Citywide Corporate Transportation, Inc.

National Labor Relations Board - Board Decisions

Oct 22, 2002

338 N.L.R.B. 444 (N.L.R.B. 2002)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 444
Citywide Corporate Transportation, Inc. and District
15, I.A.M.A.W. Case 2–CA–30832
October 22, 2002
DECISION AND ORDER
BY MEMBERS LIEBMAN, COWEN, AND BARTLETT
On August 11, 1999, Administrative Law Judge Mi-
chael A. Marcionese issued the attached decision. The
General Counsel filed exceptions and a supporting brief.
The Respondent filed an answering brief.
The National Labor Relations Board has considered
the decision and the record in light of the exceptions and
briefs and has decided to affirm the judge’s rulings, find-
ings, and conclusions and to adopt the recommended
Order.1
ORDER
The recommended Order of the administrative law
judge is adopted and the complaint is dismissed.

MEMBER LIEBMAN, concurring.
Hardly a new phenomenon, employee ownership in its
assorted varieties has commanded greater attention in
recent times as a realistic alternative to existing man-
agement, ownership, and compensation forms. This case
raises the question whether certain shareholder employ-
ees enjoy the protections of the National Labor Relations
Act, presenting yet another example of the difficulty of
applying statutory coverage doctrines to changing work-
place realities.1 The outcome of this case is arguably
straightforward, under the Board’s current law, but the
law itself is ripe for reconsideration. Established prece-
dent—although not fully rationalized—would seem to
deny the Act’s protections to some shareholder-
employees who might benefit from the Act’s guarantees
without undermining its purposes. And as employee
ownership increases, more employees may be excluded
from statutory coverage, perhaps without compelling
reasons.
Bernard Quashie is a driver for the Respondent, a lim-
ousine service organized as a New York cooperative cor-

1 In adopting the judge’s dismissal of the complaint, we find it un-
necessary to pass on his alternative finding that the Respondent’s class
A drivers, including alleged discriminatee Quashie, are independent
contractors. We also find no need to address the issues raised by our
concurring colleague with respect to precedent that she and we agree
was correctly applied by the judge in the circumstances of this case.
1 See, e.g., NLRB v. Kentucky River Community Care, Inc., 532 U.S.
706 (2001) (supervisory status of registered nurses); M.B. Sturgis, Inc.,
331 NLRB 1298 (2000) (representational rights of contingent workers);
Boston Medical Center Corp., 330 NLRB 152 (1999) (employee status
of medical interns, residents, and fellows); and AmeriHealth
Inc./AmeriHealth HMO, 329 NLRB 870 (1999) (independent contrac-
tor status of physicians).
poration. He is also a shareholder-member of the corpo-
ration, jointly owning one share. Shareholder-drivers like
Quashie hold more than 200 of the corporation’s 277
voting shares; some own more than 1 share. As a group
(the judge found), these drivers have the power to elect
the persons who run the Respondent, to change its work-
ing rules, and to amend its constitution. Accordingly, the
judge held, the Board’s precedents dictate that Quashie is
not an employee protected by the Act—and the Respon-
dent thus was free to deny Quashie work opportunities in
retaliation for his efforts to organize drivers into a un-
ion.2 The judge thus dismissed the complaint here. My
colleagues agree.
That result seems correct, under our decisions,3 which
hold that when employees, as a group, have an “effective
voice in the formulation and determination of corporate
policy,” they are managerial employees, excluded from
the coverage of the Act, based on the Board’s doctrine,
as approved by the courts. I have previously questioned
whether the Board’s approach in this area may hinder
employee-ownership arrangements that benefit firms and
workers alike. See Centurion Auto Transport, supra, 329
NLRB at 398 fn. 16. I write separately today to suggest
that the Board should soon (if not here and now) reexam-
ine its approach, which may have evolved inadvertently,
without careful consideration of all its current ramifica-
tions.
We should consider, for example, whether the Act
truly demands that workers like Quashie—who individu-
ally lack any effective power to control their working
conditions and whose job functions alone cannot fairly
be called managerial—be denied any statutory rights at
all, whether to engage in concerted activity or to bargain
collectively even in their own separate unit. By catego-
rizing certain shareholder-employees as managerial em-
ployees—as opposed to treating their situation as sui
2 Given the Board’s disposition of the case, it need not address
whether Quashie was an independent contractor, a category of workers
also excluded from the Act’s coverage. Although I also reserve judg-
ment, I am doubtful that a member of a cooperative can properly be
described as an independent contractor with respect to the cooperative,
at least insofar as he and other members carry out its core business. Cf.
Goldberg v. Whitaker House Cooperative, 366 U.S. 28, 32 (1961)
(holding that cooperative members are protected employees under Fair
Labor Standards Act).
3 See, e.g., Centurion Auto Transport, 329 NLRB 394, 398 (1999)
(directing election, after concluding that shareholder-employees did not
have effective voice with respect to single employer companies); Lake
Pilots Assn., 320 NLRB 168, 178–179 (1995) (applying Sec. 8(a)(2)
and finding employer-domination of union, based on role of share-
holder employees); Upper Great Lakes Pilots, Inc., 311 NLRB 131,
132 (1993) (applying Sec. 8(a)(3) and finding that minority-shareholder
employees, who lacked effective voice in employer’s management and
who did not have managerial job functions, were protected by Sec. 7).
338 NLRB No. 45
CITYWIDE CORPORATE TRANSPORTATION, INC. 445
generis—the Board forecloses options that likely are
consistent with the Act and sound policy as well.
Not until 1982, it seems, did the Board explain (albeit
in dicta) its approach to bargaining-unit issues involving
shareholder-employees in terms of the managerial-
employee category. See Upper Great Lakes Pilots, Inc.,
supra, 311 NLRB at 132 fn. 7 (1993), citing Florence
Volunteer Fire Department., 265 NLRB 955, 956 (1982).
Decades earlier, in a decision never expressly overruled,
the Board had held that even shareholder-employees with
an effective voice in running the company could consti-
tute their own, appropriate bargaining unit. Everett Ply-
wood & Door Corp., 105 NLRB 17 (1953) (finding ap-
propriate unit of employee-owned cooperative’s produc-
tion and maintenance employees, but excluding employ-
ees serving on board of directors).4 This holding is in-
consistent with the notion that such employees are mana-
gerial (and thus excluded from the Act’s protections),
although that category was certainly part of the Board’s
law at the time. See NLRB v. Bell Aerospace Co., 416
U.S. 267, 285–288 (1974) (discussing Board’s manage-
rial-employee doctrine following passage of Taft-Hartley
Act in 1947).
There is a basic distinction, in turn, between excluding
shareholder-employees from bargaining units that in-
clude other employees—as the Board has long done,
based on their differing interests5—and denying such
employees the right to engage in collective bargaining
altogether. There is a distinction, as well, between hold-
ing that employees cannot engage in collective bargain-
ing even in their own unit and holding that they have no
Section 7 rights at all. Confidential employees, for ex-
ample, may not bargain collectively, but the Board at
least has held that they are entitled to engage in other
types of protected activity. See Hendricks County Rural
Electric Membership Corp., 454 U.S. 170, 184 fn. 19
(1981).
The Supreme Court’s decision in NLRB v. Yeshiva
University, 444 U.S. 672 (1980), may well bear on the
issue of extending statutory protections to shareholder-
employees. In finding certain university faculty members
to be managerial employees, despite the fact their author-
ity was exercised only collectively, the Court cited with
apparent approval Board cases excluding shareholder-
employees from bargaining units that included other em-

4 The Everett Plywood & Door Board observed that the “mere fact
that an employee also has the rights and privileges of a stockholder is
not sufficient to debar him from availing himself, in his capacity as an
employee, of the rights of employees to engage in concerted activities
for the purposes of collective bargaining or other mutual aid or protec-
tion.” 105 NLRB at 19 (footnote omitted).
5 See, e.g., Brookings Plywood Corp., 98 NLRB 794, 798–799
(1952).
ployees. 444 U.S. at 685 fn. 21.6 But with respect to
workers like Quashie who as individuals apparently do
not have an essential role in the governance of the enter-
prise—in contrast to the Yeshiva faculty members, as
well as the officers and executive board members of the
cooperative corporation here—the application of Yeshiva
is debatable.
In short, there is seemingly legal room for the Board to
develop new approaches to issues posed when employ-
ees, as a group, do have an effective voice, via owner-
ship, in determining corporate policy. I am not prepared
to say, as the judge here was, that “[w]here a group of
individuals already has the power to collectively influ-
ence the policies of an organization . . . they do not need
the Act’s protection.” It is not clear that Congress has
made that determination. The Taft-Hartley amendments,
for example, did not squarely address the issue, although
Congress presumably was aware that the Board had ex-
tended the Act’s protections to workers who did own the
enterprises that employed them. See Olympia Shingle
Co., 26 NLRB 1398, 1414 (1940) (finding violation of
Sec. 8(a)(3) in discrimination against persons who sought
to become employee-stockholders in cooperative), Deci-
sion and Order set aside, 36 NLRB 473 (1941).7 And it
should give us pause that workers like Bernard Quashie,
despite their supposed collective power as owners, ap-
parently feel that exercising the rights promised by the
Act would improve their working conditions.
Even if actual collective bargaining by such workers
might raise difficult issues, there are good arguments for
permitting them to seek mutual aid and protection under
the Act, when their interests diverge from other share-
holder-employees, particularly those who directly man-
age the enterprise, who have a larger ownership stake, or
who otherwise have become entrenched in positions of
power. As for collective bargaining in such enterprises, it
may seem in tension with the conventional notion that such
bargaining presupposes a clear division between owners and
workers. But commentators have challenged that view,8 and
their argument that the institution of collective bargaining is
6 The Yeshiva Court cited Sida of Hawaii, Inc., 191 NLRB 194, 195
(1971); Red & White Airway Cab Co., 123 NLRB 83, 85 (1959); and
Brookings Plywood, supra.
7 The Board’s subsequent order does not explain why the original
Decision and Order was set aside, but the Board subsequently treated
Olympia Shingle as valid precedent. See Everett Plywood, supra, 105
NLRB at 19 fn. 3.
8 See Jeffrey M. Hirsch, Labor Law Obstacles to the Collective Ne-
gotiation and Implementation of Employee Stock Ownership Plans, 67
Fordham L. Rev. 957, 1005–1011 (1998); Michael C. Harper, Reconcil-
ing Collective Bargaining with Employee Supervision of Management,
137 U. Pa. L. Rev. 1, 48-61 (1988); see also Katherine Van Wezel
Stone, Labor and the Corporate Structure, 55 U. Chicago L. Rev. 73,
120–161 (1988).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 446
sufficiently flexible to coexist with employee control of the
enterprise is worth examining.
There is good reason to think that employee ownership is
a permanent and increasingly common feature of the
American economy.9 As one commentator observes,
“[s]upport for worker ownership as a superior firm struc-
ture, at least for certain types of companies, has been
growing for years.”10 Among the claimed benefits of
worker ownership are improved morale and productivity,
as the interests of employees are aligned more closely
with those of the firm.11 It is ironic the Board’s early
decisions—issued at a time when employee ownership
was surely less common than it is today—were more
hospitable than later decisions to harmonizing the goals
of the Act with employee control of business enterprises.
In the future, the Board may do well to look backward.

Ian Penny, Esq., for the General Counsel.
Richard Vande Stouwe, Esq., for the Respondent.
William Rudis, Grand Lodge Representative, for the Charging
Party.
DECISION
STATEMENT OF THE CASE
MICHAEL A. MARCIONESE, Administrative Law Judge. This
case was tried in New York, New York, on April 20–22, 1999.
The charge was filed by District 15, I.A.M.A.W. (the Union)
October 1, 1997,1 and the complaint was issued October 22,
1998. The complaint alleges that Citywide Corporate Transpor-
tation, Inc. (the Respondent) violated Section 8(a)(1) of the Act
through surveillance, interrogation, and threats of unspecified
reprisals in July and August, and that it violated Section 8(a)(1)
and (3) of the Act by denying its employee, Bernard Quashie,
employment opportunities since about late August. The Re-
spondent filed an answer to the complaint on November 4,
1998, denying the alleged unfair labor practices and asserting,
as affirmative defenses, that the Board lacks jurisdiction over
the Respondent because it is owned by the drivers and has no
employee drivers, and that Quashie, as a part-owner of the Re-
spondent, is not an employee within the meaning of the Act.
On the entire record, including my observation of the de-
meanor of the witnesses, and after considering the briefs filed
by the General Counsel and the Respondent, I make the follow-
ing

9 See, e.g., National Center for Employee Ownership, A Statistical
Profile of Employee Ownership (April 2002), available at
www.nceo.org/library/eo_stat.html. See also Christoper Mackin, Em-
ployee Ownership in America: A Primer for Industrial Relations, 5
Perspectives on Work No. 2, 5–9 (2001).
10 Hirsch, supra, 67 Fordham L. Rev. at 959.
11 See id. at 974–976.
1 All dates are in 1997 unless otherwise indicated.
FINDINGS OF FACT
I. JURISDICTION
The Respondent, a domestic corporation, operates a limou-
sine service company out of its facility in the Bronx, New
York, where it annually derives gross revenues in excess of
$500,000 and purchases and receives products, goods, and ma-
terials valued in excess of $5000 directly from suppliers located
outside the State of New York. The Respondent, while admit-
ting these facts, denies that it is an employer engaged in com-
merce within the meaning of the Act. The Respondent’s denial
is based upon its affirmative defense that it is owned by the
drivers and has no employee drivers. The record reveals that the
Respondent employs, in addition to the drivers, approximately
51 administrative personnel, such as dispatchers, telephone
operators, messengers, and accounts receivable and accounts
payable clerks. These administrative employees do not have
any ownership interest in the Company. Accordingly, because
the Respondent is an employer and meets the Board’s jurisdic-
tional standard for retail enterprises, I find that it is an employer
engaged in commerce within the meaning of Section 2(2), (6),
and (7) of the Act.
The Respondent amended its answer at the hearing to admit,
and I find, that the Union is a labor organization within the
meaning of Section 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
The facts regarding the alleged unfair labor practices are
largely undisputed. The evidence shows that Quashie was ap-
proached by a union organizer while working at LaGuardia
Airport on July 27 and that he thereafter met with representa-
tives of the Union from whom he received a supply of video-
tapes and literature expounding the benefits of union represen-
tation for limousine drivers. Quashie distributed this material to
fellow drivers over the next few days, until he was called be-
fore the Respondent’s executive board. The Respondent essen-
tially concedes that, at the executive board meeting on August
4, Quashie was questioned about his activities on behalf of the
Union and accused of engaging in conduct detrimental to the
Respondent. At the end of that meeting, Quashie was referred
to the security committee to determine whether his actions had
violated the Respondent’s constitution. There is no dispute that
the security committee filed charges of such a violation after a
meeting the same night at which Quashie was again questioned
about his union activities. Respondent concedes that Quashie
was tried on these charges by the Respondent’s executive board
on August 6 and found guilty of violating article V of the con-
stitution. Despite this finding, no formal penalty was ever im-
posed. The General Counsel alleges, and the Respondent dis-
putes, that the Respondent in fact penalized Quashie by deny-
ing him work opportunities after his trial. This is the only real
factual dispute with respect to the unfair labor practice allega-
tions.
CITYWIDE CORPORATE TRANSPORTATION, INC. 447
The primary and threshold issue in this case is whether
Quashie was entitled to the Act’s protection when he engaged
in union organizing activities. As noted above, the Respondent
asserts that, as a shareholder of the Respondent with the rights
and privileges set forth in the Respondent’s governing docu-
ments, Quashie was not covered by Section 7 of the Act. The
Respondent argues that Quashie, in his capacity as a share-
holder, was akin to a managerial employee. The Respondent
argues that Quashie was also excluded from the Act’s coverage
because he was an independent contractor. The General Coun-
sel disputes these contentions, factually and legally. Because
the complaint must be dismissed if the Respondent’s position is
upheld, I shall address this issue first.
Quashie’s Status
The Respondent is a black car limousine company offering
transportation to corporate clients throughout the New York
metropolitan area. The Respondent is a corporation with 300
shares outstanding, of which 277 are held by shareholder-
drivers and the remainder, having been taken back by foreclo-
sure, are held by the Respondent. The Respondent’s president,
Anthony Ciavarella, estimated that 200–220 shares are held by
drivers and the rest of the 277 are held by officers of the corpo-
ration and executive board members who are also current or
former drivers. Each share represents a radio license giving the
holder a right to receive calls through the Respondent’s com-
puterized radio dispatch system. The current price for a share is
$30,000. This price has not changed as long as Ciavarella has
been an officer.
An individual who wants to become a driver-member of the
Respondent must buy a share. Prior to 1989, share purchases
were financed by a credit union, the League of Mutual Taxi
Owners (LOMTO). The Respondent took over financing share
purchases in 1989 as a way to avoid drivers losing their radio
licenses through foreclosure by LOMTO.2 Drivers repay these
loans, whether obtained from LOMTO or the Respondent,
through deductions from their earnings as a driver. In 1987, the
Respondent distributed a surplus that had accumulated in its
account at LOMTO through repayment of these loans to then-
shareholders at approximately $10,000 per share. Since the
Respondent took over financing, all moneys collected from the
sale of shares/licenses is deposited into a fund which is used to
finance share purchases by the drivers. The Respondent also
distributes any profits from its operations to the driver-
shareholders twice a year in the form of dividends. Recent divi-
dends have been about $1000–1500. A driver-shareholder may
terminate his relationship with the Respondent by selling his
share/license back to the Respondent for the fixed price of
$30,000 or by transferring it to a family member. Under the
Respondent’s constitution, a shareholder may not make a profit
on the sale of his share until he has held the share for at least 2
years.
The Respondent is managed by 5 officers and an 11-member
executive board. The executive board is comprised of the five
2 As explained by Ciavarella, a driver experiencing difficulties re-
paying his loan may now get an extension by vote of the executive
board. In the past, LOMTO, being an independent entity, would fore-
close on drivers who failed to make payments on their loans.
officers and six driver-members. Each member of the executive
board, except the president, has one vote on matters coming
before the board. The president only votes in the event of a tie.
All officers and board members are elected by the shareholders.
The shareholders also elect the chairmen and members of the
unemployment fund committee and the security committee.
The security committee enforces the rules and can present
charges against driver-shareholders to a judicial committee,
whose chairman is also elected by the membership. Under the
Respondent’s constitution, there are seven other standing com-
mittees, including the finance committee, rules committee, and
grievance committee, whose members are appointed by the
president, and a watchdog committee whose chairman is ap-
pointed by the executive board. All officers, board members,
and committee members must be shareholders.
The Respondent’s president has authority to conduct the day-
to-day operations of the Respondent. Ciavarella has been the
president since 1989 and an executive board member since
1979. At the time of the hearing, he owned 14 shares, an in-
crease from the 5 or 6 shares he owned at the time of the al-
leged unfair labor practices. He has not driven for the Respon-
dent since 1984. Jean Mondesir, the Respondent’s vice presi-
dent since 1990, oversees the Respondent’s dispatch operations
and briefs new drivers. He stopped driving for the Respondent
sometime in 1997. At the time of the hearing, Mondesir owned
20 shares, an increase from the 3–5 shares he owned at the time
of the alleged unfair labor practices. The salary and other com-
pensation paid to the officers and other elected positions are set
forth in the constitution and can be changed by a vote of the
member-shareholders.
Prior to September 1997, each member had one vote in elec-
tions and at general membership meetings, regardless of the
number of shares owned. The constitution was amended in
September 1997, to comply with New York corporation laws,
to provide for one vote per share.3 General membership meet-
ings are held five times a year. The constitution also provides
for the calling of special membership meetings at other times.
Under the constitution, a two-thirds majority is required to
amend the constitution, or to expand the fleet. Ordinary busi-
ness questions and/or motions, and elections are determined by
simple majority vote. The constitution sets forth a procedure for
impeachment of elected officers, board members, and commit-
tee persons leading to a majority vote of the shareholders at a
special meeting. There is also a procedure in the constitution
for members to rescind any working rules. The latter may be
accomplished by submission of a petition signed by five share-
holder-members, followed by a majority vote of the member-
ship.
The drivers relationship with the Respondent is governed by
its constitution, as well as by working rules and a code of con-
duct. The working rules are formulated by the rules committee
or the communications committee and approved by the execu-
tive board or the general membership. It appears from the re-
cord that most of the rules have been approved by the executive
3 This change may explain the increase in the number of shares
owned by the Respondent’s president and vice president, and perhaps
other officers, since 1997.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 448
board and put into effect without a membership vote. However,
as noted above, it only takes five members to initiate the proc-
ess to rescind a working rule. In addition, the testimony of the
General Counsel’s witnesses at the hearing establishes that two
of the most significant rules governing the drivers’ work, i.e.,
the morning rule and the party rule, were approved by the
members.
The Respondent owns no cars itself. Instead, it provides
transportation to its clients through vehicles owned by the
driver-shareholders, one per share or radio license. Drivers who
own more than one share may lease or hire drivers to work
under their share. These drivers are referred to in the constitu-
tion as “class B drivers” to distinguish them from the “class A”
drivers who own shares in the Respondent. The class B drivers
have none of the rights or privileges set forth in the constitution
for shareholder-drivers, but they are subject to the working
rules and code of conduct. Moreover, although hired by the
driver who owns the share he is working under, class B drivers
must be approved by various committees and the general mem-
bership of the Respondent. There is no evidence in the record
regarding the number of class B drivers working for the Re-
spondent, nor is there any evidence regarding the terms and
conditions of employment of such drivers.
Drivers working for the Respondent are required to drive
late-model American made luxury sedans, such as a Lincoln
Town Car. The driver chooses the type of vehicle and finances
it himself. Drivers are also responsible for insurance and main-
tenance of the vehicles. The driver’s car is subject to approval
by the executive board or a committee. In addition, a clean car
committee conducts regular inspections to ensure that the
driver’s vehicle is up to the standards of the Respondent’s cus-
tomers. In addition to maintaining a clean car, the drivers per-
sonal appearance is governed by a dress code specifying the
type of clothing that can be worn. Included is a company tie
that must be purchased by the drivers from the Respondent. The
drivers are also required to display a magnetic sign with the
Respondent’s name and the driver’s car number on and in the
vehicle. Each vehicle operated for the Respondent is equipped
with the dashboard computer, installed by the Respondent,
through which the majority of calls are dispatched.
Although drivers can use their vehicle for personal use, it is
unclear from the record the extent to which drivers can use the
vehicle for other business. Quashie used his vehicle to drive for
another limousine company, while still working for the Re-
spondent, for a short time in 1998, after the alleged unfair labor
practice. The Respondent may have been unaware of this at the
time. Because of a New York City ordinance, the Respondent’s
drivers are prohibited from picking up street fares in Manhat-
tan. In addition, language in the driver’s application and the
Respondent’s constitution suggests that drivers are prohibited
from soliciting private jobs from the Respondent’s customers.
With the exception of the morning and party rules, the Re-
spondent does not tell the drivers when to work. Drivers choose
the days of the week and the hours of the day that they want to
work. The morning rule, adopted by the membership, requires a
driver to be available to take calls between the hours of 5 and 9
a.m. approximately once every 10 days. The rule was adopted
to ensure that sufficient cars would be available to take the
Respondent’s corporate clients to work in the morning. The
party rule, also adopted by the members, requires drivers to
accept a certain number of party calls during the holiday sea-
son, again in order to ensure coverage for parties during a busy
season. Drivers who violate these rules are suspended from
using the computer dispatch system for a specified period but,
as with any other suspension, can buy back the suspension and
be reinstated automatically. The cost of the buyback, also speci-
fied in the rules, is then deducted from the drivers earnings. The
penalty thus becomes a fine.
In addition to determining when they will work, the drivers
determine where they will work by choosing which zone to
work in. The Respondent has divided the New York metropoli-
tan area into zones, such as Midtown, the Battery, Brooklyn
Heights, or one of the airports. The number of drivers that can
book into a zone is only limited with respect to the airport
zones. Once a driver books into a zone, he goes on a list in the
order in which he booked into the zone. Calls are then auto-
matically dispatched to the drivers booked into the zone by
going down the list. As drivers receive and accept calls, they go
off the list and the next driver moves up. The computer will
bypass a driver if it has been programmed to do so, either be-
cause he was taken off an account at the request of the cus-
tomer, or because he has specified that he will not take the type
of call being dispatched, e.g., a package or a smoker, or be-
cause his car is not equipped with a phone or other amenity
requested by the client. When the driver delivers the client to
his destination, he may book into the zone where he ended his
trip or any other zone nearby. In addition to the automatic dis-
patch system, a driver can obtain work by accepting reserva-
tions, i.e., customer calls for rides the next day, without book-
ing into a particular zone. Drivers learn of available reserva-
tions through their dashboard computer by receipt of fleet mes-
sages from the dispatcher. A driver who wants to take a reser-
vation will push a button on their computer to accept it. The
first driver to do so gets the booking. The computer also in-
forms drivers of calls waiting in zones where there are no cars.
The dispatcher will sometimes offer incentives, called “prefs”
to encourage drivers to accept these pending calls. An example
of a pref would be that a driver accepting such a call could go
to the top of the list in a desirable zone after he completes the
call. Drivers can also obtain work without logging onto the
computer by going to one of the “light lines.” These are lo-
cated at the offices of the Respondent’s bigger clients, such as
Morgan Stanley or Time-Life. Cars line up and an onsite dis-
patcher for the Respondent directs the client’s employees who
are leaving the building to the first car in line. Some drivers
who are booked into the midtown zone will wait for calls at the
light line, accepting whichever comes first, a computer-
dispatched call or a light line fare.
The Respondent does not handle cash fares or pickups on the
street. A client who wants a ride from the Respondent must
open an account through one of the Respondent’s sales people.
Once an account is open, a client calls the Respondent when a
ride is needed, either immediately or for a future time. A tele-
phone operator enters the customer’s information into a com-
puter and the computer dispatches the call, as described above.
The client pays for the ride through a voucher collected by the
CITYWIDE CORPORATE TRANSPORTATION, INC. 449
driver and submitted to the Respondent for processing. The
Respondent’s billing department uses these vouchers to send
weekly invoices and monthly statements to the client. The
vouchers are also used to prepare the drivers pay statements.
The Respondent has a rate book that specifies the rate for each
call and a driver may not change these rates. The driver is paid
the fare for the ride, as specified on the voucher, less a $.50 fee
charged by the Respondent for processing each voucher and the
“discount”, which is the Respondent’s percentage of the fare.
The amount of the discount depends on how quickly a driver
wants to be paid. If the driver chooses to be paid within a week,
the Respondent deducts 20 percent of the voucher. If the driver
is willing to wait 2–3 weeks to be paid, the percentage kept by
the Respondent is 15 percent.4. In addition, drivers are reim-
bursed for tolls and customer use of cellular phones, if the
driver has one in his car. These phones are owned by the driv-
ers who maintain their own accounts with the cellular service
provider. The reimbursement rate for the phone is a flat rate,
i.e., $1.50 per minute, without regard to the actual cost of the
call to the driver. Other than the processing fee and discount,
the Respondent withholds from a driver’s earnings any buy-
backs he’s authorized, membership dues, New York State radio
use tax, and any amounts required to repay loans for the pur-
chase of a share/license or any loans from the Bronx Club. The
latter is a fund set up to assist drivers with vehicle repairs in the
event of traffic accidents not covered by insurance. The Re-
spondent does not withhold income tax, social security tax, or
Federal unemployment insurance tax. The Respondent does not
provide health insurance or other typical employee benefits to
its driver-shareholders. At the end of the year, drivers are is-
sued a Form 1099, “Miscellaneous Income” showing their
gross earnings for tax purposes. The drivers are responsible for
paying the taxes on this income.
Quashie became a driver for the Respondent in 1986 by
completing an “application” in which he agreed, inter alia, not
to make steady riders of the Respondent’s customers, not to
book any of the Respondent’s customers, to abide by the Re-
spondent’s rules, regulations and constitution and to place ad-
vertising material in his car to help the Respondent. The Re-
spondent agreed to give Quashie a 30-day trial period during
which time he could withdraw his application and obtain a
refund of a portion of his initiation fee. Quashie testified that
the initiation fee was $5000, which was a down payment on the
$25,000 purchase price of a share. He financed the remainder
of the purchase through LOMTO with loan payments deducted
from his pay. The application provides for a 6-month “proba-
tionary period” during which a new member could be expelled
without a trial or hearing by a simple majority vote of the ex-
ecutive board. At the end of the probationary period, the new
member was required to appear before the executive board for
final approval and could be expelled or have his probationary
period extended. According to Quashie, he received training
when he started by riding with an existing driver for five days

4 It appears from the pay statements in evidence that the discount is
a percentage of the gross amount on the voucher, after any reimburse-
ments to the driver for tolls or telephone usage are subtracted from the
gross.
and by attending briefings by a member of the briefing commit-
tee. This briefing involved testing Quashie on his knowledge of
the city and instruction on completing the Respondent’s vouch-
ers.
Prior to 1992, Quashie and his wife each owned a share in
the Respondent. In 1992, Quashie sold his share back to the
Respondent for $30,000 and became a partner with his wife on
her share. He transferred his car number (#97) to his wife’s
share and continued to drive as before. The record does not
indicate whether his wife had been a driver, or had leased her
share to a class B driver. Although Quashie has never held an
elective position in the Respondent, he has served as a co-
chairman of the communications committee, which formulates
most of the rules, and a member of the screening committee,
which screens applicants and conducts briefings of new mem-
bers. The record does not disclose when he served on these
committees. The record also does not indicate how Quashie and
his wife vote their share. Because Quashie’s wife returned to
their native Tobago in early 1996, it is reasonable to infer that
he has exercised the voting rights as a full shareholder.5
The Board has long held that the fact “[t]hat an employee
may also have the rights and privileges of a stockholder [is]
not, of itself, sufficient to debar him from availing himself, in
his capacity as employee, of the rights and privileges of an
employee to engage in” organizational activities. Olympia
Shingle Co., 26 NLRB 1399 (1940). Accord: Everett Plywood
& Door Corp., 105 NLRB 17 (1953). At the same time, the
Board has historically excluded from bargaining units em-
ployee-shareholders where the evidence shows that the em-
ployees as a group have an effective voice in the formulation
and determination of corporate policy. Brookings Plywood
Corp., 98 NLRB 794 (1952). Accord: Red & White Airway Cab
Co., 123 NLRB 83 (1959). See also Science Applications
Corp., 309 NLRB 373 (1992), and cases cited therein. Al-
though the Board, in the latter cases, does not specifically find
that the excluded shareholder-employees are not statutory em-
ployees, the effect of excluding them from representation is to
deny them the right under Section 7 of the Act to “bargain col-
lectively through representatives of their own choosing.”
In Upper Great Lakes Pilots,6 an unfair labor practice case,
the Board agreed with the administrative law judge’s conclu-
sion that pilots who owned shares in the Association were em-
ployees covered by the Act, but disagreed with his rationale.
The judge had relied on the fact that no individual pilot held an
amount of stock sufficient to divest him of employee status.
According to the Board, the fact that no single pilot owned
enough stock to determine corporate policy did not end the
inquiry. Because the pilots, as a group, owned all the voting
stock, as a group they could effectively determine corporate
policy. However, in that case, the evidence showed that the
respondent’s directors and officers together owned a majority
of the voting stock. Thus, the rest of the pilots, even acting in
concert, could not outvote the officers and directors. On the
5 In a different context, the Board often treats ownership by close
family members as personal ownership. See, e.g., Kenmore Contracting
Co., 289 NLRB 336, 337 (1988), and cases cited therein.
6 311 NLRB 131 (1993).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 450
basis of their stock ownership, the minority shareholders lacked
an effective voice in formulating and determining corporate
policy. Similarly, in Airport Distributors,7 the administrative
law judge rejected the respondent’s contention that an alleged
discriminatee who owned 10 percent of the respondent’s stock
and had served on its board of directors was not an employee
within the meaning of the Act. The record in that case did not
contain any evidence that he had participated in the formulation
of any policies involving management or employee relations.
There was also no evidence in the record that any other em-
ployees held stock in the respondent. The Board adopted the
judge’s decision without comment on this issue.8
The evidence in the instant case establishes that the Respon-
dent’s shareholder-drivers, like Quashie, collectively have an
effective voice in the formulation and determination of corpo-
rate policy. They own at least 200 of the 277 voting shares, a
sufficient majority to elect or impeach officers, board members,
and elected committee persons, to rescind working rules and
even to amend or change the constitution. Although Quashie,
by himself, could not determine policy, the Board has indicated
that is not the proper inquiry. Upper Great Lakes Pilots, supra.
The officers and board members here controlled only a minor-
ity of the shares and were thus subject to the whims of the ma-
jority. The Board has recognized this conflict in excluding
shareholders from bargaining units. If the Respondent’s class A
drivers, like Quashie, were represented by a union, the Respon-
dent’s “officers and directors would, in effect, be placed in a
position of bargaining with stockholder drivers who held the
power to oust them from their positions, a situation hardly con-
ducive to arm’s length bargaining.” Sida of Hawaii, Inc., 191
NLRB 194 (1971).
The General Counsel argues that the unit determination cases
in which shareholders have been excluded from bargaining
units are inapposite. The Board’s citation of such cases in un-
fair labor practice cases like Upper Great Lakes Pilots, supra,
shows the opposite is true. The rationale for exclusion of share-
holder-employees who, as a group, effectively formulate and
determine corporate policy is equally applicable to a determina-
tion whether their organizational activities should be covered
by the mantle of the Act’s protection. The congressional intent
behind the Act, and Section 7 in particular, was to equalize the
bargaining power of employees and employers in order to fur-
ther collective bargaining. Where a group of individuals already
has the power to collectively influence the policies of an or-
ganization like the Respondent, they do not need the Act’s pro-
tection. Quashie’s single vote as a shareholder-member of the
Respondent is no different than his single vote in a bargaining
unit represented by a 9(a) collective-bargaining representative.
In both cases, it’s the wishes of the majority that governs.

7 280 NLRB 1144, 1150 (1986).
8 It is not clear from the decision whether the respondent in that case
even filed exceptions to this finding by the administrative law judge.
The judge noted in his decision that the respondent only raised this as a
defense during the hearing and did not argue it in his brief. Thus, the
Board may not have even considered the issue in that case.
Based on the above, I find that the Respondent’s class A
drivers, such as Quashie, are not employees within the meaning
of the Act because they can, as a group, effectively formulate
and determine corporate policy, including labor relations pol-
icy. In reaching this conclusion, I have also considered the
cases cited by the parties involving independent contractors. To
the extent that such cases are applicable to situations where the
alleged independent contractor is an owner of the principal, the
evidence here shows that the drivers possess attributes of em-
ployees and independent contractors. See, e.g., Roadway Pack-
age System,, 326 NLRB 842 (1998), and Dial-A-Mattress Op-
erating Corp., 326 NLRB 884 (1998). As noted above, the
drivers determine their own hours and have some control over
their earnings by choosing when and where to work. They also
own their own vehicles and may be able to use them, as
Quashie did, to work for another company. At the same time,
the Respondent’s constitution, code of conduct, and working
rules appear to govern many aspects of the drivers’ perform-
ance of their work. Many of these rules, however, are dictated
by Government regulation or motivated by concern for cus-
tomer service, diminishing the impact of such control on a find-
ing of employee status. See C.C. Eastern v. NLRB, 60 F.3d 855,
859 (D.C. Cir. 1995). In any event, the critical factor here is
that any “right of control” over the drivers performance of their
work is exercised by the drivers themselves, either by voting at
general membership meetings, or by electing officers and oth-
ers who determine the rules. In essence, the drivers are working
for themselves, not for an employer with conflicting interests.9
Having found that Quashie was not an employee within the
meaning of the Act at the time he engaged in union organiza-
tional activities, it follows that the Respondent’s conduct to-
ward him was not an unfair labor practice.10 Accordingly, I
shall recommend that the complaint be dismissed in its entirety.
CONCLUSIONS OF LAW
1. The Respondent’s class A driver-shareholders, including
Bernard Quashie, are not employees covered by Section 7 of
the Act because they effectively formulate and determine cor-
porate policy.
2. The Respondent has not violated Section 8(a)(1) or (3) of
the Act as alleged in the complaint.
9 The facts in Elite Limousine Plus, Inc., 324 NLRB 992 (1997),
heavily relied on by the General Counsel, are similar to those here with
one important exception. The drivers who worked for Elite had no
ownership interest in the employer and thus, no effective voice in the
policies, rules, and regulations controlling their work.
10 The record establishes that Amidor Almonord, another share-
holder-driver who acted as Quashie’s representative at the security
committee meeting and executive board trial, was interrogated regard-
ing his union support and sympathies. Almonord, like Quashie, is not
an employee covered by Sec. 7 of the Act. Thus, the Respondent’s
interrogation of him was not an unfair labor practice.
CITYWIDE CORPORATE TRANSPORTATION, INC. 451
On these findings of fact and conclusions of law and on the
entire record, I issue the following recommended11
11 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
ORDER
The complaint is dismissed.

adopted by the Board and all objections to them shall be deemed
waived for all purposes.