Checker Cab Association, Inc.

National Labor Relations Board - Board Decisions

Aug 27, 1970

185 N.L.R.B. 182 (N.L.R.B. 1970)

182 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Checker Cab Association , Inc.' and Organization of
Baltimore Cab Drivers, Inc.' and Taxicab Drivers
& Garage Employees Local No. 426 International
Brotherhood of Teamsters , Chauffeurs , Warehouse-
men & Helpers of America , Intervenor . Case 5-
RC-6654
August 27, 1970
DECISION AND DIRECTION OF ELECTION
BY CHAIRMAN MILLER AND MEMBERS
MCCULLOCH, BROWN , AND JENKINS
Upon a petition duly filed under Section 9(c) of
the National Labor Relations Act, as amended, a
hearing was held before Hearing Officer August A.
Denhard, Jr., of the National Labor Relations Board.'
After the close of the hearing the Checker Cab Associ-
ation, Inc., Petitioner and Intervenor filed briefs with
the Board.
The Board has reviewed the Hearing Officer's rul-
ings made at the hearing and finds they are free
from prejudicial error. They are hereby affirmed.
Upon the entire record in this case the Board
finds:
The Employer is engaged in interstate commerce
within the meaning of the Act.'
The record discloses that the gross business of
all members of the Association was in the aggregate
in excess of $500,000 for the year preceding the
hearing herein and that purchases from outside the
State of Maryland were in excess of $50,000 for
this same period. We find it appropriate for jurisdic-
tional purposes to combine the gross revenues of
all members of the Association and, as legal junsdic-
tion is present, we further find it will effectuate
the policies of the Act to assert jurisdiction herein.'
Petitioner and Intervenor seek a unit of all full-
time and part-time taxicab dnvers allegedly in the
employ of the Checker Cab Association, Inc., herein-
after Checker Cab or Association.'
The name of the Association as amended at the hearing without
conceding it was an employer
The name of Petitioner as amended at the hearing
After a hearing and pursuant to Sec 102 67 of the National Labor
Relations Board Rules and Regulations, Series 8, as amended, the Regional
Director issued an order transferring the case to the National Labor
Relations Board for decision
On the basis of the record and stipulation therein we find that
the Petitioner and Intervenor are labor organizations within the meaning
of the Act
See Transportation Promotions, Inc, et a!, 173 NLRB No 114,
and Central Taxi Service, 173 NLRB No 116
The parties stipulated that the following unit would be appropriate
should the Board order an election herein All regular drivers, owner
drivers who employ no other drivers and regular part-time drivers excluding
The Association alleges that the taxicab drivers
for whom Petitioner and Intervenor seek representa-
tion by their petitions are in fact independent contrac-
tors and therefore the petitions should be dismissed.'
Checker Cab Association was formed in 1958 as
a result of an order of the Maryland Public Service
Commission (PSC) requiring all taxicab owners in
the Baltimore area to belong to an Association, in
order to improve taxi service in Baltimore. Pursuant
to such order Checker operates under a franchise
in the metropolitan area of Baltimore, Maryland.
All of the stock of the Association is owned by
Yellow Cab Company of Baltimore. In subsequent
years additional cab owners joined the Association
in order to meet the PSC requirement. The Association
does not own any cabs. It has, however, approximately
98 members who own approximately 277 cabs. These
owners are individuals, partnerships, and corporate
entities.
Pursuant to a contract between the Association
and its members all cabs put in service must assume
the name, color, and distinctive markings of the Asso-
ciation and have the phone number of the Association
painted on the door. In addition, under PSC regula-
tions the name of the actual owner must be painted
on each side of the taxicab.
Membership by cab-owners in the Association is
on a year-to-year basis and is automatically renewable
until terminated by either party. The owner-members
pay no dues to the Association. The Association's
revenue is derived largely from the sale of gasoline,
at a premium price, to owner-operators and lessee
drivers! In addition, the Association receives one-
half the income derived from the advertising each
cab is required by the Association to carry. The
other half of this latter income goes to the owners.
The Association provides the following benefits and
service to its members at no additional cost: The
use of a two-way radio dispatch system, repair service
for the radio, a telephone service, facilities for garaging
the cabs, a towing service, instructions to owners
and lessees on operation of radio and meter equipment,
the services of a safety director, furnishing daily mani-
garagemen, mechanics, dispatchers, office clerical employees, guards and
supervisors as defined in the Act
' Sec 2(3) of the National Labor Relations Act provides, in relevant
part, that the term "employer" shall not include "any individual
having the status of independent contractor " In enacting this
provision Congress did not define the status, but intended, as stated
by the US Supreme Court, that in each case the issue should be
determined by general agency principles (NL R B v United Insurance
Co, 390 U S 254, 256 )
The record shows that two owner-members, Belle Isle Cab Co
and the I K Edelstein family own approximately 130 cabs of the approxi-
mate total of 212 Checker Cabs operated in Baltimore All of these
cabs are leased by the Association to individual operators with the
exception of about 39 cabs operated by owners themselves who utilize
no other drivers
185 NLRB No. 59
CHECKER CAB ASSOCIATION, INC
fest sheets required by PSC of all drivers, clerical
services including bookkeeping, securing renewal of
leases, and permits and tags for vehicles, a Blue
Cross Plan for owners the premium for which is
paid by the Association, securing and processing leases
for lessors with lessees, and representing the owners
at PSC hearings. In addition, the Association arranges
for owners the following: liability insurance, tire rental,
repair service, a discount price on painting, assistance
in financing new cabs, and a group life insurance
policy.
The Association acting as agent for the owners
operates a system of cab leasing9 and in its leasing
operation the Association uses a standard form of
lease agreement with a lessee. This lease provides,
inter alra:
(1) The lessee agrees to lease a taxicab which
he shall operate as a lessee or independent contractor
on a self employed basis; (2) the lessee agrees to
pay all tax liabilities, Federal and State, and agrees
he is not covered by the State Unemployment Insur-
ance Law; (3) the lessee agrees to operate taxicab
in accordance with rules and regulations of lessor
Association and the PSC, and will observe State laws
and Baltimore City laws and ordinances; (4) the
lessor will carry and pay for all required public liability
and property damage insurance; (5) the lessee will
pay the agreed fixed rental and buy all his gasoline
at a specified price, with the lessee to retain all
of his receipts over and above fixed rental fee, gasoline
and State sales taxes; (6) the taxicab shall be used
only for fare paying passengers, and the lessee shall
keep proper manifests as required by PSC and file
them with the lessor; the record, however, shows
that manifests were filed only with Association; (7)
the lessee agrees to pay for all damages resulting
from his negligence; (8) the lessee shall charge passen-
gers only rates shown on the meter; (9) the lessor
may cancel the lease anytime for failure of the lessee
to keep and observe agreements made by him in
the lease, or for violation of any PSC regulation,
state law, or insurance carrier's rules.
An applicant for a driver's lease must have a chauf-
feur's license and may make application only at either
of the Association's garages where he is interviewed
by the garage manager who may make an independent
investigation of the applicant. The applicant, if
approved by the garage manager, is then sent to
the main office of the Association where he is instruct-
' Prior to the adoption of the leasing system it was found necessary
to seek a change in Maryland law which prohibited taxidrivers from
working under any system other than salary or commission Pursuant
to petition of the Maryland Public Utilities Commission and cab owners
the statute was amended in 1964 authorizing the leasing of cabs in
Baltimore
183
ed in PSC regulations, insurance company rules, and
the operation of a meter. He also is given an eye
examination and a driving test. If successful the appli-
cant returns to the garage, signs a standard lease,
and selects his shift arrangement and hours.
The lessee may select from a number of different
work schedules. However, regardless of which sched-
ule or shift he selects he must report to the garage
to pick up his cab and daily manifest, as required
by PSC regulations. When the driver returns his
cab, as he must do at the end of his shift, he must
turn in his manifest to the Association on which
he has recorded the time and point of picking up
passengers, the time and point of destination, the
number of passengers and fare charges. From the
manifest the Association determines whether the lessee
has worked within the PSC 12-hour limitation. The
Association then fills the cab with gasoline and the
cost of the gasoline, priced at 42 cents per gallon,
together with the rental fee plus state tax, are paid
by the lessee. The balance of receipts, plus tips, is
kept by the lessee as his earnings. No deductions
are made for Federal or State income taxes or unem-
ployment compensation. All lessees, however, are cov-
ered by workmen's compensation, the premium for
which is paid by the owner.
Owner-drivers, of whom there are 39, operate only
out of the Association garage and must follow the
same daily procedure as lessees, except that when
they turn in their daily manifest they do not pay
a daily rental fee, and are billed weekly by the Associa-
tion for gasoline or other charges.
We have consistently held that the Act requires
the application of the "right to control" test in deter-
mining the status of persons alleged to be independent
contractors. When the person for whom the services
are performed retains the right to control the manner
and means by which the result is accomplished, the
relationship is one of employment, while, on the
other hand, where control is reserved only as to
the result sought, the relationship is that of independ-
ent contractor. The resolution of this question depends
on the facts of each case, and no one factor is
determinative.
Thus, here the lease is not negotiated, but its terms
are set unilaterally by the Association and the drivers
must take it or leave it. If they take it, the terms
and conditions of their work are prescribed within
close limits. The cabs must carry advertising contract-
ed for by the Association. Drivers are required by
the Association to purchase all gasoline from the
Association at a price approximately 50 percent above
the retail price. Although the driver signs a lease
with one owner, the Association treats such lease
in effect as though it applies to all owner-members.
184 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Drivers may be assigned to drive any cab of an
Association member. Regardless of a driver's change
of shifts he signs only one lease. Owners rarely know
who the drivers of their cabs are. A lessee failing
to report for, his shift may be charged for a full
day's rental, or a prorated rental if another driver
takes the cab out. A lessee may be excused from
the latter payment on producing a doctor's certificate
verifying his illness, or the performance of jury duty,
or attendance at a funeral. A lessee must check in
and out at the beginning and end of each shift and
at the end of the shift file his manifest showing
all details of his day's operation. This manifest is
checked by the Association for compliance with regu-
lations and gas purchases. The Association maintains
at the respective garages a personnel file which con-
tains his lease, complaints from customers, and notices
from the Public Safety Commissioner, as well as
an accident file. The garage managers discuss the
consequences with a- driver of his accident, record,
his difficulties with the PSC, or his being subject
to customer's complaints. All lessees must attend
the Association-conducted safety classes and any safe-
ty refresher classes that the Safety Director for the
Association or garage manager may require. All lessees
are entitled to a week's vacation. Some lessees operat-
ing cabs for the Edelstein interests are given a week's
vacation with pay. The Association arranges for and
makes available tire rental, repair services, financing,
painting, and group life insurance, and arranges for
owner's insurance.
The Association argues that the foregoing elements
of control of the details of operating the cabs is
more than offset by the facts, that (a) the Association
has promulgated no rules and regulations applicable
to the driving of the cabs, and does not discipline
the drivers, (b) once the cab is on the streets, the
driver is not required to report his location or respond
to radio dispatches, (c) the drivers enjoy no fringe
benefits, and (d) the Association does not withhold
income taxes for the drivers." For these reasons,
the Association would distinguish recent Board deci-
sions finding that lessee drivers and owner drivers
were employees within the meaning of the Act."
We accord little weight to the Association's lack
of separate rules and regulations of its own. The
PSC and insurance carriers prescribe regulations and
standards governing the operation of the cabs in
all pertinent details. The Association in its lease
10 The Association makes additional arguments, but they are largely
conclusionary or rephrasmgs, derivative from the facts set forth in the
text
" Miami Beach Yellow Cab, 173 NLRB No 116, Central Taxi Service,
173 NLRB No 115, Transportation Promotions, Inc, supra, Mound
City Yellow Cab Co, 132 NLRB 484
requires the observance of all such rules, examines
and discusses with the drivers their compliance, with
or breach of such rules, and may and does discharge
the driver by canceling his lease for breach of such
rules. In such circumstances there is no discernible
need for any separate or additional rules to be issued
by the Association in order to exercise effective control
over operations of the cabs. As to fringe benefits,
their presence may indicate an employment relation,
but since there is a large volume of employment
without such benefits, their absence is of little proba-
tive value; the record discloses that fringe benefits
are present here, in that the drivers receive a week's
vacation, and some of those driving Edelstein cabs
receive pay for the vacation period., Nonwithholding
of income taxes has, because of its somewhat self-
serving character, been regarded by us as of some,
but not controlling, significance, and in all the circum-
stances of this case we so regard it here." Its signifi-
cance is further offset substantially by the fact that
the cabowners pay workmen's compensation premi-
ums.
This leaves, as the principal basis for the independ-
ent contractor contention, the Association's argument
that the cabdrivers are on their own once they leave
the garage, and need not report their locations nor
answer radio dispatches. That is to say, the driver
is free to prospect for fares when and where he
chooses. This is, however, inherent in the character
of the work, much as the choice of a route to cover
several delivery destinations lies with a truckdriver,
or the choice between a saw, chisel, and plane lies
with a carpenter. Such choices are largely routine,
dictated rather closely by circumstances, and offer
little scope for independent judgement and initiative.
And the asserted freedom of the drivers from respond-
ing to the, Association's radio dispatches appears to
us not to be clearly established."
The substantial degree of control over the drivers
exercised by the Association, its substantive and
detailed assistance to them in matters which. ordinarily
would be left entirely to an independent contractor
" We note that the Internal Revenue Service granted the Association
exemption from withholding income taxes on the ground, inter aka,
"that he [the driver] will accept all calls for service given by your
dispatcher," a representation contrary to the one made here by the
Association See In 13, infra.
" In addition to the Association's contrary representation to the Internal
Revenue Service, fn 12, supra, membership in the Association is a
requirement imposed by the PSC in order to improve cab service in
the area, and regulations of the PSC specify that "drivers of taxicabs
shall be required to make maximum use of service communications with
their switchboard operators or dispatchers in order to keep their cabs
available for reiponcevu calls (Emphasis supplied ) As we have earlier
mentioned, drivers may be and are discharged by the Association for
breach of PSC regulations. Failure by the Association to discipline the
drivers appropriately for such breach would place the Association or
member owners in jeopardy of loss of permits
CHECKER CAB ASSOCIATION, INC
to perform for himself, and the minimal latitude
allowed the driver for the exercise of his independent
judgement all lead us to conclude, from the entire
record, that the lessee drivers are employees rather
than independent contractors. Since the only difference
in these respects between owner-drivers and lessee-
drivers is that the owners garage their cabs at home
instead of at the Association garage, we find them
also to be employees and shall include them in the
unit. Accordingly, we shall direct an election in the
following unit, which we find and the parties have
agreed to be appropriate:
All full-time and regular part-time taxicab driv-
ers, including owner-drivers who do not hire
others employed by the Checker Cab Association,
Inc., as agent for owner-members of the Associa-
tion, in Baltimore, Maryland, excluding garage
men, mechanics, dispatchers, office clerical
employees, guards and supervisors as defined
in the Act.
[Direction of Election14 11 omitted from publication.]
CHAIRMAN MILLER, dissenting:
Considering this record in its entirely, I am unable
to find those indicia of employer control upon which
we customarily base a finding that an employment
relationship exists."
The following factors, adduced from the testimony
at the hearing, persuade me that the lessees are inde-
pendent contractors; lessees receive neither life insur-
ance nor other fringe benefits generally associated
with employment status;" there is no withholding
for any Federal or state taxes; lessees are subject
only to the rules promulgated by the Maryland Public
" In order to assure that all eligible voters may have the opportunity
to be informed of the issues in the exercise of their statutory right
to vote, all parties to the election should have access to a list of voters
and their addresses which may be used to communicate with them.
Excelsior Underwear Inc, 156 NLRB 1236, N.L.R B v Wyman-Gordon
Company, 394 U S 759 Accordingly, it is hereby directed that an
185
Service Commission and insurance carriers; lessees
are not disciplined by the Association and a lease
is terminated only if the lessee is disqualified by
action of the Public Service Commission or if requested
by the insurance carrier; lessees are free to go wherever
they please after they have picked up their manifests
and have no set geographical boundaries or locations;
lessees are not, in fact, required to answer radio
calls, to bid on radio dispatch calls, or to notify
the dispatcher of their whereabouts; lessees may
choose any 12-hour shift they want and may work
as many days as they want or as many hours during
a shift, provided that they pay their rental fee; lessees
are not required to service Association stands; lessees
may be held liable to the lessor for damages to
the cab arising through their own neglect; and, finally,
the record shows that the Association does not receive
gross receipts or pay any moneys to lessees, who
pay over to the Association only rental fees and
gasoline charges plus State sales tax on the rental
charges.
I would dismiss the petition.
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 5 within 7 days of the date of this Decision and Direction
of Election The Regional Director shall make the list available to all
parties to the election No extension of time 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
" The parties stipulated that the following taxicab dnvers would be
eligible to vote All regular drivers, owner-drivers who employ no other
drivers and regular part-time drivers who have worked at lease 2 days
per week in 4 of the 6 full weeks immediately preceding the date
of the Notice of the Direction of the Election or have worked at least
1 day per week in 13 of the full 16 weeks preceding the Notice of
the Direction of Election
16 See Transportation Promotions Inc., 173 NLRB No 114, Miami
Beach Yellow Cab, 173 NLRB No 116
17 Some longtime lessees who were in the employment of the Edelstein
interests from the time that the cabs were operated on 'a commission
basis are given a week off with compensation This compensation is
roughly equivalent to the lease fee for a week All other lessees, after
a stated period of continuous leasing, may take a week's leave without
pay