Roadway Package System, Inc.

196 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Roadway Package System, Inc. and General Drivers, Warehousemen and Helpers, Local 89, affiliated with the International Brotherhood of Team- sters, Chauffeurs, Warehousemen and Helpers of America, AFL-CI0, 1 Petitioner. Case 9- RC-15118 March 24, 1988 DECISION ON REVIEW AND DIRECTION OF ELECTION BY CHAIRMAN STEPHENS AND MEMBERS BABSON AND CRACRAFT On July 24, 1987, the Regional Director for Region 9 issued a Decision and Order in which he dismissed the petition based on his finding that the Employer's pickup and delivery (P&D) drivers at its Louisville, Kentucky terminal 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 Regional Director's Deci- sion and Order, contending that P&D drivers are employees within the meaning of the Act. The Board, by unpublished order dated November 10, 1987, granted the request for review. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. We have considered the entire record in this case, including the briefs on review filed by the Employer, who contends the drivers are independ- ent contractors, 2 and by the Petitioner. We con- clude, contrary to the Regional Director, that the P&D drivers sought in the petition are employees within the meaning of Section 2(3) of the Act.3 The Employer is engaged in the transportation of small packages through an interstate network of terminals and hub facilities. Packages are tendered by shippers to P&D drivers, brought to a terminal, loaded into tractor-trailers, and hauled to one of the Employer's hubs. Packages are sorted at the hub, loaded into tractor-trailers for transport to re- spective terminals, and then unloaded into P&D drivers' vehicles for delivery to customers. The P&D drivers sought in this petition operate out of the Louisville terminal. Packages are hauled to and On November 1, 1987, the Teamsters International Union was read- mitted to the AFL—CIO Accordingly, the caption has been amended to reflect that change 2 The Employer has requested oral argument The request is denied as the record and briefs on review adequately present the issues and the po- sitions of the parties 3 The Petitioner seeks a unit of truckdnvers The parties stipulated to the exclusion of salesmen, package handlers/sorters who work on the dock, and office clericals. from the Columbus, Ohio hub. 4 According to testi- mony, the Employer, as an interstate motor carrier, is licensed by the Interstate Commerce Commission (ICC) and subject to its regulations. The Employer also is subject to regulations of the U.S. Depart- ment of Transportation (DOT). At the Louisville terminal, P&D drivers current- ly commence sorting and loading packages into their vehicles at 6:30 a.m., Monday through Friday. Although the starting time is agreed on by vote of the drivers, the Employer's management had decided that sorting and loading must begin in the morning, and take place Monday through Friday. The drivers depart between approximately 8 and 9 a.m., spending the morning making deliv- eries. By early to midafternoon, drivers begin in- corporating pickups with deliveries. After pickups and deliveries are made, the drivers return to the terminal, and the packages are sorted, loaded, and taken by line-haul to the hub for national distribu- tion. To operate as a P&D driver, each driver must obtain a truck. Although prospective drivers are not restricted to any particular source, the Employ- er maintains vehicles onsite that drivers can "pur- chase or lease." Approximately 12 of the 14 P&D drivers obtained their vehicles from this source. Eleven of those twelve drivers purchased or leased their vehicle through the General Electric Credit Corporation (GECC). The precise details of the ar- rangement between the drivers and GECC are not clear from the record. Of five drivers testifying, four (including one terminated driver) stated that they leased their vehicles through GECC. The forms necessary to lease or purchase through GECC are maintained at the terminal, and the ter- minal manager forwards applications to GECC for its approval. According to one driver, the lease provides for a $521 monthly payment with a "bal- loon payment" of 20 percent of the purchase price at the end of the term. On the termination of their relationship with the Employer, two drivers were released from their obligation under the arrange- ment with GECC. The vehicles were transferred to the Employer for resale or assumption of the lease by other drivers. The transfers occurred almost simultaneously with the terminations.3 Each P&D driver must sign an "Operating Agreement and Equipment Lease." According to the Employer's manager of legal affairs, the lease is required by ICC regulations and provides that the 4 The tractor-trailer or "Ime-haul" drivers operating between the ter- minal and hub are not sought as part of this unit. 5 The terminated drivers were not required to give up their lease with GECC. However, there is no evidence that any former Louisville drivers have continued the arrangement with GECC after leaving the Employer. 288 NLRB No. 22 r, ROADWAY PACKAGE SYSTEM 197 Employer will have exclusive possession, control, and use of the equipment. Drivers, however, are permitted by the Employer to use their vehicles for personal and other commercial purposes. Such use by Louisville P&D drivers usually has been limited to personal errands. According to the agreement and testimony, the driver is responsible for, inter alia, cost of vehicle maintenance, fuel, taxes and fees, licenses and permits, insurance, workers' com- pensation, all expense and payroll deductions for any individuals hired by drivers, indemnification of the Employer for various claims, and maintenance of an escrow account to cover any indebtedness to the Employer. The driver also must maintain equipment and provide vehicle identification in ac- cordance with applicable laws and the Employer's standards, prepare various logs and reports, pre- pare and present for signature various shipping documents, return all undelivered packages with explanatory notations, and maintain personal and vehicle appearance. The contract states that the driver agrees to provide pickup and delivery serv- ices within the Louisville terminal service area. An addendum specifies various compensation rates. The agreement is assignable only on consent of both parties and is terminable without cause. The Employer reports the driver's income to the Inter- nal Revenue Service as an independent contractor and does not withhold various payroll taxes. Driv- ers must be qualified under DOT regulations and must take a drug test. The Louisville terminal manager decides in which geographic area drivers will operate. These areas consist of one or more "core zones" compris- ing postal zip codes and are homogeneous regard- ing the density of the Employer's business. Al- though drivers may offer input and make sugges- tions, the assignment is not negotiated, and the ter- minal manager makes final decisions if a dispute arises. Within assigned areas, drivers decide which routes to take to make stops. P&D drivers have no proprietary interest in assigned areas. Drivers are compensated for each stop and each package delivered or picked up. Drivers also are paid a per package handling rate for loading and unloading. A further component of compensation is the "daily core zone" rate. Each core zone has its own rate based on various factors including density of business and difficulty of operation. Drivers re- ceive a pro rata amount based on the number of stops and packages delivered and picked up in each zone. The core zone rates supplement the package/stop rates and serve to balance income across various areas. Although drivers may suggest rate changes, the Employer's regional and corpo- rate offices make all decisions regarding compensa- tion and do not negotiate with the drivers. Drivers also have no control over the rates charged to the Employer's customers. The Employer assists new P&D drivers by offering a startup loan of $130 per day up to $650 per week for the first 13 weeks of operation. Drivers receive a weekly "settlement" in which the drivers are paid under the compensation formula, minus deductions for various expenses the drivers are responsible for under the contract. The various shipping documents and logs filled out by the drivers are used for ICC reporting require- ments and also by the Employer for computing compensation and keeping track of packages. The number of packages assigned for delivery or pickup, with few exceptions, is controlled by the Employer. Packages loaded for delivery by P&D drivers come solely from the Employer's line-haul each morning. Pickups usually are arranged by the Employer. The number of packages assigned to a driver may be affected by what is termed a "flex." Flexing means that the terminal manager, and sometimes the drivers, will transfer areas, stops, or packages for delivery to other drivers when a driver is overloaded, a delivery is inconvenient, or a driver fails to report for work. A flex, however, is usually temporary. Drivers also may affect the number of future customers for the Employer in their area by turning in sales leads to the salesmen. Sales leads total only one or two a week, however, and the drivers receive no commission for leads. Drivers rarely refuse to make a pickup. Moreover, the Employer's policy is that drivers should at- tempt to deliver all packages assigned each day and attempt to meet pickup times as much as possible. Unlike admitted employees of the Employer, drivers receive no vacation, sick days, or health benefits. When they are unable to work, drivers are responsible for securing and paying a "replace- ment" who must be qualified under DOT regula- tions. Drivers testified that the terminal manager has provided names of individuals who have been used as replacements by the drivers. Drivers also occasionally hire "helpers" or "jumpers" to assist them. Although the replacements and jumpers re- ceive a daily rate sometimes suggested by the ter- minal manager, the P&D drivers are free to pay them a different rate and have done so. The termi- nal manager often is unaware that a jumper is being used. The Employer also uses "temporary" drivers for overflow work that cannot be handled by the permanent drivers. Temporaries also some- times substitute for absent drivers. The temporary drivers are supplied by a temporary agency. The Employer pays the temporary agency, which in turn pays the temporary drivers. The temporary drivers operate vehicles rented by the Employer. 198 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD There were no temporary employees at the time of the hearing. In addition to the appearance standards in the agreement, drivers are required to wear uniforms which they must purchase. Although this require- ment is not always enforced, the Employer's termi- nal manager testified that the Employer expects drivers to wear uniforms and most do. Although no particular size or type of vehicle is mandated, step-type vans usually are used and the Employer requires specific colors and use of its particular logo. The Employer has no established disciplinary system. However, the terminal manager has ad- monished drivers for being late. Moreover, the contracts of two drivers were terminated for late- ness and repeated absences without supplying re- placements. The Employer also represents in an in- formation manual for P&D drivers that it maintains a detailed five-step "Fair Treatment Procedure" for questions or complaints. The Board applies the common law right-of-con- trol test to determine whether individuals are em- ployees or independent contractors: Under this test, an employer-employee rela- tionship exists when the employer reserves the right to control not only the ends to be achieved, but also the means to be used in achieving such ends. On the other hand, where control is reserved only as to the result sought, an independent contractor relationship exists. The resolution of this question depends on the facts of each case, and no one factor is determinative. Amber Delivery Service, 250 NLRB 63, 64 (1980), enfd. in relevant part 651 F.2d 57 (1st Cir. 1981). Moreover, for an independent contractor relation- ship to exist, the arrangement most typically should exhibit entrepreneurial or proprietary characteris- tics. Mission Foods Corp., 280 NLRB 251 (1986). The Regional Director found that the P&D driv- ers have an entrepreneurial interest in their con- tractual relationship with the Employer because their efficiency of operation and ability to minimize costs will affect their income. He further found that they have substantial control over the means by which they accomplish their work including se- lecting their own routes, shifting packages between one another, employing helpers and replacements, taking breaks at their discretion, and having the ability to perform personal or commercial business during the workday. The Regional Director also found the control the Employer does exert over drivers is imposed primarily by its need to comply with ICC and DOT regulations. Contrary to the Regional Director, we find that the P&D drivers bear few of the risks and enjoy little of the opportunities for gain associated with an entrepreneurial enterprise. Although drivers are responsible for various vehicle-related costs, the Employer establishes and regulates most matters es- sential to the drivers' livelihood. The Employer controls the number of packages and stops, assign- ment of service areas, cost of service, and compen- sation. Although drivers may flex packages or areas to other drivers, such transfers are only tem- porary, and in fact serve to equalize the workload between drivers. Although drivers turn in sales leads, the volume is not substantial and drivers re- ceive no commissions. Moreover, drivers enjoy no proprietary interest in the areas which they service. The core zone supplement rate further minimizes risk and opportunity for gain because it effectively balances the drivers' incomes across various zones. Risk also is minimized by the Employer's startup loan program which guarantees $650, in gross income per week for the first 13 weeks of employ- ment. Most drivers obtain vehicles made available by the Employer through an arrangement with GECC. Risk under this arrangement is minimal as the only drivers terminated by the Employer were simultaneously released from their financial obliga- tion to GECC. The record also establishes that the Employer has substantial control over the manner and means of performing the pickup and delivery of packages, and without regard to Government-imposed con- trols. Thus, the Employer controls the daily regi- men of P&D drivers by requiring morning deliv- eries, afternoon pickups, and a return to the termi- nal by late afternoon. This routine is assured by the early morning delivery and the afternoon pickup of packages by the line-haul. The Employer has ad- monished drivers for being late for the morning sort. Although lacking any formalized disciplinary system, the Employer has discharged drivers for lateness and failure to report for work. Although the Employer's requirement respecting uniforms is not always enforced, drivers are expected to comply and most do. Vehicles must meet the Em- ployer's color requirements and display its logo. The Employer's information manual for P&D driv- ers represents that the Employer maintains a griev- ance-type procedure for drivers. Although some paperwork is necessary for Federal regulatory compliance, other paperwork fulfills only the Em- ployer's requirements, including information neces- sary to compute compensation and keep track of packages. Although drivers use replacements and helpers, such authority does not preclude employee status. See Mission Foods Corp., supra; H & H Fret- , ROADWAY PACKAGE SYSTEM 199 zel Co., 277 NLRB 1327 (1985), enfd. 831 F.2d 650 (6th Cir. 1987). Moreover, although the drivers are free to use their vehicles for other purposes, such uses have been limited to personal errands. In any event, we do not find this option to be controlling. We recognize, as is normal in this type of case, that there are factors that support independent contrac- tor status, namely, the drivers' responsibility for ve- hicle expenses, workers' compensation and unem- ployment compensation; the lack of wage with- holdings or benefits accorded other employees; and the drivers' limited ability to flex and turn in sales leads. In our opinion, however, these do not out- weigh the Employer's significant control over the manner and means of performing the pickup and delivery of packages and the drivers' relative lack of entrepreneurial freedom. Based on these facts, we find that the P&D driv- ers are employees within the meaning of Section 2(3) of the Act. Mission Foods Corp., supra; Amber Delivery Service, supra. As we have concluded that the P&D drivers are employees, the Regional Director's Decision and Order is reversed and the petition is reinstated. Ac- cordingly, we find that the following employees of the Employer constitute a unit appropriate for the purpose of collective bargaining within the mean- ing of Section 9(b) of the Act:6 All truckdrivers at the Employer's Louisville, Kentucky terminal excluding package han- dlers/sorters, salesmen, office clericals, guards and supervisors defined in the Act. [Direction of Election omitted from publication.] 6 The record is insufficient to determine whether the temporary driv- ers (if any are employed) and replacement drivers are employees of the Employer and should be included in the unit Accordingly, they are per- mitted to vote under challenged ballot.