Daily Express, Inc.

National Labor Relations Board - Board Decisions

May 31, 1974

211 N.L.R.B. 92 (N.L.R.B. 1974)

92 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Daily Express, Inc.' and International Brotherhood of
Teamsters, Chauffeurs, Warehousemen and Help-
ers of America, Petitioner. Case 4-RC-10612
May 31, 1974
DECISION AND ORDER
BY MEMBERS FANNING, KENNEDY, AND
PENELLO
Upon a petition duly filed under Section 9(c) of the
National Labor Relations Act, as amended, a
hearing was held before Hearing Officer Alexander
T. Graham. After the hearing and pursuant to
Section 102.67 of the National Labor Relations
Board Rules and Regulations , Series 8, as amended,
and by direction of the Acting Regional Director for
Region 4 , this proceeding was transferred to the
Board for decision . Thereafter, the Employer and the
Petitioner filed briefs in support of their respective
positions.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has reviewed the rulings of the Hearing
Officer made at the hearing and finds that they are
free from prejudicial error. They are hereby affirmed.
Upon the entire record in this proceeding, the
Board finds:
1. The Employer is engaged in commerce within
the meaning of the Act and it will effectuate the
purposes of the Act to assert jurisdiction herein.
2. The labor organization involved claims to
represent certain employees of the Employer.
3. No question affecting commerce exists concern-
ing the representation of employees of the Employer
within the meaning of Sections 9(c)(1) and 2(6) and
(7) of the Act.
Daily Express is a Pennsylvania corporation with
headquarters in Carlisle, Pennsylvania. It is engaged
in the business of transporting steel , machinery, and
other products by truck in interstate commerce
among 48 States under the authority of an Interstate
Commerce Commission (I.C.C.) certificate, and is
subject to the Interstate Commerce Act and to I.C.C.
and Department of Transportation (D.O.T.) regula-
tions . The Employer has two divisions, steel and
machinery. The latter operates out of Carlisle, the
former from New Kensington, Pennsylvania.
The Petitioner seeks a unit of all single-owner
drivers, nonowner drivers of leased equipment, and
direct company drivers employed in either the steel
or machinery divisions, excluding, inter alia, multi -
pwner operators. Daily contends that the owner-
operators are not employees but independent con-
tractors, and that operators who drive for them are
employees of the independent contractors, not of
Daily Express. Additionally it contends that should
the Board find that they are employees, then only
separate machinery and steel division units would be
appropriate.
Daily is largely dependent upon equipment leased
to it by single- and multi-owner operators. It owns no
tractors but does own 452 trailers assigned to its
machinery division. The steel division leases both
tractors and trailers as a complete unit. At the time
of the hearing the machinery division leased 252
tractors: 142 from single owner-operators and the
remainder from fleet owners. The steel division
leased 149 complete rigs, tractors and trailers: 41
from single-owner operators. Fleet owners hire and
pay their own drivers subject to approval by Daily.
Owner-operators sign an agreement with either the
machinery or steel division. There is little difference
between the two agreements. The agreement is for a
minimum of 30 days and may be terminated on 30
days' written notice or, by the owner, if Daily fails to
pay any amount due within 15 days, violates a
substantive provision, or fails to offer a load for 15
consecutive days. Daily may terminate the agree-
ment on less than 30 days' notice if the equipment
does not comply with D.O.T. safety regulations; if
the owner does not provide a competent driver who
is qualified under D.O.T. safety regulations; if the
owner does not comply with reasonable requests for
adjustments of equipment to render useful and
efficient service, including providing supplemental
equipment; if the owner violates any substantive
provision; or if the owner does not offer his services
for 15 consecutive days.
The agreement also provides, inter alia, that the
owner will provide complete transportation service
over his choice of legal routes for any load he accepts
and, should he be unable to complete, or arrange to
complete, delivery, Daily may do so at the owner's
expense; that any drivers or helpers shall be
controlled and directed solely by the owner and the
owner alone shall be responsible for their compensa-
tion, taxes, reports, etc.; and that the owner warrants
that all drivers meet all applicable safety standards
and that he will provide evidence of compliance
upon request. The owner is responsible for all vehicle
expenses-fuel, oil, maintenance to comply with laws
and regulations, etc.-taxes of any kind assessed
against the owner, and any tags required by the
vehicle's State of domicile. Daily is required to
reimburse the owner for the cost of any oversize or
I The Employer's name appears as amended at the heanng.
211 NLRB No. 19
DAILY EXPRESS, INC. 93
overweight permits and any ton mile, axle mile, or
special fuel taxes-not paid by Daily. The agreement
requires the,;, o npr to reimburse Daily for any
general fuel- taxes Daily pays because the owner has
failed to provide proof of payment. The owner also
must provide bobtail insurance and must reimburse
Daily for any load damage or other property damage
or bodily injury up to $100 in the machinery division
and $150 in the steel division per event and $500 in
the case of damage to a Daily trailer. The owner
assumes full liability if he leases to any other party.
The owner also agrees to report any accident, claim,
etc., involving vehicles or loads covered by the
agreement and to assist in any investigation, litiga-
tion , etc., and, on request, submit proof of insurance.
The owner is responsible for any fines, costs', etc.,
arising from his or his employees' failure to abide by
any law or regulation.
Upon termination of the agreement any compensa-
tion due the owner may be withheld and applied
against any pending claims or , if no claims are
pending, are to be paid within 30 days. In the
machinery, division the owner receives 60.2 percent
of the revenue, in steel 74 percent; in the event of trip
leasing by the owner under the machinery division
lease he must pay Daily 10 percent of its revenue,
apparently for the use of Daily's trailer. An owner
under the steel division lease is not required to pay
Daily any portion of the revenue arising from trip
leasing.
Drivers are required to submit a safety clearance
form to Daily listing previous employment, traffic
violations, and accidents in the last 5 years and must
pass , or have passed within the previous 24 months, a
physical examination. The driver also must attend a
1-day orientation course at which time he is given a
written examination based on questions provided by
the Department of Transportation and a road test.
The safety clearance form, physical, orientation
program, and written examination are required by
Federal regulations . The equipment is inspected to
determine if it meets Federal safety regulations,
Federal regulations are discussed as required by
D.O.T. and I.C.C. regulations, and the driver is
familiarized with Daily's operations. If the driver
passes the road test and meets all other requirements
imposed by the D.O.T. and I.C.C., including an
acceptable driving record, the agreement is signed
and identification decals are placed on the equip-
ment as required by the I.C.C. Thereafter, the
equipment is inspected by Daily or its agents at 30-
day intervals to comply with D.O.T. requirements for
systematic inspections . The cost of any repairs is
borne by the owner and repairs may be made
wherever he chooses.
Daily plays no role in the financial relationship
between an owner and any employees he may have,
although it will notify the owner if it finds that one of
his drivers has become disqualified by violation of
any applicable regulations; e.g., convicted of driving
while intoxicated. The machinery division pays a
bonus of 1 percent of the paid gross revenue to any
owner operator who has not had a claim during the
month and there is a similar program in the steel
division under which green stamps are awarded. It is
not entirely clear, however, whether such awards or
payments in the case of vehicles which are not driven
by the owner are made to the owner or to the driver.
Owners and drivers receive no fringe benefits, paid
holidays, etc., and although Daily will sell certain
equipment-hard hats, tarpaulins, chains, etc.-it is
sold at cost and there is no requirement that such
items be bought through Daily. Similarly, Daily sells
gasoline at cost plus 1 percent to cover slippage or
shrinkage. Daily does not aid in the purchase of
equipment nor does it make loans, although it will
advance up to 50 percent of the gross revenue from
any load. If a driver is not speedily loaded or
unloaded, Daily will charge "detention time" as
provided in the applicable tariff and pay the owner
his share.
Daily has no rules, employs no inspectors to check
up on drivers on the road, and does not penalize
owners who refuse to take a load. They are free to
accept or reject loads and the right to trip lease is not
restricted. The agreement, as noted above, may be
terminated if no load is accepted for 15 consecutive
days, other than that however, an owner-operator
may work as frequently or infrequently as he sees fit,
subject, of course, to the Federal maximum. Similar-
ly, the owner may transport the load over any legal
route and Daily plays no role in his choice of routes.
The Daily decals which are placed on the truck are
required by Federal regulations and there are no
other restrictions or requirements concerning the
appearance of the vehicle. However, the machinery
division will lease only cab-over trucks because of
limitations in certain States on the total length of
tractors and trailers permitted on their highways.
Daily also provides a Daily shoulder patch which
drivers may wear if they wish.
The Board has consistently applied the common
law right-to-control test to determine whether an
individual is an employee or an independent contrac-
tor. If the right to control the manner and means to
attain a given end is reserved, the relation is one of
employer-employee; but if control is reserved only
over the desired result than an independent contrac-
tor relation exists.
The facts in this case are almost identical to those
in George Transfer & Rigging Co., Inc., 208 NLRB
No. 25 (Members Fanning and Jenkins dissenting),
94 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and Kreitz Motor Express, Inc., 210 NLRB No. 11
(Member Jenkins dissenting), in which the Board
held that the owner-operators were independent
contractors. We reach the same conclusion here.
Although Daily complies with I.C.C. and D.O.T.
regulations requiring physical examinations of driv-
ers and systematic safety inspections of equipment,
will not permit drivers who are disqualified under
D.O.T. regulations to operate equipment leased to it,
and unilaterally establishes the rate of compensation,
apparently governed only by market forces, those
factors, in balance, are not sufficient to establish that
the relation is that of an employer to its employees,
since they fall short of establishing, indeed barely
suggest, that Daily controls the manner or means by
which the owner-operators perform services for
Daily. In contrast, the following factors establish that
Daily controls only the end to be achieved, that the
owners are subject to typical entrepreneurial risks
and profits, and that an independent contractor
relation exists : (1) the owner-operators are free to
schedule the use of their equipment; they determine
what days and hours to work, where to have repairs
made (though not always if) and purchase fuel, what
legal routes to use, whether to accept or reject loads,
and if they will trip lease; (2) the owners retain
complete control over any drivers or other employees
they may have and are solely responsible for their
pay, withholding taxes, etc.; (3) the owner-operators
are responsible for the complete transportation of
any load they accept and if unable to complete, or
arrange for the completion of, the delivery, Daily will
do so at the expense of the owner; (4) the owner-
operators are not subject to any rules imposed by
Daily in their day-to-day operations; (5) owners and
drivers receive no fringe benefits from Daily; it will
not aid them in the purchase of equipment , nor will it
make loans , although it will make an advance of up
to 50 percent of the revenue of a shipments and (6)
the owner has a substantial capital investment in
equipment , which he purchases without any assist-
ance from Daily.
In view of the foregoing , we conclude that the
single- and multi-owner operators are independent
contractors , and that the nonowner drivers are
employees of the independent contractors rather
than Daily. Since Daily has no employees driving
directly for it, we shall dismiss the petition.
ORDER
It is hereby ordered that the petition herein be, and
it hereby is dismissed.
MEMBER FANNING, dissenting:
My colleagues have found that owner-operators
who lease equipment to Daily are independent
contractors and that nonowner drivers are employees
of independent contractors, not of Daily. In George
Transfer & Rigging, 208 NLRB No. 25, a majority of
the Board held that owners leasing equipment to an
I.C.C. certificated carrier were independent contrac-
tors over a dissent by Member Jenkins and me. The
facts here do not vary significantly from those in
George Transfer & Rigging and I would find the
owner-operators here to be employees , not independ-
ent contractors , for the reasons set forth in the
dissent in George.