Kal Leasing, Inc.

National Labor Relations Board - Board Decisions

Feb 23, 1979

240 N.L.R.B. 892 (N.L.R.B. 1979)

892 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Kal Leasing, Inc. and Highway Drivers, Dockmen,
Spotters, Rampmen, Meat Packing House and Al-
lied Products Drivers and Helpers, Office Workers
and Miscellaneous Employees, Local 710, Interna-
tional Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America, Petitioner.
Case 33-RC-2348
February 23, 1979
DECISION AND DIRECTION OF ELECTION
BY CHAIRMAN FANNING AND MEMBERS P-Ni II
ANDTR ESDAI.E.
Upon a petition duly filed under Section 9(c) of
the National Labor Relations Act, as amended, a
hearing was held at Kankakee, Illinois, on September
15, 1978, before Hearing Officer Ronald J. Symkow-
iak. Following the hearing, and pursuant to Section
102.67 of the National Labor Relations Board Rules
and Regulations, Series 8, as amended, the Regional
Director for Region 33 transferred this case to the
National Labor Relations Board for decision. There-
after, briefs were filed by both the Employer and the
Petitioner.
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 au-
thority in this proceeding to a three-member panel.
The Board has reviewed the Hearing Officer's rul-
ings made at the hearing and finds that they are free
from prejudicial error. They are hereby affirmed.
Upon the entire record of this proceeding, includ-
ing the briefs of the parties. the Board finds:
1. The Employer, a Delaware corporation, is com-
prised of three divisions: a long-term leasing division,
which leases vehicles and equipment on a national
basis; two Hertz Rent-A-Car franchises: and a
schoolbus division, which provides transportation for
students pursuant to contracts with public school dis-
tricts in four States, including the Kankakee School
District No. 111 in Kankakee, Illinois. During the
period from July 1, 1977, through June 30, 1978, the
revenues from the Employer's schoolbus division
alone were in excess of $1 million.' During that same
period, this division purchased goods in excess of
$50,000 directly from customers outside Illinois.
The Employer's Kankakee operation is engaged al-
most exclusively in providing transportation to
school children pursuant to a contract with School
District No. I11, and all of its employees at that op-
'The tEmployer's revenues from its schoolbus services to School I)istrlt
No. I I I accounted for approximately $511 .(X)O during this period
240 NLRB No. 121
eration are primarily involved in providing this ser-
vice. The Petitioner petitioned for a unit consisting of
all the Employer's busdrivers and mechanics at the
Kankakee location. The Employer, however, con-
tends that the Board should not assert jurisdiction
because of the intimate connection of the Employer's
operation with that of the school district, an exempt
organization under Section 2(2) of the Act, and be-
cause the school district exercises a degree of control
over the labor relations policies of the Employer
which would preclude the Employer from engaging
in meaningful collective bargaining with a labor or-
ganization. The Petitioner contends that the Em-
ployer does possess control of its labor relations and,
further, that the intimate connection test should not
be considered by the Board in determining whether
to assert jurisdiction. For reasons fully set forth be-
low, we find that jurisdiction should be asserted in
this case.
In National Transportation Service, Inc.,2 the Board
held that it would no longer apply the so-called inti-
mate connection test to determine whether jurisdic-
tion should be asserted over an employer with close
ties to an exempt entity. Consequently, the only issue
presented is whether the Employer exercises suffi-
cient control over the employment conditions of its
employees to enable it to engage in meaningful bar-
gaining with a labor organization over conditions of
employment.
It is undisputed that the Employer, through its lo-
cal manager, is responsible for layoff and recall of
drivers, their work evaluations, and resolution of em-
ployee grievances. The Employer, however, relies, in-
ter alia, upon certain provisions in its agreement with
the school district by which the district determines
the bus routes and scheduling, prescribes the rules of
conduct to be followed by students on the
Employer's buses, reserves the right to recommend
hiring and dismissal of the Employer's drivers, and
negotiates a yearly rate increase with the Employer.
which includes discussion over prospective raises for
drivers. For the reasons discussed below, we find that
these contractual provisions do not impinge upon the
Employer's control over its labor relations.
The Employer's reliance upon the school district's
right to determine bus routes and scheduling and to
regulate student conduct on the Employer's buses re-
flects a basic misunderstanding of the concept of
control over terms and conditions of employment as
it relates to the Board's jurisdiction over an employer
performing services for an exempt entity. The right
to determine bus routes and scheduling merely per-
mits the school district to specify the nature of the
services it is to receive. This provision does not give
240( NlRB 565 (1979).
KAL LEASING, INC. 893
the school district any control over the day-to-day
operation of the Employer's business and does not
confer upon the district the right to supervise the
Employer's employees in the performance of these
services. Rather, the Employer controls the work
conditions of its employees with respect to routes
and scheduling since it, not the district, determines
the route assignments of employees based upon a se-
niority system.
With respect to the district's right to prescribe stu-
dent conduct on the Employer's buses, we again fail
to see how this provision has anything to do with
control over the Employer's labor relations. On its
face it is directed toward regulating student rather
than employee conduct. In contrast, the Employer
controls employee conduct through its promulgation
and enforcement, without interference from the
school district, of its own rules and regulations for its
employees.
The Employer also emphasizes the district's right
to recommend the hiring and dismissal of drivers.
The record indicates, however, that the Employer is
not bound to comply with any recommendation and
in fact has refused to follow such recommendations
on at least two occasions. The right reserved by the
district to influence disciplinary action against an
employee does not, in our view, rise to a level at
which it may be said that such actions are controlled
by the district and not the Employer.3
Finally, the Employer's contention that negotia-
tion of the yearly rate increase, which includes dis-
cussion of proposed salary increases for drivers, evi-
dences district control over the rate of employee
wages is also without merit. Although the Employer
may use a prospective salary increase as leverage for
obtaining a rate increase, it is not bound to limit em-
ployee raises to the amount contemplated in the rate
adjustment negotiations with the school district. Its
right to grant wage increases is limited only by its
ability to pay for them out of revenue from its Kan-
kakee operation or other sources.4
1 See JA-CE Company. Inc., 205 NLRB 578. 579 580 (1973).
Accordingly, we conclude that the Employer "re-
tains sufficient control over its employees to enable it
to engage in meaningful bargaining over conditions
of employment with a labor organization," 5 and we,
therefore, find that it would effectuate the purposes
of the Act to assert jurisdiction over the Employer's
Kankakee operation.
2. The parties stipulated, and we agree, that the
Petitioner is a labor organization within the meaning
of Section 2(5) of the Act.
3. A 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.
4. The parties stipulated, and we find, that the fol-
lowing employees of the Employer constitute a unit
appropriate for the purpose of collective bargaining
within the meaning of Section 9(b) of the Act:
All full-time and regular part-time bus drivers
and mechanics at the Employer's Kankakee, Illi-
nois facility: but excluding office clerical em-
ployees, guards, professional employees, and
supervisors as defined in the Act.
There remains for our consideration the unit
placement of the Employer's part-time mechanic and
safety officer. With respect to the mechanic, the rec-
ord reveals that this employee has worked as a me-
chanic for the Employer for several years with a min-
imum of 16 and a maximum of 32 hours work per
week. Under the circumstances, we find that he is a
regular part-time employee.
On the basis of this record, however, we are unable
to determine whether the safety officer is a supervis-
or within the meaning of the Act. Therefore, we shall
permit him to vote subject to challenge.
[Direction of Election and Excelsior footnote omit-
ted from publication.]
MEMBER PENELLO. dissenting:
For the reasons set forth in the dissenting opinion
in National Transportation Service, Inc., supra, I
would not assert jurisdiction in this case.
See. e.g.. Catholic Bishop of Chicago, A Corporation Sole. Department of
Federal Programs, 235 NLRB 776 (1978).
National Transportation Sernce, Inc., supra.
KAL EASING, INC. 93