employ- ees, but are independent contractors. The Employer owns approximately 140 taxicabs. They are painted the same color for each company, carry commercial advertising,' and bear the company's medallion, insignia, and telephone num- ber. Prior to signing the lease each driver must possess a valid chauffeur's license ° issued by the city and attend an orientation program operated by an inde- pendent corporation to which the Employer pays a fee for this service. The program, among other things, trains the prospective lessee to operate the ra- dio, use the meter, and fill out the trip sheet. It also familiarizes him with safe driving techniques, certain street maps, and municipal statutes governing opera- tion of taxicabs.' The lease agreement that all lessees are required to sign provides that discretion in the operation of the said taxicab is vested in the lessee and that the lessee acknowledges being an "independent contractor" free from interference, authority, or control in the operation of the taxicab. The lease is for a 24-hour period, renewable daily by delivery of the taxicab by the lessor and accep- tance of it by the lessee. It can be rescinded by either party for any reason. The agreement requires that the lessor provide telephone call and radio service, main- tain the taxicab in good working order, sell the lessee gas, and pay for all licenses, taxes, and fees on the leased vehicles. The lessor also agrees to furnish pro- tection against claims by third parties for personal injury and property damage subject to statutory limi- tations.6 The lessee agrees to operate the cab in conformity with all laws, inspect the vehicle each day for me- chanical defects, return it in good working order, purchase the gasoline, and pay a security deposit.' The lessee also agrees and acknowledges that the les- 2 Trade Wind Transportation Company Ltd and Trand Wind Services d/b/a Trade Wind Taxi, 185 NLRB 373 (1970), Checker Cab Association, Inc, 185 NLRB 182 (1970), Yellow Cab, Inc 179 NLRB 850 (1969) 7 The lessee does not contract for the advertising and apparently receives no money for it The Employer does not perform police record or reference checks on lease applicants, nor does it sponsor lease applicants for city cab licenses 5 Many of the matters covered by the orientation program are areas a lessee is required to be knowledgeable in by either the city of the Employer's insurance carrier, or both 6 The record indicates that the insurance provided by the lessor is re- quired by statute and its cost is included in the lease fee 7 In addition to the rental payments , the lessee deposits $ 1 each day until the deposit reaches $ 100 The security deposit is to insure the return of the taxicab in the same condition as delivered by the lessor 214 NLRB No. 93 752 DECISIONS OF NATIONAL LABOR RELATIONS BOARD sor is not responsible to the lessee for any injury or property damage and further agrees that no employ- er-employee or agency relationship exists and, as a condition of his independent contractor status, waives any coverage such as workmen's compensa- tion insurance. At the end of each day, the lessee remits to the lessor only that portion of his gross receipts that rep- resents the lease fee. The fee, set by the lease agree- ment, is based upon the hours the cab is in the lessee's possession and the total miles driven. The lessee retains all receipts above the amount and is not required to submit evidence of gross receipts, earn- ings, or profits and losses, nor does the lessor main- tain any books or records for or on behalf of the lessee . No deductions are made by the lessor for Fed- eral, state, or local taxes or for unemployment or workmen's compensation insurance . The company keeps no records with respect to the financial status of the lessee, other than the fact that the lease fee has or has not been remitted. No provisions in the lease reflect agreement on hours of work, schedules, work rules, assigned loca- tions, required use of the driver's manual, or any type of disciplinary system. The record indicates that the lessee is not required to work any specific hours or days. With availability of a taxicab the only limitation, the lessee is free to drive whenever and for however long he desires.' There is no defined daily or weekly work schedule and some lessees have, without consulting the Em- ployer, varied the hours they work or have not leased a cab for days or weeks at a time. The Employer has suggested that adequate service and a good week's pay would be assured if lessees worked 6 days a week and alternate weekends. At no time, however, has the Employer forced the lessees to meet any specific schedule. Lessees are not assigned to work at any specific location. When there is a call for service, the dis- patcher, in the interest of prompt service, radios a lessee at the cabstand 9 closest to the customer. If no one answers, or if the call is refused, the dispatcher will then radio lessees driving in the customer's vicin- ity and assign the call to the lessee closest to the customer. This dispatching procedure encourages the use of cabstands, as 70 percent of the calls come from the dispatcher. Lessees are, however, not re- quired to report to the cabstands. At his own finan- cial risk, he can drive through a particular area soli- citing his own customers and waiting for calls that 8 The Employer's executive, Glassman, testified that the rental fee is high enough to insure a profit for the company even if the taxicab is not driven during the lease period 9 There are 40 cabstands established and maintained by the city cannot be serviced by lessees stationed at cabstands10 in the vicinity. Each lessee is provided a driver's manual supplied by the Employer to help him make the most of his worktime. It includes among other things informa- tion on how to accept calls, collect fares, fill in trip sheets, make out accident reports, as well as suggest- ed long-distance rates and the names of companies, city agencies, and institutions the Employer is under contract to service. Lessees are not compelled to fol- low the manual's guidelines, although business pru- dence may require otherwise. For example, the lessee is free to negotiate different long-distance rates or decide not to service a customer under contract." The manual contains all the information needed to make the job financially rewarding, but the lessee determines for himself the best method for earning his money. In the absence of any system for reprimanding les- sees, the Employer adopts the role of a mediator when disputes arise between drivers or drivers and customers. If a driver is accused of inaccurately re- porting his location or taking a call assigned to an- other lessee, or if a customer alleges an overcharge, the Employer merely attempts to resolve the matter informally without any disciplinary action, leaving any settlement up to the disputing parties themselves. Violations of municipal statutes, such as overcharg- ing customers, are committed at the lessee's risk and occasionally the Employer will remind the lessee that he may be placing his city license in jeopardy. The rare occasions when the Employer does take action are limited to cases when a driver is intoxicat- ed or his negligence has resulted in an accident. However, the Employer exercises its discretion in this area only in extreme cases. Finally the lessee is not required to report his loca- tion or destination at any time,' does not have to abide by any dress code, can use his taxicab for per- sonal use, purchase gasoline from any source, refuse calls from the dispatcher, leave his cab unattended, or work for any other taxicab company. Based upon the entire record we conclude that upon leasing the taxicab, the lessee, dependent only upon his business judgment and motivated only by what he desires to earn, has full discretion and con- trol over the manner and means by which he oper- ates the rented taxicab. We find, therefore, that no employment relationship exists and that the lessees 10 If no cab is on station when the dispatcher radios a call, or if a driver refuses the call, drivers in the vicinity have an opportunity to take the call ii Calls from contract customers are the most lucrative and usually are sou i uht after Petitioner argues that employee status is shown by the fact that the lessee must respond immediately to a signal 3 However, the record makes clear that a signal 3 is a call to come to the garage when the lessee is in the vicinity and the lessee may continue driving the rest of the day COLUMBUS GREEN CABS, INC. are independent contractors within the meaning of Section 2(3) of the Act.13 Accordingly, we will dis- miss the petition. ORDER It is hereby ordered that the petition be and it hereby is dismissed. MEMBER FANNING, dissenting: I cannot agree that these drivers are independent contractors . The Employer has admitted that to avoid operating costs such as workmen' s compensa- tion and unemployment insurance , it recently de- vised a plan to lease cabs to drivers, most of whom were previously paid by commission. The Employer now takes the position that this new business ar- rangement denies its drivers employee status and, hence, the protection of our Act. In my view, the majority is following its new direction as seen in Greater Houston Transportation,14 ignoring significant evidence and giving no credence to the business real- ities involved. The Employer owns the cabs and pays for tires, antifreeze, oil, and maintenance. It sets the terms of the lease agreement which must be for a minimum 6-hour period, and the amount of the lease fee. It negotiates all contracts to provide taxi service to groups and for the advertising that its taxicabs carry. The lessee is not permitted to sublease to any other person and Employer's contention that this does not prohibit employing another driver is supported by no example. The lease requires driver compliance with the city ordinances and all pertinent laws. The Em- ployer alone decides whether to extend credit to its 1,200 charge account customers. The driver applies at the Employer's office, is in- terviewed, receives classroom instruction,'s is accom- panied by the Employer to the city administrative building to apply for his license to drive a cab, and receives several hours of on-the-job training, all prior to being allowed to sign a lease. Each prospective driver is furnished a 39-page manual, republished and distributed by this Employ- 13 Barwood, Inc, 209 NLRB No 8 (1974), and Greater Houston Transpor- tation Company, and all other Employers d/b/a Yellow Cab Company, 208 NLRB 1019 (1974) 14 In Greater Houston Transportation Company supra, Member Jenkins and I joined in dissenting from the majority's failure to find "appreciably the same type of unit found appropriate by the Board in numerous prior cases involving the taxicab industry," noting that the majority appeared to have staked out a new direction See also Barwood, Inc, supra, where the Board, despite a limited record, redetermined the status of cab drivers earli- er certified in a bargaining unit , I dissented 15 A so-called "independent" corporation which shares office space and some company executives of the various cab companies involved provides this class instruction 753 er since the switch to leasing its cabs. This manual contains detailed instructions covering all phases of operating the taxicab, such as accident reporting, checking in and out,16 the rates fixed for out-of-town trips, and calling the dispatcher for instructions when faced with unusual situations not covered by the rules. To these Employer-prepared directions, it is no answer to say, as the Employer does, that the manual merely furnishes information on how to earn as much money as possible and that drivers are not re- quired to follow it, particularly when the testimony shows that drivers have never been told that, and nothing printed in the manual diminishes the com- pulsory tone of its language. In my view the existence of an employment rela- tionship with the "lessee" is also shown by the Employer's retaining the ultimate power to refuse to renew, or to rescind, a lease at any time for any cause. Reason demands that we examine carefully an argument by an employer vested with this power. The practical effect of the Employer's power is evi- dent. Discipline in the ordinary sense is not neces- sary when an employer can simply threaten not to renew the daily lease for infractions like failure to comply with a "suggested" work schedule or refusing to return a fare overcharge. That drivers have com- plete discretion over work schedules and the opera- tion of the leased vehicles seems very doubtful with respect to a fleet of taxis. The cabs are readily identifiable, painted the same color for each company, bearing the company insig- nia and telephone number, giving the appearance of a single integrated business enterprise which, as Member Jenkins and I said in our dissent in Greater Houston, leaves the public with the impression that there is a responsible company on which to rely for service rather than an individual." It is unrealistic, in these circumstances, for my colleagues to accept the contention that the Employer has relinquished con- trol over the operation of these cabs. In fact, the Em- ployer admits prudence has forced it to discuss with drivers work schedules, customer complaints, person- al appearance, and violations of work rules and city ordinances, areas it nevertheless urges are within the absolute discretion of the drivers. 16 The driver is instructed to report on schedule and with a neat and clean appearance At times a driver has been required to wash up before being given keys and a trip sheet The driver must perform a detailed check on the cab, noting any damage or mechanical defects Once outside the garage, he is instructed to radio the dispatcher that he is on the job, report to the closest cabstand , and work 3 hours before taking the one 30-minute lunch period allowed Upon returning to the garage , he must perform another detailed check on the vehicle before turning in the keys and trip sheet, which , as the manual states , becomes part of the permanent company rec- ords 17 The Employer's awareness of this is indicated by the manual's instruc- tion "Be courteous to pedestrians You are operating a conspicuous vehicle and your actions speak for the Company " 754 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The majority finds "lessees" are not required to work at any specific location and may refuse calls. However, as my colleagues point out, these drivers rely heavily on calls from the dispatch service, which furnishes the best chance to make money, as Em- ployer admits; drivers keep their radios on and use the cab stands. To say that a driver has the "discre- tion" to cut himself off from what amounts to 70 percent of the business available to him is simply not realistic. Finally, I am not persuaded by the Employer's contention that the lease fee can be nego- tiated when the record shows only that the Employer occasionally accepts less than the usual fee when a driver gets sick on the job. In view of the lease requirement that all laws and city ordinances be obeyed, the care taken before ap- plicants are permitted to lease a cab, and the exis- tence of a manual for drivers that states in so many words that a driver's actions speak for the Employer, I consider untenable the Employer's argument that it retains no control over the operation of the leased cabs. Unlike my colleagues, I have no difficulty seeing beyond the ostensible effect of the lease ar- rangement to detect the significant control the Em- ployer has retained and exercises. I would find the drivers are employees within the meaning of Section 2(3) of the Act.