Koubenec Motor Service, Inc.

DECISIONS ()F NATIONAL LABOR RELATIONS BOARD Koubenec Motor Service, Inc. and Gale Q. Best, Jr. Case 33-CA-4964 February 12, 1982 DECISION AND ORDER BY CHAIRMAN VAN I)E WATEIR AND MIEMBIERS FANNING ANI) HUNTER On September 4, 1981, Administrative Law Judge Angelo G. Nicchitta issued the attached De- cision in this proceeding. Thereafter, the General Counsel filed exceptions and a supporting brief, Respondent filed cross-exceptions and a supporting brief, and the General Counsel and Respondent filed answering briefs. 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 record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings, find- ings," and conclusions of the Administrative Law Judge and to adopt his recommended Order. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board adopts as its Order the recommended Order of the Administrative Law Judge and hereby orders that the complaint herein be, and it hereby is, dismissed in its entirety. The General Counsel has excepted to certain credibility findings made by the Administrative l.aw Judge. It is the Board's established policy not to overrule an administrative law judge's resolutions with re- spect to credibility unless the clear preponderance of all of the relevant evidence convinces us that the resolutions are incorrect Standard Dry Wall Products, Inc., 91 NLRB 544 (1950), enfd 188 F.2d 362 (3d Cir 1951). We have carefull) examined the record and find no basis for re- versing his findings. In adopting the Administrative Law Judge's Decision we find it clear from his Decision as a whole and particularly from his findings that Gale Q Best, Jr., was terminated for gnood cause and that this termination was not pretextual or in violation of the Act, that the Administrative l.aws Judge discredited the testimony of Gale Q. Best, Jr., and Susan Best that Respondent's secretary-treasurer, Cole, told them that Gale Q. Best, Jr.. was being discharged because he was trying to form a union According- ly, we also agree with the dismissal of the allegation that Respondent in- dependently violated Sec. 8(a)(1) of the Act by Cole's alleged statement Since Chairman Van de Water and Member Hunter agree with the Ad- ministrative Law Judge's finding that Respondent did not engage in un- lawful conduct against Gale Q Best, Jr., they find it unnecessary to pass on the Administrative Law Judge's general discussion of the independent contractor issue and his finding that Best was an employee of Respondent within the meaning of the Act DECISION STATE:ME'NT Oil TIHE CASL ANGELO G. NICCHIITA, Administrative Law Judge: This case was heard at Rockford, Illinois, on April 27, 260 NLRB No. 28 1981, upon a complaint issued on September 12, 1980, which was subsequently amended at the hearing. The amended complaint alleges, in substance, that Respond- ent Koubenec Motor Service, Inc., discharged Gale Q. Best because the latter engaged in union or protected concerted activity and that Respondent took the latter action in order to discourage the employees from engag- ing in protected union and concerted activity. Respondent defends on the ground that Gale Q. Best, Jr., was not an employee of Respondent during the period alleged in the complaint; that Gale Q. Best, Jr.'s relationship with Respondent during the period in ques- tion was that of a corporation and an independent con- tractor; that the National Labor Relations Board lacks authority under the National Labor Relations Act to en- tertain the charges asserted herein by a nonemployee or an independent contractor against a corporation; that Re- spondent never had any knowledge whatsoever of any union activities, either by or on behalf of Gale Q. Best, Jr.; and that any relationship that existed between Re- spondent and Gale Q. Best, Jr., was terminated unilater- ally and voluntarily by Gale Q. Best, Jr. The issues for adjudication in this proceeding are whether or not Gale Q. Best is an employee of Respond- ent within the meaning of Section 2(3) of the Act, whether or not Gale Q. Best was discharged by Re- spondent in violation of Section 8(a)(1) and (3) of the Act, and whether or not Respondent independently vio- lated Section 8(a)(1) of the Act by restraining and coerc- ing its employee Susan Best. At the hearing, all parties were given full opportunity to be heard, to present evidence, and to make oral argu- ment. Briefs have been filed by the General Counsel and Respondent. Upon the entire record in the case, and upon my ob- servation of the witnesses, I make the following: FINDINGS 01 FACT I. TIHI BUSINI SS 01F RESPONI)ENT Koubenec Motor Service, Inc., hereinafter called Re- spondent, is an Illinois corporation located in Huntley, Illinois. It operates as a motor common carrier, pursuant to certificates from the Interstate Commerce Commis- sion, transporting various specified commodities over ir- regular routes in interstate or foreign commerce. It also operates in Illinois in intrastate commerce. Raymond Cole is Respondent's secretary/treasurer, a part owner, and one of its chief operating officers during the perti- nent period herein. Respondent derived gross revenues in excess of $50,000 from its interstate operations. It is admitted, and I find, that Respondent is an em- ployer engaged in commerce within the meaning of Sec- tion 2(6) and (7) of the Act. A. Re.spondents Operations Respondent employs approximately 40 company driv- ers and 5 owner-operators. The status of the company drivers as Respondent's employees is not here in dispute. 192 KOUBENEC MOTOR SERVICE, INC. Company drivers are paid between 24 and 26 percent of the revenues generated by the vehicle, less the fuel surcharge. Their health and hospitalization plan is paid for in its entirety by Respondent. While owner-operators can belong to Respondent's health and hospitalization program, the latter only provides administrative work and does not pay any premium payments for the owner- operators. All owner-operators are required to enter into an equipment lease and broker agreement. Under the terms of the lease, Respondent has the exclusive and complete possession, use, and control of the owner-operator's vehi- cle during the 3-year term of the lease agreements. Under the lease, Respondent agrees to maintain, for the leased vehicle, the public liability insurance and the property damage insurance required by the Illinois Motor Carrier of Property Law. The lessor shall furnish liability and property damage insurance in the amount of $2 million and cargo insurance in the amount of $5,000. The lease further provides that Respondent, as lessee of the leased vehicle, assumes complete and full responsibil- ity to the public, the shippers, and to all Federal regula- tory bodies or authorities. Under the terms of the broker agreement, owner-oper- ators must make timely pickups and deliveries and must inform Respondent of any delays of I hour or more. Owner-operators are further required to report any prob- lems with customers directly to its office and to maintain and keep all delivery receipts, logs, and trip sheets, all of which must be turned in to Respondent on a weekly basis. Owner-operators are also required to call into Re- spondent's facility promptly between 4:30 p.m. and 5:30 p.m. daily in order to receive the next day's work sched- ule. Additionally, Respondent requires that owner-opera- tors maintain their vehicles and tires in good condition and that the leased vehicles be painted in Respondent's colors (when convenient). Both company drivers and owner-operators are dis- patched from Respondent's facility in essentially the same manner. Basically, all drivers are dispatched tele- phonically and Respondent relies on its knowledge of a driver's ability, skill, and dependability in determining which drivers are assigned to which loads. Owner-opera- tors are expected to take all assigned runs and refusal could lead to disciplinary action by Respondent. Company drivers are normally assigned specific high- ways and directions when making a run. Owner-opera- tors are not assigned specific routes; however, specific routes are suggested and they are given specific delivery times which they are expected to meet. Owner-operators are not allowed to "trip-lease" with- out first acquiring express permission from Respondent. Any owner-operator failing to acquire permission from Respondent prior to "trip-leasing" would be viewed by Respondent as having violated the terms of the lease agreement. Respondent has the responsibility to insure that all of its drivers are in compliance with any applicable govern- mental regulations and company rules or policies. In this regard, Respondent has disciplined owner-operators for infractions of company rules or policies. Continuing in this vein, Respondent has the ultimate responsibility to insure that all drivers operating out of its terminal are qualified to do so. It checks the credentials and motor vehicle records of every driver operating out of its ter- minal. All drivers operating out of Respondent's terminal are also required to have taken a road test and a physical exam prior to beginning their employment with Re- spondent. Respondent administers the road test to all of its company drivers and any owner-operators or driver of a vehicle leased to Respondent who has not taken the road test at the time he or she applies for employment with Respondent. Respondent also insures that identify- ing markings, required by the Federal government, are placed and maintained on all vehicles operating out of the Respondent's terminal under a lease agreement. When a vehicle leased to Respondent is under dispatch from Respondent's terminal, the driver and cargo are covered by an insurance policy provided by Respondent at no expense to the drivers. While Respondent is re- quired by law to maintain insurance on its drivers and cargo, Respondent's policy limits are maintained at a rate much higher than required by law. Under the terms of the lease agreements entered into by Respondent and its owner-operators, the owner-oper- ators are compensated on the basis of a percentage of the gross revenues generated from a given run or haul. That percentage ranges from 67.4 percent to 75 percent, de- pending on the type of equipment being leased to Re- spondent and the amount of administrative functions being performed by Respondent in connection with the lease. Both company drivers and owner-operators are peri- odically provided with $300 cash advances by Respond- ent. The purpose of these advances is to provide drivers with cash to buy fuel, oil, pay tolls, or make needed re- pairs on their vehicles while they are on the road. Al- though Respondent maintains that it has no provisions or rules for making these advances to owner-operators, the record indicates that such advances have in fact been made by Respondent to owner-operators. Where cash advances are made to owner-operators prior to their leaving Respondent's terminal, no charges for bookkeep- ing or interest are levied against the owner-operator when Respondent subsequently retrieves the cash ad- vanced from moneys which have subsequently become owing to the owner-operators in the form of earned income. Both company drivers and owner-operators are al- lowed to charge gas and oil to Respondent's company accounts at various locations. Where owner-operators are concerned, Respondent is reimbursed for these ex- penditures by making deductions from the driver's pay. No charges for bookkeeping or interest are levied by Re- spondent. Owner-operators are also required to schedule their vacations I month in advance. Company drivers are paid on a weekly basis. Respond- ent makes deductions from their checks for Federal income taxes, social security, state income taxes, and a health and hospitalization plan. Owner-operators are paid once a month and no deductions are made for Federal or state income taxes or social security. Respondent also 193 DECISIONS OF NATIONAL LABOR RELATIONS BOARD makes its maintenance facility available for a fee to owner-operators. In addition, Respondent orders repair and replacement parts for owner-operators which it sells to them at cost plus a small handling charge. B. Gale Q. Best's Employment by Respondent as a Company Driver Gale Best was employed by Respondent as a company driver on two separate occasions. His first period of em- ployment with Respondent was from December 1978 to April 1979. The second period of employment was from May to September 1979. Best ended his first period of employment with the Respondent in April 1979 when he quit over a pay dispute. The pay dispute had to do with whether or not Best was entitled to additional compensa- tion for unloading a trailer. Best took the position that he had been hired by Respondent as a driver at a certain rate or compensation and if Respondent wanted him to unload the trailers after the delivery was made then the Respondent should compensate him for the additional work. Respondent took the position that unloading was part of the job and if Best did not like it he could find another job. Best ended his second period of employment with Re- spondent in September 1979 when he again quit over a pay dispute. Once again, the pay dispute concerned whether or not Best would be given additional compen- sation for loading and unloading trailers. Best discussed the problem with Richard Cole, who is Raymond Cole's brother and an officer of Respondent. Best's conversa- tion with Richard Cole took place in Richard's office at Respondent's terminal. On reporting to work on Septem- ber 24, 1979, Best had been told by the dispatcher that Richard Cole wanted to see him. Best and Richard met alone in Richard's office. Richard asked Best what his problem was and Best told him that he was again being required to load and unload trailers without being duly compensated. Richard told Best that he was not entitled to any additional compensation for loading and unload- ing. Richard then asked Best whether he was the person who had contacted the Interstate Commerce Commission back in April of that year and complained about having to unload trailers without being paid for it. Best admitted that he had contacted the ICC and he was then told by Richard that a person creating those kinds of distur- bances would not be tolerated. When Richard attempted to extract a promise from Best that he would no longer engage in such conduct or make such inquiries, if he wanted to keep his job, Best told him that he could make no such promise. Best told Richard that if he felt he had a legitimate gripe or problem about pay that he would have to raise the questions. Best also said that he could not promise not to ask these questions and therefore he would have to quit. C. Gale Q. Best's Third and Final Period of Emnployment With Respondent During the last period of employment from December 1979 through March 1980, Best was a driver of his wife's tractor. The latter, Susan (Remus) Best was employed by Respondent from November 20, 1978, through July 10, 1980. Ms. Best worked in Respondent's office area where she rated freight bills, computed pay for the drivers, and performed other clerical functions. While employed by Respondent, Ms. Best, then Ms. Remus, met and began to date Gale Best. Gale and Susan Best were married on January 26, 1980. Sometime in the fall of 1979, Ms. Best purchased a truck and on December 1, 1979, she entered into a broker agreement and equipment lease agreement with Respondent. Prior to entering into these agreements with Respondent, both Gale and Susan Best met with Raymond Cole to discuss the financial feasibility and practicality of entering into a lease agreement with Re- spondent. At the time that these discussions took place, Gale and Susan were engaged to be married and Re- spondent knew that if it signed a lease agreement with Susan that Gale would be the exclusive driver. Since the vehicle to be leased by Respondent was purchased and registered in Susan's name, she alone executed the lease agreements with Respondent. During the middle of February 1980, Gale Q. Best had a discussion with Raymond Cole at Respondent's facility. Best stated that only he and Cole were present during the conversation. Best questioned Cole with regard to whether or not Respondent was making certain deduc- tions from the gross revenues generated by the vehicle prior to computing the moneys due and owing to the lessor of the vehicle. Cole told Best that he was being properly compensated which the latter accepted. On March 15, 1980, another conversation ensued solely between Best and Cole. Best stated that the two men discussed whether or not Respondent was making certain deductions from gross revenues generated by Re- spondent's use of the vehicle leased to it by Susan (Remus) Best. Best questioned Cole about Respondent's methods of computing the amount of compensation due to the lessor under the lease agreement covering the ve- hicle driven by Best. He accused Respondent of making excessive deductions for washouts. Best stated he was called a liar by Cole and told that he was sticking his nose into areas where it did not belong. The conversa- tion culminated in Cole telling Best that he was no longer wanted on the Respondent's premises, to get out, and further, that the truck he drove would no longer have a lease. Best left the premises. On or about March 18, 1980, Susan Best received a phone call at home from Respondent's dispatcher, Jerry Wehrle. Wehrle told Susan Best that there was a load ready to go to Philadelphia and he asked her whether her truck would take it. The witness (Best) told Susan that in light of the fact that he had been fired, Susan had better talk to Raymond Cole and get the matter straign- tened out before he would agree to take the load. Susan subsequently phoned Best from Respondent's facility, discussed the situation with him, and the latter agreed to take the load. Best took the load and the following morning he called in to the dispatcher to let him know where he was. During that phone call, Best spoke to Raymond Cole. Cole asked Best whether he had a driver lined up to start driving the truck after the following Friday. When Best asked Cole what he meant, the wit- ness stated that Cole told him that Friday was the last 194 KOUBENEC MOTOR SERVICE. INC day he could drive the truck. Cole went on to say that the truck had a lease but that Best could no longer drive it. Cole further stated that if Best insisted on remaining as the primary driver, there would be no work for the vehicle. Best then responded that, under the circum- stances, he and Susan had no choice but to "pull" the truck and find other work. On or about March 22. 1980, after having returned from his last run for Respondent. Best had another con- versation with Raymond Cole. This conversation took place in Richard Cole's office at Respondent's facility. Present during that conversation were Raymond Cole, Susan Best, and Gale Q. Best. Best asked Cole why he felt that he had the right to tell him that he could no longer drive the truck. Best brought up the question of what he felt to be excessive charges by Respondent for washouts. The method of computing compensation based upon taking a percentage of the gross revenues generated by a vehicle was also discussed. The conversation then returned to the question of Cole's justification for telling Best that there would be no more work for the truck he was driving. At that point, Gale Q. Best stated Cole told him, in the presence of his wife, that the real reason he was being fired was because he was trying to organize or start a union. In reply. Best told Cole that he had op- posed a union organizing effort in June 1979 at Respond- ent's facility. Best stated that Cole replied by stating that he could bring in a number of drivers to prove that Best was trying to start a union. When Best challenged Cole to prove this allegation, he was told by Cole that it would be a waste of time and that he did not have the time. 11. I)ISCUSSION The first issue to be determined is whether Gale Q. Best is an employee of the Respondent within the mean- ing of Section 2(3) of the Act. In determining whether an individual is an employee or an independent contractor, the current legal standard is the "right to control" test adopted by the Board in Deaton, Inc.. 187 NLRB 780 (1971). The control test is traditionally stated in the following terms: "[The test focus on] the nature and the amount of control reserved by the person for whom the work is done.... [T]he employer-employee relationship exists when the person for whom the work is done has the right to control and direct the work, not only as to the result accomplished by the work, but also as to the details and means by which that result is accomplished . . . [I]t is the right and not the exercise of control which is the determining element." N. L.R.B. v. Phoenix Mutual Life Insurance Company, 167 F.2d 983, 986 (7th Cir. 1948), cert. denied 335 U.S. 845. In interstate truckline cases, an additional wrinkle on the control test has evolved. These are regulations by the Interstate Commerce Commission and the Department of Transportation. These regulations have the effect of re- quiring the holder of a certificate of public convenience and necessity to possess and exercise considerable con- trol over trucks operated under the certificate without regard to whether the holder owns the trucks. Control over the trucks involves controls over the drivers. In the present case, I have taken into account the sub- stantial nexus of control required by Federal regulation and also found that the facts established the existence of "additional controls" voluntarily reserved by Respond- ent. .N.L.R.B. v. Pony Trucking, Inc., 486 F.2d 1039 (6th Cir. 1973). These "additional controls" and governmental controls, as established by the record include: (I) Re- spondent enjoys the exclusive possession, control, and use of the leased equipment; (2) the Respondent insures that identifying markings and insignia, required by the Federal government, are displayed on the vehicle that it leases; (3) Respondent requires owner-operators to accept virtually all assigned loads, and disciplines owner- operators who refuse assigned loads without just cause; (4) Respondent assigns loads with instructions on deliv- ery times and requires the maintenance and submission of logsheets and other records; (5) Respondent requires drivers of leased equipment (like the company drivers who are admitted employees) to take physical examina- tions and road tests; (6) Respondent maintains cargo and liability insurance for owner-operators; (7) all drivers op- erating out of the Respondent's terminal, regardless of their classification, are subject to discipline for infraction of any company rule or policy; (8) where applicable. Re- spondent controls the allocation of loss due to cargo damage claims; (9) Respondent has made cash advances to ow ner-operators for operating expenses and deducted payments out of their paychecks without charging for bookkeeping or interest; (10) Respondent requires owner- operators to obtain permission before they trip lease; (11) Respondent requires that owner-operators maintain their vehicles and tires in good condition; and, (12) Respond- ent has the ultimate responsibility to insure that all of its drivers are in compliance with any applicable govern- mental regulations and company rules or policies. In analyzing the aforementioned factors, I have con- sidered the degree of control exercised over Respond- ent's owner-operators regardless of the reasons for the imposition of that control; that is. whether required by governmental regulations or inspired for other business reasons. Robbins Motor Transportation. Incorporated. S.R. T. Motor Freight Inc., 225 NLRB 761 (1976). It is my opinion, and I conclude, that Gale Q. Best is an employee within the meaning of Section 2(3) of the Act. The next issue to be determined is whether Gale Q Best was discharged upon Respondent's mistaken belief that he was trying to inform a union. The General Coun- sel's basis for finding that Best was discharged for the above-stated reason was a conversation between Best and Raymond Cole on or about March 22, 1980, wit- nessed by Ms. Best Raymond Cole had previously advised Best that his services were no longer acceptable, and on March 22, 1980, Best and Cole argued over the various problems that existed between the parties. According to Best and his wife. Cole allegedly stated that Best was no longer acceptable because he was attempting to form a union. Cole denied that he ever made such a statement and fur- ther stated that he had no knowledge of any union activ- ities by or on behalf of Best. 195 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In determining the credibility of the parties involved in the above-stated dialogue, I have taken into considera- tion other relevant factors in this proceeding. The record shows that Best had previously been an employee of Respondent on two different occasions and both times had quit because of personal complaints and gripes with Raymond Cole and the management of Re- spondent. Cole had advised Susan Best not to purchase her truck because Koubenec did not need any additional help and because "it was very difficult times." Best, as a company driver, refused to backhaul a load from a point in New Jersey and drove back empty. In March 1980, Best initially refused to haul a load of per- ishable bananas from Philadelphia and only agreed to take the freight upon the urging of his wife. Since Respondent never requested Best to do anything different than requested of other drivers, the former did not believe that Best's complaints were legitimate. There were adequate grounds for Best's dismissal. I find that Gale Q. Best's employment was terminated for good cause and that this termination was not pretextual or in violation of the Act. Therefore, I shall recommend the complaint be dis- missed in its entirety. CONCLIUSIONS OF LAW I. Gale Q. Best is an employee within the meaning of Section 2(3) of the Act. 2. The General Counsel has not established by a pre- ponderance of the evidence that Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(l) and (3) and Section 2(6) and (7) of the Act as al- leged in the complaint. Upon the basis of the foregoing findings of fact, con- clusions of law, and the entire record in this case, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: ORDER' The complaint is dismissed in its entirety. ' In the event no exceptions are filed as provided by Sec. 102.46 of the Rules and Regulations of the National Labor Relations Board, the find- ings, conclusions, and recommended Order herein shall, as provided in Sec. 102.48 of the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes. 196