Land O'Lakes, Inc.

National Labor Relations Board - Board DecisionsJun 26, 1973

204 N.L.R.B. 519 (N.L.R.B. 1973)

LAND O'LAKES, INC. 519 Land O'Lakes, Inc. and Chauffeurs , Teamsters and Helpers Local Union No. 238 , affiliated with Inter- national Brotherhood of Teamsters , Chauffeurs, Warehousemen and Helpers of America, Petitioner. Case 18-RC-9345 June 26, 1973 DECISION ON REVIEW BY CHAIRMAN MILLER AND MEMBERS FANNING AND PENELLO On February 26, 1973, the Regional Director for Region 18 issued his Decision and Direction of Elec- tion in the above-entitled proceeding, in which he found appropriate the Petitioner's requested unit of all farm bulk tank drivers and reliefmen employed by the Employer at its Cedar Rapids, Iowa, facility, re- jecting the Employer's contention that they are inde- pendent contractors and not its employees. Thereafter, in accordance with Section 102.67 of the National Labor Relations Board Rules and Regula- tions, Series 8, as amended, the Employer filed a time- ly request for review of the Regional Director's Decision on the grounds, inter alia, that in finding the haulers involved to be its employees and not indepen- dent contractors he departed from officially reported precedent. By telegraphic order dated March 26, 1973, the Board granted review and stayed the election pending decision on review. The Employer filed a brief on review. 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 considered the entire record in this case with respect to the issues under review, including the brief on review, and hereby affirms the Regional Director's Decision, pertinent parts of which are at- tached hereto as an appendix,with the following addi- tions: The Employer takes the position that its arrange- ments with the drivers or contract haulers are effected on behalf of, and as agent for, the farm producers, and that as the producers are obligated under their mar- keting agreements with the Employer to deliver their milk to its facility, the haulers perform their services for the producers. It contends, therefore, that the in- dependent contractor status of the haulers should be resolved by determining whether or not the producers control the means by which they make their deliveries. We find no merit in this contention. It is clear, under the hauling contracts, that the Employer, as agent for the producers, has contracted for the services of the haulers and created the relationship between itself and them, and that it is this relationship which the Regional Director has found to be that of employer- employee. The Employer also asserts that the Regional Direc- tor, in applying the "right of control" test to de- termine the status of the haulers, has failed to consider the recent cases of Fleet Transport Company, Inc., 196 NLRB 436; Conley Motor Express, Inc., 197 NLRB 624; Gold Medal Baking Company, 199 NLRB No. 132; and the case of Nelson-Ricks Creamery Company, 89 NLRB 204, involving similar bulk milk haulers, in each of which an independent contractor status was found to exist. Those cases, in our view, are factually distinguishable. In Fleet, Conley and Gold Medal, ap- plying the "right of control" test, weighing all relevant factors, it was concluded that, on balance, the alleged employer of the disputed drivers was concerned with the results of their performance under their lease agreements with it and did not retain significant con- trol over the means by which the results were achieved. In Nelson-Ricks, where the intention to create an independent contractor status was expressly stated, the milk haulers signed 1-year contracts; they were given exclusive territories; they had freedom to define their routes, conforming as nearly as possible to a schedule of arrivals at the processing plant; some hauled for others and some engaged in noncompeti- tive activities on their routes; and they were not sub- ject to supervision by the alleged employer. Here, it is undisputed that the haulers can be terminated on 30 days' notice; they drive exclusively for the Employer; and the Employer is involved in the hire and termina- tion of the haulers, in setting the rates to be paid by the producers, in defining and making adjustments in routes, and in the adjustment of complaints received from producers about the haulers' performances. These factors, weighed against others, as set forth in the Regional Director's Decision, in our opinion, sup- port a finding that the Employer significantly controls the means by which the haulers make deliveries pur- suant to their hauling contracts. Accordingly, as we have affirmed the Regional Director's Decision and Direction of Election, we shall remand the case to him in order that he may proceed to conduct an election among the employees in the unit found appropriate by him, except that the eligibility payroll period for the election shall be that immediately preceding the issuance date of this deci- sion.' 1 In order to assure that all eligible voters may have the opportunity to be informed of the issues in the exercise of their statutory right to vote, all parties to the election should have access to a list of voters and their addresses which may be used to communicate with them Excelsior Underwear Inc, 156 204 NLRB No. 73 520 DECISIONS OF NATIONAL LABOR RELATIONS BOARD CHAIRMAN MILLER, concurring separately: I concur in the result reached by my colleagues, but I would add the following comments to explain in some further detail the reasons underlying my concur- rence. I do not regard the 30-day termination notice with respect to the leases here to be of any real significance. Nor do I find in the record any definitive evidence as to the role played by the Employer in the hire or termination of the haulers. The evidence as to the part played by the Employer with respect to complaints by producers is also vague, and is susceptible to the inter- pretation that the Employer merely serves as a con- venient conduit for such complaints. There is no evidence that the Employer has attempted to disci- pline any hauler as a result of such complaints. We have testimony, in fact, only as to one incident of "discipline"-which involved the termination of a relief hauler. But the uncontradicted testimony as to that termination is that the regular haulers-not the Employer-were the moving force in effectuating that termination-and that is consistent with the Employer's position that the relief haulers are the em- ployees of the haulers, not of the Employer. Despite my reservations about those items, I am satisfied that the record as a whole shows so little genuine independence on the part of the haulers here and so much de facto control over their operations that I believe they must properly be regarded as em- ployees rather than as independent contractors. The evidence shows that the number and location of the producers served by the haulers, while theoreti- cally set by agreement of the haulers and producers, are in fact controlled by the Employer. It strongly indicates also that the rates are not set by any genuine negotiation between haulers and producers, but in- stead are controlled by the Employer. Even the price of sale of a route, which one might expect to be freely set by negotiation between seller and buyer, has in fact been established by the Employer as being mea- sured by the price of a new truck, and is clearly not even affected by such normal entrepreneurial factors as the profitability of the route. While the haulers, in theory, can increase their earnings by soliciting new producers, there is no showing that they do so-in- stead, it appears that the normal course is for them NLRB 1236; N L.R B v Wyman-Gordon Co, 394 U.S 759 Accordingly, it is hereby directed that a corrected election eligibility list, containing the names and addresses of all the eligible voters, must be filed by the Employer with the Regional Director for Region 18 within 7 days of the date of this Decision on Review . The Regional Director shall make the list available to all parties to the election No extension of time to file this list shall be granted by the Regional Director except in extraordinary circumstances Failure to comply with this requirement shall be grounds for setting aside the election whenever proper objections are filed simply to make the number of daily stops prescribed by the Employer and at locations also specified by the Employer. Again, their work schedule is, for all practical pur- poses, established by the Employer. There is no show- ing here, as there was in Fleet Transport and Conley Express, of genuine and freely exercised freedom to accept or reject offered loads, nor, as there, any real (as opposed to theoretical) freedom, at the will of the owner-drivers, to use such equipment for profit by hauling for persons other than the Employer. In short, while the form of the relationship here may appear to be that of independent contractor, the substance strongly appears to be that of close control and resultant employee status. For these reasons, I concur in the result. APPENDIX 4. The following employees of the Employer consti- tute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act:2 All farm bulk tank drivers and reliefmen em- ployed at or making deliveries to the Employer's Cedar Rapids, Iowa, facility; excluding office clerical employees, professional employees, guards and supervisors as defined in the Act, and all other employees. 2 The Employer agrees that the unit of farm bulk tank drivers and relief- men, as sought by the Petitioner, would constitute an appropriate unit in the event such drivers and reliefinen were employees of the Employer There are 23 bulk tank drivers. The Employer contends that the 17 contract haulers are independent contractors and that the 6 nonowner drivers, who operate equip- ment of two multi -owner contract haulers, are employees of the contract hauler whose equipment they operate Finally the Employer contends that the two reliefmen are employees of the contract haulers whom they relieve. The Petitioner contends that the contract haulers, reliefmen and nonowner drivers are employees of the Employer and are properly included in the unit The Petitioner further contends that the two multiple-owner contract haulers are supervisors within the meaning of the Act and are properly excluded from the unit. The Employer processes and markets milk at its Cedar Rapids, Iowa, facility There are between 380 and 400 producers of milk who supply milk to the facility of the Employer The Employer enters into marketing agree- ments with the producers which provide, in part, that the producer will deliver the milk to the Employer, and that the Employer will pay the produc- er therefor after deducting various costs , including the cost of transportation. The drivers involved herein load the milk into tanks and transport the milk from the producer to Employer's Cedar Rapids processing plant The Employer deducts and withholds from its payment to the producer an amount which the Employer remits to the contract hauler which represents the transportation charges The contract hauler determines the rate he will charge the producer, sub- ject to the Employer's approval Although the contract hauler can negotiate rates directly with the producer , rates have been changed only a few cents and only four or five times in the past 28 years, and because of the competi- tive nature of the business, the rates charged by the contract haulers tend to be uniform Rates were last changed a few years ago following discussions between contract haulers and the Employer. The rates charged the producers are generally based on the distance the milk has to be transported LAND O'LAKES, INC. 521 There are five nonowner drivers who operate equip- ment of contract hauler Ratajesak and one nonowner driver who operates equipment of contract hauler Wegmann . These nonowner drivers were employed and are paid by the multipleowner driver whose equipment they operate. The Employer requires that nonowner drivers , like all drivers , satisfy only the ap- plicable governmental regulations. The contract hauler enters into hauling agreements with the Employer. This agreement provides, in part, that the Employer has control of the routes and can shift producers from one route to another . The Em- ployer establishes the routes for the drivers , generally making such assignments based on geographical con- siderations , seeking to minimize as much as possible the distance required to be driven by the drivers. On occasion the Employer readjusts routes of the drivers based on geographical considerations , the require- ments of the producer , and the available capacity of the drivers ' tanks . If a driver has more milk than he can transport , the Employer will, in consultation with the contract haulers , seek to work out a route adjust- ment . Two contract haulers testified that their routes were changed by the Employer and they were not consulted prior thereto , but were merely advised of the change. The hauling agreement also provides that in the event the hauler defaults "in any way" the Employer will notify him in writing 30 days in advance; that if the hauler decides to sell his route he should notify the Employer in writing 30 days in advance of the pro- posed sale; and that the Employer has the right to interview and choose the buyer of the route. The hauling agreement finally provides that the price the contract hauler will receive when selling his route will be determined between the Employer and the contract hauler and cannot be higher than the retail price of a new truck . Contract haulers in selling their routes may realize therefrom a profit . However, as noted above , the Employer's policy is to maximize the amount of the profit. The Employer assists the contract haulers in the purchase and sale of trucks when new contract haulers are put on and existing ones leave by bringing such parties together. When a route becomes available , the Employer is generally aware of individuals who would be interest- ed in becoming contract haulers . The contract haulers purchase a truck; they lease a tank from the Employ- er. The drivers must satisfy rigid federal , state and local regulations before they can become drivers. The Employer has no additional requirements. Prior to becoming a driver the Employer meets and visits with the prospective driver. The contract haulers are responsible for securing the necessary licenses and the payment of the required fees . The Employer has no requirements with respect to the equipment, its condition, maintenance, or up- keep other than that required by federal, state and local authorities . The Employer carries no insurance on the contracting haulers' equipment. The Employer purchased the predecessor employ- er, Sanitary Farm Dairies, and assumed their opera- tion at the facilities herein involved, effective January 1, 1971. The predecessor employer had a lease agree- ment with the contract haulers for the leasing of tanks. Whether the Employer assumed or adopted this lease is unclear; however, the contract haulers continue to make rental payments pursuant to this lease. This lease agreement provides, in part, that the drivers will transport milk from the producer designated by the Employer, to the plant designated by the Employer, under routes designated by the Employer; and that no other use shall be made of the tank without the Employer's consent. The Employer's manager stated that although the contract hauler could haul for other than the Employer's producers, in his 28 years with the Employer and predecessor employer, this has nev- er occurred. Further, the manager testified that the Employer does not direct the roads the drivers must travel or the sequence of pickups when the driver is securing the milk and delivering it to the Employer. The only requirement the Employer has as to the times the drivers must work is that the drivers must deliver the milk to the Employer at times the Employ- er is open to receive such delivery. Payroll taxes are not withheld from contract haul- ers' checks which the contract haulers receive twice monthly from the Employer. The Employer requires the contract haulers carry cargo insurance. Payments for insurance are deducted from the contract haulers' checks by the Employer. The Employer does not re- quire that drivers maintain a daily activity log. Driv- ers use Employer forms for receipts which are given to the producer when the milk is picked up. Two copies thereof are turned in to the Employer. Also, the drivers fill out a bill of lading for signature by the Employer's receiving station attendant when the driv- ers' tanks are pumped out; this is turned in to the Employer's office. Drivers may also maintain other records for their own use. Contract haulers may, with- out Employer approval, secure substitute drivers sub- ject only to that condition that substitute drivers meet federal, state and local requirements. The contract haulers can solicit additional business from other producers. The Employer will accept the milk from these other producers if the producers satis- fy the applicable federal, state and local requirements and after the producer enters into a marketing agree- ment with the Employer. However, the law prohibits solicitation of a producer who is under contract to an 522 DECISIONS OF NATIONAL LABOR RELATIONS BOARD existing cooperative. The Employer 's name and logo appear on the tanks the drivers lease and use. The contract hauler's name appears on the truck. All but two drivers wear company uniforms. Some drivers wear old uniforms bearing the name of the predecessor employer and some drivers wear newer uniforms bearing the Employer's name . The predeces- sor employer and the Employer pay half the cost of the uniform purchase and cleaning. When producers make complaints about the per- formance of the drivers to the Employer , the Employ- er discusses the complaint with the driver involved and seeks his explanation . One driver was told by the Employer, when a complaint was made by a produc- er, that the driver had to be more careful. There are two relief drivers . Each reliefman drives for 6 contract haulers on a rotating basis so that each has I day off a week , in addition to Sunday. The reliefinen operate the equipment of the contract haul- er they are relieving . In order to be a reliefman the driver, like other drivers , must satisfy applicable fed- eral, state and local regulations ; the Employer impos- es no additional employment requirements . Pursuant to agreement with the contract haulers , reliefinen are paid by the Employer , their wages being withheld from the monies due the contract haulers . The Em- ployer makes the customary payroll tax deductions from the pay of the reliefinen . Complaints about reliefmen's performance , when brought to the Employer's attention , are discussed with the relief- man by the Employer and the contract hauler . Before hire , the reliefinen visit and meet with the Employer. The Employer and the contract haulers agreed that a reliefman had to be terminated , and the Employer's manager communicated such decision to the relief- man involved . The reliefinen notify the Employer when they are sick and unable to drive. In determining the status of persons alleged to be independent contractors, the Board applies the "right of control" test which turns essentially on whether the person for whom the services are performed retains the right to control the manner and means by which the result is to be accomplished or whether he controls only the result . In the latter situation , the status is that of an independent contractor . Although the contract haulers must invest in a truck , are required to main- tain their own equipment and liability insurance, are paid by the Employer via withholdings from remit- tances to producers , have no payroll taxes withheld from their checks , and are not subject to employment requirements imposed by the Employer apart from those required by governmental agencies , these fac- tors are not peculiar to independent contractor status and are not uncommon in the employment relation- ship . Contractor Members of the Associated General Contractors of California, Inc., 201 NLRB No. 36; Frito-Lay, Inc., 178 NLRB 611; El Mundo, Inc., 167 NLRB 760. Although the contract haulers can negotiate trans- portation rates directly with the producer, competitive factors result in generally uniform rates, it is uncom- mon for rates to change , and they may be changed only subject to the Employer 's approval . Further, al- though contract haulers can solicit additional busi- ness , this is limited by legal restrictions and subject to the Employer's right to readjust routes . Also contract haulers , as a practical matter , work for and deliver exclusively to the Employer . Therefore , based on the above and the record as a whole , it appears that there is no real capacity for the contract haulers to make decisions which could significantly increase their earnings. In view of the foregoing , and the record as a whole, including the facts that the contract hauler can be terminated on 30 -day notice , that the Employer is involved in the hire and termination of the drivers, the setting of rates and routes , and in the adjustment of complaints of the producers, I conclude that the Em- ployer exercises substantial control over the manner and means , as well as the result , of the drivers' work. Accordingly , I find that the contract haulers are not independent contractors but rather employees of the Employer , and that the nonowner drivers and relief- men are also employees of the Employer . Therefore, I find that the contract haulers , nonowner drivers, and reliefmen constitute a unit appropriate for collective bargaining . Contractor Members of the Associated Gen- eral Contractors of California, Inc., supra ; Newspaper & Periodical Drivers' and Helpers (San Francisco News- paper Printing Co., Inc.), 194 NLRB No. 4; Deaton, Inc., 187 NLRB 780; Trade Wind Transportation Com- pany, 185 NLRB 373; Frito-Lay, Inc., supra; El Mun- do, Inc., supra; The Maxwell Company, 164 NLRB 713; Indiana Refrigerator Lines, Inc., 157 NLRB 539. As it appears that the multiple -owner drivers, Ra- tajesak and Wegmann , hire and fire the nonowner drivers who operate their equipment, I find that they are supervisors within the meaning of the Act proper- ly excluded from the bargaining unit herein. Cf. The Maxwell Company, supra; Indiana Refrigerator Lines, Inc., supra.