Perrysville Coal Company

DECISIONS OF NATIONAL LABOR RELATIONS BOARD Perrysville Coal Company and United Mine Work- ers of America, Local 6986. Case 6-CA-14484 September 30, 1982 DECISION AND ORDER BY MEMBERS FANNING, JENKINS, AND ZIMMERMAN On June 4, 1982, Administrative Law Judge Karl H. Buschmann issued the attached Decision in this proceeding. Thereafter, Respondent filed excep- tions and a supporting brief,' and the General Counsel filed a memorandum in response to Re- spondent's exceptions. 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, 2 and conclusions of the Administrative Law Judge and to adopt his recommended Order. The Administrative Law Judge correctly con- cluded that Respondent violated Section 8(a)(5) and (1) of the Act by unilaterally, without prior notice to and bargaining with the Union, notifying the owners and the drivers of coal trucks leased to Respondent that it was going to terminate the em- ployment status of those drivers (including those truck owners who drove their own trucks);3 change its method of payment to the truckdrivers and owners; discontinue its payments toward work- men's compensation, unemployment insurance, and the Union's health and retirement benefits plan; and discontinue its withholding of personal income tax, social security assessments, and union dues.4 The record fully supports the Administrative Law Judge's finding that Respondent acted with- out notice to the Union in formulating and an- nouncing its decision to make the changes in em- ployment status and payroll practices described above. Respondent's request for oral argument is hereby denied, as the record, the exceptions, and the briefs adequately present the issues and the positions of the parties. I Respondent has excepted to certain credibility findings made by the Administrative Law Judge. It is the Board's established policy not to overrule an administrative law judge's resolutions with respect to credi- bility unless the clear preponderance of all of the relevant evidence con- vinces 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 carefully examined the record and find no basis for reversing his findings. I There are 36 drivers involved in the instant case; 12 of them are owner/operators who own their trucks and lease them to Respondent. The remaining 24 drivers do not own the trucks which they drive; their trucks are owned by third parties, and leased to Respondent. None of the trucks involved in this case are owned by Respondent. 4 Pending resolution of the instant issues, Respondent has not imple- mented the aforementioned changes in payroll practices. 264 NLRB No,. 46 Thus, on or about April 1, 1981 (all dates herein are 1981), Respondent's president, Patricia Butch, held a meeting of the truck owners and drivers. The meeting was also attended by Butch's attorney and her father, who was Respondent's dispatcher and who had until very recently been Respondent's owner and president. Butch's attorney told the truck owners and drivers that Respondent was going to revamp its operation and its method of payment for leased trucking and driving services,5 and that Respondent was going to discontinue its payment of benefits and its withholding of drivers' income taxes and social security. During the second week of April, Respondent sent a letter to each of the drivers, advising them that "due to the decision of the company to change its method of conducting business, your services as a driver are hereby terminated" (emphasis sup- plied). Finally, on April 17, at the Union's request, Butch met with the Union's president, Richard Trinclisti; the Union's committeeman at Perrysville Coal Company, Gerald Moorehead; and one of the truck owner/operators, Robert Thompson. At the meeting, Butch handed out a memoran- dum "TO: Coal truck owners doing business with Perrysville Coal Co." The memorandum advised the owners that "As you are probably aware, Perrys- ville Coal Co. has decided to change its method of operation" (emphasis supplied). The memorandum then detailed the different manner in which Re- spondent would conduct its operations in the future. Trinclisti told Butch that the announced changes were not acceptable to "the people who haul coal for her." Butch was asked to reconsider her deci- sion. She replied that she was "ninety-nine per cent sure" she would not reverse her decision. Never- theless, Trinclisti asked Butch to notify him when she made up her mind whether or not to go I As discussed more fully by the Administrative Law Judge, truck owners who leased their trucks to Respondent were paid according to a formula based upon the tonnage of coal hauled per mile. Truckdriven who drove trucks leased to Respondent were paid by the truck owners. Drivers received a percentage-usually 30 percent-of the overall lease payment owed to the truck owners by Respondent. Respondent made its lease payments in the form of two separate checks for each leased truck. One check was made payable directly to the truckdriver, in an amount based on the driver's percentage, as estab- lished between the driver and the owner, and then reported to Respond- ent; income tax, social security payments, and union dues were deducted from the driver's check by Respondent. The second check was made payable to the truck owner, and was the balance of the overall lease pay- ment due. Under the revised method of payment announced by Respondent on April 1, Respondent would discontinue the practice of issuing two checks, and would instead issue one overall check to the truck owner, who in turn would be responsible for making payment to the truckdriver, with appropriate payroll deductions. 380 PERRYSVILLE COAL COMPANY through with the announced changes. 6 A few days later, Butch called Trinclisti to tell him that she was going to go ahead with the announced changes. It is clear that, as of April 1, without any notice to or bargaining with the Union, Respondent had decided, inter alia, to discontinue its contributions toward the Union's health and retirement benefits plan; to discontinue its payment of workmen's compensation and unemployment insurance; to dis- continue its withholding of income tax, social secu- rity, and union dues; to discontinue its practice of issuing separate paychecks to the drivers of the trucks leased to Respondent; and (as discussed more fully below) to terminate the services of the truckdrivers. Nor did the April 17 meeting in any way rectify Respondent's initial failure to notify and bargain with the Union over these matters. Respondent's decision, already publicly announced and to some extent already implemented by its termination let- ters to the drivers, was, by any reasonable stand- ard, final. Accordingly, we are in complete agree- ment with the Administrative Law Judge's finding that Respondent failed to bargain with the Union over these matters, and that its failure to do so was unlawful. Our conclusion that Respondent has acted un- lawfully is of course premised on our conclusion, in agreement with the Administrative Law Judge, that the truckdrivers in this case are employees within the meaning of the Act, and not independ- ent contractors or the employees of independent contractors. As the Administrative Law Judge correctly pointed out, the Supreme Court has held that the Board should apply the common law agency test in determining whether an individual is an employee or an independent contractor.7 Under the common law "right to control" test, where the one for whom the services are performed retains the right to control the manner and means by which the result is to be accomplished, an employer-employee relationship exists. But where the one for whom the services are to be performed retains only the right to control the result, the relationship is that of an independent contractor.8 I Trinclisti testified that he did not attempt to offer any counterpropos- als to Butch's announced changes in operations. I N.L.R.B. v. United Insurance Co. of America, 390 US. 254, 256 (1968). 8 See Rediehs Interstate. Inc., 255 NLRB 1073, 1076 (1981), See, gener- ally, Restatement of Agency 2d, § 220 (1958), which provides § 220. Definition of Servant (1) A servant is a person employed to perform services in the af- fairs 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 The "right to control" test is easy to recite, but not so easy to apply: "all of the incidents of the re- lationship must be assessed and weighed with no one factor being decisive."9 And, as we said in Austin Tupler Trucking, Inc., and Gold Coast, Inc., 261 NLRB 183 (1982): Not only is no one factor decisive, but the same set of factors that was decisive in one case may be unpersuasive when balanced against a different set of opposing factors. And though the same factor may be present in dif- ferent cases, it may be entitled to unequal weight in each because the factual background leads to an analysis that makes that factor more meaningful in one case than in the other. There are, in the instant case, as is usual in these cases, certain factors that may be indica- tive of employee status as well as factors indic- ative of independent contractor status. To decide on which side of the line these drivers fall requires more than a quantitative analysis based on adding up the factors on each side; it requires the difficult task of assessing the rela- tive significance of each factor, and ultimately each set of factors, in light of the impact of each factor on the overall relationship between the drivers and the Employer. tO Thus, while the instant case, as the Administra- tive Law Judge has pointed out, is similar in some respects to Kentucky Prince Coal Corporation, 253 NLRB 559 (1980), and Tarheel Coals, Inc.. etc., 253 NLRB 563 (1980) (in which cases the Board found independent contractor relationships to have exist- ed between the employers and the truck owners who leased their equipment to those employees), (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 occu- pation or business; (c) the kind of occupation, with reference to whether, in the local- ity, 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 instrumen- talities, 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; (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. 9 N.L.R.B. v United Insurance Co., 390 U S at 258 10 261 NLRB at 184 381 DECISIONS OF NATIONAL LABOR RELATIONS BOARD there are numerous material-and ultimately dis- positive-differences, discussed below and also by the Administrative Law Judge, which fully support the Administrative Law Judge's conclusion that the truckdrivers and truck owner/operators in the in- stant case are employees within the meaning of the Act. A significant manifestation of the employer-em- ployee relationship existing between Respondent and the drivers (owners and nonowners alike) in this case, not present in Kentucky Prince and Tar- heel, is the existence from May 15, 1975, through March 27, 1981 (just 4 days prior to the onset of Respondent's unlawful activity), of a contractual collective-bargaining relationship between Re- spondent and the Union, as the recognized repre- sentative of the drivers. Also, the collective-bargaining agreement cover- ing the drivers in this case provided, inter alia, that: The management of operations, the direction of the working force and the right to hire and discharge are vested exclusively in the Em- ployer. While the record reveals that Respondent does not in practice exercise its contractual right to hire drivers," it is obvious that Respondent has exer- cised, albeit unlawfully under the circumstances, its corresponding right to fire drivers, by sending to all of them the aforementioned letters of termina- tion. We find it particularly significant in this regard, and a clear indication of the employee status of the drivers in question, that Respondent directed its termination letters to all of the drivers, including nonowner drivers, who Respondent oth- erwise contends are not its employees, but rather the employees of the particular truck owner. If the latter were the case, then Respondent would have found it necessary to notify only the truck owners of its decision to terminate the coal hauling serv- ices; the truck owners themselves, under Respond- ent's asserted theory, would in turn notify "their" supposed employees, the truckdrivers, of the effect of the termination of their services for Respondent. Thus, Respondent's individual letters to each truck- driver, regardless of ownership status, is clear evi- dence that, as a matter of fact, Respondent consid- ered and dealt with all drivers as its employees, and not as employees of the truck owners. Another indicator of the status of the instant truckdrivers and owner/operators as employees rather than independent contractors, a factor not " Nonowner truckdrivers are in practice hired 'by the owners of the trucks they drive under lease to Respondent. As seen, some truck owners drive their own trucks, as owner/operators. Respondent does, of course, have the right, which it exercises, to choose which truck owners from whom it will lease its trucks. present in Kentucky Prince or Tarheel, is Respond- ent's reliance on their relative seniority of service with the Company in selecting drivers for layoff. Thus, according to Butch's uncontradicted testimo- ny, a seniority roster of drivers was used in deter- mining who would be laid off during an earlier layoff imposed by Respondent.' 2 Butch further tes- tified that she would apply seniority in the event of any future "major cut in hauling." 3 The use of driver seniority is an indication of the employee status of the drivers. Thus, if Respondent viewed and dealt with the owners as independent contrac- tors, it would in all likelihood have selected indi- viduals for layoff on some basis other than how long a particular driver-most of whom are not truck owners-has been hauling for Respondent. Yet another substantial indicator of the status of the instant drivers as employees of Respondent is that, unlike in Kentucky Prince and Tarheel Coals, supra, Respondent maintained payroll records for each driver (nonowners and owner/operators alike), directly paying each driver with a separate paycheck, withholding from each paycheck appro- priate deductions for Federal and state tax, social security, and union dues, and Respondent made payments for workmen's compensation, unemploy- ment insurance, and the contractual health and re- tirement benefits plan.' 4 The performance by Re- spondent of such payroll functions and the pay- ment by Respondent of such benefits are decidedly inconsistent with Respondent's fundamental conten- tion that its drivers are not its employees, but in- stead independent contractors, or the employees of independent contractors. We find, in agreement with the Administrative Law Judge, that Respondent's imposition of disci- pline on tardy drivers is a particularly telling indi- cator of Respondent's right to exercise control over the manner in which the drivers perform their services, and is thus further proof of the employee status of the drivers. In this regard, the record establishes that pay- ment for trucking is made by Respondent on a ton- nage-per-haul basis; Respondent keeps account of each load hauled. Further, Respondent determines which particular trucks will make specific deliv- i2 Truck owner/operator Donald Morris testified that. the only time he was laid off by Respondent, his selection for layoff was based on his seniority as a driver. i3 Butch also testified in this regard that "[seniority is important at Perrysville Coal Company because] if there is a drastic change in the work I would want to keep the older men on .. Because I feel they would have the right to stay." 4 The collective-bargaining agreement between the parties. which ex- pired on March 27, also made Respondent responsible for providing benefits under the sickness and accident benefits plan, the purpose of which was to compensate employees for earnings lost as a result of sick- ness or accident suffered on or off the job. 382 PERRYSVILLE COAL COMPANY eries, with Respondent's dispatcher attempting to divide the loads equally over the course of the day. Moreover, Respondent is capable of increasing or decreasing the number of hauls it dispatches on any given day.'5 Nevertheless, although Respondent was thus not bound to deliver a precise daily ton- nage, Respondent's practice was to punish late arri- vals (i.e., those who arrive too late to take their first scheduled load) by not permitting them to make up for their missed load later in the day. Since Respondent pays by the load, the withhold- ing of a load has an immediate financial impact on a late-arriving truck. Respondent has also disciplined drivers for unex- cused absences. According to Respondent's former president, McElroy, the owner of one of the trucks in question, asked McElroy to discipline one of the owner's drivers for "not showing up for work." The truck owner suggested to McElroy that the latter should lay off the owner's driver for 3 days; McElroy did just that. '6 We also find Respondent's imposition of specific truck operating guidelines on drivers to be an im- portant factor in our determination that the instant drivers are employees of Respondent. For example, as discussed more fully by the Administrative Law Judge, Respondent required the use of tarpaulin to cover loads in specific areas; prohibited the use of engine brakes in other specified areas; required safety spacing between trucks in transit; and pro- hibited transit over certain routes due to weight re- strictions. These aspects of the case imply Respondent's control over more than just the end result to be achieved through its relationship with the drivers- the delivery of coal to a designated place-but also a significant degree of control by Respondent over the manner and means by which that end result is to be achieved. In addition to the existence of a collective-bar- gaining agreement between Respondent and the Union; Respondent's right under that contract to hire and discharge drivers; its actual termination of the employment status of all drivers; its reliance on seniority to implement layoffs of drivers; its main- tenance of payroll records and withholding of taxes, social security, and union dues for drivers; its payment of workmen's compensation and unem- 1i Thus, according to Calvin McElroy, who until March was Re- spondent's co-owner (with his wife), president, and dispatcher, if a truck had not reported to Respondent until noon (normal starting time is 7 a.m.), then, even though all the day's planned trucking had been sched- uled among the trucks that had arrived at the normal starting time, "Well, we'd get him [i.e., the noon arrival] a load someplace . . one load isn't going to make that much difference." 16 We find it to be particularly significant that the truck owner in this situation asked Respondent to perform what is clearly an employer func- tion-the imposition of discipline. ployment insurance; its contributions to the Union's health and retirement benefits plan; its disciplining of drivers; and its imposition of operating guide- lines for drivers, Respondent has made it abundant- ly clear, through its own draftsmanship, that it con- sidered the drivers to be-and dealt with them as- its employees. Thus, the standard "Equipment Lease Agree- ment," drafted by Respondent, by wlhich Respond- ent (as lessee) leases coal trucks from truck owners (lessors) states that "The relationship between LESSEE [i.e., Respondent] and LESSOR [truck owner] shall be that of independent contractor and the operators or drivers provided by the LESSOR shall be considered employees of the LESSEE" (em- phasis supplied). There can be no clearer nor more direct proof of the intention of Respondent to treat the drivers as its employees than the express lan- guage from the lease agreement itself. Moreover, Respondent documented its full awareness of the effect of the lease in establishing the instant em- ployment relationship between it and the drivers. Specifically, in its aforementioned April 17 memo to truck owners, Respondent announced its deci- sion to change its method of operation, so that "Hereafter, Perrysville will conduct its operations through independent sub-contractors" (emphasis supplied). The implication of this language is ines- capable-indeed, it is the purpose of the memo itself: Respondent was going to adopt a new system of operations in which the drivers would no longer be employees of Respondent, in accordance with the express language of expiring lease agree- ments. Instead, in the express language of the April 17 memo: Owners will operate their trucks as sub-con- tractors providing all equipment . . . etc., and the driver who will be their employee (emphasis supplied) .... Control of drivers will be in the truck owner and Perrysville will exercise no authority over them as an employer. Owners will be responsible for paying their employee driver's wages and any other em- ployer contributions as well as making all re- quired deductions. Thus, in stating what it intended the drivers to become under the new method of operation (i.e., employees of the truck owners), Respondent neces- sarily states what it realized the drivers had been under the current method of operation-employees of Respondent. Accordingly, we find and conclude, in agree- ment with the Administrative Law Judge, that the truckdrivers in this case are employees within the meaning of the Act, and that, therefore, Respond- 383 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ent violated Section 8(a)(5) and (1) of the Act by failing to notify and bargain with the Union, as the recognized representative of those employees, about the announced changes in payroll practice, benefits, and employment status of the drivers. 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 Respondent, Perrysville Coal Company, Apollo, Pennsylvania, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order, except that the attached notice is substituted for that of the Administrative Law Judge. APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAl LABOR RELATIONS BOARD An Agency of the United States Government WE WIILL NOT refuse or fail to recognize and bargain with the United Mine Workers of America, Local 6986, as the collective-bargain- ing representative of the drivers and unit em- ployees. WE WILL NOT unilaterally and without the agreement of the Union change the terms and conditions of employment of the drivers and unit employees. WE WIll NOT in any like or related manner interfere with, restrain, or coerce our employ- ees in the exercise of the rights guaranteed by Section 7 of the Act. WE WIL.L recognize and bargain with the Union as the collective-bargaining representa- tive of the drivers and unit employees. WE WILl. rescind all unilateral changes, in- cluding the termination of all drivers, and any attempts to make them into independent con- tractors. WE, wl.l. reinstate all drivers and unit em- ployees to their former status as employees of Perrysville Coal Company. PERRYSVILLE COAL COMPANY DECISION KARl. H. BUSCHMANN, Administrative Law Judge: This case arose upon charges filed by the United Mine Workers of America, Local 6986 (herein called the Union), on April 22, 1981, and was amended on May 6 and June 10, 1981. The complaint, issued on June 15, 1981, alleges in substance that the Respondent, Perrys- ville Coal Company, violated Section 8(a)(1) and (5) of the Act by terminating the employment status of its em- ployees and unilaterally, without prior notice to or bar- gaining with the Union, purporting to make these em- ployees independent contractors. Respondent in its answer filed June 24, 1981, denies the commission of any unfair labor practices. A hearing was held on February 1, 2, and 11, 1982, in Pittsburgh, Pennsylvania. Both parties filed briefs on March 26, 1982. Based upon the entire record in this case and my observation of the demeanor of the wit- nesses, I make the following: FINDINGS OF FACT Respondent, Perrysville Coal Company, is a Pennsyl- vania corporation located in Apollo, Pennsylvania. It is engaged in the transportation of coal for Canterbury Coal Company to points within 40 miles of Apollo. For this purpose, Respondent "employed" approximately 36 drivers.' About 12 of those were owner-operators who owned and drove their trucks for Perrysville. The re- maining drivers operated trucks owned by other "owners." The drivers were represented by Local 6986 of the United Mine Workers of America, which had operated under a collective-bargaining agreement with the Re- spondent until March 27, 1981, when the agreement ex- pired. In a meeting on April 1, 1981, Respondent informed its drivers that a change in the entire operation was contem- plated. Respondent told the owners and owner-operators to incorporate and to work independently. Respondent said that it could no longer be responsible for benefits and would have to discontinue the practice of payment in two checks. Under this system, Respondent issued one check which reflected the wages for the driver and a second check which paid for the rental of the truck. Robert Thompson, one of the owner-operators at the meeting, immediately notified the Union of Respondent's expressed plans. Richard Trinclisti, the acting union president, met with Respondent on April 17, 1981, and expressed the Union's opposition to the change in oper- ation and urged Respondent to reconsider its position. Although Respondent ultimately agreed to maintain its past practice pending the resolution of this issue here, it fully intends to change its operation. For example, in the middle of April 1981, Respondent sent a letter to its drivers stating (G.C. Exh. 6): Please be advised that due to the decision of the Company to change its method of conducting busi- ness, your services as a driver are hereby terminat- ed. Further, owner-operators were advised as follows (G.C. Exh. 7): t Respondent also used the services of 10 other truckdrivers. Their status is not involved in this proceeding. 384 PERRYSVILLE COAL COMPANY Coal truck owners doing business with Perrysville Coal Co. As you are probably aware, Perrysville Coal Co. has decided to change its method of operation. Hereafter, Perrysville will conduct its operations through independent sub-contractors. This will be done pursuant to a written lease and sub-contracting agreement between the company and the truck owners. Owners will operate their trucks as sub- contractors providing all equipment, maintenance, fuel, service, etc. and the driver who will be their employee. Hauling will be done under Perrysville Coal Co.'s rights except in those limited situations where an owner operates under his own certificate. Control of drivers will be in the truck owner and Perrysville will exercise no authority over them as an employer. Owners will be responsible for paying their employee driver's wages and any other em- ployer contributions as well as making all required deductions. It is the company's hope that all of you will chose to continue to do business with Perrysville under the new system. In order to do so, it will be necessary for the following to be done. In response to the announced changes, the Union filed unfair labor practice charges alleging that Respondent had failed to bargain with the Union as required by Sec- tion 8(a)(5) of the Act. Respondent defends its position on the ground that the owner-operators and drivers do not fall within the definition of "employee" contained in Section 2(3) of the Act, and that, in any case, Perrysville has "fulfilled any obligation it may have had to bargain over terms and conditions of employment." Analysis Respondent's argument boils down to the notion that its change of operations did not change the legal status of its drivers, since they had been independent contrac- tors prior to the contemplated changes. Respondent is, of course, correct in stating that Section 2(3) of the Act specifically excluded "independent contractors" from the protection of the Act. It is, therefore, necessary to exam- ine the relationship which the drivers had with Perrys- ville prior to any change in their status in the light of the applicable case law. The parties are in apparent agree- ment on the relevant precedents. In N.L.R.B. v. United Insurance Co., 390 U.S. 254, 256 (1968), the Court held that "the common-law agency test . . . in distinguishing an employee from an independent contractor" is applica- ble which regards the "right to control" as the deciding factor. Analogous to the instant situation are two cases relied on by Respondent: Tarheel Coals, Inc., 253 NLRB 563 (1980), and Kentucky Prince Coal Corporation, 253 NLRB 559 (1980). In those cases, the Board, after weighing the numerous indicia of the "right-to-control" test decided that "owner-operators, part-owner operators and non-owner-operators" who transport coal pursuant to oral agreements were independent contractors. There, the company compensated the truck owners irrespective of who drove the trucks, based on the amount of coal hauled. Truck owners were responsible for the mainte- nance of trucks and paid for their own workmen's com- pensation, social security deductions, and taxes. The company generally did not supervise the performance of the drivers or the scheduling of trucks, although it passed along warnings made by the police concerning speeding or reckless driving. These and other examples of control, or the lack of it, were discussed by the Board with the observation that "all of the incidents of the rela- tionship must be assessed and weighed with no one factor being decisive." On the other hand, in Air Transit, Inc., 248 NLRB 1302 (1980), the Board held that taxi- drivers, who either owned their cabs or subleased them, were employees within the meaning of the Act. Again, the Board examined each of the indicia concerning the control by the employer over the drivers in reaching its conclusion. The record2 in the instant case reveals that the relationship between Perrysville and its drivers falls somewhat in between the situation discussed in Air Tran- sit, supra, on the one hand, and the definitions analyzed in Kentucky Prince, supra, and Tarheel, supra, on the other. Respondent maintained a list of about 36 drivers in order of seniority. Some of these drivers were owner-op- erators who drove their own trucks and others were drivers who drove the trucks on behalf of owners of trucks; (G.C. Exh. 5). Perrysville leased the trucks from the owners of the trucks pursuant to a "Equipment Lease Agreement," which governed the relationship between the owners and Respondent (G.C. Exh. 4). The agree- ment which was applied for the duration of I year, speci- fied that Perrysville would take possession of the trucks and compensate the owners for the use of equipment based on the tonnage of coal hauled per mile. In addi- tion, Perrysville compensated the drivers of the trucks by paying their wages, workmen's compensation, unem- ployment insurance, and other remuneration. In practice, this meant that Respondent issued two checks to owner- operators, one for the use of the equipment and the other check representing the wages for the driving of the truck. Respondent deducted from the second check all payroll taxes, social security payments, as well as union dues. Respondent also furnished the truck owners with decals identifying the trucks as Perrysville equipment. All of the trucks, leased by Perrysville, were accordingly identified with Respondent. Pursuant to the lease agreement. the truck owners fur- nished a driver, who had to be competent, reliable, and familiar with Federal and state motor safety laws. Driv- ers were required to comply with all safety laws, and they were expected to file with Perrysville certain log- sheets, physical examination papers, accident reports, and other required documents. It was furthermore stipulated in the record that Respondent paid into the health and welfare plan maintained by the United Mine Workers for the drivers. 2 I have not credited the testimony of Patncia Butch to the extent that it conflicted with other record evidence, because of her evasive demea- nor as a witness. 385 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In terms of the typical workday, drivers were expect- ed to report for work with their trucks by 7 a.m. They lined up the trucks at the DiAnn Mine or the David Mine which belonged to the Canterbury Coal Company. There, Respondent's dispatcher, pursuant to a schedule prepared on the previous day, would inform the drivers of the loads of coal to be hauled and their destinations. A driver who reported late would lose a haul for which he was scheduled. This amounted to a form of discipline as opposed to a mere missing of his first turn in line. The dispatcher determined the number of hauls which a driver would carry on a particular day. And, even if a driver had still time after completing his scheduled hauls, he was not permitted to make up the hauls which he had missed by this tardiness. Drivers were expected to inform Respondent if they were late or unable to report for work. Respondent has on occasion reminded drivers to call the office if they would be unable to report for work. Respondent has also voiced its complaints to cer- tain individual drivers "to pass the word" that the driv- ers "were not reporting off." At one point in time, Re- spondent has considered sending letters and then dismiss- ing drivers who had failed "to report off" or who left work early. Respondent has in the past criticized drivers for taking too many coffeebreaks at one time, because they disrupted the schedule of the day. With regard to the job performance involving the driving of their coal trucks, Respondent has from time to time issued certain guidelines with which drivers were expected to comply. For example, drivers were required to use a tarpaulin on their trucks, particularly when they hauled coal out of Freeport or to the Key Stone Power plant. Drivers were warned not to use engine brakes in towns like Maysville or Avenmore, because of the noise and in order to comply with local speed limits. They were told by Respondent that "the trucks were to be spaced out so as not to create a menace" in those towns. Drivers were also instructed to use certain roads or a particular route, because some roads were restricted by weight limits. Because the Company would measure a particular route in bidding on jobs, drivers were simply expected to follow the measured route. One of the driv- ers was told by Respondent to install new sideboards on his truck as a safety factor. For the same reason, drivers were told by Respondent that they should wear hardhats outside of the trucks on plant premises. Nevertheless, Respondent argues, "owner/drivers are independent contractors and the drivers are either inde- pendent contractors or the statutory employees of the in- dependent contractor truck owners." With particular em- phasis, Respondent points to Respondent's absence of control over such fundamental processes as the hiring, firing, and substituting of the drivers, as well as Re- spondent's lack of responsibility for the "truck insur- ances, maintenance, garaging, operating expenses, inspec- tions, fines or spillage." In support of Respondent's posi- tion, it must also be considered that drivers had in the past refused to make certain hauls and had, on occasion, used the trucks for their personal use, without being sub- jected to discipline or warning. Moreover, as in Tarheel Coals, supra at 565, certain restrictions did not originate with Perrysville but were passed on to the drivers be- cause of state or local laws. To be sure, a resolution of this issue is not a simple task. On balance, however, the record reveals that the indicia of control by Respondent over the owner-opera- tors and the drivers in this case outweigh those described in Tarheel Coals, supra. and Kentucky Prince Coal, supra. Respondent is correct in stating that owners of trucks who leased them to Perrysville and who hired a driver were not listed among the 36 employees and are not part of the statutory employees. But owner-operators and drivers were treated by Respondent in the same fashion. They appeared on Perrysville's list of drivers without distinction and must be considered "employees" within the meaning of Section 2(3) of the Act. Not only was their work performance subject to certain control by Re- spondent, but also their relationship with Respondent disclosed that they were treated like employees. Perrys- ville paid them in wages under the two-check system, and withheld several types of dues on their behalf. Re- spondent covered all drivers with workmen's compensa- tion and unemployment compensation. Drivers drove trucks identified with Respondent and they considered themselves to be employees of Respondent. The expired union contract also contained a provision under which management reserved its right to direct the employees and to hire and discharge them. The record does not reveal more examples of management control pursuant to the management-rights provision, because the drivers had been with this employer and Canterbury Coal, its prede- cessor, for many years; they were reliable and familiar with their job. Ultimately. Respondent did exercise its right of control by discharging them. From the foregoing, I conclude that the drivers and owner-operators were employees within the meaning of the Act. Respondent's unilateral change in their status amounted to a violation of Section 8(a)(5) and (I) of the Act because the drivers were represented by the Union. Respondent's final argument is that it had satisfied its duty to bargain because "the Company met with the Union and explained its desire and need to change its method of operation," but, because the "union refused to accept this proposal," the parties had reached an im- passe. In support of this position, Respondent relies on Carnation Company, 192 NLRB 237, 239 (1971), where the Board dismissed the complaint. It had found that the parties had reached an impasse after several meetings be- cause of the union's fixed position in resisting any change in the relationship between the company and its drivers. The circumstances of this case, however, do not even remotely establish an impassee between the parties. First, Respondent failed to notify the Union of the contemplat- ed changes in the relationship. Only after Respondent notified the owner-operators on April 1, 1981, of its plans was the Union notified by Robert Thompson, an employee-not by Respondent in a sincere effort to bar- gain over the issue. Second, the Union, not Respondent, requested the first and only meeting in which it proposed that Respondent reconsider the plan, and in which Re- spondent indicated that it was 99 percent sure that it would not. Third, the Company, without any further 386 PERRYSVILLE COAL COMPANY notice or willingness to reconsider the plan, put it into operation, albeit agreeing to keep the status quo ante. Here, the record does not reflect a union's fixed and in- transient position after a series of bargaining efforts, but a respondent who failed to notify the Union and who unilaterally, without any attempt to bargain, attempted to change the relationship of its drivers to that of independ- ent contractors. Any argument that Respondent decided merely to go out of business, or partially to terminate a portion of a business, or to subcontract a part of its busi- ness operations, as a management decision without the requirement to bargain in good faith, is also without merit. First National Maintenance Corporation v. N.L.R.B., 452 U.S. 666 (1981). CONCL USIONS OF LAW I. Perrysville Coal Company is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. United Mine Workers of America, Local 6986, is a labor organization within the meaning of Section 2(5) of the Act. 3. The drivers and owner-operators hauling coal for Perrysville Coal Company are employees within the meaning of Section 2(3) of the Act. 4. All full-time and regular part-time employees en- gaged in the hauling of coal employed by Respondent, excluding all other employees and guards, professional employees and supervisors as defined in the Act, consti- tute a unit appropriate within the meaning of Section 9(b) of the Act. 5. At all relevant times, the Union has been the bar- gaining representative for the employees in the unit de- scribed above. 6. Respondent, by unilaterally terminating the employ- ment of its employees and purporting to make them into independent contractors has failed to bargain in good faith as required by Section 8(a)(l) and (5) of the Act. Respondent has thereby violated Section 8(a)(l) and (5) of the Act. 7. The unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. REMEDY Having found that Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act, I recommend that Respondent be ordered to cease and desist therefrom and take appropriate af- firmative action by posting a notice, by rescinding the unilateral changes, and by reinstating its employees. Since Respor.denl il practice held in abeyance its unilat- eral changes, an order requiring that Respondent make whole its employees will be unnecessary. I further recommend that Respondent be ordered to bargain with the Union about its decision to institute any changes in the relationship which it had with its employ- ees. Upon the foregoing findings of fact and conclusions of law, upon the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recom- mended: ORDER3 The Respondent, Perrysville Coal Company, Apollo, Pennsylvania, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing or failing to recognize and bargain with the Union as the collective-bargaining representative of its drivers and employees. (b) Unilaterally and without the agreement of the Union changing the terms and conditions of employment of its drivers and unit employees. (c) Refusing or failing to bargain in good faith with the Union concerning any proposed changes in the rela- tionship which it had with the drivers and unit employ- ees. (d) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of their rights under Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the purpose of the Act: (a) Recognize and bargain with the Union as the col- lective-bargaining representative of its drivers and unit employees. (b) Rescind the unilateral changes, including the termi- nation of the drivers and the attempt to make them into independent contractors. (c) Reinstate all drivers and unit employees to their former status as employees of Respondent. (d) Post at its Apollo, Pennsylvania, place of business copies of the attached notice marked "Appendix." 4 Copies of said notice, on forms provided by the Regional Director for Region 6, after being duly signed by Re- spondent'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 ensure that said notices are not altered, defaced, or covered by any other material. (e) Notify the Regional Director for Region 6, in writ- ing, within 20 days from the date of this Order, what steps Respondent has taken to comply herewith. 3 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. I 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 Pursu- ant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board.' 387