Robbins Motor Transportation, Inc.

ROBBINS MOTOR TRANSPORTATION 761 Robbins Motor Transportation, Incorporated; S.R.T. Motor Freight, Inc. and General Teamsters, Chauf- feurs, Warehousemen and Helpers, Local 470, a/w International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America, Pe- titioner. Case 4-RC-1 1670 July 28, 1975 DECISION ON REVIEW BY MEMBERS FANNING, JENKINS, AND WALTHER On October 29, 1975, the Acting Regional Director for Region 4 issued a Decision and Direction of Elec- tion in the above-entitled proceeding, in which he excluded from the Petitioner's requested unit of truckdrivers, as not employees of the alleged joint employers named in the caption (herein called Rob- bins and SRT), the owner-operators of leased equip- ment whom he found to be independent contractors, and the nonowner drivers of leased vehicles whom he found to be employed by the independent contrac- tors and not by the Employers; and he directed an election in a unit of the remaining requested truck- drivers, who are admittedly employees of SRT. Thereafter, in accordance with Section 102.67 of the National Labor Relations Board Rules and Regula- tions, Series 8, as amended, the Petitioner filed a timely request for review of the Acting Regional Director's decision on the grounds that in reaching the above determinations he made erroneous find- ings of fact and departed from precedent. The Em- ployers filed opposition thereto. On December 23, 1975, by telegraphic order, the request for review was granted and the election stayed pending decision on review. Thereafter, the Petitioner and the Employers filed briefs on review.' The Employers also filed a motion to strike portions of the Petitioner's brief on review, and the Petitioner filed an answer thereto. i The Petitioner also requested that Board Member Walther disqualify himself from participation herein on the basis that NRM Trucking Compa- ny, one of the companies named in the petition as an employer of truckdriv- ers involved, was represented by the law firm of Morgan , Lewis and Bock- ius, with which firm Member Walther was associated immediately prior to his appointment as a Board Member, and that Stephen R Tranovich, the agent for the Employers named in the caption , is also the agent for NRM Trucking Company The Employers opposed the request, noting that NRM Trucking Company was unrepresented by counsel during the first day of the hearing and on the second day was removed , by stipulation , as a party to the proceedings The request was referred to Member Walther He consid- ered the request and decided not to disqualify himself inasmuch as the law firm with which he was formerly associated does not represent any of the parties to this proceeding and its earlier participation in the hearing was limited to responding to a subpena for information concerning its client NRM Trucking Company, prior to removal of its client, by stipulation, as a party to the proceeding 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 the record does not support the Acting Regional Director's finding that the owner-operators of leased equipment here in- volved are independent carriers and not employees of the named Employers. We agree. Robbins, whose headquarters are at Eddystone, Pennsylvania, operates mainly in the Middle Atlantic States area from a number of terminals under a cer- tificate from the Interstate Commerce Commission (ICC) as a common carrier for the interstate trans- portation of iron and steel. SRT, owned by Stephen R. Tranovich, his wife, and a daughter, has a termi- nal at Morrisville, Pennsylvania, from which it oper- ates under a certificate from the Pennsylvania Public Utility Corporation (PUC) for the intrastate hauling of iron and steel and certain other commodities. SRT also acts as an agent for Robbins, principally with regard to a common customer, U.S. Steel's Fairless Works, from whose nearby plant intrastate and inter- state shipments of steel are made.3 At the Morrisville terminal, which bears the names of both SRT and Robbins, the SRT staff performs functions for both carriers, applies the same policies for both, and bills Robbins for its share of the administrative expenses incurred. SRT dispatchers control all dispatching at the terminal. A Robbins safety director spends about 2 days a week at the terminal and performs safety and inspection functions for both companies, as does an SRT mechanic safety director. At the Morrisville terminal, all equipment utilized by SRT and Robbins is leased, either under a long- term lease or under a lease from an owner-operator, as described below. SRT employs 10 drivers who are admittedly its employees. This complement is supple- mented by owner-operators of equipment which is leased by them to either SRT or Robbins and by drivers hired by owner-operators to drive their equip- ment. Robbins has 40 such drivers of leased equip- ment and SRT has 8.4 The lease agreements between owner-operators of equipment and the carriers involved, which were re- 2 The Employers' motion to strike portions of Petitioner's brief insofar as it objects to the Petitioner's attempt to introduce into evidence a document which it names "the old Robbins lease," is hereby granted, absent any show- ing by the Petitioner that such evidence is admissible as newly discovered In all other respects, the motion is denied 3 SRT also, on occasion, acts as agent for one or more other carriers 4 The number of owner-operators who lease more than one tractor to SRT and/or Robbins is not stated in the record 225 NLRB No. 99 762 DECISIONS OF NATIONAL LABOR RELATIONS BOARD vised in some respects and reexecuted on or about June 6, 1975,5 are generally summarized below, ex- cept that the Robbins agreements require compliance with regulations of the ICC and Department of Transportation (DOT), while the SRT agreements re- quire compliance with regulations of PUC and DOT. Under the leases, the owner agrees to use the equipment, together with drivers and all other neces- sary labor, to transport, load, and unload on behalf of the carrier, or on behalf of such other certified carriers through authorized "trip leases" or inter- change agreements, such commodities as the carrier may make available to the owner. The carrier takes possession of the equipment and, as a condition pre- cedent to the validity of the lease, inspects it to insure compliance with the government regulations pertain- ing to its condition. Also, during the term of the lease the equipment will be inspected periodically. If the equipment does not comply with DOT requirements it must be put in proper operating condition by the owner, and failure to do so will result in the immedi- ate termination of the lease. For each trip the carrier agrees to pay the owner 74.7 percent of gross revenue.' The owner shall have the responsibility of the carrier of satisfying the ap- plicable government regulations, subject at all times to verification by the carrier. The owner shall retain all responsibility (a) for hiring and determining the wages, hours, and working conditions of all drivers and helpers necessary for performance of the owner's obligations, who shall remain employees of the own- er; (b) for selecting, purchasing, financing, and main- taining the equipment; (c) for selecting all routes; and (d) for paying all operating expenses, including all expenses of fuel, oil, repairs, road taxes, mileage taxes, fuel taxes, fines, licenses, permits, or any other levies or assessments based upon operation of the equipment, subject to any regulatory requirements by various governmental agencies. The owner has fi- nancial responsibility for workmen's compensation and withholding and employment taxes on account of drivers and helpers. The owner agrees to carry bobtail and deadhead insurance.7 The carrier shall provide cargo insurance; however, the owner shall be liable to the carrier for up to a maximum of $1,000 where the owner or its employees or agents are at fault.' The carrier also maintains, pursuant to regula- tions, public liability and property damage insur- 5 Except as noted below, the Employers do not point to any substantial changes in the reexecuted leases which would have a bearing on the issues under review 6 Less a charge for rental of a trailer, if applicable The 74 7-percent rate does not include a I-percent charge which , as noted below, is made for providing Workmen's Compensation coverage for the owner-operators and ani other drivers they may utilize to operate their equipment Bobtailing involves operation of a tractor without a trailer; deadheading is the operation of equipment without a load ance ; however, the owner shall indemnify the carrier for losses from its operation to a maximum of $200. The owner reserves the right to trip lease. The carrier provides decals to be fixed to the equipment while under lease. The term of the lease is 30 days and continuously thereafter until canceled by either party by written notice. If for any reason the owner fails to complete delivery, carrier has the right to complete performance and hold the owner liable for cost there- of and any other damages. Lastly, the parties to the agreement state their intention to create the relation- ship of carrier and independent contractor. The Employer's witness, Tranovich, testified as to the practice under the lease agreements . Inasmuch as the leases were revised and reexecuted after the filing of the instant petition and about a month before the hearing, it is not clear whether his testimony related solely to practice under the new leases, or whether it purported to include the practice under the antece- dent leases . On the other hand, there was testimony by Petitioner's witness, Stanley B. Moan, who leased and operated his equipment at the Morrisville termi- nal for approximately 9 years prior to June 2, 1975, concerning actual practices under the lease arrange- ment. All the disputed drivers, including owner-operators and others driving their equipment, must complete a driver qualification questionnaire for the carrier to which the equipment is leased and undergo a physi- cal examination by a qualified physician, as required by government regulations. The applicant is also giv- en a multiple choice test of his knowledge of operat- ing procedures under DOT regulations. Past employ- ers are requested to complete a detailed inquiry form concerning, inter alia, the applicant's ability to main- tain accounts, salary garnishments, accidents, license suspensions or revocations, injuries on the job, physi- cal disabilities, reason for leaving, general conduct, and competency as a driver. The applicant is also given a road test. A detailed inspection report is completed on the owner's equipment. The same inspection report form is utilized for monthly inspections of all vehicles leased to SRT and Robbins. These inspections are performed by Solamon, safety director and mechanic of SRT, or one of his assistants . On the reverse side of this inspection report is a leased equipment main- tenance and inspection report form which the owners are required to complete. It is there stated that in the event the owner fails to complete this report, and/or to have the reverse side completed by the designated inspectors, his equipment will not again be loaded until this requirement is complied with. It is stated that completion of this report is "not merely a Com- b At the Morrisville terminal the limit of the operator's liability is $500 ROBBINS MOTOR TRANSPORTATION 763 pany policy," but that government regulations re- quire the carrier to cause the records to be main- tained? Solamon and Summers, who is Robbins' safety director, also conduct individual safety meet- ings with all drivers. As stated, the principal customer of Robbins and SRT at the Morrisville terminal is the nearby Fairless Works plant. Interstate hauls are made by Robbins; intrastate hauls, by SRT. Leased equipment of own- er-operators when used in making these hauls bear the decals of the lessee carrier. Tranovich testified that in general drivers of leased equipment are under no compulsion to accept a particular load and may reject any load freely without fear of reprisals. Yet when asked if the first driver to call in gets his pick of the loads, he responded: "This is basically true. We also try to even the loads out, as it were. If a fellow hasn't gotten a load in three days we would hopefully offer him a load he could accept ...." On the other hand, Moan testified that when he turned down a load to Reading for SRT, he was not given any more loads the rest of that day, and that this remained the practice as long as he was employed. On loads which are less than 40,000 pounds, in order to accomodate the customer and have them moved, the carriers, in their discretion, will pay a premium, i.e., the rate is figured on the basis of 40, 000 pounds. Also, when a driver of a leased vehicle is detained for more than 3 hours beyond his scheduled reporting time before the shipper loads him, the ship- per is billed by the carrier for the time in excess of 3 hours at a rate of $13.70 per hour, and upon receipt of payment for such detention time from the shipper, the carrier remits 74.7 percent of that amount to the owner. Problems have arisen in the past with regard to operators who "jump" or deviate from their time scheduled by the carrier for arrival at the Fairless Works plant to obtain their loads, thereby taking an- other operator's time slot as directed by the carrier. In January 1973, SRT imposed a fine of $20 for jumping, to be paid to the operator whose load is taken, and warned that anyone who adopts this atti- tude would not only pay the fine but have his lease cancelled. Some loads of pipe are required to be "strung" and there is a stringing charge to be added to the tariff for the load. Operators have been instructed that if the consignee will not make a notation on the deliv- ery receipt that the load was strung, the driver must do so. There was testimony that if the notation was not made, the operator would not be paid for string- ing the pipe. 9 There was testimony that the monthly inspections were in fact frequent- ly not made by SRT The carriers require chains and binders to secure loads on vehicles and they require header boards to protect the driver, in compliance with Federal Motor Carrier Safety Regulations. If the shipper requires the load to be tarped, the carrier requires the driver to do so and to supply the tarpaulin.10 Also, there is evidence that the carrier requires the load to be tarped if there is any hint of inclement weather. By letter dated March 8, 1973, from Tranovich, included in the operators' pay envelopes, carrier provided that anyone not tarping a bar load and receiving a claim would pay for the entire claim, not just $500. The letter also required obedience to the carrier's orders with the added admonition, "and if I find anyone not tarping a load, his lease will be cancelled, claim or not." The carrier's operations and the original assigned trips are one way. However, as set forth in a letter to the Morrisville, Pennsylvania, drivers, all leased op- erators going to the Baltimore area are not free to return or arrange their own loads, but "are required to help out with some of the return loads to the New York City area." Any other return trip leases must also go through the carrier, for which it charges a 1-percent handling charge. Prior to the execution of new leases in early June 1975, SRT and Robbins both had permanent lease agreements covering the same equipment with some of the same operators in the belief that it was permis- sible to do so under the separate state and Federal regulations. This has presumably changed under the new leases which give the operators the option as to which carrier they would lease to. Free parking space is provided for leased equip- ment at the Morrisville terminal. With regard to road, mileage, and fuel taxes, the record is unclear as to who is responsible. In all states except New Jersey, the states bill SRT for gasoline taxes,on the basis of mileage of the vehicle within the state, not the amount of gasoline actually purchased, and SRT de- ducts from the operator's settlement sheets the taxes paid on his behalf, allowing him credit for any fuel receipts turned in by him. SRT in turn uses these fuel receipts for gasoline purchased within the state as an offset against the mileage tax. The operators do not receive any accounting of SRT's handling of the fuel tax obligations, although SRT states it would provide it on request. As to certain other financial and administrative as- 10 Tarpaulins, as well as hardhats, required by a shipper or consignee because of regulations of the Occupational Safety Health Administration imposed on them , are made available by the carriers to the operators at 10 percent above cost, as a convenience to the driver A tire bank is also maintained by SRT at the terminal where purchases can be made on the same basis 11 SRT handles this tax obligation for all Morrisville terminal operations 764 DECISIONS OF NATIONAL LABOR RELATIONS BOARD pects of the relationship between the owner-opera- tors and the carriers, the practice is for SRT, on its own and Robbins' behalf, to pay the operators their share of the tariffs billed regardless of payment from the shipper, to make interest-free cash advances to the operators in amounts up to the anticipated reve- nues due the operator, which advances are to be re- paid at final settlement for the week, and to bill the shippers for detention time and to distribute the pro- ceeds to the operators in accordance with the lease percentages. SRT also maintains records of logs kept by all drivers," and it handles the administrative de- tails of accident reporting as required by its insur- ance carrier and DOT regulations. SRT also provides and maintains Workmen's Compensation coverage for all drivers operating leased equipment, but in payment therefor deducts 1 percent from the operator's share of the revenues received." SRT has a policy of making personal loans to drivers up to a maximum of $500, charging drivers of leased equip- ment 10 percent interest on the loan balance, with repayment in terms of at least $50 a month. The drivers who are admittedly employees of SRT also receive as compensation a percent of the load revenue, either 30 or 31 percent depending on length of service. SRT also provides them with a medical plan at a cost of approximately $50 per month, 5 paid holidays at an approximate rate of $35 per day, and vacations, compensation for which is a weekly pro rata share of their average weekly commission for the previous 6 months. Loans to them are interest free and repayment terms are liberal. Drivers of leased equipment receive none of these benefits on the same basis. In making our determination as to the status of these owner-operators, we are guided by the common law right-of-control test, whether the carriers exercise control over the means used to achieve the ends de- sired or merely over the ends to be achieved. In ap- plying this test, we do not consider any one factor determinative. In making our examination of the facts we must consider the degree of control exer- cised over the owner-operators regardless of the rea- sons for the imposition of that control; that is, whether inspired by governmental regulations or for other business reasons. Based upon our review of the record facts above summarized, we are not persuaded that the owner- operators in fact occupy the status of independent contractors. This is demonstrated first of all by the carrier's requirements relating to safety in the condi- 12 Moan testified that he has been asked by SRT to modify his logs be- cause they showed too many hours. 13 Drivers of leased equipment are required by Pennsylvania statute to be covered by Workmen's Compensation tion of the equipment, the securing and tarping of loads, and other aspects of the operation of the leased vehicles, including the imposition of discipli- nary measures and threat of lease cancellation. Moreover, while the Employers state that the owners of leased equipment are free to accept or reject loads which are offered to them and to enter into trip leas- es with other carriers upon delivery of their loads, the record facts above set forth reveal that the Employ- ers exercise control over the owner's decisions with respect to these matters by means of instructions, fines, threats of reprisal and of cancellation of their leases; and indeed, as indicated, until recently, some of the owners had permanent leases with both SRT and Robbins, thus providing the Employers with even greater flexibility in the scheduling of loads for their customers. As well, there are a number of ways in which the entrepreneurial risk factor frequently as- sociated with an independent contractorship is mini- mized. Thus, the Employers wholly assume the risk of nonpayment by their customers; limit the risk of loss to owner-operators in the event of claims cov- ered by cargo and liability insurance while the leased equipment is being operated in their behalf; perform a number of administrative services for the owner- operators without apparent expense to them, such as in the handling of billing for detention time, the pro- cessing of insurance claims, and the handling of fuel tax payments; make interest-free cash advances and extend personal loans at interest rates lower than charged by financial institutions; in some cases, pay a premium for loads below a minimum weight; make available to the owners free parking for the leased equipment; and sell certain items of equipment need- ed in their operations at 10 percent above cost. Final- ly, the absence of an arm's length relationship typical of a true independent contractorship is suggested by the facts that the Employers unilaterally decide what the owner-operator's percentage of load revenues shall be for the use of the leased equipment and the driver's services; whether or not a premium will be paid for loads below 40,000 pounds; and whether or not to charge for certain administrative services per- formed for the owners and for certain benefits pro- vided them to expedite their operators. For these reasons, we find that the owner-opera- tors and the drivers hired by them to operate their leased equipment are employees of the lessee car- riers. We also find, inasmuch as SRT applies the same labor relations policies to all the employees in- volved, that SRT and Robbins constitute joint em- ployers for unit purposes. In the circumstances, we conclude that the following unit is appropriate herein for the purpose of collective bargaining within the meaning of Section 9(b) of the Act: ROBBINS MOTOR TRANSPORTATION 765 All truckdrivers employed by the Employers at their Morrisville, Pennsylvania, terminal, includ- ing owner-operators,14 and nonowner operators of equipment leased by the owners to the Em- ployers, excluding office clerical employees, guards, and supervisors as defined in the Act. 14 As the record does not reveal how many owner-operators have lease agreements covering more than one tractor, there is no factual basis for determining whether or not they are supervisors as defined in the Act Ac- cordingly, if there are such "multiple" owner-operators, they shall be per- mitted to vote under challenge Accordingly, the case is hereby remanded to the Regional Director for Region 4 for the purpose of conducting an election pursuant to his Decision and Direction of Election, as modified herein, except that the Intervenor, Fraternal Association of Special Haulers, Local 100 (FASH), shall be included among the choices on the ballot and the eligibility payroll period for the election shall be that immediately pre- ceding the date of issuance of this decision.15 15 (Excelsior footnote omitted from publication I