Capital Parcel Delivery Company

DECISIONS OF NATIONAL LABOR RELATIONS BOARD Capital Parcel Delivery Company and Local 150, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. Case 20-CA-14716 June 2, 1981 DECISION AND ORDER On June 4, 1980, Administrative Law Judge James M. Kennedy issued the attached Decision in this proceeding. Thereafter, the General Counsel filed exceptions and a supporting brief, and Respondent filed a brief in support of the Administrative Law Judge's Decision. The Board has considered the record and the attached Decision in light of the exceptions and briefs and has decided to affirm the rulings, findings, and conclusions of the Administrative Law Judge only to the extent consistent herewith. The complaint alleges that Respondent violated Section 8(a)(1) and (5) of the Act by discharging its unit employees and replacing them with new employees who were not union members and by withdrawing recognition from the Union. The Administrative Law Judge found that Respondent replaced the unit employees with independent contractors, and that such action was permissible under the terms of its collective-bargaining agreement with the Union. He therefore recommended dismissal of the complaint. We disagree. Respondent is engaged in the business of retail furniture and appliance delivery and installation in and around Sacramento and its outlying areas. It contracts with various retail stores for the home delivery and installation of merchandise sold by those stores. On February 1, 1975, Respondent contracted with Montgomery Ward and Company (herein called Ward's) to provide a regular delivery service. The 16 employees involved herein have been represented by the Union at least since February 1975. The most recent collective-bargaining agreement covering these employees was effective from February 1, 1977, to July 31, 1980, and applied only to the employees who serviced the Ward's account. In November 1978, Respondent for the first time assigned an owner-operator to service this account; he was not a member of the unit and was paid a daily, rather than an hourly, rate. On January 29, 1979,1 Respondent advised the Union that it was "seriously contemplating exercising its right to subcontract out work On February 2, Respondent met with Union Representative Dyer and complained that it was experiencing economic problems and Dyer agreed to discuss a wage reduction with employees. However, on February 16, Respondent notified the Union that it would lay off all unit employees the next day and subcontract out the unit work. Respondent asserted that it was exercising its right under the "Reservation of Rights" clause in the contract.² Then on February 17, Respondent, without the Union's agreement, took the work from the bargaining unit employees and gave it to nonunion owner-operators with whom it had signed subhauler agreements. On March 9, Dyer requested a meeting to discuss the "economic problems" and, if necessary, to negotiate severance pay for the employees. On March 20, Respondent notified the Union that the employees were not entitled to severance pay or vacation pay on the grounds that they had not been terminated, only "laid off for lack of work." Commencing February 17, owneroperators have performed the unit work under the terms of subhauler agreements. Respondent contends that it has bargained in good faith with the Union about the effects of the decision to subcontract unit work. It further contends that it was under no obligation to bargain over the decision, because the Union, by contract, had waived its right to bargain over the subcontracting of unit work. Respondent argues that it has lawfully transferred the work to independent contractors who own and operate their own trucks. The controlling issue in this case is whether the owner-operators are independent contractors. The standard which the Board applies in determining whether owner-operators are employees rather than independent contractors is the common law "right to control" test as set forth by the Supreme Court in N.L.R.B. V. United Insurance Company of America, et al., 390 U.S. 259 (1968), and Restatement of Agency 2d §220 (1958). Under this test, an employer-employee relationship exists when the employer reserves the right to control not only the 2 The clause reads as follows: SECTION 24-RESERVATION OF RIGHTS (a) Except as specifically abridged, delegated, granted or modified by this Agreement, or any supplementary agreements that may hereafter be made, all of the rights, powers, and authority the Employer had prior to the signing of this Agreement are retained by the Employer, and remain exclusively and without limitation within the rights of management. (b) All work customarily performed by the employer with its own employees shall be continued to be so performed unless the Employer decides otherwise at its sole discretion. No provision of this Collective Bargaining Agreement shall be construed to limit the Employer's right at any time to subcontract all or any part of the work covered by this Agreement. Provided: The Employer will not exercise its right to subcontract in the Sacramento area before March 19. 1977. (c) Rights reserved and granted to the Employer under this Section shall not be subject to Section 19-the Grievance Procedure and/or Arbitration. 1 All dates refer to 1979 unless otherwise indicated. 256 NLRB No. 50 CAPITAL PARCEL DELIVERY COMPANY result to be achieved but also the means to be used in attaining the result. However, when the employer has reserved only the right to control the ends to be achieved, an independent-contractor relationship exists. The test requires an analysis and balancing of the facts in each case. Among the factors considered significant at common law in connection with the "right to control" test in determining whether an employment relationship exists are (1) whether individuals perform functions that are an essential part of the company's normal operation or operate an independent business; (2) whether they have a permanent working arrangement with the company which will ordinarily continue as long as performance is satisfactory; (3) whether they do business in the company's name with assistance and guidance from the company's personnel and ordinarily sell only the company's products; (4) whether the agreement which contains the terms and conditions under which they operate is promulgated and changed unilaterally by the company; (5) whether they account to the company for the funds they collect under a regular reporting procedure prescribed by the company; (6) whether particular skills are required for the operations subject to the contract; (7) whether they have a proprietary interest in the work in which they are engaged; and (8) whether they have the opportunity to make decisions which involve risks taken by the independent businessman which may result in profit or loss.³ The record in the instant case reveals that the nature of the employment relationship between Respondent and the owner-operators is based on Respondent's contract with Ward's. This agreement is for an indefinite term, subject to termination by either party after May 1, 1975, upon 30 days' written notice. The Ward's agreement designates Respondent as an independent contractor, requires Respondent to load merchandise at such time and places as Ward's may direct, and to make deliveries within a 100-mile radius of Sacramento in accordance with time schedules set by Ward's and via routes selected by Respondent. Respondent is obliged to furnish trucks painted and lettered to Ward's standards and to provide drivers and helpers suitably uniformed. Ward's reserved the right to designate the brand of tires used in all vehicles. The agreement requires Respondent to account for all c.o.d. deliveries and to hook up all appliances at time of delivery. Under the agreement, Ward's sets the rate schedule and agrees to use each regularly assigned truck with driver and helper a minimum of 40 hours per week at $25.83 per hour or to pay a standby rate of $2.03 per hour for the difference between hours worked and 40 hours. Finally, the Ward's agreement states that Respondent would provide public liability and cargo insurance, and workmen's compensation insurance and pay the necessary taxes.4 Until February 16, Respondent performed its Ward's contract principally with its own employees driving Respondent's trucks.5 These employees were covered under a collective-bargaining agreement with the Union, which was effective from February 1, 1977, to July 31, 1980. Under the terms of the collective-bargaining agreement, a driver was assigned a truck owned by Respondent, given the assistance of one helper, and paid an hourly wage and the usual fringe benefits. The record demonstrates that employees punched in and out on a timeclock, and worked from approximately 7 a.m. until all deliveries were completed. A driver's route varied daily, a manifest designated the order in which deliveries were to be made, and he was supervised at the dock by supervisors of Respondent. Each driver was required to note the time of arrival and departure at each stop, to call Respondent when the merchandise arrived damaged or when a customer was not at home, and he was required to return the truck to the garage at the end of each day. 3 Standard Oil Company, 230 NLRB 967, 968 (1977), citing N.L.R.D. V. United Insurance Company, supra; N.L.R.B. V. Pepsi Cola Bottling Co. of Mansfied, Ohio, 455 F.2d 1134, 1141 (6th Cir. 1972), and Restatement of Agency 2d §220 (1958). On February 17, owner-operators took over the delivery services which had been performed by unit employees. Approximately 10 owner-operators performed the work under the "old" subhaulers agreement which all subhaulers signed before January 1, and under a "new" subhaul agreement which drivers signed after January 29. Under the terms of the subhaul agreements, Respondent set all the terms and conditions of employment. The owneroperator is required to provide a truck of 22-24 feet or more in length, necessary delivery equipment, driver, and helper. He is responsible for making all necessary tax contributions, including social security, workmen's compensation, and the deduction of Federal and state income taxes. He is required to post a $2,000 c.o.d. bond, supply public liability and cargo insurance to protect against claims arising out of the operation of his truck, and bear all necessary costs of providing the transportation service. Although the agreement provides that the owner-operator may choose routes, rest stops, gas stops, worker hours, and timing of customer 4 In September 1979, Ward's terminated its contract with Respondent. 5 In November 1978, Respondent for the first time assigned an owneroperator to service this account; he operated under the subhauler contract; see infra. DECISIONS OF NATIONAL LABOR RELATIONS BOARD pickups and deliveries "within the shippers' requirements," these requirements are rigid and permit the owner-operator no discretion in these matters. The working conditions are essentially the same as those which prevailed under the collectivebargaining agreements. Drivers are required to report to the dock at approximately 7 a.m. every weekday and be ready to depart by 9 a.m. They are required to work a 5-day week, are guaranteed 8 hours' pay, and do not deliver for any other company. Respondent tells the owner-operators where to make deliveries within an assigned geographic area which varies from day to day and in which the owner-operator has no proprietary rights. They are required to call in each delivery for "not homes" at the end of each workday and must account for all c.o.d. orders. On the basis of the foregoing and the entire record, we are satisfied that the owner-operators are employees rather than independent contractors. While the evidence discloses several factors which usually indicate independent-contractor status, the presence of these factors does not alone establish such status. Thus, we do not regard as controlling the fact that Respondent does not grant vacations or other fringe benefits or provide workmen's compensation coverage. Also of minor significance is the fact that owner-operators may reject additional work. Such factors are of little weight or use in determining who controls the performance of the work. Nor do we regard as fact that the owner-operators are responsible for insurance and maintenance of their trucks.⁶ We find, rather, that these factors are outweighed by others which indicate that Respondent effectively controls the daily activities of the owner-operators. As previously stated, the determination of employee status under the common law right-to-control test is to be based on "all of the incidents of the [work] relationship with no one factor being decisive." Examining the eight factors set forth above as being among those considered in the application of the right-to-control test, we find that: (1) the owner-operators perform functions that are an essential part of Respondent's business; (2) owner-operators have a permanent working arrangement with Respondent which may continue as long as performance is satisfactory; (3) owner-operators do business in Ward's name, pursuant to Respondent's contract with Ward's. Respondent provides substantial assistance and guid- 6 See The Herald Star, Canton Division, Thomson Newspaper Inc., 227 NLRB 505, 506 (1976); Contractor Members of the Associated General Contractors of California, Inc., 201 NLRB 311 (1973); Pepsi-Cola Bottling Company of Michigan, Grand Rapids Division, 156 NLRB 80 (1965); Frito- Lay Inc., 178 NLRB 611, 613 (1969). 7 N.L.R.B. V. United Insurance Company of America, supra. ance. Thus, Respondent tells the owner-operators where to make deliveries within an assigned area. The owner-operators are required to call in each delivery for "not homes." They are required to report to the loading dock at 7:30 a.m. each workday and must be loaded and ready to depart by 9 a.m. They are granted 8 hours pay per day but must maintain a production average of three stops per hour. They work a 5-day week and do not deliver for any other company. Finally, a supervisor visits customers' homes to determine whether the work is satisfactory and reports the findings on a "customer interview" report. (4) Respondent sets all the terms and conditions of its relationship with the owner-operators and has unilaterally changed the contract terms; (5) owner-operators are required to account to Respondent for funds they collect on c.o.d. orders; (6) owner-operators need not have any prior training or experience and they are trained by Respondent's supervisory personnel; (7) owner-operators have no proprietary interest in their routes; and (8) owner-operators have no opportunity to make decisions which involve financial risks inherent in an independent business enterprise. Considering all these factors, as we are required to do, leads to the inescapable conclusion that Respondent's owner-operators are employees within the meaning of the Act. We are satisfied that Respondent reserved to itself the right to control both the results to be achieved and the means to be used in achieving them. In view of the above finding that the owner-operator replacements were not independent contractors, it follows that Respondent had a duty to observe the terms and conditions of its then-current collective-bargaining agreement with the Union. Therefore, we find that, by discharging the unit employees and withdrawing recognition from the Union, Respondent has failed to abide by and has effectively repudiated the collective-bargaining agreement. Accordingly, we find that Respondent's actions amount to a unilateral termination of its contractual relationship with the Union in violation of Section 8(a)(5) and (1) of the Act. C & S Industries, Inc., 158 NLRB 454, 457 (1966). The Board, upon the basis of the foregoing facts and the entire record, makes the following: CONCLUSIONS OF LAW 1. The Respondent, Capital Parcel Delivery Company, is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union, Local 150, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and CAPITAL PARCEL DELIVERY COMPANY Helpers of America, is a labor organization within the meaning of Section 2(5) of the Act. 3. Respondent violated Section 8(a)(5) and (1) of the Act by discharging the unit employees, withdrawing recognition from the Union, and unilaterally terminating its contractual relationship with the Union. 4. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY** Having found that Respondent has engaged in certain unfair labor practices, we shall order it to cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. Having found that the employees named below were unlawfully terminated, we shall order Respondent to offer them immediate and full reinstatement to their former positions or, if those positions no longer exist, to substantially equivalent positions, without prejudice to their seniority or other rights and privileges, and make them whole for any loss of pay suffered by reason of the unlawful discharges. Joe Silva Don Iames John Blood Ron Holmes Bob Blood Richard E. Smith Jerry Prunty Gail P. Geisick Don Jefferies Garner Nigh Mack Craig Garry Appino Joe Habel Larry Goodman Laurence Purscell Ernie Gonzales Backpay shall be computed as prescribed in F. W. Woolworth Company, 90 NLRB 289 (1950), with interest as set forth in Florida Steel Corporation, 231 NLRB 651 (1977).8 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the recommended Order of the Administrative Law Judge and **In its clarification issued on September 14, 1981, the Board amended The Remedy to direct that Respondent reimburse the Union in accordance with its 1977-80 collective-bargaining agreement with the Union, as set forth in Ogie Protection Service, Inc., 183 NLRB 682, 683 (1970). It further directed that the contractually mandated health and welfare fund and pension fund be made whole for losses suffered on account of Respondent's failure to give effect to that collective-bargaining agreement, as set forth in Western Truck Services, inc., 252 NLRB 688 (1980). See Merryweather Optical Company, 240 NLRE 1213 (1979). 8 See, generally, Isis Plumbing & Heating Co., 138 NLRB 716 (1962). In acordance with his dissent in Olympic Medical Corporation, 250 NLRB 146 (1980), Member Jenkins would award interest on the backpay due based on the formula set forth therein. hereby orders that the Respondent, Capital Parcel Delivery Company, Sacramento, California, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Failing and refusing to bargain collectively with Local 150, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, as the exclusive representative of all of its employees in the following appropriate unit: All full-time and regular part-time employees, including tractor drivers, delivery drivers, and driver-helpers; excluding office clerical employees, all other employees, guards and supervisors as defined in the Act. (b) Continuing to give effect to any owner-operator agreement with its employees in the previously described appropriate unit. (c) Discharging unit employees, withdrawing recognition from the Union, and unilaterally terminating its contractual relationship with the Union. (d) In any like or related manner interfering with, restraining, or coercing its employees in the exercise of the right to self-organization, to form labor organizations, to join or assist any labor organization, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purpose of mutual aid or protection, as guaranteed in Section 7 of the Act, or to refrain from any and all such activities. 2. Take the following affirmative action which the Board finds will effectuate the purposes of the Act: (a) Offer to Joe Silva, John Blood, Bob Blood, Jerry Prunty, Don Jefferies, Mack Craig, Joe Habel, Laurence Purscell, Don Iames, Ron Holmes, Richard E. Smith, Gail P. Geisick, Garner Nigh, Garry Appino, Larry Goodman, and Ernie Gonzaies full and immediate reinstatement to their former positions or, in the event that their former positions no longer exist. to substantially equivalent employment, without prejudice to their seniority or to other rights which they formerly enjoyed. (b) Make whole all of the employees named in paragraph 2(a) of this Order for any loss of pay and benefits which they have suffered by reason of Respondent's unfair labor practices, found herein, as set forth in the section entitied "The Remedy." (c) Recognize and, upon request, bargain collectively in good faith with Local 150, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, as the exclusive collective-bargaining representative of Respondent's employees in the unit set forth in paragraph 1(a) of this Order. DECISIONS OF NATIONAL LABOR RELATIONS BOARD (d) Forthwith honor and enforce retroactively that collective-bargaining agreement effective from February 1, 1977, to July 31, 1980, between Respondent and Local 150, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, as provided by the terms of said agreement. (e) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze and determine the amount of backpay and other benefits due under the terms of this Order. (f) Post at its Sacramento, California, place of business copies of the attached notice marked "Appendix. Copies of said notice, on forms provided by the Regional Director for Region 20, after being duly signed by Respondent's representative, shall be posted by Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (g) Notify the Regional Director for Region 20, in writing, within 20 days from the date of this Order, what steps Respondent has taken to comply herewith. 9 In the event that this Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT refuse to bargain collectively with Local 150, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, as the exclusive representative of our employees in the appropriate unit. The appropriate unit is: All full-time and regular part-time employees, including tractor drivers, delivery drivers, and driver-helpers; excluding office clerical employees, all other employees, guards and supervisors as defined in the Act. WE WILL NOT continue to give effect to any owner-operator agreement with our employees in the previously described appropriate unit. WE WILL NOT discharge or lay off our employees and transfer the work to nonunion employees. WE WILL NOT in any like or related manner interfere with, restrain, or coerce employees in the exercise of the rights guaranteed them in Section 7 of the Act. WE WILL offer full reinstatement to the following employees: Joe Silva Don lames John Blood Ron Holmes Bob Blood Richard E. Smith Jerry Prunty Gail P. Geisick Don Jefferies Garner Nigh Mack Craig Garry Appino Joe Habel Larry Goodman Laurence Ernie Gonzales Purscell WE WILL reinstate the foregoing employees to their former jobs or, if those jobs no longer exist, to substantially equivalent positions, without prejudice to their seniority or other rights and privileges, and WE WILL make them whole for any loss of pay suffered by them by reason of their unlawful discharges, with interest. WE WILL enforce retroactively the collective-bargaining agreement with the Union covering our drivers and helpers effective for the period of February 1, 1977, to July 31, 1980. CAPITAL PARCEL DELIVERY COMPANY DECISION STATEMENT OF THE CASE JAMES M. KENNEDY, Administrative Law Judge: This case was heard before me at Sacramento, California, on December 19 and 20, 1979,1 pursuant to a complaint issued by the Regional Director for the National Labor Relations Board for Region 20 on August 31 based on a charge filed by Local 150, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (herein called the Union), on July 16 and amended on August 31. The complaint alleges that Capital Parcel Delivery Company (herein called Respondent) has engaged in certain violations of the National Labor Relations Act, as amended (herein called the Act). 1 All dates herein refer to 1979 unless otherwise indicated. CAPITAL PARCEL DELIVERY COMPANY Issues The issue involved is whether or not Respondent has violated Section 8(a)(5) and (1) of the Act by replacing its statutory employees with putative independent contractors even though it had the contractual right to do so and even though it offered to bargain over the effects of the operational change. In practical terms the case presents the question of whether or not the owner-operators are employees or independent contractors. If they are the latter, the complaint must fail; if the former, then I must determine (a) whether the discharged employees (concededly nondiscriminatorily "laid off") are entitled to reinstatement and/or backpay and (b) whether the collective-bargaining contract should be applied to the owner-operators and their helpers. All parties were given full opportunity to participate, to introduce relevant evidence, to examine and cross-examine witnesses, to argue orally, and to file briefs. Briefs, which have been carefully considered, were filed on behalf of the General Counsel and Respondent. FINDINGS OF FACT I. RESPONDENT'S BUSINESS Respondent admits it is a California corporation engaged in the furniture and appliance delivery business having its headquarters in Sacramento. It further admits that during the past year, in the course and conduct of its business, it has sold services valued in excess of $50,000 to department stores within California which themselves are engaged in interstate commerce. Accordingly it admits, and I find, that it is an employer engaged in commerce and in a business affecting commerce within the meaning of Section 2(2), (6), and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED Respondent admits, and I find, that the Union is a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Background Respondent is in the business of supplying delivery services for various department stores in Sacramento and outlying areas. In this regard it signs business agreements with various department stores. During late 1978 and at least through September 1979 it had such contracts with Montgomery Ward & Co. (herein called Ward's) and Sears, Roebuck & Co. The Sears account was serviced by Respondent solely through the use of owner-operators. Until February 16 the Ward's account was serviced by Respondent's own employees driving Respondent's trucks, although at least one, and maybe two, intercity drivers were owner-operators. There were 16 employees handling the Ward's account, 8 drivers and 8 helpers. They were represented for collective-bargaining purposes by the Union and had been since at least February 1, 1975. Most recently their terms and conditions of employment were set forth in a collective-bargaining agreement effective from February 1, 1977, to January 31, 1980. The parties agree that the collective-bargaining agreement never applied to the owner-operators or to any driver performing work for Sears. Subparagraph (b) of section 24 of the collective-bargaining agreement entitled "Reservation of Rights" reads as follows: All work customarily performed by the Employer with its own employees shall be continued to be so performed unless the Employer decides otherwise at its sole discretion. No provision of this Collective Bargaining Agreement shall be construed to limit the Employer's right at any time to subcontract all or any part of the work covered by this agreement. Provided: The Employer will not exercise its right to subcontract in the Sacramento area before March 19, 1977. [Emphasis supplied.] As can be seen, this subsection entitled Respondent unilaterally "to subcontract all or any part" of the bargaining unit's traditional work. Sometime in the spring of 1978 Respondent's president, Ernest Farrington, conducted a meeting of bargaining unit employees. That meeting was attended by Union Business Agent James Dyer. During the meeting Farrington advised that he was considering converting the Ward's account to owner-operators. The meeting ended when Dyer was asked to leave and all the employees followed him. On January 29, 1979, Farrington advised Dyer by letter that Respondent was "seriously contemplating exercising its right to subcontract" unit work and suggested that, if Dyer wished to consult with him before a final determination was made, Dyer should contact him by February 1. Dyer did so and on February 2 met with Farrington and other management officials, including its attorney, Richard Harding. During that meeting company officials explained the economic problems it was facing and cited its options. Dyer suggested that, when the circumstances were explained to the employees, perhaps they would agree to a pay reduction, but said he could not mention a specific amount because he had not yet consulted with his membership. He concedes the wage reduction was his idea and also says the Company gave him time to discuss it with the employees. Thereafter, Dyer arranged an employee meeting but, on February 16, before it could be held, Farrington sent a letter to Dyer advising him that the Company had elected to exercise its right under the "Reservation of Rights" clause to subcontract out all the work then currently being performed by Respondent's employees and that those employees were to be laid off on the close of business that day. Farrington also offered to discuss the effect the decision to subcontract would have upon bargaining unit members. Prior to February Respondent had contractual commitments from at least 10 and possibly 11 owner-operators. All of these individuals had signed the so-called old subhaul agreement on various dates beginning in October 1977, the most recent having been signed in October 1978. The 11th was owner-operator Nick Birondo who had signed a subhaul agreement with another Farrington- DECISIONS OF NATIONAL LABOR RELATIONS BOARD controlled firm, AABCO. Beginning January 29, with the signing of Ron Schmidt, Respondent began soliciting prospective and current owner-operators to sign the new subhaul agreement. The individuals we are concerned with here later operated under the terms of the new agreement. By the end of March Respondent had obtained 12 such agreements. In early April it signed a new agreement with a corporation, J. J. Trucking, Inc., whose principals included owner-operator Jim Breech who had operated under both the old and the new agreements, and Robert Orsetti who had operated under the old agreement. Their circumstance was a little different since they drove the intercity shuttle instead of making home deliveries. Later, on July 10, two individuals, William Long and A. W. Parrish, jointly signed a new agreement. They can fairly be termed a partnership. Likewise, Bill Lee who signed the new agreement on February 15 characterized his business as a "family partnership". Although a number of owner-operators had signed old subhaul agreements prior to the fall of 1978, it appears that Respondent did not actually begin assigning Ward's driving to those individuals with any regularity until then. It is probable that many who had signed the old agreement were more regularly assigned to the Sears or other accounts. However, there is no question that these individuals occasionally delivered for Ward's. By letter dated March 9, 21 days after the employee layoff and 16 days after Respondent began utilizing the owner-operators on the Ward's account, Dyer stated that the employees were willing to take "whatever economic reduction" was necessary to maintain steady employment. He offered "to meet and discuss the 'economic problems' of Capital Parcel at your earliest convenience." He stated that in the event the economic problems could not be resolved he wished to negotiate severance pay for "terminated employees." By letter dated March 20, Attorney Harding responded for Farrington advising that none of the employees had been "terminated" but had been "laid off for lack of work." He then cited the contract clause relating to subcontracting and asserted that in their meeting of February 2 he had set a deadline of February 14 for the Union to investigate its proposal regarding whether or not the employees would be willing to accept a wage reduction. He said that since the deadline had not been met Respondent had gone ahead and decided to subcontract the work. Although he repeated Respondent's earlier offer to bargain about "the impact" of the changeover, he said that because the employees had not been terminated there was a question about whether they were entitled to severance pay. However, he said Respondent would be happy to discuss the matter further. He also offered to discuss vacation schedules but said he did not believe employees were entitled to vacation pay sinde they had not yet been terminated. On April 5 the parties met to no resolve and on April 13 Harding mailed a counteroffer. The Union did not thereafter pursue the matter except to file the instant charge on the last day of the Section 10(b) period. B. The Manner in Which the Owner-Operators Performed Services for Respondent At the outset of the hearing the parties entered into a number of stipulations, summarized here, regarding the actual fashion in which the owner-operators handled their affairs vis-a-vis Respondent. From these stipulations I find that the owner-operators owned their own trucks and that Respondent did not assist them in financing their purchase. They had the freedom to provide at their discretion the make, model, and year of the vehicle except to the extent that it met the minimum size requirement of the subhaul agreement. They provided their own insurance for their vehicles and the cargo, as required by the subhaul agreement. Each owner-operator was required to obtain the appropriate Public Utility Commission (PUC) permit from the State of California and he was also required to provide the equipment necessary to perform his duties under the agreement. They were responsible for providing fuel, repairs, maintenance, and service for each vehicle and decided who performed the maintenance and where the maintenance services were to be obtained. They were free to park or garage their trucks at any place they chose and were not required to park them at either Respondent's facility or at Ward's. They had to obtain a bond to secure moneys obtained from Ward's customers on c.o.d. purchases and Respondent did not finance that bond. Respondent did not take any social security withholdings make state disability contributions pay for workmen's compensation insurance, unemployment insurance, or health insurance, and provided no fringe benefits for the owner-operators. Nor did Respondent take any other type of deduction from the remuneration of the owneroperator or his helper. It did not provide for vacations or holidays for the owner-operators or their helpers and those individuals did not participate in any benefits or programs provided by Respondent to its statutory employees; neither did Respondent provide the owner-operators or their helpers or drivers with any pension or retirement program. The owner-operators were obligated to hire helpers or replacement drivers and were not required to obtain Respondent's approval before hiring such individuals. Moreover, the owner-operators had the sole responsibility for hiring, firing, and supervising their helpers and were responsible for setting the wage and paying the wage of the helper. With respect to wage payments the owner-operators made social security and state disability contributions on behalf of the helpers and were also required to withhold appropriate state and Federal income taxes. In addition, it was their responsibility to provide workmen's compensation insurance and unemployment insurance for the helpers. The parties also stipulated that the owner-operators were responsible for taking care of all traffic tickets, accidents, claims, or PUC violations regarding the operation of their vehicles; they were responsible for all damage to their vehicles and bore the responsibility for safety and for meeting state and Federal requirements regarding them, including licensing. CAPITAL PARCEL DELIVERY COMPANY With respect to the remuneration tendered by Respondent to the owner-operators for their services, the parties agree that prior to March 29 the owner-operators utilized the trip manifest as the principal document from which to calculate payment; after March 29 each owneroperator presented Respondent with a bill for services and the payment was based on that. The form of the bills varied and some drivers continued to use the manifest. It was a convenient document; they were used to it. Aside from spending some time calculating the payment due the owner-operators prior to March 29 Respondent provided no administrative services for the owner-operators such as accounting, bookkeeping, or tax services or processing insurance claims. Until March 29 the owner-operators who worked on the Ward's account were paid an hourly rate for supplying the truck, driver, and helper and providing the services required by the subhaul agreement. After March 29 the owner-operators were paid on a per-stop basis. Furthermore, Respondent did not provide financial assistance to the owner-operators for the operation of their trucks or the employment of their helpers. Finally, under the subhaul agreement the owner-operators were free to haul for other companies or persons when not hauling for Respondent; thus they were assigned exclusively to Ward's whenever Ward's had deliveries and during that time they did not haul for anyone else, with the possible exception of Respondent itself or AABCO. Contrary to its practice prior to converting to the owner-operator system, Respondent did not require physical examinations of owner-operators or their helpers and did not conduct driver tests or other examinations for those people. Further, there were times when Respondent asked the owner-operators to attend company-sponsored meetings but did not require them to do so; in fact, some did not. As noted above, some owner-operators conducted their businesses as sole proprietorships, some as partnerships, and one appears to have been a corporation. Some owner-operators ran more than one truck and maintained sole responsibility both for those vehicles and for supplying the other driver. The General Counsel would not stipulate the same for the helper on the second truck, but the evidence appears to so show. The new subhaul agreement, like the "old," specifically states in section 4 that "the relationship of the parties shall at all times be that of independent contractors "2 The business agreement which is in evidence between Respondent and Ward's is dated February 1, 1975 (although a supplement refers to a January 14, 1974, date), and requires Respondent to provide hauling services for Ward's merchandise according to time schedules set by Ward's "via routes selected by [Respondent] to the respective destinations designated by Ward's within an airline radius of 100 miles of the city limits of Sacramento, California." It also requires Respondent to furnish, operate, and maintain in good working condition and appearance trucks painted and lettered to Ward's standards and to provide qualified drivers and helpers "suitably uniformed at no additional expense to Ward's." It also requires Respondent to collect c.o.d. charges from customers for Ward's and mandates Respondent to protect the merchandise and to reimburse Ward's for losses sustained through Respondent's failure to do so. Respondent, under the contract, must meet certain public liability insurance requirements and the agreement generally attempts to describe an independent contractor relationship between Respondent and Ward's. With respect to the 20- to-24 foot delivery vans with driver and helper, as of June 27, 1978 (retroactive to March 1), the contract required Ward's to reimburse Respondent at the rate of $25.83 per hour and also guaranteed that Ward's would use each truck "a minimum of 40 hours per week." From that amount Respondent paid its employees an hourly wage pursuant to its collective-bargaining agreement with the Union. When, in February, it converted to the independent contractor system it continued to receive that amount from Ward's but, pursuant to its subhaul agreements, paid the owner-operators $19 per hour for each truck. From that amount the owner-operator was to cover all of his expenses, including the wage of his helper as set forth in the stipulations cited, supra. To facilitate its relationship with Respondent, Ward's had earlier issued a four-page instruction to drivers entitled "Delivery Procedures." In general, it explained Ward's procedures for handling merchandise and for keeping track of time and mileage. It contained detailed installation instructions for appliances and other merchandise and directions on how to handle undeliverable items. It required the driver to be courteous to the customer and contained commonsense directions for good customer relations. The instructions were first given to Respondent's employees and upon Respondent's conversion to the owner-operator system were also given to the owner-operators. When they were given to the owneroperators, apparently sometime in March, they were accompanied by Respondent's own "Sub-haulers rules" for Ward's. Respondent's subhaulers' rules first recited that the owner-operators were independent contractors who were expected to manage and operate as independent businessmen. Nonetheless, it said, certain rules and guidelines "must be followed in order to obtain and keep [Ward's] business on which we both depend." It stated that each owner-operator's performance would be measured in terms of his compliance with the rules, which Respondent could from time to time amend, as well as the contract. The rules required the owner-operator to meet Ward's delivery schedules, arrange or substitute vehicles, drivers, or helpers as may be necessary, and stated that those individuals must be the owner-operator's own employees. It required the driver to be courteous and for both him and his helpers to maintain a neat and wellgroomed appearance. It directed the owner-operator to report to the dispatcher if the customer was "not home," if the merchandise could not be delivered for any reason, if there was damage to merchandise or other property, 2 Similar language is found in sec. 20 of the old subhaul agreement. 3 Thus the owner-operator received 73-1/2 percent of the amount paid Respondent by Ward's. Later, on the "per stop" basis, the owner-operator received $7.65 for each delivery. "Specials," if accepted, were valued at $15.30 each. DECISIONS OF NATIONAL LABOR RELATIONS BOARD or if a vehicle accident occurred; it also directed him to call in regularly at 4:30 p.m. as well as upon completion of the route. It further directed the owner-operator to comply with Ward's instructions and Respondent's instructions regarding acceptance of customer checks for c.o.d. and remittance of c.o.d. collections. It required the driver to inspect merchandise before loading and to protect Ward's cargo at all times. It called for the vehicles to be properly maintained and in good appearance. Finally, it stated that delivery records had to be turned in daily and that protests of records or payments by Respondent must be filed within 7 days. As can be seen, most of the rules tracked the subhaulers' agreement. As of March 29, as noted in the stipulations, supra, Respondent switched from the hourly payment system to the "per-stop" system. At the same time it issued a "clarification of policies" in which it granted the owneroperators payment for morning "load time." This was described by Respondent's officials as an "incentive" and the policy clarification refers to it as such. The clarification added an 8-hour guarantee for regularly scheduled loads, something which had not been done before. Although Respondent did not "negotiate" any of these items with the individual owner-operators and none of the new subhaul agreements was amended to reflect these changes, all three of these constituted additional remuneration for them. Owner-operator Bill Lee testified that the per-stop method had been discussed with him before he signed the new subhaul agreement and he had been aware for some time that it was coming. He said that all the drivers wanted that system as it meant more money in their pockets. Likewise, being paid for the morning load time and being guaranteed a minimum of 8 hours' pay were also benefits which they had not enjoyed before. The policy clarification did however state, with respect to recordkeeping, that owner-operators who made false entries on their trip sheets would suffer "disciplinary action." It further refined the means of measuring productivity, saying that an acceptable rate would be a three-stop-per-hour average.4 And, drivers were to continue calling the warehouse on "not homes" and to check in with the dispatcher by 4:30 p.m. The policy clarification also advised that the owner-operators could continue to buy their gasoline at Ward's and that Ward's was requiring them to sign in acceptance of any claims. It also advised that "to be fair to all drivers" Respondent was establishing a rotating out-of-town schedule and each driver would be given a fair share.⁵ In conclusion the policy clarification reiterated the general concern that Respondent wished to maintain its business connection with Ward's and therefore wanted the owner-operators to meet Ward's requirements; it urged the owner-operators to be patient as Respondent attempted to "improve [their] lot" for "big corporations move slowly." It concluded with the statement that if any problems arose "see us and we will work them out individually." C. The Testimony of the Owner-Operators Four owner-operators were called to testify, three by the General Counsel and one by Respondent. The General Counsel called Nick Birondo, Joe Ferreria, and Ron Henson. Respondent called Bill Lee. Upon hearing the testimony of Birondo and Ferreria the parties stipulated that Henson would testify identically to them with respect to their workday. Likewise the parties stipulated that much of Respondent's evidence would be repetitive and that some nine other owner-operators would testify in the same fashion as Lee.⁶ There is obviously no great benefit to be derived from totaling the number of witnesses that each party called or could have called; however, I think it is fair to observe that the owner-operators called by the General Counsel all had difficulty of one kind or another with respect to carrying out their subhaul agreements. Indeed, it appears that Joe Ferreria never signed the new subhaul agreement. Birondo signed reluctantly after having been denied a load on March 5 because he had "outstanding paperwork"-i.e., he had neither signed the new subhaul agreement nor obtained a PUC permit as required under his old subhaul agreement.⁷ Birondo signed the agreement on March 12 but because he had become disenchanted with Respondent's attitude toward him he decided to let his helper, his son, drive the truck from then on. He hired a helper for his son. He says that in late March Respondent's supervisor, John Parks, called him at home on three or four occasions saying he was wanted back on the truck even though his son and his son's helper were doing "okay." Parks threatened to "fire him." Ultimately, by letter dated April 5, Respondent canceled Birondo's subhaul agreement by giving him the 30 days' notice required by it. Henry Moreno, then Respondent's dispatcher (and shortly before that its quality control official having liaison duties with Ward's), says Birondo's contract was canceled because he had still failed to get the PUC permit. He denies Birondo's agreement was canceled because he persisted in utilizing his son as the driver. Moreno says in April a PUC investigator had reviewed Respondent's records and had observed that Birondo had no permit. Later, on May 11, a PUC official formally "admonished" Respondent for "hiring sub-haulers without a permit issued by the Commission." As noted, Ferreria never signed the new subhaul agreement and, although Respondent treated him as if he had, his connection to Respondent was severed on May 4 in the midst of a dispute over his authority, some damage claims, and his refusal to buy liability insurance for a second truck which he occasionally rented. An additional bone of contention was a large debt which he owed to an auto supply firm which had since been purchased by Respondent's president, Farrington. Respondent had begun deducting the debt from his remuneration 4 If that level was met the owner-operators received 89 percent of Ward's payment. 6 Those nine are: Tony Hernandez, Tom Padilla, Robert Orsetti, Jim Breech, Al Salerno, Henry Mora, David Labo, Ron Schmidt, and Rich Hanson. 5 A suggestion of owner-operator Bill Lee. 7 Birondo's old agreement was with AABCO, not Respondent; thus Respondent had no contractual commitment whatsoever from him until he signed the new agreement. CAPITAL PARCEL DELIVERY COMPANY without his consent and that caused hard feelings. Ferreria ended the subhaul agreement himself by refusing to perform any more hauling.⁸ The third owner-operator called by the General Counsel, Ron Henson, had primarily worked as a subhauler for the Sears account until February. He signed the new subhaul agreement at that time and continued to work until April 20. As a result of a delivery problem he encountered on a Loma Rica run he was told by Supervisor Parks to go back. Henson angrily refused but after being calmed down by Moreno made the delivery. He says he was not assigned for a run for 2 days thereafter as he and Parks had gotten into an argument. He says Parks accused him of lying about the delivery in question, told him it was not an 8-to-5 job, that he was to stay out till 4 a.m. if necessary to make deliveries and, even though the contract may have referred to Henson as an owner-operator, as far as Parks was concerned he was "an employee." He says Parks also told him he would not get paid until he signed some outstanding claims which until then Henson had never heard about. Later, Respondent deducted $1,600 from a check and terminated his agreement. That action resulted in a lawsuit. It appears from the testimony of all four owner-operators that a typical day began at approximately 7 a.m. Between 7 and 8 a.m. the owner-operators were to appear at Ward's dock with their vehicles to load the day's merchandise. Also present at the dock was Respondent's dispatcher. Ward's warehousemen had previously placed each load in a particular dock according to area. The dispatcher then told each owner-operator, as he had each employee previously, where his load was. The truck was then backed into the appropriate slot and the owner-operator and his helper began loading the vehicle. Owneroperators were free to load the vehicle in any manner they liked, though commonsense dictated that the last delivery of the day was loaded first, and the first delivery loaded last. The actual manner of packing the merchandise was up to the owner-operator, although Respondent's dispatcher could and sometimes did make suggestions where necessary, particularly to inexperienced helpers. The route had been "roughed" by the dispatcher the previous day on the manifest sheet which he gave each driver. The owner-operator was, however, allowed to make changes in the order of delivery and commonly did so. If that occurred, the driver was supposed to notify either the dispatcher or Ward's so the customer could be advised of an approximate delivery time. It is uncontested that the owner-operators regularly failed to advise either Respondent or Ward's of such changes and that that failure later became a source of displeasure between Ward's and Respondent. Because some of the owner-operators failed to arrive until approximately 8 a.m., rather than the 7 a.m. Ward's hoped for, the delays caused a tieup on the dock as Ward's warehousemen were already beginning to prepare the following day's loads but could not properly locate them because the owner-operator had not yet cleared the dock. The morning load incentive was intended to alleviate the problem. After loading the truck the owner-operator and his helper proceeded on the route. They did not follow any specifically designated streets or highways and were free to choose their own course. At least once during their tenure, Respondent's quality control man, Moreno, rode for at least part of a day with each owner-operator. And, it appears that he also followed each owner-operator at least once, conferring with customers regarding their satisfaction with the delivery. Respondent put in evidence the "customer interview" sheet. That form covered the "deliveryman's" conduct. Following it, Moreno customarily asked if he had been courteous and helpful and whether he was neat and clean. He also inquired whether he had protected the customer's property from damage, had properly assembled or connected merchandise, and if he had explained its operation. The form concluded with an inquiry regarding the customer's satisfaction with the service. The same form was used by Moreno whether he rode with the owner-operator or followed later. He made no effort, and testified that he could have made no effort, to control the manner in which the vehicle was driven or whether the driver complied with traffic laws or drove the vehicle in a safe manner. He says the surveys were to determine the quality of work being done and that he made no attempt to control their driving habits. Somewhat wryly he said, "As long as they didn't get me killed, I didn't care." He does say that in some circumstances he offered suggestions, sometimes during the delivery and sometimes afterward, about ways in which the owner-operator could save time or make more money. He says the owner-operator was not under any obligation to follow his suggestions. Similarly, Moreno periodically conducted training sessions at the Ward's dock with respect to the proper method of handling certain types of merchandise and on some occasions Ward's personnel conducted demonstrations regarding the proper installation of appliances. None of these meetings was mandatory for the owneroperators and they were free to attend if they wished. Some did and some did not. Bill Lee found the appliance sessions helpful to him in performing his job. The owneroperators were not paid to attend these meetings, although some of the demonstrations may have occurred during the morning load time. Apparently they were of short duration. At 4:30 p.m. and when each driver got home he was supposed to call the dispatcher. Both dispatchers Huff and Moreno testified the rule was mostly often honored in the breach. 8 The dispute over his authority centered around his refusal to make an evening delivery in a remote area one-day: He contended he did not have to; dispatcher Huff and Supervisor Parks said he did. The dispute was resolved only by Ferreria's decision to quit. Ferreria's independence was further shown by his declining to paint his truck with Ward's logo. On May 21, Ward's changed its paperwork to a computer system and Respondent's dispatcher became able to get an additional day's lead time on routing. As a. result he stopped doing the rough routing altogether and simply gave the computer printout to the driver to do his own rough and fine routing. DECISIONS OF NATIONAL LABOR RELATIONS BOARD Both Moreno and Huff testified, and Lee and the others to some extent confirmed, that while Ward's asked the drivers and helpers to wear uniforms and to present neat appearances, few owner-operators bothered to comply. Moreover, owner-operators commonly refused to handle "specials" or "go backs." Until the perstop system was installed each owner-operator commonly negotiated his own terms on those items as they were not covered by the subhaul agreement. When the owneroperators did take such items they were not obligated to use their regular trucks; sometimes they used pickup trucks to save money. Contrary to the testimony of Ferreria and Henson, Lee says he had never been reprimanded over a refusal to take a "go back" or a "special." He testified that he has his own bookkeeper and bookkeeping system and that Respondent does not help him with it. He says he is responsible for the hiring and firing of his helper and the driver of both his trucks. He calls his business a "family partnership" and says Respondent does not even have the right to inspect his trucks and may not do so without his permission. His other testimony is consistent with the stipulations recited above. It is true that both Ferreria and Henson testified that they were denied loads (by Huff) as a disciplinary measure for one reason or another. Moreno, however, denies that he ever disciplined a driver in that fashion. He and Huff both say they could not discipline the drivers except by repetitious requests or "ridicule" in the case of one helper who refused to get rid of his "raggedy" shoes. Huff says that approximately 65 percent of the time the owner-operators failed to notify him of breakdowns or other delivery problems. He and Moreno both say that the owner-operators were so independent they could not control them to Ward's satisfaction. Indeed, about September 14 Ward's refused to renew its hauling agreement with Respondent and the account was taken over by another company. Donald Gilhooly, Ward's regional traffic manager, was in charge of home delivery contracts for Sacramento. He dealt with Respondent on a regular basis and said that prior to February 16 Respondent provided very good service and was even used as an example for companies in other cities. He says that after Respondent switched to the owner-operator system its service fell off and he recommended to his superiors that, if Respondent were to be kept as the delivery service, it should be required by agreement to return to the employee system. He says Ward's gave Respondent a 60-day break-in period to test the efficacy of the owner-operator system but discovered the drivers would not wear uniforms, failed to complete runs, and constantly failed to phone in. Moreover, complaints of customer abuse and appliance installation errors increased. He says it was Ward's policy not to have deliveries occur after 7 p.m. but the owner-operators regularly went beyond that deadline. He also claims nondeliveries increased from 5 to 70 percent but, since Ward's has been dealing with the new firm, nondeliveries have again fallen to the 5-percent level. In Respondent's Exhibit 12 Gilhooly points to what he says is a representative series of customer complaints beginning February 16. He says the exhibit shows the types of offenses the drivers engaged in, though not the frequency. One of these recounts a driver who refused to carry chain link fencing in his truck because of expected damage and who told the Stockton customer to drive to Sacramento to pick it up himself. Others deal with alleged driver probity, claiming the customer was not home when the customer said he was, or telling the customer the merchandise was damaged but simultaneously marking the trip sheet "refused by customer, do not call customer." Another was a failure to install a washing machine. Others deal with similar problems. Ward's obviously had reason to be concerned with Respondent's ability to carry out its business agreement. IV. ANALYSIS AND CONCLUSIONS First of all, were there serious veracity questions presented in this matter I would tend to credit Respondent's witnesses over the owner-operators called by the General Counsel in view of the fact that those individuals appear to have animosity towards Respondent for its treatment of them. However, it is probably not necessary to make specific findings in that regard as even Birondo, Ferreria, and Henson all generally agree with Lee except in one respect. That area is the question of Respondent's right to discipline and thereby closely control the drivers. In all other respects the testimony is nearly congruent and comports with the stipulations of fact. Even though Henson testified that Supervisor Parks told him that despite his owner-operator status Parks considered him to be an employee, I am not inclined to give that testimony great weight for in the overview it is totally overshadowed by other factors. Section 2(3) of the Act draws a specific distinction between employees subject to Section 7 and independent contractors who do not enjoy the rights set forth therein. The Supreme Court in N.L.R.B. V. United Insurance Company, 390 U.S. 254, 256 (1968), mandated the Board to utilize the common law right-of-control test in determining whether or not specific individuals were employees or independent contractors. Both the courts and the Board have commonly utilized Restatement of Agency 2d §220 as a litmus for determining that status. The text of section 220 is set forth in the footnote below.9 See 9 §220. Definition of Servant (1) A servant is a person employed to perform services in the affairs of another and who with respect to the physical conduct in the performance of the services is subject to the other's control or right to control. (2) In determining whether one acting for another is a servant or an independent contractor, the following matters of fact, among others, are considered: (a) the extent of control which, by the agreement, the master may exercise over the details of the work; (b) whether or not the one employed is engaged in a distinct occupation or business; (c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision; (d) the skill required in the particular occupation; (e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work; (f) the length of time for which the person is employed; (g) the method of payment, whether by the time or by the job; Continued CAPITAL PARCEL DELIVERY COMPANY N.L.R.B. V. United Insurance Company, supra; Joint Council of Teamsters No. 42, et al. V. N.L.R.B., 450 F.2d 1322 (D.C. Cir. 1971); Associated Independent Owner-Operators, Inc. V. N.L.R.B., 407 F.2d 1383 (9th Cir. 1969); Local 814, International Brotherhood of Teamsters, Chaufjeurs, Warehousemen and Helpers of America (Santini Brothers, Inc.), 208 NLRB 184 (1974). And, as both the authors of the Restatement and the courts have observed, although the control or the right to control the physical conduct of the person giving the service is important and often determinative, the control may be "very attenuated." Moreover, the kind of control available varies within industries and within the various tasks to be performed. Of particular difficulty is the driving industry, if that be a proper description. The taxicab industry has given the Board and the courts great difficulty (see Local 777, Democratic Union Organizing Committee, Seafarers International Union of North America, AFL-CIO [Yellow Cab Company] V. N.L.R.B., 603 F.2d 862 (D.C. Cir. 1978); Air Transit, Inc., 248 NLRB 1302 (1980)), as have the grading (Associated General Contractors of California, Inc., 220 NLRB 540 (1975). enforcement denied 564 F.2d 271 (9th Cir. 1977)), and dumptruck (Associated Independent Owner-Operators, supra; Joint Council of Teamsters No. 42, et al. (California Dump Truck Owners Association), 248 NLRB 808 (1980)) businesses. Similarly, the department store delivery cases offer the same varied views. See Merchants Home Delivery Service, Incorporated, 230 NLRB 90 (1977), enforcement denied 580 F.2d 966 (9th Cir. 1978). See also The Standard Oil Co. (of Ohio), 241 NLRB 1248 (1979), which dealt with owner-operators of petroleum tankers and Local 814, Teamsters (Santini Brothers, Inc.), supra, which dealt with owner-operators in the household moving industry. Undoubtedly the reason for the variance in approach with respect to drivers is the fact that, although each industry requires the driving of a vehicle and the delivery of either goods or passengers, usually the owner-operator is not subject to minute physical control. Nonetheless, control is readily available. On the other hand, the control itself often comports with commonsense and a driver operating without close supervision, but exercising that commonsense, would in the normal course of things carry out the delivery task in a manner which, if control were to be exercised by supervision, would be the same. Thus, the actual question of control can be most elusive. It is no wonder, therefore, that many Board decisions appear to be inconsistent or that there has been sharp court disagreement with Board analyses. The Supreme Court has not made the Board's task any easier by observing in United Insurance Co., supra, that the Board has no greater expertise in this field than the courts. Nonetheless, despite these troublesome matters, I believe Respondent has effectively rebutted the General Counsel's contention that the individuals in question here are employees. (h) whether or not the work is a part of the regular business of the employer; (i) whether or not the parties believe they are creating the relation of master and servant; and (j) whether the principal is or is not in business. Utilizing the factors set forth in the Restatement, I conclude that the owner-operators of these particular trucks are independent contractors within the meaning of Section 2(3) of the Act and that Respondent no longer has a bargaining obligation to the Union. Leaving aside for the moment the question of physical control, I have no doubt that each of the owner-operators in question here is actually engaged in a distinct occupation or business. While most of the owner-operators do business as sole proprietorships, at least two appear to be partnerships in fact and one is a corporation. Most keep their own books and records and all have accepted an employer's obligation of hiring and firing helpers and additional drivers, paying them wages, and deducting from those wages normal tax and employee withholdings. In addition they pay unemployment insurance and workmen's compensation insurance on their behalf. They have a substantial business investment in each vehicle and some own more than one. Respondent has no financial interest in their businesses and has not assisted them financially to commence their businesses. The owner-operators have obtained their own PUC permits and are responsible for the maintenance and repair of each vehicle. They also insure it and pay for their own fuel. 10 There is no definitive evidence in this record regarding whether or not in the Sacramento or northern California area this kind of owner-operator business is common. If anything, the evidence is relatively neutral. Respondent's own operations, however, clearly allowed for owner-operators with respect to department store accounts other than Ward's. The Sears account has always been serviced by owner-operators, although that contract is of relatively short duration, having been entered into in 1978. Nonetheless, the Union made no protest then about the use of owner-operators, although the recognition clause of the collective-bargaining agreement must have applied to the Sears drivers in the same fashion as the Union claims it now applies to the Ward's owner-operators. The skill required in driving these trucks, too, seems relatively neutral on this record. I have no doubt that it requires a certain amount of skill to operate these 22 to 24-foot trucks as well as properly load them to. Nonetheless. the skill level is undoubtedly the same for owneroperators as for employees. Here, however, the owner-operator, rather than Respondent, supplies the instrumentality and the tools for the work. He owns the truck together with the blankets and dollies necessary for packing, shipping, and loading. I do not believe the place of work here has any relevance since all work is performed either at the department store dock, on the road, or at the homes of Ward's customers. It is true that Respondent has an office or desk at the department store's dock or its dispatcher, but his presence relates more to the question of control than anything else. 10 It appears that the owner-operators are able to obtain fuel from Ward's and that they may be able to benefit from 2 Ward's discount, at least judging by the price, but that is not clear on this record. Even SC, that benefit is not obtained from Respondent. DECISIONS OF NATIONAL LABOR RELATIONS BOARD With respect to the length of time for which each owner-operator is employed, again that factor appears relatively neutral. On a daily basis the driver and the helper work as long as necessary to get the job done; they do have an 8-hour guaranteed wage, but if they work less than 8 hours they are free to leave. The only difference between that and the previous employee system was that the employees had to return to the dock to punch out. If work was available for the employees when they returned Respondent directed them to perform it. Prior to the implementation of the 8-hour guarantee the owner-operators regularly ignored requests for additional work. But even the 8-hour guarantee does not require them to return to the dock and if they do not do so, the inducement to continue working has failed. It is not clear how common additional work, such as "specials" or "go backs" are, though, and I regard this topic as relatively insignificant to the determination of the ultimate question. At all times after Respondent converted to the owneroperator system, Ward's continued to pay Respondent on an hourly basis. For approximately 6 weeks thereafter Respondent in turn paid each owner-operator on an hourly basis, but the amount was not limited to recompense for labor. The $19 per hour which was provided was intended to cover all of the owner-operators' expenses. The intent of such payment was to obtain a specific result, the delivery of merchandise, and Respondent knew that the owner-operators would have to be paid in amounts sufficient to cover their expenses so the result could be accomplished. Later, on March 29, Respondent converted to the "per stop" basis, a form of payment more closely related to "by the job" analysis. Moreover, morning load time was then added to their pay, a stipend not earlier paid. It seems unlikely to me that employees would work for nothing during that period and therefore, at least during the 6 weeks in which loading time was not paid, tends to show that the owner-operators were independent contractors. Later, even when loading time was added, it again seems to me to be more in the nature of an inducement to get the job done. Thus, though not strongly, that element leans in favor of independent contractor status. The next factor, whether or not the work is part of the regular business of the employer, is also a mixed bag. It is clear that Respondent's business is to see to it that department store merchandise is delivered to the department store's customer. Whether Respondent utilized employees or independent contractors to accomplish that task does not seem to me to assist in determining the status of those individuals. Thus, whether Respondent was acting as employer having employees or as a service broker utilizing independent contractors it is still in the business of delivering merchandise. I find this factor to be of no help in determining the status of the individuals in question. However, it is clear that the parties believed that they were creating an independent contractor relationship. Both the old and the new subhaul agreements clearly stated, and Respondent and the individual owner-operators all agreed, that such was their intention. The only contrary evidence is Henson's testimony that Supervisor Parks in an angry altercation claimed he was an employee, not an independent contractor. Frankly, even assuming Henson is to be credited, it is insufficient in the overview to alter the parties' announced original intent. Parks did not negotiate or draft Henson's subhaul agreement and cannot be presumed to know its purpose. In any event it would be anomalous to permit this Decision to turn upon Parks' legal opinion, if that is what it was. More likely, it was the product of Parks' frustration at his inability to control the drivers as he had in the past. With respect to the issue of control, it should be observed that the amount and kind of "control" exercised by Respondent under the subhaul agreements varied and different elements changed their weight from time to time. For example, at the outset the 7 a.m. starting time was loosely enforced and treated with haphazard care by the owner-operators. They were not paid for that time and felt no obligation to adhere to it. During those times their independence is clear. Later, in an attempt to induce the owner-operators to begin and complete their loading between 7 and 8 a.m., Respondent unilaterally, without negotiations, granted them the loading time benefit. This was probably an attempt to control more closely the owner-operators' use of their time. Moreover, it could be argued that by making such a unilateral change Respondent was treating these individuals as if they were employees. However, it can also be argued that the grant of loading time pay was simply an attempt to "get the job done"-a recognition by one party to the contract that perhaps the offered remuneration was not sufficient for the purpose. 11 Yet, at the same time the additional benefits were being given to the drivers, the mechanics of payment were also being changed. Instead of utilizing the manifest as the mandatory payment document, Respondent insisted on being invoiced in order to avoid calculation disputes. It accepted, with a lesser likelihood for questioning, the owner-operators' payment claims. That suggests a recognition of greater independence on the part of the owner-operator. Likewise, the rough and fine routing was later given to the drivers. Thus, it is fair to say that the question of control ebbed and flowed in different ways during the summer. Certainly the owner-operators' ability to alter their route and their right to reject additional work tend to show their relative independence. Even the occasional "discipline" described by Birondo, Ferreria, and Henson is not clear evidence of control. They claim they were either denied loads or had their contracts canceled either because of disputes over their job performance or be- 11 Even if one assumes that it was an attempt to recapture lost control, it raises the question of whether or not there was a period of time between February 6 and the recapture, of whether or not they were independent contractors or that period but, by practice were later converted to employees. If that is true, the waiver language of sec. 24 of the collective-bargaining agreement probably rendered the collective-bargaining contract nugatory, for the conversion can reasonably be analogized to a lawful cessation of operations. Cf. Fraser V. Magic Chef-Food Giant Markets, Inc., 324 F.2d 853, 856-857 (6th Cir. 1963). Whether the Union may still be presumed to continue to enjoy maiority status in that circumstance is a difficult question which I do not need to decide. But compare Dimarc Broadcasting Corporation d/b/a KCKC, 204 NLRB 378 (1973), a waiver not too distantly related to this one. CAPITAL PARCEL DELIVERY COMPANY cause of some nonjob disagreement. The Ninth Circuit has said however "there is a difference between directing the means and manner of performance of work and exercising an ex post facto right to reprimand when the end result is unsatisfactory." Merchants Home Delivery Service V. N.L.R.B., 580 F.2d 966 at 974. But see N.L.R.B. V. Pepsi Cola Bottling Company of Mansfield, Ohio, 455 F.2d 1134 (6th Cir. 1972). Thus, even though discipline may at times be evidence of the right to control physically, that sort of control is not conclusive of the independent contractor/employee status question. Even so, the evidence here is conflicting regarding whether or not Respondent ever disciplined any driver. Birondo never complied with the subhaul agreement; Ferreria never signed one and then quit. Only Henson may have been disciplined by load denials, and even that is not clear. Thus, the physical control exercised by Respondent is quite ephemeral. I do not accept as factual the General Counsel's assertion in his brief. Where he said: Respondent exercised control over the manner and means of making deliveries by assigning dispatchers to sit in the trucks, to offer constructive criticism and assist the owner-operators in expediting their deliveries and hooking up the appliances. Also, company spotters were assigned to follow the owner-operators to insure that they observed the order of the routing assigments. Armed with reports from the dock supervisors and spotters, Respondent exercised its authority to warn and discipline owner-operators and to terminate the sub-haul agreements by merely giving 30 days' notice. First, so far as I am aware there is no evidence that Respondent assigned dispatchers "to sit in the trucks." It is true that they offered criticism and assisted the owneroperators in expediting their deliveries. That was commonly done for inexperienced drivers or for individuals who requested it. With respect to appliance hookups there was some training done by Ward's, but the training sessions were not mandatory. Furthermore, the fact that Moreno attempted to insure that the owner-operators were performing duties in such a manner as to satisfy the Respondent-Ward's contract on a sporadic basis is not the same as physical control. Moreno never directed drivers with respect to the management of their vehicle and only checked with customers to determine if they were satisfied with the work. He did not insist that they observe the order of routing assignments. And, the General Counsel's assertion that based on the reports from the dock supervisors and spotters that Respondent exercised its authority to warn and discipline or to terminate is simply not well substantiated. Even if it is true that contracts were terminated on those bases, it is equally reasonable to conclude that the contracts were being terminated for failure to meet the contractual obligation to perform the end service. The General Counsel's approach here is far too simplistic. The question of control being as elusive as it is here leads me to conclude that the other factors in determining the legal status of these individuals are more significant. Certainly the owner-operators believed they were independent contractors; so did Respondent. They acted as if they were and assumed the business risks of profits and losses as would any entrepreneur. They were regulated by the State as independent motor carriers and hired and fired employees without Respondent's approval. They even exercised great independence with respect to handling extra work. In short, they believed and acted as if they were independent businessmen. Finally, though it is somewhat after the fact, it appears from the testimony of Ward's traffic manager, Gilhooly, that the owner-operators exercised such great independence that they failed to carry out the terms of Respondent's business agreement with Ward's. That ultimately resulted in the loss of that contract. The cancellation underscores Respondent's inability to control these individuals and leads to the conclusion that they were truly independent contractors. Taken altogether, it seems to me that the only real conclusion which can be drawn from these facts is that the owner-operators are independent contractors within the meaning of Section 2(3) of the Act and that the complaint must therefore be dismissed. Local 814, Teamsters (Santini Brothers, Inc.), 208 NLRB 184 (1974), reaffd. 223 NLRB 752 (1976), enfd. 546 F.2d 989 (D.C. Cir. 1976). Therefore, I find that the evidence presented by the General Counsel in support of the contention that Respondent violated Section 8(a)(5) and (1) of the Act with respect to its utilization of owner-operators fails to support the allegation. Based on the foregoing findings of fact and the record as a whole, I hereby make the following: CONCLUSIONS OF LAW 1. Respondent is an employer within the meaning of Section 2(2) of the Act, engaged in commerce and in an industry affecting commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section (5) of the Act. 3. The owner-operators with whom Respondent contracted to supply delivery services under the terms of the subhaul agreements are independent contractors and not employees as defined in Section 2(3) of the Act. 4. Respondent has not engaged in the unfair practices alleged in the complaint. [Recommended Order for dismissal omitted from publication.]