Mister Softee of Indiana, Inc.

National Labor Relations Board - Board Decisions

Dec 22, 1966

162 N.L.R.B. 354 (N.L.R.B. 1966)

354 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Mister Softee of Indiana , Inc. and Curb Service of Indianapolis,
Inc.' and Oil , Chemical and Atomic Workers International
Union, AFL-CIO, Petitioner . Case 25-RC-3259. December 22,
1966
DECISION AND DIRECTION OF ELECTION
Upon a petition duly filed under Section 9(c) of the National
Labor Relations Act, as amended, a hearing was held before Hearing
Officer William A. Molony of the National Labor Relations Board.
The Hearing Officer's rulings made at the hearing are free from
prejudicial error and are hereby affirmed. The Employer filed a brief
which has been considered by the Board in making its decision in
this case.
Pursuant to the provisions of Section 3(b) of the Act, the Board
has delegated its powers in connection with this case to a three-
member panel [Chairman McCulloch and Members Brown and
Zagoria].
Upon,the entire record in this case, the Board finds:
1. Mister Softee of Indiana, Inc., and Curb,Service of Indianapo-
lis, Inc., which are at the same location, are owned, managed, and
controlled by individuals of the same family, and the same policies
and practices are in effect for both corporations. We find, in view of
the virtual agreement of the parties and upon the entire record, that
these corporations, herein referred to jointly as the Employer, con-
stitute a single employer herein.
The Employer is engaged in commerce within the meaning of the
Act and it will effectuate the purposes of the Act to assert jurisdic-
tion herein.
2. The labor organization involved claims to represent certain
employees of the Employer.
3. A question affecting commerce exists concerning the representa-
tion of certain employees of the Employer within the meaning of
Sections 9(c) (1) and 2(6) and (7) of the Act.
4. The Petitioner seeks a unit of all single-owner drivers and
nonowner drivers operating equipment under permanent leases with
the Employer and all drivers operating the Employer's equipment
in the Indianapolis, Indiana , area . The Employer, which does not
otherwise dispute the appropriateness of the unit sought, contends
only that the single-owner drivers are independent contractors and
not employees.
The Employer is the Indiana representative of Mister Softee, Inc.,
located in New Jersey, which is not a party to this proceeding. This
' The name of the Employer appears as amended at the hearing.
162 NLRB No. 22.
MISTER SOFTEE OF INDIANA, INC. 355
corporation, herein called the New Jersey Corporation, has entered
into a 20-year franchise agreement with the Employer and the
single-owner drivers, who are referred to in the agreement and herein
as dealers. By the terms of this agreement, each dealer is granted an
exclusive territory in which to sell Mister Softee soft-serve ice cream.
At any time after 2 years from the institution of the agreement, the
Employer can, in its discretion, reevaluate the territory, and either
require the dealer to purchase another truck or reduce his franchise
area. The agreement further states that if a dealer desires to sell his
franchise, he must first secure the Employer's consent.
As further provided in the agreement, the Employer sells to the
dealer a Mister Softee ice cream truck. As a matter of practice, the
Employer finances the purchase for the dealer or helps the dealer
secure financing. The dealer is required to keep his truck in a clean
and sanitary condition, in accordance with the various health laws
and regulations as well as the standards set by the New Jersey Cor-
poration. In order to assure compliance with this requirement, the
Employer's agent is given the right to inspect the truck at any time
and any place, and there is testimony that the Employer has keys
to many of the trucks.
The dealer is also required by the agreement to maintain and
operate his truck in strict conformance with the plans, procedures,
policies, and promotional directives prescribed by the New Jersey
Corporation. The right to enforce these controls is in the Employer,
as the agreement provides that, in the event of a breach by the dealer
which is not remedied within 10 days after notice from the Employer,
the Employer has the right to terminate the agreement, and to pur-
chase the truck at a rate established by the agreement.
Although the exact hours of work are not set, the agreement
requires the dealer to devote full time to the conduct of the business
during the period from April 1 to October 31. There is no specific
restriction as to the price which the dealer must charge for the prod-
uct, but the price at which he purchases the mix from which the ice
cream is made is determined by the agreement. The New Jersey
Corporation designates the dairies which are to supply the mix, and
the dealer is required to purchase at least 2,500 gallons of mix a
year. As a matter of practice, the Employer requires the dealer to
purchase other products through it, rather than at more economical
prices for which such products are sometimes offered if purchased
directly from the distributor.
Many dealers perform their duties with the aid of helpers. The
agreement provides that these helpers are to wear a special uniform,
and are to be paid such wages as required by law. An official of the
Employer, asked at the hearing if he had ever requested a dealer to
356 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
discharge a helper, replied, " ... only if there was something known
about this man that would make him undesirable."
The dealer is required by the agreement to provide workmen's
compensation insurance for the helpers. The agreement also requires
the dealer to purchase both products liability and personal injury
insurance, for amounts stated in the agreement, although the dealer
is free to choose the carrier he wishes. The Employer is not required
to pay social security or to withhold income taxes for the dealers or
their helpers, licenses and certificates are usually taken out in the
dealer's own name, and neither the dealers nor the helpers appear
on the books of the Employer.
The Board has frequently held that, in determining the status of
persons alleged to be independent contractors, the Act requires appli-
cation of the "right to control" test. Where the person for whom the
services are performed retains the right to control the manner and
means by which the result is to be accomplished, the relationship is
one of employment; on the other hand, where control is reserved only
as the result sought, the relationship is that of an independent con-
tractor. The resolution of this question depends on the facts of each
case, and no one factor is determinative.
On the basis of the foregoing and the entire record, we are satis-
fied that the single-owner drivers are employees and not independent
contractors. We are aware that the evidence discloses several factors
which are usually considered to indicate an independent contractor
status, but the presence of such factors does not alone establish such
status. Thus, we are not persuaded by and do not regard as control-
ling, the fact that the franchise agreement describes the dealer as not
an agent or servant of the Employer; that the dealer furnishes his
own equipment, which he is required to purchase from the Employer;
that the dealer hires and pays helpers; or that the Employer does not
make the usual payroll deductions.2
The result to be accomplished is the sale of Mister Softee products
to the public. In accomplishing this result, the dealers bear slight
resemblance to the independent businessman whose earnings are con-
trolled by self-determined policies, personal investment and expendi-
tures, and market conditions. The "exclusive territory" can at any
time after 2 years be unilaterally decreased by the Employer if the
driver does not purchase another truck which the Employer deems
necessary ; and the dealer cannot assign the franchise without the
consent of the Employer. The price of the mix, and the gallonage
requirement are controlled by the agreement, and the dealer must
purchase the mix from dairies designated by the New Jersey Cor-
2 Eureka Newspapers, Inc., 154 NLRB 1181 ; Pepsi-Cola Bottling Company of Michigan,
Grand Rapids Division, 156 NLRB 80.
KARAT INC. 357
poration. The New Jersey Corporation has the right to control the
operations of the dealers by its apparently unlimited right to pre-
scribe plans, procedures, and policies relating to the operation and
maintenance of the truck, and the Employer carries out this control
by virtue of its authority to terminate the agreement. The fact that
the drivers are not paid wages does not in and of itself establish that
they are free of the Employer's control over the critical cost factors
which are determinative of their pay.3
Accordingly, on all the facts, we conclude that the Employer has
reserved the right to control the manner and means as well as the
result of the single-owner drivers' work, and that these drivers are,
therefore, employees and not independent contractors.
We therefore find that a unit of the following employees of the
Employer is appropriate for the purposes of collective bargaining
within the meaning of Section 9(b) of the Act:
All single-owner drivers and all nonowner drivers operating equip-
ment under permanent leases with the Employer; and all drivers
operating the Employer's equipment who are employed by the
Employer in the Indianapolis, Indiana, area, excluding all multi-
owner drivers, guards, and supervisors as defined in the Act.
[Text of Direction of Election omitted from publication.] 4
8 See The Seven-up Bottling Company of Detroit, 120 NLRB 1032, 1034.
4 An election eligibility list, containing the names and addresses of all the eligible
voters, must be filed by the Employer with the Regional Director for Region 25 within
7 days after the date of this Decision and Direction of Election . The Regional Director
shall make the list available to all the parties to the election . No extension of time to file
this list shall be granted by the Regional Director except in extraordinary circumstances.
Failure to comply with this requirement shall be grounds for setting aside the election
whenever proper objections are filed. Excelsior Underwear Inc., 156 NLRB 1236.
Karat Inc . d/b/a The Stardust Hotel and American Federation of
Casino and Gaming Employees . Case 31-CA-341. December 93,
1966.
DECISION AND ORDER
On August 26, 1966, Trial Examiner Herman Marx issued his
Decision in the above-entitled proceeding, finding that the Respond-
ent had not engaged in the unfair labor practices alleged in the
complaint and recommending that the complaint be dismissed in its
entirety, as set forth in the attached Trial Examiner's Decision.
Thereafter, the General Counsel filed exceptions to the Decision and
a supporting brief, and the Respondent filed a brief in support of
the Trial Examiner's Decision and in opposition to the General
Counsel's exceptions.
162 NLRB No. 39.