National Freight, Inc.

National Labor Relations Board - Board Decisions

Feb 26, 1964

146 N.L.R.B. 144 (N.L.R.B. 1964)

144 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
National Freight, Inc. and Local Union No. 445, International
Brotherhood of Teamsters , Chauffeurs ,- Warehousemen and
Helpers of America, Petitioner. Vase No. P-RC-12626. Febru-
-ary 26, 1964
DECISION ON REVIEW AND DIRECTION OF
ELECTION'
On May 31, 1963, the Regional Director for -the Second Region is-
sued a Decision and Order in the above-entitled proceeding dismissing
the petition on the ground, that the, proposed unit of owner-drivers
and nonowner-drivers was inapp`ropria`te' in"that all the individuals
involved therein were either independent contractors or employees of
independent contractors. Thereafter, the Petitioner, in accordance
with Section 102.67 of the Board's--Rules an&Regulations, Series 8,
as amended, filed with the Board a request for review of, such De-
cision and Order. The Employer, filed a statement in opposition to
the request for review. The Board by telegraphic order dated July 19,
1963, granted the request for review. Thereafter,, the Employer
and the Petitioner filed briefs. -
The Board has considered the entire record in this case, and makes
the following findings : - -
At the Orangeburg terminal the Employer, National Freight, Inc.,
is engaged exclusively in hauling for the Glenshaw Glass Company
with which it has the relationship of common carrier and shipper.
The Employer has its own trailers, but the entire fleet of tractors used
at its Orangeburg operation are leased from nine individual' lessors,
herein called "Owners," who own one or more of these vehicles. The
drivers of- the Orangeburg fleet consists of (1) owner-drivers, who
own a single tractor which they drive-and lease to the Employer; (2)
multiple owner-drivers who own more than 1 tractor- leased to the
Employer, 1 of which they drive; and (3) 50 to 60 nonowner-drivers
who drive tractors leased to the Employer.
All work is assigned by the Employer's dispatcher who notifies the
Owners in the evening what their loads will be for the following day.
In turn, Owners with multiple equipment issue appropriate instruc-
tions to'the drivers of their respective tractors. All drivers are re-
quired to pick up their loads at a time and place designated by the
dispatcher. Upon completion of a delivery, they are required to tele-
phone the Employer's nearest terminal for additional instructions.
Although they may refuse an assignment, such refusal is an exception
rather than general practice. No directions are given regarding roads
or routes, and drivers are permitted to park their tractors when not in
146 NLRB No. 17. -
NATIONAL FREIGHT, INC. 145
use wherever they choose. However, they are not permitted to solicit
outside work and leased tractors are for the exclusive use of the Em-
ployer. All drivers are required to furnish daily "log sheets" and
equipment reports to the Employer. When they begin work each
driver is given, an identification card which lists his employer as
National Freight, Inc., and a packet of instructions detailing pro-
cedures to be followed in the event of an accident.
All Owners are compensated for the use of their equipment at a trip
rate unilaterally established by the Employer in accordance with a
predetermined rate schedule. Although, Owners theoretically have
an option of buying their own insurance, they are all in fact covered
by a master policy maintained by the Employer with the premiums
deducted by, the Employer from gross. earnings at ,the rate of 5
percent per week. Owners are free to choose where to buy gasoline,
oil, and tires, and to have repairs made, but repair work is generally
done at the Employer's Vineland repair shop. The Employer pro-
vides a maintenance escrow for each Owner which is funded by a
weekly deduction of 3 percent from gross earnings. This is done with-
out any written authorization by the Owner. The Employer also ad-
vances sums not exceeding $275 for maintenance purposes.
At the time the Owners sign leases, they fill out the Employer's
standard application for employment forms and are required to take
certain road and vision tests. The nonowner-drivers are required to
do likewise. The Employer checks all references and has the right
to reject drivers. All personnel and payroll records are maintained
at the Employer's main office. Although there is no training program
for drivers or a requirement to wear uniforms,, about a year ago the
Employer instituted a program of giving parts of uniforms to all
drivers for timely deliveries and for careful handling of freight.
The nonowner-drivers are hired by the respective Owners although,
as noted above, the Employer has a right to reject drivers. The
drivers negotiate their wages with the Owners who make deductions
for social security and income tax, and provide for fringe,benefits if
any. The Employer can require the Owner to use helpers, depending
on the nature of the trip or load. Although the Employer can
discipline drivers by suspension for late deliveries and other improper
conduct, the Owners have the power to discharge, assign, and trans-
fer drivers from one tractor to another without the approval of the
Employer. At various times, when they are not driving, the dis-
patcher has requested both the Owners and nonowner-drivers to
move trailers in and out of the loading docks.
Whether. or not the owner-drivers and the nonowner-drivers here
sought are employees of the Employer involves the application of the
146 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
common law "right of control" test.' If the'recipient of the services
in question has a right to control not only the end to be achieved
but also the means to be used in reaching such result, an employer
relationship exists as a matter of law; otherwise there exists an inde-
pendent contractor relationship. The application of this principle
is not a mechanical one in any case, but requires a careful balancing
of all factors bearing on the relationship.
While certain factors in the instant case suggest in isolation that
the Owners are independent contractors, the record as a whole con-
vinces us that the Employer in fact retains sufficient control over their
activities to warrant a finding of the existence of the employee-
employer relationship. We note particularly the following circum-
stances: (1) The Employer assigns loads with detailed instructions
as to delivery and requires the furnishing of daily log sheets and
frequent equipment reports; (2) on return trips Owners are not per-
mitted to solicit or obtain return loads without the approval of the
Employer; (3) the lease is in fact terminable at the will of the Em-
ployer; (4) drivers are given Employer identification cards and de-
tailed instructions of procedure in the event of an ,accident; (5) .as in
the case of admitted -employees and drivers for other terminals, all
Orangeburg drivers are required to fill out application for employ-
ment forms and take the Employer's qualifying driving tests; (6)
the Employer may reject any drivers selected by Owners; (7) com-
pensation for the Owner is unilaterally determined by the Employer
on the basis of a predetermined rate schedule which is generally ac-
cepted by the Owner without question; (8) Owners are in fact covered
by the Employer's master insurance policy;' (9) the Employer with-
out written' authorization withholds a portion of the Owners' gross
earnings to insure payment of the latter's operating and maintenance
expenses and makes limited advances to Owners for maintenance pur-
poses; (10) an incentive plan is maintained by the Employer to en-
courage safe driving and timely deliveries, and (11) the Employer's
dispatcher has the authority to request drivers to move trailers in and
out of the loading docks.
In view of the foregoing and on the basis of the entire record, we
find that the owner-drivers and nonowner-drivers are employees of
the Employer within the meaning of the Act. Although we are satis-
fied that the multiple owner-drivers are not independent contractors
under the common law test, an issue arises as to whether they are
supervisors or employees within the meaning of the Act. The record
1 See, e.g., Bowman Transportation, Inc., 142 NLRB 1093 ; Reisch Trucking and Trans-
portation Go, Inc., 143 NLRB 953 ; Western Nebraska Transport Service, Division of
Consolidated Freightways , 144 NLRB 301; and Chemical Leaman Tank Lames, Inc, 146
NLRB 148, issued on the same day as the instant case.
NATIONAL FREIGHT, INC. 147
shows that these individuals have and exercise the power to hire
drivers subject to the approval of the Employer and to discharge
them. It also appears that the multiple owner-drivers assign, trans-
fer, and responsibly direct drivers. We are satisfied that the fore-
going supervisory authority is exercised not only for the purpose of
protecting the equipment involved, but also as an integral part of the
Employer's business operations. In these circumstances and especi-
ally as the multiple owner-driver has effective authority with respect
to the tenure of nonowner-drivers whom we have found to be em-
ployees of the Employer, we find that the multiple owner-drivers are
supervisors within the meaning of the Act. Accordingly, we shall
exclude them from the Unit .2
Accordingly, we find that the following employees at the Em-
ployer's Orangeburg, New York, station constitute an appropriate
unit for the purposes of collective bargaining within the meaning
of Section 9 (b) of the Act :
All owner-drivers and nonowner-drivers operating under a lease
agreement, but excluding the dispatcher,' the multiple owner-drivers,
all other employees, office clerical employees, professional employees,
guards, and supervisors as defined in the Act.
[Text of Direction of Election omitted from publication.]
MEMBER LEEnoM, dissenting :
Unlike my colleagues, I would sustain the Regional Director's find-
ing that the owner-drivers who lease trucks to National Freight, Inc.,
are independent contractors, and not employees of the lessee, and
that the nonowner-drivers of these leased vehicles are the employees
of the lessors.
The facts in this case are similar in all material respects to those
in Chemical Leaman Tank Lines, Inc., 146 NLRB 148, issued to-
day, in which I also dissented. I attach no controlling significance to
the fact that the owner-drivers in this case are compensated on the
2 See Deaton Truck Lines , Inc., 143 NLRB 1372, and Chemical Leaman Tank Lines, Inc,
supra. Member Leedom would find, for the reasons set forth in his dissent herein, that
the owners are independent contractors and that the , nonowner-drivers are their em-
ployees As such , he would exclude them from any unit found appropriate.
Member Brown agrees that the owner-drivers and nonowner -drivers are employees but
disagrees that the multiple owner-drivers are supervisors . He finds that the record
clearly Indicates that the multiple owner-drivers are subject to the same degree and
manner of control over the means as well as the result of the work as nonowner -drivers
and that they share the same community of interests and working conditions. In his
opinion, the direction and authority they exercise over drivers of leased equipment are
for the protection of their leased property and are not in the interest of the Employer.
s We find that the dispatcher responsibly directs the work of the drivers and in addition,
because of the nature of his work, has little community of interest with employees in-
eluded In the unit. We therefore exclude him. See Overnite Transportation Company,
128 NLRB 723, 724.
148 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
basis of a trip rate determined by the lessee's rate schedule, as com-
pared to a percentage of the gross realized on each haul, in that case.
I am satisfied that because the owner-drivers here make the same
'investment, pay virtually the same costs, and take similar risks,
their opportunities for increasing their profits by the use of their
own judgment are not significantly diminished by their method of
compensation. Moreover, the owner-drivers' relationship to their
drivers is virtually identical to that in the Chemical Leaman Tank
Lines case. As I would therefore find, for the reasons given in my
dissent in that case, that the owner-drivers are independent contrac-
tors and that the nonowner-drivers are their employees, it follows that
the individuals in both groups are not employees of the Employer in
this proceeding, and the Regional Director properly dismissed the
petition.
MEMBER JENKINB took no part in the consideration of the' above
Decision on Review and Direction of Election.
Chemical Leaman Tank Lines, Inc. and Truck Drivers Local
No. 348, affiliated with International Brotherhood of Team-
sters, Chauffeurs, Warehousemen & Helpers of America, Peti-
tioner. Case No. 8-RC,-5019. February 26, 196.
DECISION ON REVIEW AND DIRECTION OF ELECTION
On April 8, 1963, the Regional Director for the Eighth Region
issued a Decision and Order in the above-entitled proceeding finding
that all the drivers sought by the Petitioner, except three, were either
independent contractors or the employees of independent contractors
and therefore not employees of the Employer. With respect to the
three individuals mentioned above, he found that two were tem-
porary employees and that all parties agreed that the third was an
employee. On the basis of these findings, the Regional Director
concluded that since there existed only a one-man unit, no question
of representation was presented. Accordingly, he dismissed the
petition. Thereafter, the Petitioner, in accordance with Section 102.67
of the Rules and Regulations, Series 8, as amended, filed with the
Board a request for review of such Decision and Order. The Em-
ployer filed a statement in opposition to the request for review. The
Board by telegraphic order dated May 2, 1963, granted the request
for review. The Employer filed a motion to present its views in
oral argument as to why the Petitioner's request should be denied.
146 NLRB No. 18.