Tarheel Coals, Inc.

TARHEE. COALS, INC. Tarheel coals, Inc., Newcon Coals, Inc.; Sigmond Enterprises, a Partnership; Bass Trucking a/k/a Bass Transit, Inc.' and Perry County Coal Haulers Association, Petitioner. Case 9-RC- 12939 December 4, 1980 DECISION AND DIRECTION BY CHAIRMAN FANNING AND MEMBERS PENII I.O AND TRUE-SDAIF Upon a petition duly filed under Section 9(c) of the National Labor Relations Act, as amended, a hearing was held before Hearing Officer Daniel J. Roketenetz of the National Labor Relations Board on June 28 and 29, 1979. Pursuant to Section 102.67 of the National Labor Relations Board Rules and Regulations, Series 8, as amended, by di- rection of the Regional Director for Region 9, this case was transferred to Board for decision. There- after the Employers and the Petitioner filed briefs.2 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 authority in this proceeding to a three-member panel. The Board has reviewed the Hearing Officer's rulings made at the hearing and finds that they are free from prejudicial error. They are hereby af- firmed. Upon the entire record in this proceeding, the Board finds: 1. Tarheel Coals, Inc., a Kentucky corporation, is engaged in the mining and sale of coal from its Bulan, Kentucky, location and surrounding areas. During the past 12 months, a representative period, Tarheel mined and shipped coal directly or indi- rectly in interstate commerce valued in excess of $50,000. Newcon Coals, Inc., a Kentucky corpora- tion, is engaged in the mining of coal for Sigmond Enterprises, an employer engaged in interstate commerce. During the past calendar year, a repre- sentative period, Newcon derived revenues for its services provided to Sigmond Enterprises valued in excess of $50,000. Sigmond Enterprises, a Ken- tucky partnership, is involved in the business of leasing and purchasing coal at its Bulan, Kentucky, location and surrounding areas. During the past calendar year, a representative period, Sigmond purchased coal for shipment directly in interstate commerce having a value in excess of $50,000. Bass Transit, Inc., a Kentucky corporation, has been en- ' At the hearing, the Petiltioner amended its petition hy deleting Sidd Trucking as a named Employer 2 The Petitoner has requested oral argument This request is hereby denied as the record and briefs adequately present the issues and the posi- lions of the parties 253 NLRB No. 71 gaged in the business of providing transportation services for the intrastate hauling of coal for em- ployers engaged in interstate commerce; namely, Tarheel Coals, Inc., Newcon Coals, Inc., and Sig- mond Enterprises. During the past 12 months, a representative period, Bass Transit, Inc., derived in excess of $50,000 for services so provided. The parties stipulated, and we find, that the above Em- ployers are engaged in commerce within the mean- ing of the Act. We further find that it will effectu- ate the purposes of the Act to assert jurisdiction herein. 2. The Employers have declined to stipulate that the Petitioner is a labor organization within the meaning of the Act. 4 3. No question affecting commerce exists con- cerning the representation of employees of the Em- ployers within the meaning of Section 9(c)(1) and Section 2(6) and (7) of the Act. 4. The Petitioner seeks to represent a unit of in- dividuals owning equipment utilized in hauling coal for the above-named Employers in Perry County, Kentucky, and surrounding areas. Petitioner seeks to include in the unit all single truck owner opera- tors and certain single truck owners who do not operate their own equipment. The Petitioner does not seek to represent multiple truck owners nor does it seek to represent individuals operating equipment that they do not own. The Employers contend that the petition should be dismissed be- cause the individuals whom the Petitioner seeks to represent are independent contractors and are not employees within the meaning of the Act. As set forth below, we find that the record supports the Employers' contentions, and accordingly we dis- miss the petition. Tarheel Coals is engaged primarily in the mining of coal. In order to move coal from its mines to tipples, where the coal is processed, Tarheel has utilized a pool of approximately 30 trucks. The trucks in the pool are capable of hauling heavy loads (up to 60 tons of coal) over the rough terrain between the mines ad the tipples. The mines vary in distance from 5 to 25 miles from the tipples. Some of the trucks are driven by owner-operators a The Petitioner contends that the above-named Employers constitute a single and/or joint employer for the purposes of collective bargaining In addition, subsequent to the hearing. the Petitioner filed a motion to amend the petition and name Lost Mountain Mining, Inc.. as a successor to the above-named Employers The Employers denied that they are single and/or joint employers, and Lost Mountain Mining. Inc., filed a motion opposing the Petitioner's request to amend the petition. Further. the parties raised a number of issues regarding the appropriateness of he unit sought by the Petitioner In iew of the dismissal of the petition based on our finding that the individuals whom the Petitioner seeks to represent are independent contractors, we find it unnecessary to resolve any of these issues Ii iess f our dismissal of the petition, we find it unnecessar to determine the Petitioner's status as a labor organization 563 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and some of the trucks are driven by nonowner-op- erators. None of the Employers own any of the trucks. For a number of years Tarheel has had informal oral agreements with each of the truck owners. The oral agreements have been limited to an agree- ment by Tarheel to compensate the truck owners at a specified rate for hauling coal. The oral agree- ments have not set forth any other terms or condi- tions controlling the relationship between the haul- ers and the Employers. The rate at which the haul- ers have been compensated has been based on the type of coal and the distance between the mines and tipples multiplied by the total number of tons hauled per truck. In June 1978, Tarheel contracted with Bass Trucking to provide coal hauling serv- ices. Bass contacted the truck owners and request- ed them to sign a written contract. A number of owners acquiesced and signed the agreement. However, other owners refused to sign the agree- ment. The record indicates that although Bass began to remunerate the truck owners for the serv- ices of their trucks, the truck owners continued to haul coal pursuant to the preexisting oral agree- ment with Tarheel whether or not an agreement had been signed with Bass. For example, the writ- ten agreements between Bass and some of the owners require those owners to carry specified amounts of liability insurance. In practice, howev- er, Bass has not enforced this requirement and none of the truck owners have been required to carry li- ability insurance for their trucks. None of the Employers have ever become in- volved in the purchase or financing of any of the trucks by the owners, and it is clear that the pur- chase of coal hauling trucks involves a substantial capital investment by the truck owners. The Em- ployers maintain no requirements as to the type or condition of equipment used to haul their coal, and the Employers make no inspection of the vehicle. The truck owners are entirely responsible for the maintenance of their equipment and are responsible for all repairs and for all fuel and oil used by the trucks. The Employers have permitted the owners to purchase fuel at a below-market price, but the decision as to where fuel is purchased is entirely within the owners' discretion. The Employers do not require the owners to paint or mark their vehi- cles in any particular manner and the trucks do not carry any markings which indicate any identifica- tion with the Employers. As indicated earlier, some of the owners operate their own equipment while other owners hire driv- ers to operate their trucks. In addition, the owners exercise the right to substitute a driver at any time, and often the Employers do not know the identity of the individual driving a truck. The Employers do not become involved in the employment rela- tionship between nonoperating owners and drivers, and the owners unilaterally set the rates of com- pensation and hire, fire, and discipline their drivers. Regardless of who drives the truck, the Employ- ers compensate the truck owners based on the amount of coal hauled by the trucks. Unlike the other classifications employed by the Employers, the truck owners and/or drivers do not receive sick pay, vacation pay, unemployment, insurance, or any other fringe benefits. The Employers do not withhold taxes or social security, provide no train- ing, and keep no personnel files for the owners and/or drivers. Although the Employers employ individuals with similar skills and responsibilities (rock truck drivers and operators of earth-moving equipment), there has never been any interchange between such individuals and the coal truck driv- ers.5 Originally, the Employers had no set schedule for any of the trucks. Trucks were assigned loads on a indiscriminate basis. Many of the truck owners complained that this system was inequitable and that some trucks were receiving a dispropor- tionate share of profitable loads. Depending on the type of coal and the distance from the mine to the tipple, some loads are more profitable than other loads. In addition, the Employers had an insuffi- cient supply of available coal to keep all of the trucks busy each day, and on a number of occa- sions there was no work available when the trucks showed up at the Employers' facilities. As a result, several years ago, a number of truck owners re- quested the Employers to devise a system that would distribute the loads on a more equitable basis and bring some order to the workplace. Ac- cordingly, with the truck owners' approval, a system was implemented whereby each truck is as- signed a number and loads are scheduled on a nu- merically rotating basis. The hauling schedule for the next day is posted each evening at the Employ- ers' office, and truck owners are able to determine if their trucks are scheduled for hauling by calling the Employers' office or by checking the list. The truck owners, however, retain the right to refuse to haul on any scheduled day. In order to facilitate the scheduling of a replacement, the Employers re- quest that they be notified if a truck is not available for hauling on a scheduled day. Likewise, the Em- ployers permit trucks to work a partial day; how- ' The Employers own the trucks utilized for hauling rock and also own the earth-moving equipment. 564 TARHEEL COALS, INC. ever, for scheduling purposes, the Employers re- quest that they be informed in advance. 6 The Employers determine where the trucks will be loaded and where the coal will be delivered. The Employers also determine the times that the loading of trucks will commence and cease; how- ever, the Employers do not require trucks to report at any scheduled time. Scheduled trucks are loaded on a first come, first serve basis, and the Employ- ers do not keep track of the number of hauls per day nor do they require a specified number of hauls per day. In addition, the Employers control the destination of the coal deliveries; however, they retain no control over the routes to be taken to make the delivery. During inclement weather, the Employers make an initial determination as to whether trucks will be loaded, but the truck owners retain the right to refuse to haul coal on such days, and no owner has ever been penalized for refusing to accept a load during inclement weather. If a truck overturns and loses a load of coal, the Employers do not pay the hauling cost for that load or pay for any damages to the truck. The Employers only compensate the truckowners for completed deliveries of coal to the tipples. The Employers control the amount of coal loaded on the trucks, and on occasion trucks are loaded beyond the legal weight limits permitted on the roads between the mines and the tipples. When local officials have complained about the over- loaded trucks, the Employers have responded by lightening the loads. In addition, the Employers have used their influence to assist truck owners in attempting to reduce fines received for operating overloaded trucks on county and state roads. How- ever, the Employers have never paid any portion of such fines, tolls, or highway use taxes on behalf of truck owners. The Employers pass on warnings received from state and county officials regarding trucks being driven in a reckless manner or at ex- cessive speeds. The Employers, however, retain no control over the manner in which trucks are driven when off company property. The Employers have never penalized a truck owner because of excessive tickets, nor have the Employers ever paid any por- tion of a traffic fine received by truck owners. The Employers on occasion have warned drivers about speeding and driving recklessly on company property. In one instance, after repeated warnings about reckless driving, the Employers canceled an owner-operator's hauling privileges after he had I One owner-operator testified that he was "laid off' for I week be- cause he had left work early. The witness further testified that he ceased hauling at midday without informing the Employers that his truck would not be available for the full day. Witnesses for the Employers testified that truck owners were not penalized for failing to show on a scheduled day or appearing late or leaving early. knocked down the telephone lines to the Employ- ers' main office. On another occasion, the Employ- ers temporarily denied hauling privileges to an owner-operator because that owner-operator had "rudely" interfered with an important business con- versation being conducted by a high official of the Employers. If the Employers are dissatisfied with the per- formance of a driver, the Employers initially warn the driver. If the driver's performance does not im- prove, the Employers complain to the truck owner. If improvement is still not forthcoming, the Em- ployers inform the truckowner that the particular driver will no longer be permitted on company property. The Employers, however, permit the truck owners to substitute a new driver. Witnesses for the Employers testified that similar action has been taken against employees of other vendors pro- viding services for the Employers who have per- formed in an unsatisfactory manner. Witnesses for the Petitioner testified that they have been required to haul gravel and equipment for the Employers without being compensated and that they "believed" that they would be disciplined if they refused such "free hauling requests." Wit- nesses for the Employers, on the other hand, testi- fied that truckowners are paid for hauling gravel to or from the Employers' rock quarry; however, truckowners are not compensated for hauling gravel to repair company roads utilized by the trucks. The record indicates that no truckowner or driver has ever been penalized for refusing to haul gravel. With regard to the hauling of equipment, witnesses for the Employers testified that on occa- sion the Employers have requested, as a favor, that truck owners carry equipment in the cabs of their trucks. These witnesses further testified that on oc- casion truck owners have refused such requests and that no truckdriver or owner has ever been penal- ized for refusing such a request. The Employers retain no control over the truck- owners' right to haul cargo on the return trips from the tipples to the mines. However, because of the relatively short distance traveled and the isolat- ed locations of the Employers' mines, it is unlikely that any cargo would be available for back hauling. The truck owners are not required to haul exclu- sively for the Employers, and a number of truck owners have hauled cargo for other employers. 7 The Employers do not enforce any Interstate Com- merce Commission regulations or any other State ? Several truck owners testified that they have hauled exclusively for the Employers. These truck owners, however, further testified that work in the area has been limited. No truckowner testified that he has been required to haul exclusively for the Employers or that he has been penal- ized for hauling for other companies. 565 DECISIONS OF NATIONAL LABOR RELATIONS BOARD or Federal agency regulations controlling the manner or means by which the truckowners per- form their duties. Analysis and Conclusions In N.L.R.B. v. United Insurance Company, 390 U.S. 254, 256 (1968), the Supreme Court, in agree- ment with the Board, pointed out that the Board "should apply the common-law agency test . . . in distinguishing an employee from an independent contractor." Accordingly, in determining whether an individual is an employee or an independent contractor under the Act, the Board has consistent- ly applied the common-law test of "right to con- trol."8 Thus, the Board finds a relationship to be one of employment where the one for whom the services are performed retains the right to control the manner and means by which the result is ac- complished. On the other hand, the Board finds a contractor relationship where the one for whom the services are performed merely retains control over the result to be accomplished. The application of this test is a difficult process which requires that "all of the incidents of the relationship must be as- sessed and weighed with no one factor being deci- sive."9 In the instant case there are an overwhelming number of factors which indicate that the truck owners are independent contractors. ' The Em- ployers' oral agreements are with the truck owners and not the drivers.' The Employers maintain no personnel files for the drivers or truck owners and often the Employers are unaware of the identity of the individual driving a truck. Significantly, the Employers have no control over the selection of drivers and the owners are free to substitute driv- ers at any time. Regardless of who drives a truck, the Employers compensate the truck owners, and the compensation is based on the amount of coal hauled by a truck, not the number of hours worked by a particular individual. Although the Employers provide fringe benefits, make social security, unem- ployment, and workmen's compensation payments, and withhold taxes on behalf of other classifica- tions of employees, the Employers do none of the above for truck owners. The nonoperator owners are entirely responsible for setting the terms and conditions, hiring, disciplining, and firing non- owner drivers. The Employers have no input as to 8 Air Transit, Inc., 248 NLRB 1302, 1306 (1980). See, generally, Re- statement of Agency 2d §220 (1958). 9 United Insurance Company. supra at 258. 10 See Kentucky Prince Coal Corporation, 253 NLRB No. 70 (1980). for a discussion of similar issues. I As indicated earlier, in some instances the owners operate their own trucks, whereas in other instances the owners hire other individuals to operate their trucks. The Petitioner does not seek to represent any of the nonowners. whether the nonowner drivers receive fringe bene- fits, social security, workmen's compensation, and unemployment benefits, or have taxes withheld on their behalf. Although the hauling of coal is essential to the Employers' operations, the truck owners do not do business in the Employers' name. The trucks have no markings indicating any association with the Employers, and the drivers wear no uniforms indi- cating an association with the Employers. The Em- ployers do not require that a truck haul coal exclu- sively for the Employers and, on a number of oc- casions, owners have hauled coal for other compa- nies. Significantly, the truck owners retain the right to refuse to haul coal for the Employers at any time. The Employers determine the destination and type of coal loaded on the trucks, but such deter- minations are more concerned with the result to be achieved then with the means used to achieve the result. In addition, the Employers do not exert any control over the route that the trucks take in deli- vering the coal. The Employers determine the amount of coal loaded on the trucks and this weight often exceeds weight limits permitted on local roads. The truck owners, however, retain the right to refuse to haul such loads. '2 The Employers have no financial interest in any of the trucks, and it is clear that the trucks repre- sent a substantial capital investment on the part of the truck owners. The Employers make no safety inspections of the trucks and the Employers have no requirements regarding the trucks other than an ability to haul large amounts of coal. The truck owners are entirely responsible for fueling, repair- ing, and maintaining their vehicles. All of these factors are evidence of independent contractor status. The record also indicates that the Employers lack the authority to impose and/or change unilat- erally the truck owners' working conditions. Thus, when Bass Trucking attempted to force truck owners to sign written agreements setting forth new terms and conditions, the truck owners re- fused to sign and/or comply with Bass' written agreement. No action was taken against the truck owners and they continued to operate under the preexisting oral agreements. Such independence is clearly indicative of independent contractor status and not employee status.i 3 Although the Employers determine the times that they will commence and cease loading coal, 12 Georgia Pacific Corporation, 249 NLRB 1280 (1980). 13 Compare with Air Transit, supra, at 1310, where a majority of the Board, Member Penello dissenting, found that an employer's right to uni- laterally impose terms and conditions of employment evidenced employee status. 566 TARHEEL COAILS. INC. the Employers do not require trucks to report or cease hauling at specified times. Rather, scheduled trucks are loaded on a first come, first serve basis, and owners and/or drivers are not required to keep specified hours. As indicated earlier, the scheduling system utilized by the Employers was devised at the request of the owners in order to distribute loads on a more equitable basis and to create a more orderly workplace. In view of the truck owners' right to decline work at anytime, it is clear that the truck owners, not the Employers, deter- mine when a truck will be available for hauling. 4 Thus, the scheduling system amounts to little more than a routine method of distributing work, and the Employers' request that they be notified if a sched- uled truck is unavailable for hauling evidences an extension of courtesy between contractors doing business with each other and merely provides a degree of order benefiting all of the parties. Ac- cordingly, we find that the Employers' scheduling system is not indicative of employee status. ' Another significant indication of employee-inde- pendent contractor status is the authority to exer- cise discipline. Although a contractor can inform an independent contractor of its general business standards and a contractor can discontinue the con- tract if the standards are not met, a contractor cannot discipline an independent contractor for failing to comply. In the instant case, the record fails to establish that the Employers have exercised any disciplinary authority. Thus, as indicated earli- er, the Employers maintain no personnel records and often are unaware of the identity of the indi- vidual driving a particular truck. The Employers do not keep track of the number of trips made by a particular driver, and efficient drivers are not re- warded and inefficient drivers are not punished. The truck owners retain the unilateral right to de- termine who drives their trucks and they are free to substitute drivers at any time. Although the Employers require that trucks be driven in a safe and prudent manner while on the Employers' property,' 6 the Employers exert no ]4 Georgia Pacific Corporation. supra 1' See, generally, Restatement of Agency 2d. $220 comment at 491 which indicates that rules made for the general policing of the employer's workplace are not indicative of employee status '6 As indicated previously, if the Employers are not satisfied with the performance of a truckdriver, initially they will communicate their dissat- isfaction to the driver If a driver's performance does not improve, tile Employers communicate their dissatisfaction to Ihe truck oners On oc- casion the Employers have permanently or temporarily denied hauling privileges to drivers who continued to perform in an unsatlsfactory manner In such instances, however, the Employers have permitted the truck owners to substitute a different driver in order to continue hauling coal for the Employers The record further reveals that the Employers have denied access to their property to employees of endors other than control over the manner in which trucks are driven or drivers perform away from the Employers' property. Thus, the Employers have not disciplined drivers because of traffic violations or reports of reckless or unsafe driving off of the Employers' premises. Similarly, the Employers do not disci- pline truck owners or drivers who have been fined for driving overweight trucks on county or state roads. 17 The truckowners are entirely responsible for the manner in which the trucks are driven away from the Employers' premises. In reaching our conclusion that the truck owners sought by Petitioner are independent contractors, we have not ignored certain factors indicating em- ployees status. Thus, the truck owners perform functions essential to the Employers' operations. The Employers set the hauling rates. There is no evidence that the truck owners require any special qualifications or training, and some of the truck owners have a continuing relationship with the Employers. However, the instant case is distin- guishable from other recent cases wherein we have found employee rather than independent contractor status. Unlike Air Transit, supra, the Employers herein retain no control over the right to substitute drivers, unilaterally change or impose working conditions, discipline truck owners or drivers, or control the performance of drivers or truck owners away from the Employers' premises. Similarly, there is no evidence here of the extensive govern- ment regulations which introduced many of the elements of employment into the working relation- ship in Mitchell Bros. Truck Lines, 249 NLRB 476 (1980). Rather, like our recent decisions in Ken- tucky Prince Coal Corporation, supra, and Georgia Pacific Corporation, supra, the record as a whole in- dicates that the Employers here do not retain con- trol over the manner and means by which the truck owners haul coal and that, therefore, the truckowners do not have an employment relation- ship with the Employers. 8 truck owners who have performed in an unsatisfactory manner. Such iso- lated incidents do not evidence the imposition of discipline Rather, they are indicative of a contractor's requirement that nonemployees conform with general rules established to police a contractor's premises See, gen- erally. Restatement of Agency 2d, §220, 2(l) at 491 ' We do not find that he passing along of warnings that officials or residents have complained about speeding or overloaded trucks indicates that the Employers exert disciplinary control over the truck owners. ' Memhber Penello agrees that the coal haulers are independent con- tractors In reaching this result he finds it unnecessary to distinguish this majority's finding from .4ir 7nit, upra. in hich he dissented from the majority's finding that certain taxicab drivers were not independent con- Iractors 507 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In view of all the foregoing, we find that the truck owners sought by the Petitioner to be inde- pendent contractors rather than employees. Ac- cordingly, we shall dismiss the petition. ORDER It is hereby ordered that the petition herein be, and it hereby is, dismissed. 568