Metropolitan Taxicab Board of Trade, Ind.

National Labor Relations Board - Board Decisions

Sep 28, 2004

342 N.L.R.B. 1300 (N.L.R.B. 2004)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
342 NLRB No. 130
1300
Metropolitan Taxicab Board of Trade, Inc., and its
Constituent Members and Local 74, Service
Employees International Union, AFL–CIO.
Case 2–CA–31330
September 28, 2004
DECISION AND ORDER
BY MEMBERS LIEBMAN, SCHAUMBER, AND MEISBURG
On November 15, 1999, Administrative Law Judge
Raymond P. Green issued the attached decision. The
General Counsel and the Charging Party filed exceptions
and supporting briefs, and the Respondents1 filed an an-
swering brief. The Respondents filed limited cross-
exceptions and a supporting brief, the General Counsel
filed an answering brief, and the Respondents filed a
reply brief. The International Alliance of Theatrical
Stage Employees, AFL–CIO, the Screen Actors Guild,
Inc., the Writers Guild of America, East, Inc., AFL–CIO,
and the American Federation of Musicians of the United
States and Canada, AFL–CIO, filed a joint amicus brief
in support of the General Counsel’s and the Charging
Party’s exceptions.2

1 Respondent Metropolitan Taxicab Board of Trade (MTBOT) is a
trade association whose members are operators of fleets of New York
City-licensed medallion taxicabs. The member fleet operators that are
parties to this action include J & I Maintenance Corp., Ann Service
Corp., Glenties Leasing Corp., Ronart Leasing Corp., Irene Leasing,
Inc., 55-Stan Operating Corp., Linden Maintenance Corp., and Team
Systems Corp.
2 On February 24, 2004, the Charging Party, through its attorney,
submitted a letter that stated that it wished to withdraw its unfair labor
practice charge and discontinue all related proceedings, including, but
not limited to, its exceptions pending before the Board. The Respon-
dents and the General Counsel did not oppose the Charging Party’s
request. The General Counsel, however, did not withdraw his own
exceptions to the judge’s decision.
Only the Board is vested with discretion to determine whether a pro-
ceeding, once instituted, may be abandoned. See Robinson Freight
Lines, 117 NLRB 1483, 1485–1486 (1957), enfd. 251 F.2d 639 (6th
Cir. 1958). This matter has been fully litigated, exceptions and briefs
have been filed, and considerable time and resources have been in-
vested by the Board in consideration thereof. The issue whether nearly
2000 New York City taxi drivers are Sec. 2(3) employees who can
claim collective-bargaining rights under the Act is not moot simply
because the Charging Party apparently no longer seeks to represent
them. No comparable issue warranting final Board resolution existed
in Wilson Tree Co., 312 NLRB 883 (1993), cited by our concurring
colleague. Accordingly, we decline to exercise our discretion to dis-
miss the charge and to discontinue all related proceedings as the Charg-
ing Party requested.
Member Schaumber respectfully disagrees with his concurring col-
league that the principal of judicial restraint—upon which he relied in
part in his dissenting opinion in Double D Construction Group, 339
NLRB 303 (2003)—weighs in favor of the Board granting the Union’s
request to withdraw its petition in lieu of issuing a decision on the
merits. In Double D Construction Group, the panel majority remanded
for the judge to explain why he discredited an employee witness who
lied on an INS form. The remand was inconsistent with extant Board
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the exceptions, the cross-exceptions, and briefs
and has decided to affirm the judge’s rulings, findings,
and conclusions only to the extent consistent herewith,
and to dismiss the complaint in its entirety.
The complaint alleged that the Respondents unlawfully
withdrew recognition and refused to bargain with SEIU
Local 74 as the collective-bargaining representative of
their taxi drivers.3 For the reasons set forth in the judge’s
decision, we agree with him that the Respondent fleet
operators’ lessee taxicab drivers are independent contrac-
tors and not statutory employees. Because the lessee
taxicab drivers comprised the majority of the historical
bargaining unit, the judge concluded that the bargaining
unit was so changed (i.e., essentially destroyed), that the
Respondents were no longer obligated to recognize and
bargain with the Union. Therefore, he dismissed the
complaint. While we agree with the judge that dismissal
of the complaint is appropriate, we find it unnecessary to

law, Standard Dry Wall Products, 91 NLRB 544, 545 (1950), enfd. 188
F.2d 362 (3d Cir. 1951), relied on facts which were not in evidence,
thus presenting only a hypothetical question, and was, in any event,
unnecessary because the General Counsel failed to satisfy his burden of
proof under Wright Line without regard to the discredited testimony.
Unlike Double D Construction Group, the instant case presents im-
portant considerations that militate in favor of final resolution of the
issue raised. This is one of several cases considered together by the
Board because each raised the issue of independent contractor versus
employee status under Sec. 2(3) of the Act. The Board contemplated
simultaneous issuances of the decisions for the benefit of the parties
and the public. The Union sought to withdraw the charges that gave
rise to this appeal, which had been pending before the Board for nearly
5 years, at a late stage in the Board’s decisional process. Thus, in
weighing the interests of the Board, the Charging Party Union, the
Respondents, and the taxicab drivers in the bargaining unit, I believe
the benefits arising from the resolution of the question presented—
employee status under the Act of the former bargaining unit mem-
bers—outweigh any minimal savings of additional Board resources. In
my view, leaving the drivers in the dark with respect to their coverage
under the Act would constitute circumstances in which “restraint is not
prudent.” Double D Construction Group, supra.
3 The Respondents and SEIU Local 3036 had a collective-bargaining
relationship for more than 25 years. The most recent collective-
bargaining agreement had a term of April 1, 1987, until March 31,
1990, which was subsequently modified and extended until October 5,
1997. In June 1997, Local 3036 sought assistance from sister Local 74
in negotiating a successor contract. That same month, the sister locals
notified the International Union of their desire to have Local 3036
merge into Local 74. Each local informed its members of the merger,
and at separate meetings, their members, having had full opportunities
for discussion, overwhelmingly approved the merger by voice votes.
The International Union approved the merger on September 17, 1997.
We do not pass on the question of whether the merger comported with
our due process standards. See, e.g., Sullivan Bros. Printers, 317
NLRB 561 (1995), enfd. 99 F.3d 1217 (1st Cir. 1996). For the reasons
discussed in her concurring opinion, Member Liebman agrees that it is
unnecessary to pass on this issue.
METROPOLITAN TAXICAB BOARD OF TRADE 1301
pass on his rationale for reaching that conclusion and
instead rely on the reasons described below.
The complaint alleges that, for purposes of collective
bargaining, the “following employees” constitute “a unit
appropriate” within the meaning of Section 9(b) of the
Act: “drivers and inside workers in the garages of the
employer members of the Association.” The complaint
also alleges that the Respondents “withdrew its recogni-
tion of the Union as the exclusive collective-bargaining
representative of the Unit,” and have “failed and refused to
recognize or bargain with the Union as the exclusive col-
lective-bargaining representative of the employees of the
Unit described above.” Prior to the hearing, the parties
stipulated that the inside workers are “employees” within
the meaning of Section 2(3) of the Act and that they con-
stitute an appropriate bargaining unit under the Act.
The record evidence here compels us to find that the
Respondent fleet operators’ lessee taxicab drivers are
independent contractors who do not belong in the histori-
cal bargaining unit. Although the parties stipulated that
the inside workers constitute an appropriate unit, the
complaint, strictly construed, failed to allege that the
Respondent fleet operators’ inside workers constituted an
appropriate unit within the meaning of Section 9(b), that
the Union demanded recognition and bargaining in that
unit, and that the Respondents violated Section 8(a)(5)
and (1) by failing and refusing to bargain with the Union
as the collective-bargaining representative of those unit
employees. Given the limited scope of the present com-
plaint, we find that dismissal of the complaint is war-
ranted.4 Cf. Barwood, Inc., 209 NLRB 19 (1974) (dis-
missing complaint allegation that employer failed to bar-
gain over cab rental rates because the employer’s cab
drivers were independent contractors who should be ex-
cluded from the certified bargaining unit).
ORDER
The complaint is dismissed.

MEMBER LIEBMAN, concurring in the result.
There is no good reason to decide this case. The
Charging Party Union has sought to withdraw its unfair
labor practice charge and to discontinue all related pro-
ceedings. In the interest of administrative economy, we
should grant the Union’s request and dismiss the com-

4 Although Sec. 10(b) bars the Union from now filing an unfair labor
practice charge alleging that the Respondents failed and refused to
recognize and bargain with it as the exclusive collective-bargaining
representative of the inside workers, the Union may file a properly-
supported representation petition if it is interested in representing those
employees, and the employees themselves may approach a union, in-
cluding this one, about representing them.
plaint, on that basis alone. See, e.g., Wilson Tree Co.,
312 NLRB 883 (1993).1
The majority, on the other hand, proceeds to issue a
decision that reaches the merits. It is not clear that any
party desires that result at this point.2 In any case, “judi-
cial restraint should guide the Board in its decision-
making. With an enormous backlog lessening our effec-
tiveness, the Board should not reach out to address issues
unnecessary for it to decide.”3
Citing no Board precedent for ignoring the wishes of
the parties in cases in which the judge has recommended
dismissal of a complaint, the majority maintains that,
because this matter has been under consideration by the
Board for several years, justice can be served only if the
merits are addressed. But there are no individual rights
that need to be remedied here. Moreover, any bargaining
rights the Union might have had, it essentially relin-
quished once it filed the withdrawal request. As a result,
reaching the merits of this case in no way effectuates the
policies of the Act.
Indeed, it represents an unfortunate waste of the
Board’s resources. Independent-contractor cases like this
one are fact-intensive, and the basic legal principles that
govern them are well established. The Board’s deci-
sion—an advisory opinion, for all practical purposes—
thus can provide the public with only limited useful guid-
ance.4 We have better things to do.

Ruth Weinreb Esq., for the General Counsel.
Merril A. Mironer Esq. and David E. Ross, for the Respondent.
Thomas P. Ryan Esq., for the Union
DECISION
STATEMENT OF THE CASE
RAYMOND P. GREEN, Administrative Law Judge. This case
was tried before me on June 3 and 4 and July 28, 1999. The
charge was filed by Local 74, Service Employees International
Union, AFL–CIO on March 17, 1998 and the complaint was
issued on October 27, 1998. In substance, the complaint al-
leges that Local 74, is the proper collective-bargaining repre-

1 In Wilson Tree, supra, the charging party union requested to with-
draw the Sec. 8(a)(5) portion of its charge because, due to the passage
of time since the employer refused to bargain, the employees had be-
come disillusioned with the union and the progress it had made in se-
curing representation rights. Because no party was opposed, the Board
majority granted the withdrawal request, dismissed the corresponding
allegations of the complaint, and modified the recommended Order to
reflect only the other allegations.
2 Neither the General Counsel nor the Respondents have filed a
written response to the Union’s request. The Board should have solic-
ited such responses by issuing an order to show cause why the Union’s
request should not be granted.
3 Double D Construction Group, Inc., 339 NLRB 303, 309 (2003)
(Member Schaumber, dissenting).
4 I express no view on the correctness of the Board’s decision on the
merits.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1302
sentative inasmuch as it is the successor to Local 3036, SEIU,
AFL–CIO which merged into it. The complaint further alleges
that subsequent to the merger, the Respondents withdrew rec-
ognition and have refused to bargain.1
The Respondents make the following arguments. First they
argue that the merger was not carried out with the proper safe-
guards to ensure a fair election among the respective members
and therefore that it was not effective for the purpose of impos-
ing any duty to bargain with the successor union. Second, they
argue that in any event, the collective-bargaining unit is inap-
propriate because most of the persons who the Union purports
to represent are independent contractors and not employees.
On the entire record, including my observation of the de-
meanor of the witnesses and after reviewing the briefs filed by
the parties, I hereby make the following2
FINDINGS OF FACT
I JURISDICTION
The parties agree and I find that the Respondents are em-
ployers engaged in commerce within the meaning of Section
2(2), (6), and (7) of the Act. It also is agreed and I find that the
charging party, Local 74 is a labor organization within the
meaning of Section 2(5) of the Act.
A. The Relationship Between Fleet Owners
and Taxicab Drivers
I remember a day, long ago, when I found myself was count-
ing ballots in the large ballroom of the now defunct St. George
Hotel in Brooklyn, after which the late and flamboyant Re-
gional Director, Samuel Kaynard, announced that the taxi driv-
ers in New York had voted for union representation. That was
quite an event and this case is perhaps the sad conclusion of a
Union’s rise and fall.
The employers involved in this case are companies that own
fleets of taxi cabs which are operated in the city of New York.
The taxis are the familiar yellow painted vehicles operating in
New York which are the only commercial vehicles permitted
by law to pick up customers on the street. There are other
companies which provide car or limousine services, but they
are not involved in this case.
There are four types of players in this industry. There are
people who hold medallions which are licenses issued by the
City of New York to operate a taxicab on the city’s streets. The
number of licenses outstanding at any given time is limited to
about 10,000 and generally speaking there is one medallion per
cab. Thus, although it sometimes seems that there are a lot
more, particularly in midtown Manhattan, the total number of
yellow cabs in New York is about 10,000. People who own
medallions may also be owners of cab companies. But in some
instances, they are the widows and heirs of people who used to

1 The individual employers named as respondents in this case are
Linden Management Corp., J and I Maintenance Corp, Ann Service
Corp., Glenties Leasing Corp., Ronart Leasing Corp, Irene Leasing
Inc., 55 Stan Operating Corp., and Team Systems. All of these are fleet
owners.
2 The Respondent’s unopposed motion to correct the transcript dated
September 10, 1999, is granted.
have them in the past. Medallions, because they are limited in
number, are bought and sold on a market and their value may
vary from year to year. At the time of the hearing, a medallion
was worth about $300,000.3
There also are people who own taxi cabs. A cab may cost
about $20,000. It may be owned by an individual who operates
the cab himself, but more commonly, may be owned by a com-
pany that operates a fleet of cabs. The companies involved in
the present case are fleets that consist of at least 50 cabs and
which have a fixed location where they do business. The fleet
owner or owners may have some or no medallions in their own
names, but in order to operate the cabs, each cab has to covered
by a medallion. If a fleet company does not have medallions
for some or all of its cabs, it leases the requisite number of
medallions from those people who hold them. There are, ap-
parently, brokers who act as middlemen for these kinds of
transactions.
The fleet owners maintain facilities where they keep and
maintain their cabs. They employ office clerical employees
and also employ maintenance people who take care of repairs.
The owner is responsible for all insurance, including liability
insurance for the cabs. Additionally, the owners are required
by law to provide Workers Compensation Insurance for all their
employees, including the drivers. Therefore, whether or not
drivers are held to be employees in the context of this case, they
are treated as if they were employees for purposes of New York
State’s workers’ compensation laws. However, for other pur-
poses, such as taxes and unemployment compensation, the
drivers are treated as independent contractors. The fleet owners
neither make federal or state income tax deductions, nor deduc-
tions for social security purposes.
In addition to cab owners and medallions holders, there is the
group of people who drive the cabs. (There are about 40,000
New York City cabdrivers.) This is a group of workers who are
engaged in a relatively unskilled field of endeavor and who, if
they don’t own their own cabs, lease them from the cab owners.
In order to become a taxidriver, a person needs to obtain a hack
license from the City of New York, but this does not seem to be
very difficult. (The city does require that prospective taxidriv-
ers take an 80-hour course). There are a variety of leases rang-
ing from one for a single 12-hour shift, to leases that run for
several months. The cost of the lease depends on its length,
(the most costly being the single-shift lease), and the days of
the week that are covered by the lease. (Some days cost more

3 Actually the cost of medallion, if issued by the city, is quite low.
What keeps the price so high is that the city limits the number of me-
dallions at a steady level and therefore does not issue them except on
rare occasions. Thus, with the supply limited by the government, the
cost of a medallion is much higher than its initial issuance price. Pre-
sumably, the city limits the number of medallions in order to limit the
number of taxicabs on the streets. I would imagine that this is done for
traffic control reasons, although a side effect of this practice is that the
current medallion owners protect their value. Obviously, if there were
no limit on the number of medallions there would be no premium to
their price, but there might be a large increase in the number of taxicabs
on the streets. I, of course have no expertise and no opinion as to what
would happen if the city made more medallions available and therefore
reduced their cost.
METROPOLITAN TAXICAB BOARD OF TRADE 1303
than others because of the anticipated volume of business). The
terms of the lease are regulated by the New York Taxicab
Commission which sets maximum amounts for each type of
available lease. Daily leases run from about $95 per day to
$112 per day. The standard weekly lease for a cab with a me-
dallion is somewhat less on a prorated daily basis. And based
on some exhibits offered by the employers, the average hourly
earnings of drivers, after accounting for the lease price, is, de-
pending on the day of the week, between $8.25 to $10 per hour,
(including tips calculated on the basis of 15%).4 In some cases,
a driver on a particularly good day might make around $15 per
hour and on a particularly bad day may earn under $5 per hour.
These figures do not include the cost of gasoline which is borne
by the drivers; nor do they include the payments by drivers for
license fees, fines, etc. Tolls are charged to customers.
Perhaps the biggest player in the industry is the government
through the operation of the New York Taxi & Limousine
Commission. For it is this body that sets the prices that are
charged to customers, regulates the types of vehicles that can be
used, mandates the inspection of these vehicles, and determines
the maximum price that a cab owner can charge a cabdriver in
the form of a lease.
Additionally, as noted above, because the City government
limits the number of outstanding medallions, it is the cause for
this licensing cost to far exceed the cost of vehicles. Thus, the
cost of buying or renting medallions is no doubt, a major por-
tion of the cost of doing business for a taxi owner, whether it be
an individual or a fleet. In addition, the Taxi Commission re-
ceives complaints from customers regarding either the vehicles
or their operation by drivers and has a formal hearing mecha-
nism to hear, decide and if necessary, punish both owners
and/or drivers for infractions of its many and varied rules.
Thus, insofar as the economics of this industry is concerned, it
is the city government which is the final arbiter of the income
received by the fleet owners, by setting the maximum amounts
they can charge for leases, and the income received by the cab-
drivers, by setting the fees that they can charge to customers.
Accordingly, the final determination of income for both groups
is not set in the market place but rather is a consequence of
decisions made, (no doubt after a certain amount of lobbying
and petitioning), by public officials.5
For many years, Local 3036 has been the collective-
bargaining representative of the drivers and inside workers
employed by the Respondents’ fleets through successive collec-
tive-bargaining agreements between that Union and the Metro-
politan Taxicab Board of Trade, a multiemployer association.

4 The figures here are based on a very small sample and cannot be
viewed as dispositive. I should note that drivers are not covered by Fair
Labor Standards laws and therefore do not receive any premium pay for
working in excess of 40 hours per week. From the records, it seems
that a typical driver’s shift will consist of anywhere from 10 to 12
hours.
5 To enforce the pricing rules, each cab is required to have the rates
printed on the outside of the vehicle and each has a taximeter which
registers the amount of the fare during the trip; this being determined
mostly by mileage. Each driver is required by the Taxi Commission to
maintain a trip card on which he or she is required to note the start and
end time of every fare during the shift.
By 1997, the number of employees covered by a collective-
bargaining agreement was about 3000 drivers and about 200
inside workers.
There is no dispute by the Respondents that before 1979 the
drivers were employees of the fleets. The event that perhaps
changed this situation was a change in the law by City of New
York which, after lobbying from the fleet owners and opposi-
tion from the Union, permitted the owners to lease their cabs to
the drivers. With the acquiescence of the Union, which permit-
ted, in its collective-bargaining agreement, the new leasing
arrangements, the pattern shifted, over time, from a system of
commission sharing to a system of leasing. Under the former
arrangement, the fares were shared between the driver and the
owner and an elaborate system of accounting and control was
maintained to ensure that the owners got their share of the
fares. When the arrangement shifted to leasing, the owners got
their money up front before the driver took the vehicle out of
the garage. From a practical point of view, the owner couldn’t
care less how the driver used the vehicle during the leased pe-
riod as long as the vehicle was returned, on time, in the same
condition as it went out.6
At the commencement of the trial, the parties entered into
evidence a stipulation regarding the relationship between the
fleet owners and the drivers. This stipulation describes the
relationship in great detail and it reads as follows:
Stipulation
1. Respondents, J & I Maintenance Corp., Ann Service
Corp., Glenties Leasing Corp., Ronart Leasing Corp., Irene
Leasing, Inc., 55-Stan Operating Corp., Linden Maintenance
Corp., and Team Systems Corp., are operators of fleets of New
York City-licensed medallion taxicabs, and are in the business
of leasing such medallions and taxicabs to licensed New York
City taxi drivers. (The respondent fleets are hereafter referred
to as the Fleets.) Respondent Metropolitan Taxicab Board of
Trade, Inc. (MTBOT) is a not-for-profit corporation, and is a
trade association whose members include the Fleets. MTBOT
has served as the designated bargaining representative of the
Fleets in connection with collective-bargaining negotiations
with Taxi Drivers and Allied Workers Union, Local 3036, Ser-
vice Employees International Union, AFL–CIO (Local 3036).
MTBOT and the Fleets are the respondents in this matter.
2. Prior to 1979, New York City law precluded the leasing of
medallion taxicabs. Accordingly, the Fleets, or their predeces-
sors in interest, employed drivers to drive their taxicabs, and
paid such drivers pursuant to commission arrangements involv-
ing the splitting of fares between the employer and its em-
ployee-drivers. Such employee-drivers received benefits pursu-
ant to the collective-bargaining agreement between Local 3036
and the Fleets. Those benefits included paid vacations, health
insurance, pension benefits, death benefits and eligibility for
school scholarships. Such employee-drivers were also subject

6 The Respondents assert that the change from commission sharing
to leasing came about largely because the drivers felt it served their self
interest. While I am skeptical of the reasons asserted by the Respon-
dent, there is no doubt that this was a voluntary change and after a few
years, virtually all of the drivers changed over to the leasing arrange-
ment.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1304
to discipline and discharge for misconduct, including misap-
propriation or theft of fares, violation of their employer’s rules
and regulations, lack of productivity and various other causes.
In 1979, New York City amended its applicable law to permit
the leasing of medallion taxicabs. Shortly thereafter, the Fleets,
or their predecessors in interest, began to lease their taxicabs
and medallions to taxi drivers, subject to the terms of the col-
lective-bargaining agreement between the Fleets and Local
3036.
3. Before the Fleets commenced leasing, Local 3036 was the
collective-bargaining representative of the taxi drivers who
were employed by the Fleets or their predecessors in interest.
After the Fleets commenced leasing, Local 3036 was the col-
lective-bargaining representative of the taxi drivers who leased
taxicabs from the Fleets. Since 1983, each collective-
bargaining agreement between Local 3036 and the Fleets has
stated, in the article entitled “Leasing of Taxicabs,” that “A
lease taxicab driver shall be an independent contractor and shall
not have any of the rights, benefits or obligations of commis-
sion driver employees, except as specifically provided for in
this Agreement.”
4. Under the leasing system, drivers lease taxicabs (and the re-
lated medallions) from the Fleets pursuant to varying lease ar-
rangements. As more fully set forth below, pursuant to a written
lease agreement, the driver pays the Fleet a flat fee to lease a
taxicab at a rate set by the Fleets, subject to the qualifications
described in paragraphs 12 and 13 below. Having paid the lease
fee, the driver keeps all fares (including night surcharges) and
tips that he/she collects. The New York City Taxi & Limousine
Commission (TLC) sets the rate of fare which is charged to taxi-
cab passengers. The driver pays for the gasoline consumed dur-
ing the lease period. Certain Fleets maintain on-site gas pumps
for sale of gasoline to those drivers who choose to purchase gaso-
line at the Fleet’s premises. A driver who leases a medallion and
cab five shifts per week throughout a year pays approximately
$20,000-$25,000 in lease fees and gasoline. Drivers lose income
due to lost fares because of accidents and breakdowns, being
stopped and ticketed by the police or TLC inspectors, or other
interruptions such as those caused by inclement weather or severe
traffic. Drivers also lose income due to robberies and nonpaying
passengers. In addition, drivers must pay for tickets issued by the
police, the TLC or NYC parking violations bureau, where such
tickets are related to the driver’s conduct. The above factors can
cause a driver to earn less in fares for a particular shift than he
pays to lease the cab.
5. Drivers receive no compensation of any kind from the
Fleets, nor do they receive any fringe benefits (including over-
time, vacation pay, medical, dental or life insurance, pension or
retirement contributions). As the Fleets pay no wages to driver-
lessees, they withhold no social security or other moneys from
and issue no tax-related forms to, the drivers. The driver alone
is responsible for his/her tax reporting. The U.S. Internal Reve-
nue Service has issued individual determination letters to each
of the Fleets or their predecessors in interest, acknowledging
that the lessee-drivers are “independent contractors” for all
purposes under the Internal Revenue Code. Likewise, the New
York State Department of Labor, Division of Unemployment
Insurance has repeatedly found that the lessee-drivers are not
employees, but instead “independent contractors,” who are not
eligible for unemployment insurance coverage. New York
State law was amended in 1986 to require that lessee-drivers be
covered under the workers’ compensation law and, accordingly,
the Fleets provide such coverage at their cost. While the trip
sheets which the TLC requires drivers to complete and the
Fleets to maintain call for information on fares, the Fleets make
no attempt to ascertain and do not know how much money their
lessee-drivers receive in fares and tips, except as set forth in the
next sentence. On approximately three occasions during the
past 10 years, on request of counsel for the Fleets, several of
the Fleets reviewed a limited sample of trip sheets to present
statistical information to the TLC.
6. Each of the Fleets operates 7 days per week and 24 hours
per day, based on two 12-hour daily shifts. The “day shift”
typically begins between 4 and 5 a.m. and concludes 12 hours
later when the “night shift” begins.
7. In order to become licensed, a driver must first obtain a
New York City “hack” license. To obtain a hack license, a
driver must at his/her own cost pay for application and licens-
ing fees, an 80-hour TLC-mandated taxi driver’s course and a
6-hour DMV-approved defensive driving course, and manda-
tory medical and drug-testing examinations. The driver is also
responsible for the costs of periodic license renewals, refresher
courses and drug tests mandated by the TLC. The Fleets and
MTBOT have, from time to time, assisted drivers in completing
TLC forms and referred them to notaries. To attract new driv-
ers to drive for the Fleets, from October, 1997 to March, 1999,
some of the Fleets offered new drivers lease credits equivalent
to the cost of tuition for the TLC-required course, which credits
could be applied after a new driver leased for 20 shifts from the
same Fleet.
8. Drivers are free to lease from any companies and indi-
viduals who are in the leasing business, including individual
owners, lease managers, owner/drivers looking for a “second
driver”, fleets other than the Fleets, and those firms comprising
the Fleets. Lease managers act as brokers with respect to taxi-
cab medallions, contracting with medallion owners to pay to
such owner a fixed sum each month for the use of the medal-
lion and leasing the medallion to drivers, often together with a
vehicle. However, lease managers do not operate taxicab ga-
rages and usually lease medallions exclusively on a longer-term
basis, unlike the Fleets. The Fleets have “fleet” status under the
rules of the TLC, which require that the fleet maintain a full-
time garage, where vehicles can be serviced. A driver chooses
which firm or individual medallion/cab owner or lease manager
to lease from based on the driver’s preference for the nature,
type and lease prices/arrangements of a particular Fleet, firm,
medallion/cab owner or lease manager, as well as its location
and convenience for his/her particular lifestyle.
9. When a driver wishes to lease from a Fleet for the first
time, a Fleet will typically ask the driver to fill out a lease ap-
plication form which seeks basic information to identify the
driver, his driver’s and hack license information, and driving
history. This information is then used by the Fleet to run a
check with the DMV to verify that the driver is properly li-
censed and in good standing, and to determine whether the
driver’s driving record, particularly his/her history of accidents
METROPOLITAN TAXICAB BOARD OF TRADE 1305
and moving violations, indicates that the driver presents an
acceptable risk to that Fleet. The driver’s safety record is of
utmost importance to the Fleet because its primary objective is
to maximize the number of its cabs that are leased during every
shift, by keeping them operational and by avoiding costly acci-
dents. The Fleets generally do not lease to new potential les-
see-drivers with excessive moving violations or a history of
accidents. For current lessee-drivers, Fleets will terminate the
leasing privileges of those drivers who have an excessive num-
ber of accidents, or fail to pay lease or gasoline fees when due,
or engage in threatening or abusive behavior. With respect to
Respondent Glenties Leasing Corp., a lessee driver’s leasing
privileges may be suspended or terminated if the driver fails to
lease on a shift when the driver has previously advised the Fleet
that he would lease for such shift.
10. If a new lessee-driver has an acceptable driving history,
the Fleet will typically give such driver a “road test” that lasts a
few minutes to determine whether the driver is able to safely
back up, drive and park the cab. Following a new lessee’s suc-
cessful road test, a driver new to the industry is then typically
provided with a very short “orientation” to verify that he/she
understands how the taximeter works, how to complete the
“trip sheet” (as required by the TLC regulations) and how to
check the cab to ensure it complies with all other TLC regula-
tions which are the driver’s responsibility, such as those set
forth in paragraphs 16 and 17 below. Other than such “orienta-
tion,” the Fleets provide no other training to lessee drivers.
New drivers who have previous taxi industry driving experi-
ence do not receive any orientation or other training. Written
orientation guidelines are issued to new drivers by many of the
Fleets. Although the guidelines vary significantly, each em-
phasizes the importance of avoiding accidents and damage to
the taxicab, and gathering accident information required by the
Department of Motor Vehicles and needed for insurance pur-
poses. Each set of orientation materials also emphasizes the
need to comply with TLC rules. Some of the Fleet’s guidelines
include information concerning procedures for accidents and
breakdowns, refueling of the cab at the conclusion of the shift,
and information concerning the shift schedule.
11. Prior to leasing a cab from a Fleet, the driver must sign a
written lease agreement with such Fleet which sets forth the
contractual terms of the lease. Each Lease Agreement provides
as follows:

RELATIONSHIP BETWEEN PARTIES: It is understood
and agreed that the relationship between the parties hereto
shall be solely that of LESSOR and LESSEE, and that the
LESSEE shall be an independent contractor and not an em-
ployee of the LESSOR, nor shall LESSEE be deemed an
agent of the LESSOR. LESSEE shall at all times be free from
the control or direction of LESSOR in the manner of opera-
tion of the automobile leased hereunder, and LESSOR shall
have no right to, nor attempt to, exercise any supervision over
LESSEE in the operation of said vehicle. LESSEE shall retain
all fares collected from passengers.

12. After signing the lease agreement, the driver then typically
meets with a Fleet dispatcher or representative to advise on what
days and what shifts the driver wishes to lease. The driver’s
leasing arrangements with a fleet are subject to the Fleet’s ability
to supply a cab for the desired days/shifts. Drivers’ leasing pref-
erences vary greatly depending on whether they wish to lease full
time or part time, with some drivers leasing only days or nights
or weekdays or weekends, or even during school intercessions.
For at least the past 4 to 5 years, there has been a growing short-
age of lessee-drivers. As a result, lessee drivers have been re-
questing and often obtaining lower lease fees, a better choice of
shifts, and new automobiles from the Fleets.
13. Among the Fleets, there are wide variations in the lease
options and associated pricing they offer. Some operate almost
exclusively on a “two-shift, 12-hour” basis. Others offer a
wide variety of lease terms including varying hourly leases (on
9, 12, 18, 36, 48, and 72-hour bases, for example), weekly
leases (5, 6, or 7 days for the day or night shift), 24-hour (2-
shift) leases, weekend leases, monthly leases, or partial shift
leases. Some Fleets also enter into leasing agreements with
drivers who own or are financing the purchase of a cab, with
the driver leasing only the medallion from the Fleet. These are
known as driver-owned vehicles or “DOV’s” in the industry.
Many of the Fleets will negotiate their lease prices with drivers
and will enter into special deals depending on supply and de-
mand for drivers and cabs. Other Fleets have set lease prices
that a driver can either accept or reject. Many drivers change
the party from whom they lease to get better lease prices, dif-
ferent lease options or newer cars (which have fewer break-
downs). Over the course of an average year, there is approxi-
mately a 40-percent turnover among the drivers who lease
from the Fleets. Among the reasons drivers cease leasing from
a Fleet are: leaving the industry, revocation of drivers’ licenses,
taking an extended break from leasing, or choosing to lease
from a different fleet or taxicab operator.
14. Over the 14 12-hour shifts during a week, the Thursday,
Friday and Saturday night shifts are considered the “prime”
shifts during the fall, winter and spring because taxis are typi-
cally in high demand on those nights (and tipping is frequently
more generous at those times). In the summer, Wednesday and
Thursday nights are considered “prime shifts”. As a result of
this difference between shifts, there is a high demand among
drivers to lease during prime shifts and Fleets frequently cannot
fill the demand for cabs during those shifts. Correspondingly,
as there are fewer passengers during the day shifts on Saturday
and Sunday, lease demand is much lower during those shifts.
Because the Fleets seek to maximize the number of cabs they
lease during every shift, many will structure their leases to pro-
vide for a lessee-driver to drive during a relatively less profit-
able shift in order for the driver to be guaranteed the opportu-
nity to lease during more profitable shifts. The Fleets do not
require lessee drivers to accept such arrangements. If the Fleet
and a lessee-driver do agree to such an arrangement, and if the
lessee-driver thereafter fails to lease in accordance with such
arrangement, the Fleet may choose not to continue the ar-
rangement. The Fleets do not require lessee drivers to lease on
weekends, unless they have committed to do so pursuant to an
agreed arrangement as described above.
15. The dispatcher, an agent of the Fleets, assigns cabs to the
drivers. A driver advises the dispatcher of the shift he/she
wants to drive. If a driver requests a shift that is already filled,
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1306
then the dispatcher will offer another shift to that driver, if a
cab is available for such other shift. If the driver does not want
to drive that alternative shift, then he/she can decline to lease a
cab from such Fleet and go elsewhere for that shift. The driver
can also choose not to drive at all for that shift. Drivers can
also lease a cab by coming to the garage before the shift begins.
If there is a cab available, the dispatcher will assign one to such
driver.
16. Prior to October 5, 1997, pursuant to the collective-
bargaining agreement between the Fleets and Local 3036, driv-
ers were required to purchase from a union vending machine a
lease permit, which cost $3, in order to lease a taxicab. The
lease permit was presented to the Fleet’s dispatcher and subse-
quently collected by the Union, which also collected the pay-
ments from the vending machine. Such moneys constituted
union dues.
17. The Fleets do not supply their drivers with anything ex-
cept the cab they have leased, equipped with a taximeter and
receipt paper, and the TLC-mandated trip sheet. The Fleets
advise, and periodically remind, drivers of many of the
“Driver’s Rules” to assure compliance with all TLC rules.
Such TLC Driver’s Rules bar a driver from, among other
things: subleasing a taxi, driving more than 12 consecutive
hours, smoking in the cab, charging more than approved rates,
refusing to take any orderly passenger to a destination within
New York City, Nassau or Westchester, or requesting a tip.
Such Driver’s Rules also mandate, among other things, that the
driver: be “clean and neat in dress and person” (specifying
prohibited dress such as shorts, bathing suits, or “underwear”),
insure that brakes, tires, lights, signals and seatbelts are in good
working order, properly maintain the “trip sheet”, properly
display and (after sunset) illuminate his hack license, the “rate
card” and the taximeter, insure that the interior and exterior of
the cab is clean, have a NYC map in the cab, and dispense re-
ceipts to passengers.
18. When a driver leases a taxicab, the driver undertakes cer-
tain steps to assure compliance with TLC rules. These include
checking: (a) that the correct trip sheet, which is required by
the TLC, has been given to the driver by the Fleet; (b) damages
to the vehicle to avoid liability for previous accidents; and (c)
cleanliness of the cab and that off duty and brake lights are
working, as required by the TLC. If the driver advises the Fleet
that the cab is not in compliance with TLC requirements, and
the Fleet agrees, the Fleet will either remedy the problem or
provide an alternate car if one is available. Fleets provide free
car washes for the cabs which are being leased to drivers, since
TLC rules require the owner to maintain a clean cab. Trip
sheets, as required by the TLC, are filled out by the driver,
recording the location a passenger is picked up, the passenger’s
destination, and the amount of fare. Pursuant to TLC rules,
drivers return completed trip sheets to the Fleets, which are
required to retain them for three years. In accordance with
TLC rules, the dispatcher records the shift and the cab leased
by the driver and the Fleets retain these records.
19. The lease agreement used by each of the Fleets, except
for Glenties, provides that the Fleet can charge a late fee to a
driver who returns the cab to the Fleet’s garage after the con-
clusion of the leased shift and, for some Fleets, after the expira-
tion of a grace period. Only some of the Fleets actually charge
a late fee.
20. Once the driver drives the leased cab out of the garage,
the driver alone chooses where he wants to pick up his first
fare, where he chooses to “cruise” for fares when riding empty,
when to take breaks to eat or rest, and whether to wait for fares
in hotel or airport taxi lines. There are no mileage limitations or
penalties imposed on driver-lessees for excess mileage. The
Fleets do not operate two-way radios to communicate with
drivers and do not dispatch any calls or fares to drivers. Once
the driver drives the leased cab out of the garage, the Fleet has
no contact with him till the cab is returned to the garage; and
the driver is not required to and does not report his location to
the Fleet at any time during a shift with these exceptions: if a
cab breaks down, is in an accident, or in the case of some of the
Fleets, if the driver wishes to take a fare beyond the New York
City metropolitan area. In the case of a breakdown or an acci-
dent, the Fleets require that the driver promptly report same to
the Fleet both for insurance purposes and to expedite repairs.
Some Fleets will provide an alternate car in the event of a dis-
abling breakdown or accident, subject to the availability of an
alternate cab, and certain Fleets provide lease fee credits for
such accidents or breakdowns, where the driver is not at fault.
21. Fleets service and repair at their cost the taxicabs they
own and lease. When an accident or breakdown is the fault of
a lessee-driver, the Fleet may require the driver to pay all or
part of the cost of the repair. Fleets are responsible for sum-
monses issued with respect to equipment violations. Drivers
are expected to deliver such summonses to the Fleets. The
Fleets are responsible for complying with TLC rules pertaining
to operation of the taximeter. The Fleets also insure the taxi-
cabs they own and lease, and register them with the State De-
partment of Motor Vehicles, and follow TLC rules for readying
them for operation as a taxicab (which is referred to in the in-
dustry as “hacking up”).
22. Drivers who lease taxicabs from the Fleets are not incor-
porated. Although TLC rules, and accordingly, the Fleets’
lease agreements, prohibit drivers from subletting taxicabs
which they lease, many drivers who lease taxicabs for extended
periods, such as weekly leases or DOV leases, work with one or
more other drivers so as to maximize for them the profitability
of their lease arrangement, sharing the costs and revenues in
proportions determined by such drivers. With respect to such
additional drivers, the Fleets screen them in the same manner as
described in the first two sentences of paragraph 9 above.
23. Approximately half the Fleets own and operate tow
trucks, which are driven by inside workers and which respond
to accidents or breakdowns involving the taxicabs of the Fleet,
performing minor repairs at the site of the breakdown or acci-
dent, or towing the taxicab back to the Fleet’s garage. The
Fleets which do not own and operate tow trucks contract with a
towing service, which tows the Fleet’s disabled cabs back to the
Fleet’s garage. Lessee-drivers do not pay for the towing of a
disabled cab.
24. None of the taxicabs operated by the Fleets have any
identifying logo, or other marking indicating the identity of the
Fleet which operates the taxicab.
METROPOLITAN TAXICAB BOARD OF TRADE 1307
25. The “inside workers” (mechanics, “body” workers, gas
dispensers and others) are employees of the Fleets, servicing
the taxicabs, dispensing gasoline and performing various other
jobs. The Fleets’ inside workers are “employees” within the
meaning of Section 2(3) of the NLRA. The Fleets’ “inside
workers” constitute an appropriate bargaining unit under the
Act. If it is ultimately determined that lessee-drivers are statu-
tory employees, rather than independent contractors under the
Act, the lessee-drivers and the inside workers would constitute
an appropriate bargaining unit under the Act.
26. Respondent alleges that the event which purported to
combine Local 3036 and Local 74 was not a valid merger.
Hereinafter, such combination is referred to as the “Merger.”
Prior to the Merger, Local 3036 was a labor organization within
the meaning of Section 2(5) of the Act.
27. Prior to the Merger, Local 3036 was the collective-
bargaining representative of the inside workers employed by the
Fleets as well as the collective-bargaining representative of the
drivers who leased taxicabs from the Fleets. Prior to the Merger,
the Fleets or their predecessor companies and Local 3036 had a
collective-bargaining relationship for more than 25 years.
28. On or about September 18, 1997, MTBOT, on behalf of
the Fleets, declined recognition of Local 74 as the representa-
tive of the drivers who leased taxicabs from the Fleets and the
Fleets’ inside workers.
29. The most recent collective-bargaining agreement be-
tween Local 3036 and MTBOT, on behalf of the Fleets, that
covered inside workers and lessee-drivers, had a term from
April 1, 1987 until March 31, 1990 and was extended, from
time to time, and modified by the agreement of the parties,
finally expiring on October 5, 1997.
B. The Unions Merge and the Employers Refuse to Bargain
For many years, Local 3036 was the collective-bargaining
representative for the drivers and inside workers who were
employed by the Respondent fleets. As of August 1997, the
unit consisted of about 3000 drivers and about 200 inside
workers. The most recent contract executed between Local
3036 and the Metropolitan Taxicab Board of Trade (MTBOT)
was set to expire on October 5, 1997. Prior to expiration, rep-
resentatives of the Union and MTBOT commenced, in 1996,
negotiations for a successor contract. The main negotiator for
the Union was Larry Goldberg who was Local 3036’s secre-
tary/treasurer.
In June 1997, Larry Goldberg at a meeting with Jack Ryan,
President of sister Local 74, SEIU, AFL–CIO, asked for assis-
tance in negotiating the taxicab contract. Ryan agreed. At the
same time, Goldberg and Ryan talked about the possibility of
merging the two locals and thereafter raised that possibility with
Mike Fishman, who is the assistant to the president of the Inter-
national Union. As a consequence, representatives of the two
locals and the International Union agreed that a merger should
take place on an expedited basis pursuant to which Local 3036
would disappear and its members would become members of
Local 74. It was further agreed that upon completion of the
merger, Local 74 would establish a taxi division and that Local
74 would hire Goldberg and several other of Local 3036’s em-
ployees including Mike Rosenthal, and Ben Goldberg, respec-
tively Local 3036’ recording secretary and president.
On June 6, 1997, Ryan and Larry Goldberg signed a letter
sent to Andrew Stern, the International Union’s president indi-
cating their desire to accomplish a merger. In essence, they
agreed to have a merger.
On June 19, 1997, Ryan and Goldberg signed a document
stating:

Local 3036 SEIU hereby agrees to merge into SEIU Local 74
subject to the following terms and conditions:

1. All current members of Local 3036 shall become
members of Local 74 upon the effective date of the
merger, without payment of any additional initiation fees.
Local 3036 members will enjoy the same rights and bene-
fits as Local 74 members, and shall be subject to Local
74’s Constitution and By-laws. The time during which
Local 3036 members have been members in good standing
of Local 3036 shall count as membership time in Local 74.
2. Local 74 shall assume all of the collective-
bargaining responsibilities and representational rights with
Local 3036 as well as the governance and administration
of its respective funds.
3. The dues rates paid by Local 3036 members shall
remain the same, after this merger, until such time as Lo-
cal 74 may lawfully change them.
4. All current staff of Local 3036 and its funds shall be
considered for employment with Local 74, to the extent
that openings exist and the staff member is qualified. All
decisions regarding the hiring of the staff of Local 3036
and its funds shall be made at the discretion of the Presi-
dent of Local 74.

In mid-June 1997, Goldberg introduced Ryan to the repre-
sentatives of the Respondents and informed them of their de-
sire to merge Local 3036 into Local 74.
In late June 1997. Goldberg and Ryan met with the executive
board of Local 3036 to explain the reasons for the proposed
merger. It was explained to them that Local 74 intended to
create a taxi division which would negotiate and vote on its
own contracts. The Board voted in favor of a merger. A simi-
lar meeting was held by Ryan with the executive Board of Lo-
cal 74 which also approved the merger.
During July 1997, Goldberg met and spoke to Local 3036
members about the merger. On July 1, 1997, Local 3036
mailed postcards to its members advising them as follows:

ATTENTION LOCAL 3036 SEIU UNION MEMBERS
The executive Board of Local 3036 SEIU
recommended the merger of Local 3036 into Local 74 SEIU
and have called a
SPECIAL UNION MEETING
for the purpose of approving this merger.
The meeting will be held on Tuesday, July 29th 1997
at 1:00 p.m.
At SEIU Local 74, located at 24-09 38th Avenue
Long Island City, NY (corner of 24th street)

Additionally, Local 3036 representatives visited garages, dis-
tributed and posted flyers and made an effort to reach its active
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1308
and retired members about the July 29 merger meeting. (The
flyers said essentially the same thing as the postcards and noti-
fied members of the July 29 meeting.)
On July 29, the meeting was held but was not well attended.
(In fact many of the attendees were retired members). No at-
tendance records were kept or maintained and apart from know-
ing people by sight, no effort was made to insure that those in
attendance were members. According to Goldberg, there were
about 200 people present at this meeting including retirees who
no longer worked for the respondents. The persons present
were told of the reasons for the merger and approved the
merger by a voice vote. Although the testimony was that the
vote was overwhelmingly in favor of the merger, there was no
mechanism to record the ayes and nays.
From the Respondents’ point of view, most significant are
the facts that (a) the vote was not conducted by secret ballot
and (b) the vote was taken before there was any discussion at
the July 29 meeting about the proposition. Thus, the Respon-
dents argue that the merger vote did not meet the minimum
standards of “due process” enunciated by the Supreme Court in
NLRB v. Financial Inst. Employees, 475 U.S. 192 (1986), be-
cause of the failure to allow meaningful discussion before the
vote and because the vote itself was not held by secret ballot.
The General Counsel contends that notwithstanding these two
factors the merger vote met an adequate “due process standard”
and therefore constituted a valid action which the employers
could not legally challenge. The Union’s position is somewhat
broader in that it asserts that inasmuch as the present situation
involves two locals of the same International Union, the due
process standards applied by the Board and the Courts should
not be applicable or appropriate. The Union contends that
where the merger involves two locals of the same International,
this is strictly an internal union matter, not subject to scrutiny
by the Board or the employer.
On the same afternoon, (July 29), a similar membership
meeting was held by Local 74 which had notified its members
in similar fashion as Local 3036. According to Ryan there
were about 400 of his members at this meeting who also ap-
proved the merger by voice vote.
In August 1997, Union Representatives Ryan, Goldberg and
Rosenthal met with MTBOT’s chief negotiator Ron Stoppel-
mann, and its attorney Merril Mironer. Also present were Tom
Ryan, counsel to Local 74 and Local 74’s funds administrator,
Hugh Ford. According to Ryan, Mironer stated that at “that
time” they would be recognizing Local 74. Ryan told Mironer
that Local 74 intended to have former Local 3036 representa-
tives, Larry Goldberg and Rosenthal, continue as Local 74
business agents who would be involved in contract negotiations
and grievance handling.
On September 17, 1997, Andrew Stern, the International
President sent a letter to Ryan and Goldberg approving the
merger, effective August 15, 1997.
At a meeting held on September 18, 1997, Mironer advised
Ryan and Goldberg that MTBOT declined to recognize and
bargain with Local 74.
Subsequent to the merger, Local 74 hired Larry Goldberg as
a business agent and his father, Ben Goldberg, as a consultant.
Rosenthal was hired on a per diem basis for about a month but
was unable to continue his services inasmuch as no money was
coming in from the taxi drivers division after negotiations
ceased. Local 74 took over the premises previously occupied by
Local 3036 and moneys in Local 3036’s benefit funds were
transferred to Local 74 benefit funds.
III. ANALYSIS
There are two issues to be decided here, both of which have
to be decided in favor of the Union and the General Counsel in
order for them to prevail.
The first issue is whether there was an effective merger be-
tween two local unions of the same International which, after
implementation, gave the second, Local 74, Service Employees
International Union, AFL–CIO, the legal right to compel the
Respondents to bargain with it as the successor to Local 3036,
SEIU, AFL–CIO.
The second issue is more basic and deals with the question of
whether the taxi drivers who have been covered by a collective-
bargaining relationship between Local 3036 and the Respon-
dent fleets have, since about 1979, continued to be employees
or have become, for want of a better term independent contrac-
tors. Since the drivers comprise the vast bulk of the collective-
bargaining unit, if it is determined that they are not employees
as defined in the Act, then the employers would not be required
to bargain with any union on their behalf. And as the pre-
existing bargaining unit which did contain some nondriving
employees it would have been so changed, (essentially de-
stroyed), that the employers would have been within the law to
refuse to bargain either with the original union, Local 3036 or
its alleged successor, Local 74.
Because it is my opinion that the drivers no longer were em-
ployees at the time of the withdrawal of recognition, I need not
answer the first question dealing with the validity of the union
merger.7
To call the fleet taxi drivers independent businessmen is, in
my opinion to use a category which has little or no application
to these people. They do not own the cabs they drive and more
importantly they do not own the licenses to operate the cabs. In
this sense they have no proprietary interest in the means by
which they perform their services. For the most part they lease
cabs on 12-hour shifts and by managing to stay out on the road
for perhaps 11-1/2 hours at a time, they may earn, with tips, an

7 The basic rule as enunciated in Sullivan Bros. Printers, 317 NLRB
561, 562 (1995), is that an employer has a obligation to bargain with a
successor union where an affiliation vote is conducted with adequate
due process safeguards and where the organizational changes are not so
dramatic that the post affiliation entity lacks substantial continuity with
the pre-affiliation union. In the present case, there clearly was continu-
ity between the preexisting bargaining agent and the successor union,
as there was continuity of representatives who were going to be in-
volved in the bargaining for and administration of a fleet taxi collec-
tive-bargaining agreement. There is, however, a real question as to
whether an affiliation of this type requires a secret ballot election and
an opportunity for the members to discuss and evaluate a merger before
voting. Compare Sullivan Bros. supra at fn. 5 with May Dept. Stores
Co., v NLRB, 897 F.2d 221, 226 (7th Cir. 1990), and Paragon Paint &
Varnish Corp., 323 NLRB 882 (1997), where the Board accepted the
Court’s decision at 90 F.3d, 591 (D.C. Cir. 1996), as the law of the
case.
METROPOLITAN TAXICAB BOARD OF TRADE 1309
average of about $9 or $10 an hour with no overtime pay. They
receive no health insurance, no life insurance, nor any other
benefits for their labor. And the only way that they can realisti-
cally maximize their earnings is to stay on the road for as long
as possible during a shift, be lucky in the tips they garner, and
perhaps use some discretion in limiting the amount of income
they report for taxes.
The drivers have no control over the prices they charge to
customers or in the choice of customers. Nor for that matter,
do they have any significant control over the prices of the lease
for the use of a vehicle. As to these significant economic func-
tions, the drivers have no control over their income or costs as
these are set by the Taxi Commission after hearings and lobby-
ing by those for whom it may concern.8 (I suppose that a driver
has some limited control over costs relating to the operation of
the vehicle in that he can search out a lower priced gasoline
station and drive within the law so as to avoid fines.)
On the other hand, the relationship between the fleet owners
and the drivers is virtually devoid of control of the latter by the
former. The fleets own vehicles and they lease them to the
drivers, with a medallion, (which in many cases may be owned
by somebody else). Assuming that a driver has a hack license
and is therefore legally licensed by the city to drive a taxi, the
fleet is not at all interested in how the driver uses the vehicle
during the term of the lease except to the extent that the driver
delivers it back in the same condition, and on time for the next
lessee. This is because the fleet owner gets all of his money
from the driver and does not get a percentage of the fares, all of
which are retained by the driver. Indeed, once a driver gets on
the road, there is virtually no communication between the com-
pany and the driver unless the cab breaks down and the driver
calls in to get a repair or tow.
The drivers are nevertheless subject to stringent controls re-
garding their behavior on the road and with respect to the pub-
lic they serve. But these are controls that are not imposed on
them by the fleets; they are imposed by the Taxi Commission
through a system of citations, fines, and ultimately license sus-
pensions. If there is a single entity controlling the economic
return and the working behavior of drivers, it is the city and not
the fleets.
In NLRB v. United Insurance Co. of America, 390 U.S. 254
(1968), the Supreme Court stated that in determining whether
people were employees or independent contractors, the Board
should apply the common-law agency test under which “all the
incidents of the relationship must be assessed and weighed with
no one factor being decisive. In that case where the Court up-
held the Board’ determination of employees status for debit
agents the Court stated:

[T]he agents do not operate their own independent business,
but perform functions that are an essential part of the com-
pany’s normal operation; they need not have any prior train-
ing or experience , but are trained by company supervisory

8 The stipulation noted and there was some testimony that to an ex-
tent, the degree to which was not demonstrated in the record, drivers
may be able to obtain lower cost leases from fleets on some occasions.
To the extent that drivers may have leverage, this would probably be
due to either a general lowering of the unemployment rate in the city.
personnel; they do business in the company’s name with con-
siderable assistance and guidance from the company and its
managerial personnel and ordinarily sell only the company’s
policies; the “Agents Commission plan” that contains the
terms and conditions under which they operate is promulgate
and changed unilaterally by the company; the agents account
to the company for the funds they collect under an elaborate
and regular reporting procedure; the agents receive the bene-
fits of the company’s vacation plan and group insurance and
pension fund; and the agents have a permanent working ar-
rangement with the company under which they many con-
tinue as long as their performance is satisfactory.

In a recent case, Roadway Package System, Inc., 326 NLRB
842 (1998), a majority of the Board held that certain truck driv-
ers were employees and not independent contractors and noted
inter alia that the right of control test while still a factor should
not be considered the “predominant” factor in determining
employee status.9 The Board found that the individuals in
question performed functions that were an essential part of the
company’s operations; that the drivers did not operate inde-
pendent businesses; that they did not have any prior training or
experience, receiving all of their training from the employer;
that they did not engage in outside business; that they had no
substantial propriety interest beyond the investment in a truck
which was usually leased with substantial involvement of the
employer; that they worked as an integral part of the em-
ployer’s business under its substantial control; and that they had
no significant entrepreneurial opportunity for gain or loss. The
facts showed among other things that the drivers wore uniforms
approved by the employer, that they operated uniformly marked
vehicles that were custom designed by the employer, and that
the vehicles clearly displayed the employer’s name, logo, and
colors. The decision in Roadway, while perhaps downplaying
the right of control test, clearly did not eliminate it as a signifi-
cant factor in determining employee status.
On the same day that the Board issued its decision in Road-
way, it also issued a decision in Dial-A-Mattress Operating
Corp., 326 NLRB 884 (1998), in which a majority found that
the drivers were independent contractors and not employees. In
that case, as opposed to Roadway, the owner operators em-
ployed at least one other worker whom they hired and directed;
many had more than one truck and were incorporated busi-
nesses; and they could refuse to do deliveries and were not
guaranteed a minimum amount of revenue. Additionally, the
drivers owned their own trucks and the company involved had
no role in the selection, acquisition, ownership, financing, in-
spection, or maintenance of the vehicles.
The Board and the Courts have had occasion to deal with a
number of taxicab cases at different geographic locations in the
country. The decisions in these cases have gone either way
depending upon facts peculiar to each case and to a degree,
depending on the views of the deciders in applying a legal stan-
dard to a particular fact pattern. In the past, it seems to me that

9 Then-Chairman Gould in a concurring opinion, expressed the view
that where an enterprise becomes the mechanism for carrying out gov-
ernmental controls over drivers, this should be a probative factor in
favor of finding that the drivers are employees.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1310
the most decisive facts related to (a) whether the lessor (com-
pany) shares directly or indirectly in the revenues collected by
the drivers and (b) whether the company controls the drivers’
means and manner of operating the vehicles once they leave the
company’s garage. NLRB v. O’Hare-Midway Limousine Serv.
Inc., 924 F.2d 692, 695 (7th Cir., 1991); Yellow Taxi Co., of
Minneapolis v. NLRB, 721 F.2d 366, (D.C. Cir. 1983); Local
777 (Seafarers), v. NLRB, 603 F.2d 862, 880 (D.C. Cir. 1978),
rehearing denied 603 F.2d 682 (D.C. Cir. 1979); Elite Limou-
sine Plus, 324 NLRB 992 (1997); Yellow Cab of Quincy, 312
NLRB 142, 144 (1993) ; Metro Cars, 309 NLRB 513, 516
(1992); and City Cab of Orlando, 285 NLRB 1191 (1987).
In Local 777 (Seafarers) v. NLRB, the Court held that the
drivers became independent contractors when the taxicab com-
pany switched from a commission system of leasing to a leas-
ing system similar to the one in the present case. The Court
stated inter alia,

When a driver pays a fixed rental, regardless of his earnings
on a particular day, and when he retains all the fares he col-
lects without having to account to the company in any way,
there is a strong inference that the cab company involved does
not exert control over “the means and manner” of his per-
formance. This conclusion is justified because under such
circumstances, the company simply would have no financial
incentive to exert control over the drivers, other than such as
is necessary to immunize the proprietor of a cost from liability
which arises from its operation by virtue of the lessor’s own-
ership. However the driver conducts his occupation, the com-
pany has received its financial reward…. Not only do cab
companies have no financial incentive to impose controls on
their lessee-drivers, but also it would be anomalous for them
to try to do so. This is true because one the motivations be-
hind the institution of leasing was an attempt to be less in-
volved in the routine difficulties of directing the daily opera-
tions of their cabs. Moreover to the extent that the compa-
nies’ assertion of control would likely be resented by potential
drivers, to the extend that the company sought to assert such
controls beyond those required to guard against liability, it
would be acting against its own best interest. In sum, once fi-
nancial accountability is no longer important, [the cab com-
panies] have little business justification for seeking to con-
tinue to hold their drivers accountable in other matters.

The same result was reached in City Cab Co. of Orlando, su-
pra, where the Board affirmed the decision of the administra-
tive law judge who concluded, inter alia, that drivers who
leased their cabs at a fixed rate independent of the fares re-
ceived were independent contractors and not employees.
Contrast the situations described above with cases where the
cab owner and the drivers share the fares received from the
customers and where, of necessity, the owner must put in place
a system of controls to ensure that he or she receives the set
percentage of the fares. For example, in Yellow Cab of Quincy,
supra at 144, the cab owner received a percentage of the fares
since the rental fee paid by the drivers were based on mileage
which was also the mechanism for determining the fares. The
Board noted that due to this de facto fare sharing arrangement,
the owner had an incentive to have the cabs driven as many
miles as possible and coupled with the drivers’ substantial reli-
ance of the employer’s dispatching service for obtaining fares,
this gave the company a motive for and a method of controlling
the drivers’ means and manner of operating the vehicles. See
also NLRB v. O’Hare Limousine Service, supra, Elite Limou-
sine Plus, supra, and Metro Cars, where either a court of ap-
peals or the Board found that the drivers were employees where
there was a fare sharing arrangement, even if that arrangement
was in the guise of a lease, or if the company, despite a lease
arrangement, nevertheless exercised substantial control over the
drivers.
It is probably true, as suggested by the General Counsel, that
the Board’s decisions in Roadway Package System, and Dial-A-
Mattress Operating Corp., supra, may have shifted the legal
standard a bit more in favor of finding employee status. But it
is my opinion that under the prior decisions involving taxicabs
and taking into account the standards in Roadway and Dial-A-
Matress, the drivers in this case would still not be considered
employees as defined in the Act. As discussed above, the facts
show too much independence of the drivers from the fleet own-
ers. And whether or not one would characterize these people as
independent business persons, I can’t escape the conclusion that
they are not employees of the fleets.
CONCLUSION OF LAW
The Employer has not violated the Act in any manner al-
leged in the complaint.
On these findings of fact and conclusions of law and on the
entire record, I issue the following recommended10
ORDER
The complaint is dismissed.

10 If no exceptions are filed as provided by Sec. 102.46 of the
Board's Rules and Regulations, the findings, conclusions, and recom-
mended Order shall, as provided in Sec. 102.48 of the Rules, be
adopted by the Board and all objections to them shall be deemed
waived for all purposes.