Metro Cars, Inc.

National Labor Relations Board - Board Decisions

Nov 16, 1992

309 N.L.R.B. 513 (N.L.R.B. 1992)

513
309 NLRB No. 77
METRO CARS
1 The only issues on which the Employer seeks review are whether
the Acting Regional Director erred in finding that the sedan drivers
are employees of the Employer rather than independent contractors,
ruling that the drivers of sedans owned by someone other than the
Employer shall vote subject to challenge in the election, issuing his
decision without the parties filing their posthearing briefs, and find-
ing sufficient evidence of a showing of interest by the Petitioner.
Metro Cars, Inc. and Local 299, International
Brotherhood of Teamsters, AFL–CIO, Peti-
tioner. Case 7–RC–19847
November 16, 1992
ORDER DENYING REVIEW
BY CHAIRMAN STEPHENS AND MEMBERS
DEVANEY AND RAUDABAUGH
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel, which has considered the Employer’s request for
review of the Acting Regional Director’s Decision and
Direction of Election (pertinent portions attached).1
The request for review is denied as it raises no sub-
stantial issues warranting review.
APPENDIX
4. A question affecting commerce exists concerning the
representation of certain employees of the Employer within
the meaning of Section 9(c)(1) and Sections 2(6) and (7) of
the Act.
The Employer, a Michigan corporation located at 28900
Goddard Road, Romulus, Michigan, provides luxury sedan
transportation to passengers traveling to and from Detroit
Metropolitan Airport. The Employer was given authorization
to operate a sedan service at the airport by Wayne County,
Michigan (the County), owner of the airport., through a con-
cession agreement signed by the county and the Employer.
The concession agreement is effective January 1, 1991
through December 31, 1995.
The Petitioner seeks an election among all regularly sched-
uled full-time chauffeur drivers; excluding all professional
employees, clerical employees and guards and supervisors as
defined in the Act. Petitioner contends that there are approxi-
mately 51 full-time drivers in the proposed unit.
The Employer contends that the drivers are independent
contractors and, on that basis, the petition must be dismissed.
In support, the Employer claims that the drivers’ terms and
conditions of employment are dictated by the concession
agreement with the County, and are not determined by the
Employer. In the event the Board finds that the drivers are
employees within the meaning of the Act, the Employer
would also include in any unit found appropriate all regular
part-time drivers.
The concession agreement requires that the Employer have
a minimum of 30 cars in its fleet and that it service the trav-
eling public 24 hours a day. The concession agreement also
requires that the sedans be American-made full-sized luxury
sedans, all of the same make, model and color, and must not
be more than three model years old. Three pages of the
agreement relate to the vehicle’s interior and exterior appear-
ance. The agreement states that fares will be set on a zone
basis and will be ‘‘at least 15% more than the taxicab rates
approved by the County to the same locations.’’ The risk of
non-payment shall be borne solely by the Employer. The
agreement also gives the County the right to inspect the vehi-
cles and to direct the Employer to remove a car from service
in the event it does not conform with the cleanliness and
maintenance standards set forth in the agreement. As to uni-
forms, the agreement requires that the employees wear uni-
forms identifying such as the Employer’s employees. The
concession agreement is not distributed to the drivers.
The Employer requires every driver to sign a sales agency
agreement which sets forth the commission structure, sales
policies, dispatching arrangement, accounting policies, and
required periods of availability for service. The Employer
also distributes to new drivers the ‘‘rules of operation.’’
These rules are incorporated into the sales agency agreement
by reference and essentially reflect the requirements set forth
in the concession agreement, although with more specificity
as to uniforms, zone rates, method of payment, and general
operating procedures. For instance, the rules of operation re-
quire that the drivers wear Employer-issued uniforms consist-
ing of a navy blue blazer, grey slacks, a white button-down
shirt with a company tie, and name identification. Each driv-
er pays a $500 security deposit to the Employer for his or
her uniform. The rules of operation are distributed to all
drivers at the time they are hired.
Cullan Meathe is the Employer’s president and chief exec-
utive officer. His duties include the acquisition of vehicles,
government affairs, and overseeing the operations of the
company. Meathe testified that in order to maintain ‘‘shift in-
tegrity,’’ drivers are assigned to work particular shifts. When
a driver can not cover his or her shift, a ‘‘walk-on’’ driver
normally fills in. Walk-on drivers do not maintain regular
shifts, but come to the Employer’s dispatch office in the
morning to drive vehicles whose scheduled drivers are un-
available. Walk-on drivers are subject to the Employer’s
rules of operation, disciplinary. System, and dispatch poli-
cies. They are also required to sign the sales agency agree-
ments. There are approximately 25–35 walk-on drivers.
The Employer operates two 12-hour shifts. The drivers
generally are permitted to choose their shifts at the time they
are hired, but must maintain that choice for the duration of
their employment or until the Employer authorizes a shift
change. Drivers with high seniority and proven sales per-
formance are given first choice among available shifts. Each
driver is required to work every other weekend. Drivers who
wish to take vacations must give the Employer two weeks
prior notice. Vice president of sales and operations Edward
Till, director of fleet Michael McNeely, and dispatch admin-
istrator Carolyn Collins are responsible for making sure that
the drivers adhere to their shift assignments.
During busy periods, the Employer posts mandatory work
schedules for drivers who were not otherwise scheduled.
Driver Joe Hardy testified that when he went to the Employ-
er’s premises to pick up his last check the week before the
Grand Prix race, he saw a ‘‘mandatory’’ work schedule post-
ed in the lobby. This schedule was posted in anticipation of
the increased demand for driver services from people arriving
in Detroit for the race.
514 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
3 Metro Cars Management Corporation is a separate Michigan cor-
poration which is owned by the same principals which own Metro
Cars, Inc. The two companies share corporate offices. No parts has
asserted that the Management Corporation is a joint or single em-
ployer of the employees at issue.
The Employer maintains a central reservation office which
customers call to place a request for a ride. The dispatcher
communicates the request to an available driver via a two-
way radio system installed in each sedan. Drivers who solicit
customers at the airport without a dispatch must report all
trips/services to the dispatcher. The drivers are not permitted
to maintain exclusive customer accounts which they alone
service.
The sedans park in designated areas at the airport while
waiting for passengers, and are required to rotate through the
North, South and International terminals until they obtain a
fare. The drivers provide the customer with a trip from the
airport to any destination. The driver determines the route
from the airport to the customer’s destination and charges the
customer for any incidental expenses such as parking or
bridge tolls. If the driver solicits a return trip to the airport
for the following day, this request is communicated to the
dispatcher who then assigns the trip to a driver. If a customer
requests a particular driver, that request is honored unless the
driver is unavailable, in which case the dispatcher assigns it
to the driver who has been waiting the longest time at the
terminals.
The Employer also offers ‘‘executive as directed service’’
which consists of picking up a passenger at the airport and
transporting that passenger to several different locations over
a period of time. This service is offered to customers as an
alternative to renting a car at the airport. The employer deter-
mines and pays for all advertising related to its sedan serv-
ices.
The fares for the luxury sedans are set forth in the rules
of operation, Article VI. The rates range from $15 for Zone
A, municipalities nearer the airport such as Inkster, Wayne,
Romulus, and Baylor, to $70 for Zone J (Highland,
Clarkston, Lake Orion, New Haven, New Baltimore, which
are more distant). Meathe testified that the drivers may not
raise their rates unilateral under any circumstances.
The driver is responsible for collecting all fares, cash and
credit, and is liable for non-payment. The drivers fill out
transportation vouchers provided by the Employer for each
service performed. The driver is also responsible for properly
documenting ‘‘house account’’ purchases, i.e., passengers
who ask to be billed directly. All transportation vouchers and
credit card receipts are submit.ted to the dispatcher at the end
of the driver’s shift.
The driver is responsible for all maintenance on the vehi-
cle, including maintaining fuel, oil, windshield fluid, and
power steering fluid levels and interior and exterior cleaning.
The record does not indicate whether the driver or Employer
bears the costs of major repairs. The drivers are required to
pay a $50 security deposit to the Employer for the use of
the vehicle. The Employer, in turn, leases the vehicles from
Metro Cars Management Corporation.3
The Employer reports the drivers’ commission payments
to the Internal Revenue Service on 1099 forms and does not
withhold taxes or workers’ compensation premiums. The
Employer provides insurance for all of its vehicles, although
drivers who need additional coverage due to a poor driving
record must pay the additional expense. The Employer pays
all license fees and taxes on the vehicles.
The drivers must have a luxury sedan permit to operate at
the airport. These permits are issued by the County and are
provided to the drivers through the Employer. For a fee of
$25, the Employer provides a training course for all drivers
which they are required to attend and pass. In its rules of op-
eration, the Employer reserves the right to perform random
drug tests on the drivers. Each driver is tested approximately
once a year and, if the test result is positive, the driver is
terminated.
The Employer’s disciplinary policy allows for two warn-
ings, and on the third incident, the violator is terminated.
President Meathe testified that the policy of ‘‘three strikes
you are out’’ has been enforced. In April 1992, Meathe ob-
served a driver operating a Metro Car vehicle in areas that
he did not belong. The dispatcher directed the driver to bring
the car in immediately. The next day he was digcharged as-
sertedly for misappropriating a car, a violation of the rules
of operation.
Driver Joe Hardy testified that he was required to maintain
particular shifts and could not refuse to pick up a fare during
working hours. Drivers who do not work their scheduled
shifts, refuse to pick up fares, or refuse to stand outside their
cars to solicit business, are subject to discipline. According
to Hardy, discipline normally consists of being called off the
road and questioned by Meathe.
Hardy was terminated in May 1992 assertedly for ‘‘mis-
appropriation of funds.’’ On three occasions prior to his ter-
mination, the Employer informed Hardy that it had found he
was short of funds in the vouchers he submitted to the dis-
patcher. For each shortage, the Employer deducted the
amount from Mardy’s commission check.
Felicia McKinney was employed by the Employer as a
driver from March 1991 through October 30, 1991. On Sep-
tember 5, 1991, she was suspended for leaving work early
and was required to meet with the owners before she could
return to work. She also received four disciplinary slips from
her immediate supervisor, Pat Clancy, three of which were
for leaving work before her shift ended. One slip recites,
‘‘removed from schedule, may drive on walk on basis.’’ She
also received discipline for arguing with a dispatcher and
wearing an unkempt uniform. On November 9, 1991,
McKinney received a certified letter dated November 6,
1991, from Pat Clancy, which stated that she was terminated
as of October 30.
Prior to July 14, 1992, the Employer required that the
drivers sign sales agency agreements upon their hire. These
agreements established the following commission structure:
new drivers receive 35 percent commission on gross sales,
the Employer receives 65 percent; after 120 days of employ-
ment, the driver receives 40 percent and the Employer re-
ceives 60 percent. The drivers earn a 25 percent commission
on cellular telephone charges and retain all gratuities. The
drivers are paid by the Employer on a weekly basis.
According to the Employer’s witness, on July 14, a date
four days after the close of the hearing, the sales agency
agreements in effect were to be cancelled and the drivers re-
quired to enter into new agreements with a different commis-
sion structure. This change was announced at a mandatory
sales agency meeting on May 8, 1992, and explained in a
newsletter which the drivers received with their checks on
515METRO CARS
May 14, 1992. Under the new agreement, the drivers would
receive 45 percent of gross sales and the Employer would re-
ceive 55 percent. Further, rather than one sales agency agree-
ment, the new arrangement requires that the driver enter into
two agreements: a rental/lease agreement between the driver
and Metro Cars Management Corporation, and a management
agreement between the driver and Metro Cars, Inc. The new
agreements would be offered to every driver currently driv-
ing for the Employer.
The rental/lease agreement gives the driver the right to
lease a vehicle from Metro Cars Management Corporation
for a four-week period, automatically renewable for an addi-
tional four weeks under the same terms and conditions.
The management agreement contains essentially the same
terms as the sales agency agreement scheduled to expire on
July 14. The driver must observe the Employer’s rules of op-
eration and work exclusively for Metro Cars, Inc. Pursuant
to this new agreement, however, each vehicle must be on the
road 18 hours a day. To fulfill this obligation, the driver had
the right to hire one or two additional drivers to operate the
vehicle in his or her absence. All commission checks issued
by the Employer will go directly to the lessee-drivers, who
in turn will compensate any other drivers operating the vehi-
cle. As before, all drivers must observe the Employer’s rules
of operation.
At sometime between the hearing and July 14, the Em-
ployer asserted, that all drivers will be asked to sign the new
agreements. As of the hearing date, no sales or lease agree-
ments had been distributed or otherwise made available to
the drivers for their acceptance. In summarizing the changes
that will take place on July 14, the Employer’s counsel stated
that he did not believe ‘‘that it is anything substantial other
than it is changing some of the structure of the allocation of
the commissions.’’ Indeed, president Meathe testified that the
only change would be the commission percentage.
DISCUSSION
Section 2(3) of the Act excludes from the definition of
employee ‘‘any individual having the status of an independ-
ent contractor.’’ In NLRB v. United Insurance Co., 390 U.S.
25, 256 (1968), the Supreme Court concluded that Independ-
ent contractor status is to be determined by evaluating ‘‘the
total factual context . . . in light of the pertinent common
law agency principles.’’ The Board has adopted the common
law right of control test to determine whether individuals are
independent contractors or employees. This test has been ex-
plained as follows:
Where the one for whom the services are performed
retains the right to control the manner and means by
which the result is to be accomplished, the relationship
is one on employment; while on the other hand, where
control is reserved only as to the result sought, the rela-
tionship is that of independent contractor. The resolu-
tion of this question depends on the facts of each case,
and no one factor is determinative. News Syndicate Co.,
164 NLRB 422, 423–424 (1967).
Among the factors considered significant under the ‘‘right
to control’’ test are (1) whether individuals perform functions
that are an essential part of the company’s normal operation
or operate an independent business; (2) whether they have a
permanent working relationship with the company which will
ordinarily continue as long as performance is satisfactory; (3)
whether they do business in the company’s name with assist-
ance and guidance from company personnel; (4) whether the
agreement which contains the terms and conditions under
which they operate is promulgated and changed unilaterally
by the company; (5) whether they account to the company
for the funds they collect under a regular reporting procedure
prescribed by the company; (6) whether particular skills are
required for the operation subject to the contract; (7) whether
they have a proprietary interest in the work in which they
are engaged; and (8) whether they have the opportunity to
make decisions which involve risks taken by the independent
businessperson which may result in a profit or loss. Standard
Oil Co., 230 NLRB 967, 968 (1977); NLRB v. Pepsi Cola
Bottling Co., 455 F.2d 1134, 1141 (6th Cir. 1972).
Other relevant factors are (a) the nature of the parties’ un-
derstanding; (b) indicia of entrepreneurial activity and risk;
(c) the method of compensation and tax withholding; and (d)
the extent of supervision imposed by government or accredit-
ing agencies. North American Van Lines v. NLRB, 869 F.2d
596, 599 (1989); Cardinal McCloskey Children’s & Family
Services., 298 NLRB 434 (1990); Pierre’s Vending Co., 274
NLRB 1219 (1985): Capital Parcel Delivery Co., 256 NLRB
302 (1981).
With regard to supervision imposed by government au-
thorities, the Board, in Cardinal McCIoskey, supra at fn. 8,
stated:
Government regulations constitute supervision not by
the employer but by the state. Thus, to the extent that
the government regulation of a particular occupation is
more extensive, the control by a putative employer be-
comes less extensive because the employer cannot
evade the law either, and in requiring compliance with
the law he is not controlling the [individual]. Citing
Seafarers Local 777 (Yellow Cab) v. NLRB, 603 F.2d
862, 875 (D.C. Cir. 1978); Don Bass Trucking, 275
NLRB 1172, 1174 (1985).
In NLRB v. O’Hare-Midway Limousine Service, 136
LRRM 2505 (1991), the Seventh Circuit affirmed the
Board’s determination that an airport-limousine driver was
not an independent contractor but an employee of the lim-
ousine service.
O’Hare-Midway is factually similar to the instant matter
and appears to be the controlling case in the area of airport
limousine drivers. In O’Hare-Midway, the drivers were per-
mitted to select the a.m., p.m. or all-day shift, but a driver
could not change his or her work schedule, or terminate a
shift early, without the employer’s permission. The drivers
could retain only 40 percent of their gross fares and were re-
quired to turn in the remaining 40 percent to the employer.
The drivers were required to adhere to company rules regard-
ing the manner in which they collect fares and service pas-
sengers, including maintaining records of each fare received.
The employer had the right to fine or reprimand the drivers
for failure to comply with company procedures and the em-
ployer retained the discretion to refuse to, provide a driver
with a vehicle. The Court also relied on the fact that the em-
ployer required the drivers to follow a mandatory dress code.
In concluding that the drivers were employees and not
independent contractors, the Court stated, ‘‘Although drivers
516 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
buy their own gasoline and absorb the losses for delinquent
passengers, and although the Company provides no benefits
to its drivers, makes no deductions for social security and
does not withhold state and local income taxes, on balance,
the evidence was substantial that [the driver] was not an
independent contractor.’’ 136 LRRM at 2506.
As in O’Hare-Midway, the drivers here are allowed to
choose their shifts at the time they are hired, but may not
deviate from that schedule without the Employer’s permis-
sion. When shifts are available, the Employer considers se-
niority and sales performance in determining which employ-
ees have priority in selecting those shifts. The Employer re-
quires all drivers to work two weekends a month and to give
the Employer two weeks notice in requesting vacation time.
As in O’Hare-Midway, the Employer is dependent on the
drivers’ sales activity for its profit. The Employer requires
the drivers to submit all fares to the Employer’s dispatch of-
fice at the end of their shift. The Employer then keeps 55
percent of the gross sales before returning the remainder to
the driver. Thus, based on the split commission structure, the
Employer has a direct financial stake in the amount of fares
collected by the drivers
The drivers must also account for their earnings by record-
ing every service rendered and the fare received for such
service on a transportation voucher provided by the Em-
ployer. Failure to turn in all transportation vouchers and
credit card documents may result in discipline.
The drivers must wear Employer-issued uniforms for
which they must pay a security deposit. Their uniforms in-
clude badges which identify the driver as a Metro Cars Inc.
employee. If the drivers do not adhere to the uniform policy,
they may be subject to discipline.
The Employer’s disciplinary system includes three steps:
written warning, suspension, and termination. The record
shows that drivers have been pulled off the road, warned,
suspended and terminated for infractions of the Employer’s
rules of operation. Indeed, Employer President Meathe testi-
fied that the ‘‘three strikes you are out’’ policy has been en-
forced.
I reject the Employer’s argument that the concession
agreement dictates the drivers’ terms and conditions of em-
ployment. While the concession agreement sets forth certain
minimal standards that the Employer must maintain in order
to do business at the airport, it does not carry the same force
or effect. of a government law or regulation. By choosing to
enter the concession agreement, the Employer made the deci-
sion to do business and employ persons subject to certain
minimal standards set by the county. This agreement does
not affect the fact that the drivers work exclusively for the
Employer, get paid by the Employer, and their working con-
ditions are controlled by the Employer.
It is clear that the Employer exercises substantial control
over the daily activities of the drivers. They are hired, super-
vised, paid a commission, and work hours assigned by the
Employer. The Employer further influences the drivers work-
ing conditions by requiring uniforms and detailed accounting
procedures, enforcing an established disciplinary system, and
maintaining rules of operation and a drug testing policy.
Based on all of the above, I find that the drivers are employ-
ees of the Employer and not independent contractors.
The Employer also contended at the hearing that the walk-
on drivers should be included in any unit found appropriate.
The Employer has approximately 25–35 walk-on drivers on
its payroll. Walk-on drivers will in for regularly scheduled
drivers who cannot make their shift. While they do not main-
tain regular shifts, the record indicates that they regularly
show up at. the Employer’s dispatch office in the morning
and drive any available Metro Car vehicles. Meathe testified
that walk-on drivers can work their way up to a full-time
driver if shifts become available. Walk-in drivers are subject
to the Employer’s rules of operation, disciplinary system, and
dispatch policies. They are are required to sign the same
sales agency agreements that the full-time drivers sign.
Under these circumstances, I find that the walk-on drivers
share a sufficient community of interest with the full-time
drivers and should be included in the unit. as regular part-
time employees. However, the record does not delineate the
work frequency of the on-call drivers other than as set forth
above. As I cannot determine from the record who among
the on-call drivers would qualify as regular part-time em-
ployees, I find it appropriate to apply an eligibility formula
utilized by the Board in such circumstances. Accordingly, el-
igible to vote as regular part-time employees will be only
those on-call drivers who averaged four hours or more on
work per week in the calendar quarter immediately preceding
the date of this Decision. Tri-State Transportation Co., 289
NLRB 356, 357 (1988); V.I.P. Movers, Inc., 232 NLRB 14,
15 (l977). Those individuals who do not satisfy this formula
will be ineligible to vote as set forth as irregular or casual
employees.
With regard to the alteration in contractual arrangements
that assertedly was slated to occur subsequent to the close of
the hearing, no determination can be made as this time
whether the announced procedures will cause, or have
caused, any substantial changes in the composition of the
unit found appropriate below, or in the voting eligibility sta-
tus of any individuals. While the Employer asserted that the
changes are not substantial and that the essential differences
from prior practices are only with the drivers’ commission
payment arrangements, it appears that the drivers may work
longer hours daily or arrange for others to drive their leased
vehicles. However, it is noted that all drivers would be sub-
ject to the same working conditions.
In an arrangement assertedly existing up to the time of the
hearing, driver Ben Hayes, according to the record, owns two
luxury sedans which he was described as operating under the
Employer’s management to which he paid management fees.
Hayes apparently utilized three individuals, Keith Anthony,
Rodney Harrington and Walter Welch, to drive his two se-
dans. The three were subject to the same Employer rules of
conduct and performance required of drivers employed di-
rectly by Metro Cars. The parties, on the record, agreed that
Anthony, Harrington, and Welch should be excluded from
the unit. However, in the circumstances of this case, includ-
ing that the Employer itself appears to be urging unit drivers
to make similar arrangements after July 14, 1992, I shall not
accept the agreement to exclude the three Hayes drivers, but
instead I shall permit them to vote subject to challenge if
they appear at the polls.
5. Based on the record evidence as a whole, the following
employees of the Employer constitute a unit appropriate for
517METRO CARS
4 As the exact number of eligible on-call drivers cannot be deter-
mined, I am satisfied, administratively, that the Petitioner has sub-
mitted sufficient evidence of interest to proceed to the election di-
rected. However, as the unit found appropriate is broader in scope
than the one sought by the Petitioner, I shall accord it 10 days from
the date of this decision to advise me whether it wishes to proceed
to an election. Should Petitioner choose not to proceed, it may re-
quest to withdraw its petition, without prejudice against refiling.
the purposes of collective bargaining within the meaning of
Section 9(b) of the Act:4
All full-time and regular part-time chauffeur drivers
employed by the Employer at its facility located at
28900 Goddard Road, Romulus, Michigan; but exclud-
ing all professional employees, clerical employees,
guards and supervisors as defined in the Act.