Chemical Leaman Tank Lines, Inc.

National Labor Relations Board - Board DecisionsFeb 26, 1964

146 N.L.R.B. 148 (N.L.R.B. 1964)

148 DECISIONS OF NATIONAL LABOR RELATIONS BOARD basis of a trip rate determined by the lessee's rate schedule, as com- pared to a percentage of the gross realized on each haul, in that case. I am satisfied that because the owner-drivers here make the same investment, pay virtually the same costs, and take similar risks, their opportunities for increasing their profits by the use of their own judgment are not significantly diminished by their method of compensation. Moreover, the owner-drivers' relationship to their drivers is virtually identical to that in the Chemical Leaman Tank Lines case. As I would therefore find, for the reasons given in my dissent in'that case, that the owner-drivers are independent contrac- tors and that the nonowner-drivers are their employees, it follows that the individuals in both groups are not employees of the Employer in this proceeding, and the Regional Director properly dismissed the petition. MEMBER JENKINS took no part in the consideration of the- above Decision on Review and Direction of Election. Chemical Leaman Tank Lines, - Inc. and Truck Drivers Local No. 348,, affiliated with International Brotherhood of Team- sters, Chauffeurs, Warehousemen & Helpers of America, Peti- tioner. Case No. 8-RC,-5019. February 26,-1964 DECISION ON REVIEW AND DIRECTION OF ELECTION On April 8, 1963, the Regional Director for the Eighth Region issued a Decision and Order in the above-entitled proceeding finding that all the drivers sought by the Petitioner, except three, were either independent contractors or the employees of independent contractors and therefore not employees of the Employer. With respect to the three individuals mentioned above, he found that two were tem- porary employees and that all parties agreed that the third was an employee. On the basis of these findings, the Regional Director concluded that since there existed only a one-man unit, no question of representation was. presented. Accordingly, he dismissed the petition. Thereafter, the Petitioner, in accordance with Section 102.67 of the Rules and Regulations, Series 8, as amended, filed with the Board a request for review of such Decision and Order. The Em- ployer filed a statement in opposition to the request for review. The Board by telegraphic order dated May 2, 1963, granted the request for review. The Employer filed a motion to present its views in oral argument as to why the Petitioner's request should be denied. 146 NLRB No. 18. CHEMICAL LEAMAN TANK LINES, INC. 149 The Board has considered the entire record in this case and makes the following findings : 1 The Employer is engaged in the transportation of liquid chemicals, petroleum, and cement. It maintains two terminals in Barberton, Ohio one, the liquid terminal involved in the instant proceeding; the other, a cement terminal where the Employer owns its tractors driven by its employees represented by a labor organization not a party herein. With the exception of 1 Employer-owned tractor used in liquid hauling and the tractors assigned from its cement terminal, the Employer's liquid fleet terminal consists of approximately 17 tractors for over-the-road hauling which are furnished by 9 indi- viduals, herein called the Owners, under a leasing agreement. These leased vehicles are driven by (1) owner-drivers who own one trailer leased to the Employer; .(2) multitractor owner-drivers who own more than one tractor and drive one of them; and (3) nonowner- drivers.who drive tractors owned by the multiple owners. Some of the important aspects of the lease and working relationship between the Owners and the Employer are as follows : (1) The Owner is responsible for all maintenance costs of the leased_ equipment, and must furnish all gas and oil, although he is encouraged to utilize the Employer's facilities;. (2) the Owner must display the Employer's name and color on the equipment, and all drivers of such equipment wear special safety clothing which is furnished at the Owner's ex- pense; (3) the, Owner must furnish acceptable drivers whose ap- plication for employment, forms are supplied, reviewed, and retained by the Employer. In addition, drivers are required to undergo physi- cal examinations by a doctor generally chosen by the Employer, al- though examinations by other doctors have been accepted; (4) the Owners withhold and pay all necessary taxes arising out of the em- ployment of drivers, but quarterly reports are made to the Employer showing that all necessary payments and deductions have been made; (5) the Owner must furnish at his expense all licenses, fees, and per- mits required. to operate the equipment. In addition, the Owner must maintain -fire, theft, and collision insurance on the leased tractor and is responsible to the Employer for all costs and expenses incurred by the. Employer such as shortage, spillage, and/or contamination of the products being delivered; (6) the Employer furnishes and pays the cost of public liability, property damage, and cargo insurance on the Owner's equipment. However, the Owner is responsible for the first $250 of damages to any Employer-owned trailer while in the custody of the Owner; (7) the Employer may sublease the lessor's equipment 'As we are of the opinion that the Regional Director's Decision and Order , the Peti- tioner's request for review , the briefs of the parties , and the record as a whole sufficiently present the issues, we deny the Employer 's request for oral argument before ' the Board. 150 DECISIONS OF NATIONAL LABOR RELATIONS BOARD where permitted by applicable law and regulations; (8) as compensa- tion, the Owners receive an agreed percentage of the gross obtained from each load their equipment hauls; and (9) the lease is termin- able by either party upon 30 days' written notice. _ Dispatching is controlled by the Employer and, as far as prac- ticable, is made on a. rotating basis. After a load has been delivered, a driver is required to call the nearest terminal of the Employer so that a return load, if any, can be assigned. If the Employer has no return order, work cannot be solicited and the trailer is returned empty. Owners are generally free to choose their own routes and to decide whether to use a helper, but in certain cases the Employer can require that the Owners furnish two drivers with no increase in the percentage of revenue paid the Owner. The Employer maintains a safety patrol in conjunction with other trucking firms as part of a cooperative program. If an Owner or driver of leased equipment is operating improperly, the Employer is notified and the matter is in turn discussed with the Owner. Before they begin work the Employer gives the owner-drivers and other drivers a six-page document' titled "Uniform Rules sand Regula- tions," which is a schedule of disciplinary penalties, ranging from warning to discharge for the omissions or commissions of acts relating to driving, care of equipment, personal conduct, and schedules. The Owners and drivers also receive a 29-page booklet entitled "Driver's Manual of Instructions" which covers company regulations, personal conduct, rules for safe driving, inspection and care of equipment, duties in case of accident, fire prevention, procedures under a monthly accident review board, and reports and forms. Although the Em- ployer contends that the above rules, regulations, and instructions are not enforced, the record does not show. that the above document and booklet were ever withdrawn and it further shows that one driver received the above material as recently as 1962. Although nonowner-drivers are subject to the Employer's approval before employment and may be disciplined by the Employer, multiple owner-drivers have the power to hire and fire drivers of their tractors. 'Moreover, the record indicates that the multiple owner-drivers re- sponsibly direct such drivers and that such authority is exercised not only for the purpose of protecting the equipment involved, but also to be certain that the work assigned is properly performed. Applying the common law "right of control" test to the relationship of the. Employer and Owners, we are persuaded on the record as a whole, and particularly on the following facts, that the Owners are not independent contractors 2 2 See, e.g., Bowman Transportation , Inc., 142 NLRB 1093 ; Reisch Trucking and Trans- portation Co., Inc ., 143 NLRB 953 ; Western Nebraska Transport Service, Division of Consolidated Freightways . 144 NLRB 301; and National Freight, Inc., 146 NLRB 144, issued the same day as the instant case. CHEMICAL LEAMAN TANK LINES, INC. 151 (1) The Owner must display the Employer's name and color on the equipment and all drivers are required to wear special safety clothing; (2) application for employment forms are supplied and reviewed by the Employer, and if a dispute arises as to the competency of a driver, the Employer's judgment prevails; (3) all assignments are made by the Employer's dispatcher who also dispatches the Em- ployer's admitted employees; (4) drivers must keep in constant touch with the nearest terminal after shipment is made so as to be available for a return load, and if there is no return order, work cannot be solicited; (5)' the Employer can require that the owner furnish two drivers with no increase in the percentage of revenue to be received; (6) the Employer supports a safety patrol which checks on the method by and manner in which drivers perform their work, and if an Owner or nonowner-driver of leased equipment is operating improperly, the Employer discusses this with the Owner; and (7) the document and manual are given to drivers at the time of their employment which regulates the conduct of the drivers in minute and comprehensive detail. In view of the foregoing we conclude, contrary to the Regional Director, that the owner-drivers and nonowner-drivers are employees of the Employer within the meaning of the Act. Although the mul- tiple owner-drivers are not independent contractors under the com- mon law test, an issue arises as to whether they are supervisors within the meaning of the Act. The record shows that these individuals have and exercise the power to hire drivers; subject to the approval of the Employer, and to discharge them. It also appears that the multiple owners assign and transfer drivers -and responsibly direct them. We are satisfied that the foregoing authority over drivers of their leased equipment is exercised not only for the purpose of protecting the equipment involved, but also in the interest of the Employer's oper- ations. In these circumstances and especially as the multiple owners have effective authority with respect to the tenure of nonowner-drivers whom we have found to be employees of the Employer, we find that the multiple owner-drivers are supervisors, within the meaning of the Act. We shall, therefore, exclude them from the unit.' P See Deaton Truck Linea , Inc., 143 NLRB 1372, and National Freight, Inc., supra. Member Leedom would find, for the reasons set forth in his dissent herein , that the owners are independent contractors and that the nonowner- drivers are their employees. As such, he would exclude them from any unit found appropriate. Member Brown agrees that the owner -drivers and nonowner-drivers are employees, but disagrees that multiple owner -drivers are supervisors under the Act. He finds that the record clearly indicates that the multiple owner-drivers are subject to the same degree and manner of control by the Employer over the means as well as the result of the work as nonowner-drivers and share the same community of interest and working conditions. The multiple owner-drivers are employees rather than supervisors for, in his opinion, the direction and authority they exercise over drivers of leased equipment are for the pro- tection of their leased property and are not in the interest of the Employer. 152 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Accordingly, we find that the following employees at the Em- ployer's liquid terminal in the Barberton, Ohio, operation constitute an appropriate unit for the purposes of collective bargaining within the meaning of Section 9(b) of the Act: All the owner-drivers, nonowner-drivers operating leased equip- ment, and truckdrivers operating the Employer's equipment, biit ex- cluding the multiple owner-drivers, temporary drivers,4 all other em- ployees, office clerical employees, professional employees, guards, and supervisors as defined in the 'Act. - [Text of Direction of Election omitted from publication:] - MEMBER LEEDOM, dissenting : • Unlike my colleagues, I would sustain the Regional Director and find that the, owner-drivers who lease their tractors to Chemical Lea- man Tank Lines,, Inc., are independent contractors; and that the nonowner-drivers of these leased vehicles are "employees of the lessors, involved, and not of the lessee. The facts found by the Regional Director are undisputed" and establish the following: Each 'of these owner-drivers owns one or more tractors, representing a substantial investment' by him. He obligates himself under the lease agreement to considerable overhead expenses. These include the maintenance of his equipment; the cost of gas and oil and of all licenses, fees, and permits required for its opera- tion; the charges for fire, theft, and collision insurance thereon; and the wages of those who drive his equipment., In addition, the owner- driver assumes the risk of all losses due to, shortages, spillage, or contamination of the products hauled, and the first $250 of,any dam- age to the lessee's trailers in his custody or the custody of his drivers. The owner-driver offsets the expenses which he incurs in these. re- pects against his percentage of the gross amount realized on the loads hauled by his equipment. In contrast to the foregoing,.the lessee, Chemical Leaman, has no financial interest in the tractors other than the lease required by Interstate Commerce Commission regulations, and keeps no records of the owner-drivers other than a record of pay- ment of their percentage and a list of loads hauled by•their equipment. Significantly, too, under the lease arrangement, the lessor rather than the lessee arranges for the manning of the equipment and, as my col- leagues concede, sees to it, through responsible direction, that the work assigned is properly performed. Thus, in addition to assuming all the risks incidental to operation of the leased equipment, it is the 4 We agree with the Regional Director's finding that Ilosteller and Dodson , who were using two tractors from the cement terminal , were hired only for a limited period with no reasonable expectation of permanent employment at the liquid terminal and are not' eligible to vote in the election directed herein. We shall, therefore, exclude them from the unit. See E. F. Drew & Co., Inc., 133 NLRB 155, 157. CHEMICAL LEAMAN TANK LINES, INC . 153 owner-driver who decides whether he will drive his tractor or whether to hire a driver and what route he or the driver is to take in reaching a given destination. If he hires a driver, he determines, by direct negotiations with the driver, the wages and fringe benefits to be paid. In addition, he is responsible for withholding 'all taxes and social se- curity payments from wages paid to his drivers, and for providing them with safety clothing. He has sole authority to discharge his drivers, while the lessee must take up with him any objection it may have to their conduct. The lessee's role vis-a-vis the nonowner- drivers, on the other hand, consists chiefly of giving competency and physical examinations preliminary to their employment by the lessors, of designating the tractor to be used and its destination, and of re- porting the drivers' safety violations; if any, to the lessors. In this connection, the written rules and driver's manual through which the lessee formerly purported to regulate the conduct- of drivers are no longer, if they ever were, enforced; indeed, their issuance .was largely abandoned 3 or 4 years ago. It is noteworthy too, that while owner- drivers are responsible for furnishing one or two drivers, as the case may be, owners as well as their drivers are free to refuse assignments. It is clear from these facts that the earnings of the owner-drivers depend'upon their resourcefulness in the maintenance and operation of the leased equipment. Their acumen in the care, maintenance, and insurance coverage of their equipment, their choice of routes, their decision as to whether to work alone or to hire drivers, and their selection of drivers and determination of the wages. to be paid will, in the final analysis, determine whether the lease arrangement ; will prove to be profitable., The entrepreneurial aspects of their relation- ship to the lessee are further, underscored by the lease agreements themselves, which declare their status to be that of independent contractors. ' In view, therefore, of the opportunity of owner-drivers to increase their profits by the exercise of their own judgment, the risks under- taken, and their control over the manner and means by which their business is conducted, I would find that the owner-drivers are inde- pendent contractors, and that the drivers whom they hire to drive their leased equipment are their employees.' As neither owner-drivers s N L R.B. v. A. S. Abell Company and Hearst Consolidated Publications , 327 F 2d 1 C.A. 4) ; Rei8ch Trucking and Transportation Co., Inc., 143 NLRB 953. See, also, the dissent in Western Nebraska Transportation Service Division of Consolidated Freightways, 144 NLRB 301, and the cases cited therein. Deaton Truck Lines, Inc., 143 NLRB 1372, is clearly distinguishable because there, unlike the instant case , there was a bargaining his- tory of inclusion of owner-drivers and nonowner-drivers in the same unit with the lessee's admitted employees ; all were covered by the same collective-bargaining agreement, were paid the same standard wage, and were subject to the direction and control of the lessee. In addition , the lessee maintained a pool of acceptable drivers from which the lessors were required to select their drivers ; and the lessee oriented and reprimanded all drivers and required them to attend safety meetings. 7.54 DECISIONS OF NATIONAL LABOR RELATIONS BOARD nor their nonowner-drivers are employees of the Employer in this proceeding, it would follow, as the Regional Director concluded, that the petition should be dismissed. MEMBER JENKINS took no part in the consideration of the above Decision on Review and Direction of Election. United Sugar Workers Union , Local 9, affiliated with Inter- national Longshoremen 's Association, AFL-CIO [American Sugar Company] and Melvin Lawrence United Sugar Workers Union , Local 9, affiliated with Inter- national Longshoremen 's Association, AFL-CIO and Brother- hood of Sugar Workers . Cases Nos. 2-CB-3700 and 2-CB- 3700-2. February 27, 1964 DECISION AND ORDER On November 6, 1963, Trial Examiner Eugene F. Frey issued his Trial Examiner's Decision in the above-entitled proceeding, finding that the Respondent had engaged in and was engaging in certain un- fair labor practices, and recommending that it cease and desist there- from and take certain affirmative action, as set forth in the attached Trial Examiner's Decision. Thereafter, the Respondent filed excep- tions to the Trial Examiner's Decision and a supporting brief. Pursuant to the provisions of Section 3(b) of the Act, the Board has delegated its powers in connection with this case to a three member panel [Members Leedom, Fanning, and Brown]. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions and brief, and the entire record in this case, and hereby adopts the findings,' conclusions,2 and rec- ommendations of the Trial Examiner as modified below. 1 We agree with the Trial Examiner that the evidence amply supports a finding that Randazzo had knowledge of Lawrence 's activities on behalf of the Brotherhood. s while we agree with the Trial Examiner that the Respondent 's President Randazzo threatened employees with physical violence because of their opposition to Respondent, in finding that such threats were made , we rely only on the words used and not on the Trial Examiner 's conclusion that the "quiet fashion" in which the statements were made "was calculated to make them more ominous in their implications." 146 NLRB No. 14.