Transit Systems, Inc.

National Labor Relations Board - Board Decisions

Nov 3, 1975

221 N.L.R.B. 299 (N.L.R.B. 1975)

TRANSIT SYSTEMS, INC. 299
Transit Systems, Inc. and . Local No. 320, Public
Employees-State of Minnesota , affiliated with
international Brotherhood of Teamsters, Chauf-
feurs, Warehousemen and Helpers of America,
Petitioner. Case 18-RC-10475
November 3, 1975
DECISION AND ORDER
BY CHAIRMAN MURPHY AND MEMBERS
JENKINS AND PENELLO
Upon a petition duly filed under Section 9(c) of the
National Labor Relations Act, as amended, a
hearing was held before. Hearing Officer Leslie J.
Kraus of the National Labor Relations Board on
May '27, 1975. Following the hearing and pursuant to
Section 102.67 of the National' Labor Relations
Board Rules ' and Regulations, Series 8, as amended,
and by direction of the Regional Director for Region
18, this proceeding was transferred to the Board for
decision. Thereafter, -the Employer submitted a brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has reviewed the Hearing Officer's
rulings made at the hearing and finds .that they are
free from prejudicial error. They are hereby affirmed.
Upon . the entire record in this proceeding, the
Board finds:
The Petitioner seeks to represent certain employees
working as bus drivers for the Employer in the city of
St. Cloud and the adjacent communities of Waite
Park and Sauk Rapids, Minnesota. A question is
presented whether Transit Systems, Inc., herein also
referred to as TSI or the Employer, is an "employer"
within the meaning of Section 2(2) of the Act. TSI, a
Minnesota corporation with headquarters in St.
Augusta, Minnesota, was formed in 1969 for the
purpose of managing and operating a bus transit
system for the St. Cloud Metropolitan Transit
Commission, hereinafter called the MTC.
The Employer contends that it is exempt from
coverage of the Act because: (1) the MTC is funded
by area taxpayers and is a controlled political
subdivision of the State of Minnesota;1 (2) an
"intimate connection" exists between TSI and the
Metropolitan Transit Commission; (3) the gross
annual revenue of TSI does not meet the jurisdiction-
al standard the Board has established for transit
systems not involved as instrumentalities, links, or
channels of interstate commerce.2
In 1969 the Minnesota state legislature created the
St. Cloud Metropolitan Transit Commission to
operate a public transportation system in the three
cities involved herein. The election officials of each-
constituent. municipality appoint the members of the
MTC, which is the governing body of. the St. Cloud
Metropolitan Transit, Area. The Commission has the
power of, condemnation and can raise revenue by
levying ad valorem property taxes against real
property within the area of its, operations.
Pursuant to its statutory authority, the MTC
entered into a contract with the Employer for the
operation and management of the,St. Cloud mass,
transit bus system. Under the agreement, TSI is
considered an independent contractor as that term is
used in the law of the State of Minnesota. The MTC
also has capital grant contracts with the United
States Department, of, Transportation, Division of
Urban Mass Transportation, to obtain additional
operating equipment for the expansion of the transit
system in the St. Cloud metropolitan area. Further-
more, the Urban Mass Transportation Act of 1969
requires that the contract contain provisions for'the
job and benefit protection of all of TSI's employees.
Another stipulation permits the intervention of the
Secretary of Labor into disputes between the
Employer and its employees regarding compliance
with both the contract and the Urban Mass Trans-
portation Act.
The contract between the MTC and the Employer
mandates that the Employer furnish a resident
manager to direct the transit system on behalf of the
MTC. In this regard, TSI receives a management fee
of $1,000 per month, which includes the salary of the
resident manager. The MTC also remits monthly
payments to the Employer to cover the cost of
renting garage and office space on the premises of
TSI.
As manager of TSI, Melvin Voigt has complete
responsibility for the daily operations of the bus
service, including the hiring and firing of employees,
equipment and building maintenance, labor rela-
tions, equipment purchasing, and accounting. How-
ever, the manager does consult with the MTC
regularly relative to policies involving personnel,
staffing, and operations. According to the contract,
all personnel hired by the Employer are employees of
TSI and not those of the MTC. Voigt must also
insure that those individuals employed are qualified
to operate buses in Minnesota.
The MTC owns all the vehicles operated by TSI,3
buys the fuel necessary to meet daily schedules, and
maintains a spare parts inventory for repair purposes.
1 Sec. 2(2) of the Act excludes from the definition of "employer" "any 2 Charleston Transit Company, 123 NLRB 1296 (1959).
wholly owned Government corporation . . . or any State or political 3 The MTC also leases one bus for emergency situations from Voigt Bus
subdivision thereof .... Services, Inc., winch has substantially the same ownership as the Employer.
221 NLRB No. 53
300 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In addition, the MTC establishes the schedules and
routes for' the transit system. Regarding the fares
collected from passengers along the bus routes, a,
bank selected by the MTC daily removes all coin
boxes from the buses and deposits the funds to the
account of the MTC. TSI and its employees never
handle the money collected in the fare boxes.
At the regular meetings of the'MTC; Voigt presents
a complete monthly operating report and financial
statements . The contract provides that the MTC
must reimburse ' the Employer for all salaries of the
employees and -other operating expenses. Moreover,
the MTC also pays directly to the insurance carrier
the amount of the premiums incurred by the
Employer for general and comprehensive liability
insurance,, the workmen's compensation policy, and
other umbrella policies.
Although TSI controls the repair and maintenance
of the vehicles, Voigt Bus Service, Inc., which
handles 90 percent' of such work, submits its bills
directly, to the MTC for payment. Other companies
operate under the same procedure when they
perform the work.
The Board's determination with respect to its
jurisdiction over an employer such as this one which
provides services to an exempt government agency,
such as the, St. Cloud Metropolitan Transit Commis-
sion, begins with an examination of the 'relationship
of the services, performed, for the '.exempted opera-
tion.4 Where, the services are intimately connected
with the exempted operations of the government
entity, the Board has found that the independent
contractor shares the exempt'ion.5 On the other hand,
where the services are not essential to such opera-
tions, the Board hasconcluded that the contractor is
not exempt and asserts jurisdiction over its activities.
Thus, we asserted jurisdiction over the employer in
BDM Services Company, 218 NLRB No. 180 (1975),6
because there the employer merely provided advice
to the U.S. Army, but, did not itself perform the
exempt function of the U.S: Army, national, defense.
In this case, the Employer is performing the exempt
function of the MTC as mandated by-the Minnesota
legislature, i.e., public transportation by bus. There-
fore, the Employer with `the MTC is` exempt by the
Act from the Board'sjupsdiction. '
Accordingly, we shall dismiss the'petition. ,
ORDER
It 'is ' hereby ordered that the petition filed herein
be, and it hereby is, dismissed.
4 Rural Fire: Protection Company,, 216 NLRB No. 95 (1975); Herbert NLRB 86 (1973); Current Construction Corp. and Samuel M. Wagner, 209
Harvey, Inc., 171 NLRB 238 (1968). NLRB 718 (1974).
5 Rural Fire Protection Company , supra, The Wackenhut Corp, 203 6 Member Penello would not have asserted jurisdiction in that case.