Precision Bulk Transport, Inc.

PRECISION BULK TRANSPORT 437 Precision Bulk Transport, Inc. and Teamsters Local 486, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. Case 7-CA-21376 24 April 1986 DECISION ORDER BY CHAIRMAN DOTSON AND MEMBERS DENNIS AND STEPHENS On 30 June 1983 Administrative Law Judge Rus- sell M. King Jr. issued the attached decision. The Respondent filed exceptions and a supporting brief. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the decision and the record in light of the exceptions and brief and has decided to affirm the judge's rulings, findings, and conclusions only to the extent consistent with this Decision and Order. The judge found, inter alia, that the Respondent, a carrier engaged in interstate trucking services, violated Section 8(a)(1) of the Act by coercively interrogating a prospective employee regarding his union sentiments, and Section 8(a)(5) and (1) by re- fusing to recognize and bargain with the Union on and after 4 October 19821 as the exclusive bargain- ing agent of its owner-operator truckdrivers. The Respondent has excepted to these findings, con- tending, inter alia, that the owner-operators who lease their equipment to the Company are inde- pendent contractors and are not entitled to the pro- tection of the Act. We find merit in the Respond- ent's exceptions and conclude, contrary to the judge, that the owner-operators are independent contractors. We shall therefore dismiss the unlaw- ful interrogation and unlawful refusal-to-bargain al- legations. The Board uses the common law right-of-control test to determine whether individuals are employ- ees or independent contractors, as follows: Where the one for whom the services are per- formed retains the right to control the manner and means by which the result is to be accom- plished, the relationship is one of employment; while, on the other hand, where control is re- served only as to the result sought, the rela- tionship is that of an independent contractor. The resolution of this question depends on the facts of each case, and no one factor is deter- minative.2 i All dates refer to 1982 unless otherwise specified 2 See News Syndicate Co, 164 NLRB 422, 423-424 (1967), quoted in Air Transit, 271 NLRB 1108, 1110 (1984), and Don Bass Trucking, 275 NLRB 1172, 1173-1174 (1985) In applying this standard to the instant facts, the judge relied on the Board's analysis in Mitchell Bros. Truck Lines, 249 NLRB 476 (1980), and Rob- bins Motor Transportation, 225 NLRB 761 (1976), in which the Board found, inter alia, that the perva- sive scheme of governmental regulations in the trucking industry resulted in substantial company control over drivers and substantially minimized entrepreneurial freedom and risk. In Mitchell Bros. and Robbins, the governmental regulations were a significant factor in the Board's determination that the owner-operators were employees within the meaning of the Act. In Air Transit, supra, however, the Board favor- ably cited Seafarers Local 777 (Yellow Cab) v. NLRB,3 in which the court rejected the argument that government-imposed regulations constitute company control over drivers.4 Similarly, in Don Bass Trucking Co., supra, the Board rejected the union's contention that the Illinois Commerce Commission regulations applicable to the trucking industry substantially dictated the terms of the em- ployment relationship and supported a finding that the owner-operators were employees within the meaning of the Act.5 In the instant case, the parties' lease agreement provides that the leased truck or rig "shall be ex- clusively possessed and controlled by [Precision] and used in [Precision's] business" and that Preci- sion "shall be responsible for the operation of such equipment." This language is consistent with the written lease requirements mandated by Federal Interstate Commerce Commission regulations. The parties' lease further provides that the equipment will not be used for any purpose other than con- ducting Precision's business, except by the Compa- ny's direct order, or with the Company's written consent. The judge found that such a restriction in effect prevents owner-operators from privately ar- ranging "trip leases," a practice whereby a driver may haul freight for another company under that company's authority. Although Precision's vice president and terminal manager both testified that owner-operators have a right to negotiate their own trip leases, but rarely do so,6 the lease lan- guage itself gives the Company control beyond that imposed by law and limits the drivers' entre- preneurial freedom. This factor, however, is insuffi- cient to support a finding that the owner-operators ' 603 F 2d 862 (D C Cir 1978) 4 271 NLRB at 1110 8 In Don Bass Trucking, above, the Board overruled Mitchell Bros to the extent it was inconsistent 275 NLRB 1172, 1175 6 The record indicates that Precision arranged trip leases, and owner- operators were free to accept or reject such assignments Owner-opera- tors have rejected Company-arranged trip leases without discipline 279 NLRB No. 60 438 DECISIONS OF NATIONAL LABOR RELATIONS BOARD are statutory employees, in light of the record evi- dence showing that the owner-operators enjoy cer- tain freedoms and bear certain risks consistent with the operation of an independent business. The owner-operators purchase and own their rigs.7 The purchase of such vehicles involves a substantial personal investment. Each owner-opera- tor pays for his own fuel, oil, and maintenance, and chooses the location for his repairs and purchase of fuel. The drivers' diligence and efficiency in main- taining and operating their rigs permit them to con- trol their profits and losses within the confines of the lease agreement's financial terms. (See below.) The Company does not exercise day-to-day su- pervision over the drivers' loading, unloading, and hauling activities. Precision does not impose disci- plinary, safety, or reporting rules on its drivers beyond those required by law. The owner-opera- tors determine their own work schedules and deliv- ery routes, and where to park their vehicles. Owner-operators are neither required to accept, nor are they promised, a minimum number of trips, nor does the Company establish or enforce a maxi- mum number of trips which may be accepted." The owner-operators are free to accept or reject loads. The record demonstrates that, although the lease contains a clause to the contrary, in actual practice owner-operators have refused loads and trip leases with no adverse result. Owner-operators have indicated run and customer preferences, and the Company has attempted to accommodate such preferences to the extent such loads are available.9 The owner-operators select the States in which they may operator by deciding which state permits to acquire. Owner-operators have hired replace- ment drivers on several occasions.1 ° The owner- operators control their opportunity to backhaul by deciding whether to call the dispatcher after deliv- ering their load to check for available truckhaul as- signments." The owner-operators furnish their Upon commencing work for Precision, drivers Baranic and Vaughn were required to purchase their own vehicles They received no instruc- tion from Precision about the type of rig to buy There is no evidence that Precision financed or maintains any right to purchase such equip- ment 8 The Company does not impose restrictions on the number of hours or miles driven beyond those set by Federal regulations 8 For example, owner-operator Denton preferred not to accept back- haul assignments because he had local insurance and did not want to pur- chase long-haul insurance Denton refused backhaul assignments without discipline i° The Company's written policy requires the driver to obtain the Company's permission before using a replacement driver Precision's vice president testified that the reason for this policy was to assure that the replacement driver met Government standards 11 Although the Company requires owner-operators to call in after they complete an assignment , some owner-operators do not call in No disciplinary action has been taken for failure to comply with their re- quirement own tools and equipment.12 Owner-operators are responsible for obtaining state licenses, fuel permits, license plates,13 and state treasury decals. They pay their own Federal and state highway use taxes, mileage taxes, fuel taxes, fines, and license and permit fees. Precision is legally required to pur- chase general disability insurance. The owner-oper- ators furnish collision, fire, theft, and bobtail insur- ance coverage. The owner-operators are paid on a percentage basis, depending on whether or not they furnish their own trailer. The lease, voluntarily entered into by both parties, provides that the driver be paid 80 percent of gross revenue when using his own trailer, and 65 percent of gross revenue when using a company trailer. The Company makes no deductions from the owner-operators' checks, pays no benefits, and does not provide FICA, unem- ployment, or workers' compensation contributions on their behalf.14 On the whole record, we find the common law agency test for employee status has not been met. The owner-operators here are independent contrac- tors because the Employer has not retained the right to control the actual manner and means by which the owner-operators perform their serv- ices.15 Accordingly, we shall dismiss the com- plaint. ORDER The complaint is dismissed. 12 The Company has no requirements about the type of equipment which a driver must have Each owner-operator determines his own needs Two drivers have purchased hydraulic wet kits for use in unload- ing Precision furnishes no tools or equipment other than a log mainte- nance inspection sheet and mileage sheet which the Company is legally required to maintain for Federal and state inspection is Precision obtains Michigan Public Service Commission plates for owner-operators because the owner-operators are not legally permitted to purchase them and the Company is legally obligated to obtain them 14 The independent contractor relationship between the Employer and the owner-operators is further demonstrated by the sharp contrast to the acknowledged employment relationship between the Employer and driver McPherson Thus, the latter drove trucks owned and maintained by the Employer, while owner-operators invest large sums of capital in the purchase and upkeep of their trucks The Company paid hospitaliza- tion, FICA, unemployment, and workers' compensation contributions on behalf of McPherson, deducted state and Federal withholdings from his paycheck, paid him 26 percent of gross revenues, rather than 65 or 80 percent, and provided him insurance and pension plan benefits is See Don Bass Trucking Co, above, 275 NLRB 1172, and Air Transit, above, 271 NLRB 1108 K. C. Hartop, Esq., for the General Counsel. James J. Salzman, Esq. (Seyfarth, Shaw, Fairweather & Geraldson), of Chicago, Illinois, for the Respondent Employer PRECISION BULK TRANSPORT DECISION STATEMENT OF THE CASE RUSSELL M. KING JR., Administrative Law Judge. This case was heard by me in Bay City, Michigan, on April 25, 1983. The charge was filed by Teamsters Local 486, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (the Union) on October 27, 1982.1 The complaint was issued on Decem- ber 7 by the Regional Director for Region 7 of the Na- tional Labor Relations Board (the Board) on behalf of the Board's General Counsel.2 The complaint alleges that the Respondent Employer (the Company) violated Section 8(a)(1) of the National Labor Relations Act by coercively interrogating a prospective employee regard- ing his union sentiments. The complaint also alleges that the Company violated Section 8(a)(5) and (1) of the Act by refusing to recognize and bargain with the Union on and after October 4, as the exclusive bargaining agent of its employee-drivers.3 The Company denies the unlawful interrogation and, although admitting its refusal to recognize and bargain with the Union, it defends on the grounds that it is not a successor employer and the drivers involved are inde- pendent contractors. On July 16, the Company entered into an agreement with Harmon Trucking Company to purchase Harmon's assets and its intrastate shipping au- thority. The Company commenced operations at the Harmon facility in Caro, Michigan, on or about October 4, but approximately I month later it moved its oper- ations some 7 miles away to Fair Grove, Michigan, where it continues to operate. On the entire record, including my observation of the demeanor of the witnesses, and after due consideration of the briefs filed herein by the General Counsel and the Company, I make the following FINDINGS OF FACT I. JURISDICTION The pleadings, admissions, and evidence herein estab- lish the following jurisdictional facts. The Company is now, and has been at all times material, a corporation duly organized under and existing by virtue of the laws of the State of Illinois, and is also registered to do busi- ness in the State of Michigan. At all times material, the i All dates hereafter are in 1982 unless otherwise specified 2 The term "General Counsel," when used herein will normally refer to the attorney in the case acting on behalf of the General Counsel of the Board , through the Regional Director 2 The pertinent parts of the Act (29 U.S.C § 151 et seq ) provide as follows. Sec 8 (a) It shall be an unfair labor practice for an employer- (1) to interfere with , restrain , or coerce employees in the exercise of the rights guaranteed in section 7; (5) to refuse to bargain collectively with the representatives of his employees Sec 7 Employees shall have the right to self-organization, to form , join, or assist labor organizations , to bargain collectively through representatives of their own choosing , and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection 439 Company has maintained its principal office and place of business in the city of Chicago. Commencing on or about October 4, the Company also maintained a place of busi- ness in Caro, Michigan, which was subsequently moved to Fair Grove, Michigan, in early November, where it has continued to date to conduct the business of the Company. The Respondent is, and has been at all times material herein, engaged in providing interstate trucking services out of its facilities in Chicago, Illinois. During the 12-month period ending October 31, the Company earned in excess of $50,000 from providing trucking services out of its Chicago, Illinois facility to customers located outside of the State of Illinois. It is further antici- pated that during the 12-month period ending October 31, 1983, the Company will earn in excess of $50,000 in providing trucking services out of its Michigan facility to customers located outside of the State of Michigan. The Michigan facility, now located in Fair Grove, is the only facility directly involved in this case. Thus, I find and conclude, as admitted, that the Company is now and has been at all times material an employer engaged in com- merce within the meaning of Section 2(2), (6), and (7) of the Act. I further find, as also admitted, that the Charging Union is and has been at all times material herein a labor organization within the meaning of Section 2(5) of the Act. II. ALLEGED UNFAIR LABOR PRACTICES A. History Harmon Trucking Company (Harmon) had been en- gaged in the trucking business from its Caro, Michigan facility for many years. Its business was the transporta- tion of both liquid and bulk sugar for the Michigan Sugar Company to various customers both in and out of Michigan.4 Since 1973, Harmon had recognized the Union as the collective-bargaining agent for its drivers and the last collective-bargaining agreement between Harmon and the Union covered the period April 1, 1975, through March 31, 1982. The agreement contained an automatic renewal clause. On July 16, the Company and Harmon entered into an agreement whereby the Compa- ny purchased Harmon's assets and its trucking authority, and commenced operations at the Caro facility on Octo- ber 4. Prior to the Company's takeover , Harmon em- ployed six drivers, three of whom drove Harmon's own trucks (drivers McPherson, Baranic, and Vaughan) and three of whom owned their own ngs (drivers Ryan, Denton, and Schell). Harmon paid its drivers on a per- centage basis, provided them with insurance, pension benefits, and other fringe benefits, and made contribu- tions on their behalf to unemployment compensation funds. In addition to Albert Harmon, owner, Harmon also employed Mrs. Harmon, the Harmon's daughter Pam, Sandy Fox Salgat, Mable Taylor, and a mainte- nance mechanic. Through the months prior to October 4 * There is some question in the record as to whether or not Harmon had both intrastate and interstate authority The sales agreement between the Company and Harmon indicates Harmon had only intrastate author- ity DECISIONS OF NATIONAL LABOR RELATIONS BOARD the Company discussed with Harmon's drivers their future status, indicating its intent that they should all become "independent contractors" after the takeover. As of October 4, the Company retained the following Harmon employees: Salgat and Taylor (office workers); and drivers Ryan, Denton, Schell, Baranic, Vaughan, and McPherson. Of the six drivers, Ryan, Denton, and Schell already owned rigs which they leased back to the Company. Baranic and Vaughan apparently purchased or obtained rigs and also entered into lease-back agreements with the Company." The Company continued to operate out of the Caro fa- cility for approximately I month and then moved the op- eration to Fair Grove where it contracted with Fair Grove Oil Company to provide all future terminal serv- ices. The president of Fair Grove Oil Company was Vern Gehrls, who thereafter served as the Company's terminal manager in Fair Grove.6 Terminal Manager Gehrls also worked as such at the Caro facility com- mencing on October 4. The Union had the same collective-bargaining agree- ment with approximately 30 employers, including Harmon. On its expiration March 31, all those employers had entered into new agreements except two, one of which was Harmon. On September 20, Union Business Agent Bruce Obuchowski visited Albert Harmon and at- tempted to get his signature on a letter recognizing the Union as the exclusive bargaining agent for Harmon's dnvers. It was apparently at that time that Obuchowski (and the Union) learned that Harmon had sold his busi- ness, and Albert Harmon refused to sign the letter and referred Obuchowski to his attorney, Thomas D. Abbey. On September 29, Abbey wrote the Union stating that it was an "inadvertent failure" of Harmon not to have given the Union earlier notice of contract termination, and adding that the contract shall be terminated in 60 days. On October 4, Union Business Agent Robert G. Bess went to the Caro terminal where he also confronted Terminal Manager Gehrls with a letter acknowledging recognition of the Union by the Company. Gehrls re- fused to sign the letter, indicating that such matters would have to be taken up with the Company's main office in Chicago. Gehrls forwarded the letter to the Company's main office in Chicago where it arrived Oc- tober 11 or 12. On October 8, Business Agent Obu- chowski also forwarded a letter to the Company at the Caro terminal, again requesting recognition and bargain- ing, and adding that the Company had a duty to do so by virtue of the Board's rulings regarding successorship. To date the Company has refused to so recognize and 5 The record, however, is not clear in this respect A posthearing stip- ulation was submitted by the parties which indicates that as of October 12, the following drivers were retained or "employed" by the Company Schell, Denton, McPherson, Ryan, and Gibson This stipulation is accept- ed as evidence in the case Apparently between October 4 and October 12, drivers Baranic and Vaughan left the Company and driver Gibson was hired Driver McPherson was retained as an actual employee and not required to purchase or obtain his own rig because of his age He has since (and before the hearing in this case) retired The lease agreements will be discussed in great detail later 6 The Company, in its agreement with Harmon, had not purchased but merely leased the Caro facility bargain with the Union, giving rise to the charge and complaint filed in this case. B. The Independent Contractor Issue If the Company's drivers are found in this case to be independent contractors, then they are not employees within the meaning of Section 2(3) of the Act, and thus there is no duty to bargain and no unit of employees to be represented by the bargaining agent.7 The lease agree- ments with the owner-drivers is for a period of 1 year with 30-day automatic renewal periods until the lease is canceled by either party. The leased truck or rig was to be "exclusively possessed and controlled" by the Compa- ny and used in its business. The Company was "responsi- ble for the operation of such equipment." The agreement provided that the rigs would not be the subject of any other lease or agreement and would not be used by their driver or any other person for any purpose other than conducting the Company's business, except by the Com- pany's direct order or with the written consent of the Company. A violation of this clause subjected the lease to cancellation by the Company. This clause in effect prevented what is known as "trip leasing," a practice whereby a driver may haul freight for another company under that company's authority. Although the Compa- ny's vice president, Pringle, testified that contrary to the clause, drivers could negotiate their own trip leases, he added that it rarely happened. Terminal Manager Gehrls testified that, to his knowledge, trip leasing occurred only once and that it was arranged by the Company itself and accomplished under the Company's authority. The leases provided that the driver would be paid 80 percent of gross revenue when using his own trailer, and 65 percent of gross revenue when using a company trail- er. In order for a driver to be paid under the lease, the driver was required to submit to the Company a bill of lading, freight bill, timecard, a log for the period cover- ing the trip, a detention ticket (if the driver was unduly detained) signed by the consignee, and a detention ticket with the "authority to unload" section signed and dated. The lease provided for a system of advances of funds by the Company for various reasons and established a pay- back procedure whereby any such advances were de- ducted from the driver's gross receipts. It also provided that the Company would furnish general liability insur- ance for each truck, physical damage insurance for the Company's own trailers, and cargo insurance. An addi- tional termination clause in the lease provided that the Company had a right to terminate the lease upon giving the driver 10 days' notice in the event the driver violated any of the terms or conditions of the lease. This termina- tion clause also provided that the driver could remedy any such violation during the 10-day period after which the lease remained in full force and effect. The lease agreement provided further that the driver "shall per- form any and all work assigned to him by [the Compa- ny's] dispatcher and shall not refuse loads." The testimo- ny and evidence in the case indicated that there had been ° The Company did retain driver McPherson admittedly as an employ- ee As indicated earlier, McPherson has since retired PRECISION BULK TRANSPORT some few exceptions to this "refusal" clause. Driver Denton had apparently refused a load a short time before the hearing of this case and had not yet been disciplined. Driver Schell was allowed to restrict his loads to the Company's primary customer at the Fair Grove Termi- nal, Michigan Sugar Company. Schell was also allowed to generally restrict his driving to the State of Michigan. However, the record reflects that at least one driver was terminated for the failure to make an appointment and because he was undependable. The drivers were to con- duct themselves with customers and shippers in such a manner to reflect credit on the Company's service and it was further agreed that the driver 'would deliver all freight assigned to him as quickly, safely, expeditiously as possible. The drivers were required to comply with all the safety rules of the Company and to further comply with the rules and regulations of the Interstate Commerce Commission (ICC) and all other Federal and state regu- latory bodies. These rules and regulations included cer- tain written requirements by the United States Depart- ment of Transportation (DOT) together with those of the ICC. These agencies, among other things, publish their own safety rules and requirements for inspection and maintenance, and physical conditions, together with providing a training program for safety rules. The driv- ers were to carry full collision coverage on their tractor equipment with a deductible not to exceed $1000 and naming the Company as the insured. Also under the lease, each driver was responsible for selecting his own tractor and equipment, so long as the same complied with Federal and state law. In addition to collision insurance, each driver was required to pay all operating expenses, including expenses for fuel, oil, re- pairs, road taxes, mileage taxes, fuel taxes, fines, licenses, and permits. It was solely the drivers' responsibility to keep up his equipment in conformance with all Federal and state laws and rules. The Company's color scheme and name was required to be on each tractor at all times and the lease provided that if the tractor was driven for personal uses other than hauling freight, that the Compa- ny's name would be covered up. Regarding the matter of replacement or substitute drivers, it occasionally happened that a substitute driver would be obtained when the owner-driver was on vaca- tion or sick. This did not happen often, and the Compa- ny's written policy required the driver to obtain the Company's permission before using a substitute or re- placement driver. The drivers were dispatched by calling the Company's terminal and receiving an assignment. They then proceeded directly to the customer's facility, and the customer generally dictated the time for the pickup and delivery. The driver then delivered the load to the destination point and, on completion of the deliv- ery, the driver is required to call the Company's dispatch office by use of a toll-free number, presumably to receive another trip if time permitted. As counsel are aware in this case, I am duty bound to follow current Board law in deciding these matters. In my opinion, this case falls within the mold of the Board's decisions in Mitchell Bros. Truck Lines, 249 NLRB 476, (1980), and Robbins Motor Transportation, 225 NLRB 761 441 (1976).8 In these cases, the Board held that driver- owners were employees within the meaning of the Act. In its brief, the Company relies in part on the case of A. Duie Pyle, Inc., 606 F.2d 379 (3d Cir. 1979), wherein the circuit court denied enforcement of the Board's order. The Board had found that driver-owners were employ- ees under the Act." In A. Duie Pyle the Third Circuit relied heavily on the fact that the driver-owners regular- ly arranged their own trip leasing without involving the Company. Notwithstanding the fact that I am constrained to follow Board law here, such freedom or frequency in trip leasing was not the case herein as the lease agree- ment definitely prohibited the same, and the evidence re- flects that it rarely occurred, and then only with the con- sent of the Company. In Mitchell and Robbins, the Board disavowed some five earlier decisions which had stated that the imposition of Federal regulations on the parties by governmental fiat is of no great significance in deter- mining employee status. i ° In Mitchell, supra at 481, the Board quoted from an earlier decision as follows: It is irrelevant, in our view, that some of the rules enforced by [the employer] imanate from the Inter- state Commerce Commission, the Department of Transportation , or other government agencies. For, surely, as this record shows, the drivers controlled by [the employer] are not under the aegis of those agencies, but under the complete and operative au- thority of [the employer], subject to losing their em- ployment at the will of [the employer]. I' The Board in deciding Mitchell considered and relied on other factors apart from what it considered to be the "pervasive scheme of governmental regulation ." First the Board noted that the drivers' work was not merely a part of the regular business of the employer, but that it "is" the business of the employer . Second, the Board considered the fact that the employment was of an in- definite nature because of restrictions on trip leasing and the automatic renewal provisions in the lease agreement. Third, the Board considered the fact that trip leasing was infrequent and permission to trip lease was required under the lease agreement, although not specifically re- quired by Federal or state regulations . Finally the Board considered that, although there was no need for actual day-to-day control over the drivers who were constantly on.the road, the Board pointed out that the employer su- pervised the drivers through preventive measures, in- cluding physical exams, regular vehicle inspections, and inspection of the trip reports and settlement statements. The Supreme Court has mandated that the Board should apply the common law agency test in distinguish- ing an employee from an independent contractor. 12 As 8 Regarding the issue at hand, the General Counsel relies heavily on Mitchell In the Respondent's fairly exhaustive brief, neither case is men- tioned 8 236 NLRB 1220 (1978) 10 The Respondent cited all five decisions in its brief I I George Transfer Co, 208 NLRB 494 (1974) 12 NLRB v United Insurance Co, 390 U S 256 442 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the Board stated in Mitchell, it is the right to control and not actual control or supervision which is important, adding that the Board seeks to determine if the employer reserves the right to control the manner and means by which the result is accomplished , or whether it con- cerned itself with results only, leaving the manner and means to the driver. Thus, also involved herein is the question of entrepreneurial control or risk. In its brief, the Company raises the issue and argues that the drivers are independent businessmen whose earnings are depend- ent on their entrepreneurial skill and ability . The Board in Mitchell also considered the issue , indicating that on the surface some facts may suggest that the drivers do operate as independent businessmen. However, the Board considered a number of ways in which both entrepre- neurial freedom and risk are substantially minimized. Among these considerations was the fact that when the drivers worked, they worked only for the employer and, through the exclusive arrangement or lease agreement, the employer ensured that the drivers were regularly available during the workweek . The Board also consid- ered the fact that a driver must purchase a truck which complies with Federal regulations which ensures substan- tial uniformity of equipment , resulting in the fact that the entrepreneurial judgment of the owner-operator is mini- mal in this respect. Additionally, the Board considered that the employer had unilaterally established a percent- age for earnings which the drivers must accept , and the drivers had little or no authority to refuse to haul a load. The Board also considered the fact that although the owner-operator could obtain a substitute driver, that driver must comply with the Federal regulations or he would be unacceptable to the employer. Finally, the Board in Mitchell pointed out that the employer assumed many responsibilities for the owner -operators which minimized the drivers' entrepreneurial risk. These re- sponsibilities included the assumption of risk for nonpay- ment by customers, the providing of fleetwide insurance policies including cargo and liability insurance , and the handling of all bookkeeping for all hauls without any overhead charged to the drivers. The Board further pointed out in Mitchell that the employer depended total- ly on the drivers to perform its business as a carrier, and concluded that this interdependence belies an independ- ent contractor relationship . Thus I find and conclude in this case that the Company's drivers are employees within the meaning of Section 2(3) of the Act. C. The Successor Issue When the Company purchased Harmon Trucking, it also purchased Harmon 's authority (or certificates) to haul various items intrastate which the Michigan Public Service Commission had granted . At the time of the pur- chase, Harmon's only customer was the Michigan Sugar Company, and Harmon , on behalf of Michigan Sugar, delivered its product to various points and customers within the State of Michigan . With the exception of the lease agreements with the drivers, the Company essen- tially changed or altered Harmon 's business in three ways. First, approximately 1 month after the takeover the Company moved its terminal from Caro to Fair Grove, some 7 miles away . Second, the Company ceased to furnish most maintenance on the driver -owned trucks. And lastly, the Company eventually expanded its busi- ness by furnishing services to another customer (other than Michigan Sugar). However, the record reflects that there was no interruption of service to Michigan Sugar and that hauling for Michigan Sugar remained at lease 80 percent of the Company 's business . Also, the Company initially retained all Harmon's employees except for Harmon and his wife . On October 12, the Company's main office received the Union 's letter of October 8, 1982, again requesting recognition and bargaining regard- ing a new contract. On October 12 the Company had still retained four out of six of Harmon's original driv- ers,13 and were in the original bargaining unit of drivers. I find that the Company continued the employing indus- try as of October 4 and thereafter by using substantially the same work force for the same basic purposes for es- sentially the same customer in the same geographical area. I do not believe that the changes made by the Company were of sufficient significance to warrant a finding that the Company is not a successor to Harmon. Accordingly, I find that the Company was a successor employer for the purposes of the Act. NLRB v. Burns Security Services, 406 U.S. 272 (1972); First Food Ventures, 229 NLRB 1228 (1977); Ranch-Way, Inc., 183 NLRB 1168 (1970). It is well established that a successor employer is obli- gated to bargain with a union which is recognized as the majority representative of the employees in the unit to which the employer succeeds, unless it is demonstrated that the union no longer represents a majority of the em- ployees on the date of refusal to bargain, or that the re- fusal to bargain was grounded on a good-faith doubt concerning the union's majority status. First Food Ven- tures, supra; NLRB v. Wayne Convalescent Center, 465 F.2d 1029 (6th Cir. 6, 1972). I find in this case that as of October 4 and October 12 a majority of the unit employ- ees were retained by the Company.14 In view of the above findings, I find and conclude that the Company was obligated to bargain with the Union on and after October 4 and that its refusal to do so con- stituted a violation of Section 8(a)(5) and (1) of the Act.15 First Food Ventures, supra; Maintenance, Inc., 148 NLRB 1299 (1964). D. The Alleged Wrongful Interrogation The complaint alleges that "in or about July, 1982," the Company's admitted agent , Arthur D. Pringle III, coercively interrogated driver Schell, in violation of Sec- tion 8(a)(1) of the Act. Schell testified that sometime in 19 These drivers were Ryan, Schell , Denton, and McPherson Drivers Baranic and Vaughan, who did not originally own their own trucks, had left the Company 14 The earlier contract that Harmon had entered into with the Union provided for union membership as a condition of employment The Com- pany, of course, argues that no majority existed as all the drivers except McPherson had become independent contractors 15 The date of October 4 is used as the Company amended its answer at the hearing admitting that on October 4 it refused to recognize or bar- gain with the Union It was on October 4 that the Company commenced running the business, and also when Union Business Agent Bess asked Terminal Manager Gehrls to sign a recognition letter PRECISION BULK TRANSPORT 443 July he talked with Pringle at the Harmon facility in Caro, Michigan, and that Pringle stated he "didn't want no union, and had no objection to us belonging to the union, and . . . we could have our own union set up ... ." Schell additionally testified that Pringle asked him how he felt about the Union, and that he replied that he had belonged to the Union a long time but was not always 100 percent for it. At the time Pringle was the Company's secretary and he was personally involved in the purchase of Harmon and in the transition. Pringle testified as follows: Q. At anytime when you spoke to Hollis Schell, did you tell him that he could not belong to the Union, to the Teamsters, if he wished to drive for Precision? A. No, I didn't. I credit Schell's testimony completely here, further noting that Pringle was never asked if he, in fact, ques- tioned Schell how he felt about the Union. At the time, Schell was a prospective employee and a unit and union member. In light of the circumstances of this case, in- cluding Pringle's preliminary remarks about unions, I find that Pringle's question about Schell's feelings rela- tive to the Union was coercive and unlawful, and thus I find that the same was violative of Section 8(a)(1) of the Act. 16 CONCLUSIONS OF LAW 1. The Respondent is an employer engaged in com- merce within the meaning of Section 2(2), (6), and (7) of the Act. 2. The Union is a labor organization within the mean- ing of Section 2(5) of the Act. 18 The Company , in its brief, makes no mention whatsoever of the in- cident or the allegation in the complaint The allegation was discussed in the brief submitted by the General Counsel 3. In July 1982 the Respondent Employer improperly interrogated an employee regarding his union sympathies in violation of Section 8(a)(1) of the Act. 4. The Union is, and at all times material was, the ex- clusive collective-bargaining representative of the Re- spondent's employees in the following appropriate unit: All truckdrivers employed by Precision Bulk Trans- port, Inc. at its facility formerly located in Caro, Michigan, and now located in Fair Grove, Michi- gan, but excluding office clerical employees, guards and supervisors as defined in the Act. i 7 5. On and after October 4, 1982, the Respondent un- lawfully refused to recognize and bargain with the Union in violation of Section 8(a)(5) and (1) of the Act. 6. The unfair labor practices found in paragraphs 3 and 5, above, affect commerce within the meaning of the Act. THE REMEDY Having found that the Company has engaged in cer- tain unfair labor practices within the meaning of Section 8(a)(1) and (5) of the Act, I shall recommend that it be ordered to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act, including the posting of a notice and the order- ing of the Company to recognize and bargain collective- ly with the Union, on request, concerning rates of pay, wages, hours, and other terms and conditions of employ- ment, and embody any understanding reached in a signed agreement. [Recommended Order omitted from publication.] 17 As indicated earlier, the appropriateness of the unit was not disput- ed by the Company at the hearing or in its brief, although it was denied in the Company's answer to the complaint The Board has held such a unit to be appropriate for the purpose of collective bargaining Mitchell Bros. Truck Lines, 249 NLRB 476 (1980), Gogin Trucking, 229 NLRB 529 (1977)