Diamond L Transportation

National Labor Relations Board - Board Decisions

Mar 8, 1993

310 N.L.R.B. 630 (N.L.R.B. 1993)

630
310 NLRB No. 97
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The only issue raised by Petitioner’s request for review was
whether owner-operators and drivers who transport containers using
tractors leased by the Employer are independent contractors.
Diamond L Transportation, Inc. and United Con-
tainer Haulers, Petitioner. Case 16–RC–9555
March 8, 1993
ORDER DENYING REVIEW
BY CHAIRMAN STEPHENS AND MEMBERS OVIATT
AND RAUDABAUGH
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel, which has considered the Petitioner’s request for
review of the Regional Director’s Decision and Order
(pertinent portions of which are attached).1 The request
for review is denied as it raises no substantial issues
warranting review.
APPENDIX
REGIONAL DIRECTOR’S DECISION AND ORDER
The Employer is a contract commercial carrier licensed by
the Interstate Commerce Commission (ICC) and the Depart-
ment of Transportation (DOT) and is engaged in the business
of hauling containers to various ports in Houston and Gal-
veston for international shipping. The Employer provides this
service by leasing tractors from owner-operators to transport
the shippers’ containers and trailers from its customers’
warehouse and/or factories to port. The Petitioner seeks to
represent the owner-operators and drivers who transport the
containers using the tractors leased by the Employer. Nine of
the 14 individuals in question are owner-operators who drive
their own tractors. Three of the five remaining drivers are
employed by owner-operators who already drive for the Em-
ployer. The other two drivers are employed by Ruth Mat-
thews, who also is employed by the Employer as a dis-
patcher. Matthews contracts with the Employer to provide
two trucks (and drivers) under the same lease agreement used
by the owner-operators. The Employer contends that the
owner-operators and drivers are independent contractors and
thus not employees within the meaning of the Act.
Under the lease agreement between the Employer and the
owner of the tractor, the owner is paid 70 percent of the fee
received by the Employer from its customer. The Employer
makes no FICA or other payroll tax deductions from this
amount. The owner-operators receive no vacation, sick pay,
or health insurance benefits. As stated above, nine of the
tractors leased by the Employer are driven by owner-opera-
tors. The owners of the tractors are free, however, to hire
other drivers to operate their vehicles. The Employer has no
control over the owner’s hiring decision other than to require
that the driver comply with DOT requirements and meet the
Employer’s insurance carrier’s specifications. The owner ne-
gotiates and pays the driver’s wages and is responsible for
making the applicable FICA, unemployment, and workers’
compensation deductions from the driver’s paycheck.
The owner-operators and drivers do not run regularly
scheduled routes, but call the Employer each morning to see
if there are loads available. The contract between the tractor
owner and the Employer does not specify any minimum pay-
ment from the Employer nor minimum number of trips to be
made by the driver. The owner-operator/driver determines the
amount of income he will receive from the Employer by the
number of trips he is willing to accept. Should an owner-op-
erator be unable or unwilling to accept a load, he may refuse
the job without forfeiting his contract. Although the Em-
ployer requests that it be given notice that an owner-operator
is taking vacation, the owner-operator determines if and
when he will take the time off and is not required to provide
advance notice to the Employer.
Although DOT regulations require that the Employer
maintain files including the operating logs filed by the
owner-operators and drivers, the Employer does not deter-
mine the routes taken by the drivers, nor does it control the
manner or method in which the drivers comply with the
DOT rest requirements. Instead the owner-operators and driv-
ers make these decisions based on their own desires and
independent judgment. Similarly, the owner-operators are re-
sponsible for obtaining any loading or unloading assistance
they require and are not reimbursed by the Employer for this
expense. The Employer allows the drivers to wear caps bear-
ing its logo which were created for advertising purposes but
does not require the drivers to wear the caps or any other
type of uniform. Additionally, the Employer has no rules of
conduct or disciplinary procedures with respect to the owner-
operators or drivers. Although the Employer may request that
the owner-operators and drivers behave in a courteous man-
ner to its customers, it does not issue discipline to the driver
for failing to do so. Should one of the Employer’s customers
prohibit an owner-operator or driver from its facility, the
Employer does not send that individual to the facility again.
However, the Employer does not cancel the owner’s lease
agreement on this ground but instead will use the owner-op-
erator or driver on other jobs.
The Employer has no ownership interest in the tractors
driven by the owner-operators/drivers and is not responsible
for maintenance, repair, fuel, licensing, or any other oper-
ating expenses. Pursuant to their lease contracts with the Em-
ployer, the owners of the tractors are required to obtain all
operating permits and licenses required by the Department of
Transportation. Although the Employer is obligated under
ICC and DOT regulations to provide cargo liability insurance
to cover the container and products, the lease contract pro-
vides that the owner must establish an escrow account to
cover the Employer’s deductible. Additionally, the owner is
responsible for any addional insurance of the tractor and/or
its driver. ICC regulations require that the Employer’s
placard or logo be placed on the tractor to show that the trac-
tor is being operated under the Employer’s license. However,
the owner of the tractor may ‘‘trip lease’’ the tractor to an-
other carrier provided that the Employer’s placard is covered
or removed for the duration of the trip. Further, the Em-
ployer places no restrictions on the owner-operator’s personal
use of the vehicle.
The question of whether an individual is an independent
contractor or an employee within the meaning of Section 2
(3) of the Act is determined using the common law ‘‘right
of control’’ test, i.e., whether the party for whom the service
is performed has the right to control the ‘‘manner and
means’’ of performance or whether that party is concerned
631DIAMOND L TRANSPORTATION
only with the final result. This analysis also includes exam-
ination of the ‘‘entrepreneurial risk’’ undertaken by the party
performing the service. NLRB v. United Insurance Co., 390
U.S. 254 (1968); e.g., Central Transport, 299 NLRB 5
(1990); Precision Bulk Transport, 279 NLRB 437 (1986);
Don Bass Trucking, 275 NLRB 1172 (1985); North Amer-
ican Van Lines v. NLRB, 869 F.2d 596 (D.C. Cir. 1989).
In the instant case, the record reflects that the Employer
neither owns nor has financed any of the tractors it leases
from the owners, that the Employer does not direct the main-
tenance, repair, or outside use of the tractors by the owners,
and that the employer does not determine the routes or break
times chosen by the owner-operators and/or drivers when
they are transporting the containers for the Employer’s cus-
tomers. Further, the owner-operators and drivers assume sig-
nificant entrepreneurial responsibility in their relationship
with the Employer as their income is determined by the num-
ber of loads they decide to carry as well as their independent
decisions regarding maintenance and repair of their vehicles.
Unlike the owner-operators and drivers determined to be em-
ployees in the unreviewed decision in International Transfer
of Florida, Case 12–RC–1256 and in the Board’s recent de-
cision in C.C. Eastern, Inc., 309 NLRB 1070 (1992), the
owner-operators and drivers in the instant case are not sub-
ject to any formal or informal disciplinary procedures. Essen-
tially, the control exercised by the Employer over the owner-
operators and drivers is limited to that required by DOT and
ICC to maintain the Employer’s status as a licensed contract
carrier. It is well-established that restrictions imposed by
government regulations do not constitute actual control or su-
pervision by a putative employer. E.g., Precision Bulk Trans-
port, supra; Air Transit, 271 NLRB 1108 (1984).
The facts in this case are also distinguishable from those
in C.C. Eastern, Inc., supra, in that the owner-operators em-
ployed by C.C. Eastern did not bear the same ‘‘entrepre-
neurial risks’’ undertaken by the owner-operators and drivers
in the instant case. The C.C. Eastern employees drove pre-
assigned routes and were eligible for a yearly bonus based
on their performance and disciplinary records. In contrast, the
owner-operators and drivers in the instant case call the Em-
ployer each morning and are assigned their routes on a ‘‘first
come-first served’’ basis. An owner-operator can increase his
income by ‘‘hustling,’’ i.e., making sure he calls in early.
Conversely, the owner-operator can choose not to call the
Employer for an assignment on any given day with no ad-
verse affect on his contract. Further, while the Board noted
that the C.C. Eastern owner-operators did not work for other
companies or employ other drivers, three of the five non-
owner-operator drivers in the instant case are employed by
owner-operators who drive for the Employer themselves. The
other two drivers are employed by the Employer’s dis-
patcher, who leases her two tractors to the Employer under
the same contract used by the owner-operators. The record
reflects that the Employer did not participate in hiring any
of these drivers and that their payment is negotiated with the
owners of the tractors rather than with the Employer.
Based on the foregoing, I have determined that the owner-
operators and drivers are independent contractors rather than
employees within the meaning of Section 2(3) of the Act.
ORDER
IT IS HEREBY ORDERED that the petition filed herein be,
and it hereby is, dismissed.