Mission Foods Corp.

MISSION FOODS CORP. Mission Foods Corporation and Salesdrivers, Help- ers and Dairy Employees Union Local No. 683, a/w the International Brotherhood of Team- sters, Chauffeurs, Warehousemen and Helpers of America, Petitioner. Case 21-RC-17572 6 June 1986 DECISION ON REVIEW AND ORDER BY CHAIRMAN DOTSON AND MEMBERS DENNIS AND BABSON On 7 May 1985 the Acting Regional Director for Region 21 issued a Decision and Order in which she dismissed the instant petition based on her find- ing that the Employer's "jobbers" (route salesmen) were independent contractors and not employees within the meaning of Section 2(3) of the National Labor Relations Act. In accordance with Section 102.67 of the Board's Rules and Regulations, the Petitioner filed a timely request for review of the Acting Regional Direc- tor's decision, contending that these individuals are employees. The Board, by mailgram dated 2 July 1985, granted the request for review. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the entire record in this case, including the Employer's brief on review, and concludes, contrary to the Acting Regional Director, that the petitioned-for individuals are em- ployees within the meaning of Section 2(3) of the Act.' The Employer is engaged in the manufacture and distribution of tortillas and related Mexican food products throughout California. It maintains a warehousing operation and delivers its products to its retail customers through jobbers, who are re- sponsible for selling the Employer's products in as- signed territories. The Employer maintains that the jobbers are independent contractors and not em- ployees, and distinguishes its relationship with these jobbers from its relationship with the "com- pany drivers" it also employs.2 The Employer's sales manager testified that the distribution system was 95-percent jobber at the time of the hearing, although it is clear from the record that the Em- ployer often has switched these individuals back I Petitioner seeks to represent approximately 12 jobbers and I ware- houseman The parties agreed that the warehouseman is an employee of the Employer properly included in any unit found appropriate. 2 In addition to jobbers and company drivers, the Employer also uti- hzes "distributors" to service certain outlying areas. These distributors "carry their own paper"-which we assume to mean handle their own billings-and, unlike the jobbers, are not prohibited from handling, and indeed do handle, a variety of other products in addition to those pro- duced by the Employer As of the date of the hearing , however, no dis- tributors were working out of the facility involved herein. 251 and forth from employee or company driver status to jobber status. The record shows that the jobbers currently are paid a straight 14.5-percent commission on sales (a percentage which the Employer unilaterally has changed on occasion); receive no fringe benefits, sick days, vacations, or holidays; must purchase their own vehicles or lease them from the Employ- er; and are responsible for maintenance, fuel, and insurance costs. They are not carried on the Em- ployer's payroll, and no deductions are taken for taxes or workers' compensation. They cannot sell their routes, and they must sign a "Jobber's Agree- ment," which has no expiration date but provides for termination for cause. The company drivers, on the other hand, are supplied trucks, maintenance, and fuel; receive holiday, vacation, and sick pay; earn a salary of $300 a week plus commission; are paid expenses; do not work on Wednesdays; and must fill out settlement and order sheets and turn in cash daily. The Employer assigns jobbers specific routes, which they may run in any order they wish. The record shows that the Employer frequently adds or removes stops from routes on a unilateral basis; gives specific instructions about how the routes are to be serviced (including setting a mandatory number of store visits per week for the large retail chains); provides schematics for product-stocking; adds unordered products to jobbers' orders which they are expected to sell ("plussing"); and disci- plines the jobbers with threats of fines or loss of loading privileges. The Employer's witness testified that there is no daily supervision of the jobbers. Although it is not usual to have anyone ride along with a jobber, branch managers may monitor company drivers by observing "work ethics" and driving habits. The Employer reviews the performance of both jobbers and company drivers in a "route sales personnel report," which analyzes an entire route to see if it is up to company standards in such areas as mer- chandising techniques, condition of racks in stores, proper ordering procedures, and "cleanliness of routes." Although a company driver may not refuse to service an account, jobbers may refuse unless it is a major (chain store) account which constitutes 90 to 95 percent of each jobber's terri- tory. The jobbers may hire helpers and set their com- pensation without the Employer's approval. The record shows, however, that helpers seldom are utilized and, even when a jobber chooses to use a helper, on occasion the Employer has required that the jobber "remove" or not use the jobber's chosen helper. The record also shows that the Employer 280 NLRB No. 26 252 DECISIONS OF NATIONAL LABOR RELATIONS BOARD has terminated 7-10 jobbers in the last 4-5 years in Southern California for unsatisfactory performance. Approximately 7 or 8 of the Employer's 12 job- bers purchased their trucks directly from the Em- ployer, some with loans from the Employer. Those jobbers who do not so purchase their trucks are re- quired to lease them from the Employer. The Em- ployer retains the option to repurchase the trucks that it sold if the jobber leaves; and if the jobber wishes to keep the vehicle, all loans must be paid in full. The trucks are sold with the Employer's logo, and the jobbers are encouraged to keep the logo but are not required to do so . In the past, uni- forms were required and deductions from pay were made for them. The Employer, however, no longer requires that the jobbers wear uniforms . Lastly, the Employer issues written warnings to jobbers for such infractions as selling "out of code" products or failing to serve a customer . These warnings are closely followed up by the Employer and, if not corrected, the jobber is terminated. The Acting Regional Director found that the factors which would support a finding of employee status-the jobbers' lack of a proprietary interest in their routes and the Employer's complete control over prices-did not outweigh the factors support- ing a finding of independent contractor status, in- cluding the jobbers' freedom to run their routes in any order they wish, the lack of daily supervision or monitoring of their work, the independent hiring and compensation of helpers, and the lack of fringe benefits received from the Employer, together with the "Jobbers Agreement" which holds out these jobbers as independent contractors. Contrary to the Acting Regional Director, we agree with the Petitioner that although the Jobbers Agreement, on its face, is indicative of an inde- pendent contractor arrangement between the Em- ployer and the individual jobber, the record clearly establishes that the Employer retains the right of control over the manner and means by which the jobbers perform their jobs. Further, we find that the jobbers' arrangement with the Employer lacks any of the basic entrepreneurial or proprietary characteristics found in true independent contrac- tor relationships. The Employer alone sets and makes adjustments to the jobbers' routes, sometimes after requests by the jobbers and at other times over the objections of jobbers; determines the frequency of calls upon major (chain store) accounts, which constitute ap- proximately 90 to 95 percent of the dollar volume in each territory, and gives detailed instructions re- garding servicing and stocking of each account; sets all prices; adds unordered merchandise to the jobbers' orders, which the jobbers are required to sell; and often has switched jobbers back and forth between company driver and jobber status accord- ing to what it felt was most advantageous to the Company at that particular time. The Employer also disciplines the jobbers through written warn- ings and threats of loss of loading privileges. Fur- ther, although the jobbers may purchase or lease their trucks, if they lease they must do so through the Employer. The Employer retains the option of repurchasing any trucks it "sold" to the jobber in the event the jobber leaves. Although the jobbers are responsible for their own vehicles and, with some restrictions exercised by the Employer, may hire and use helpers on their routes, they do not have a proprietary interest in those routes as they cannot sell them, and the Employer may change them unilaterally and without notice to, or further recourse by, the affected jobbers. Accordingly, based on the facts detailed above, we find that the Employer's jobbers are employees within Section 2(3) of the Act and not independent contractors. Compare NLRB v. Amber Delivery Service, 651 F.2d 57 (1st Cir. 1981), enfg. 250 NLRB 63 (1980), H & H Pretzel Co., 277 NLRB 1327 (1985), and Atlantic Interstate Messengers, 274 NLRB 1144 (1985), with Checker Cab Co., 273 NLRB 1492 (1985), and Air Transit, Inc., 271 NLRB 1108 (1984). Therefore, as we have concluded that the job- bers are employees, we find the petitioned-for unit appropriate for the purpose of collective bargaining within the meaning of the Act. Accordingly, the Acting Regional Director's Decision and Order is reversed, and we shall reinstate the petition and remand the proceeding to the Regional Director for further appropriate action. ORDER The petition in Case 21-RC-17572 is reinstated and remanded to the Regional Director for appro- priate action.