John Himmer Transfer, Inc.

National Labor Relations Board - Board Decisions

Oct 31, 1975

221 N.L.R.B. 284 (N.L.R.B. 1975)

284 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
John Himmer Transfer , Inc. and Teamsters' Steel
Haulers Local Union No . 800, a/w International
Brotherhood of Teamsters, Chauffeurs, Ware-
housemen and Helpers of America, Petitioner
John Himmer Transfer , Inc., Employer-Petitioner and
General Teamsters, Chauffeurs and Helpers Local
249, a/w International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of
America.' Cases 6-RC-7156 and 6-UC-102
October 31, 1975
DECISION AND DIRECTION OF
ELECTION
BY MEMBERS FANNING, JENKINS, AND
PENELLO
Upon petitions duly filed under Section 9(b) and
(c) of the National Labor Relations Act, as amended,
a hearing was held before Hearing Officer Robert L.
Flint, Jr., on June 30 and July 1 and 2, 1975. On July
9, 1975, the Regional Director for Region 6 issued an
order transferring this case to the National Labor
Relations Board for decision. Thereafter, briefs were
filed by the Employer and the Petitioner.
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 they are free
from prejudicial error. The rulings are hereby
affirmed.
Upon the entire record in this case, the Board
finds:
1. The Employer is engaged in commerce within
the meaning of the Act and it will effectuate the
policies of the Act to assert jurisdiction herein.
2. The Petitioner and Intervenor2 are labor
organizations claiming to represent certain employ-
ees of the Employer.
3. A question affecting commerce exists concern-
ing the representation of employees of the Employer
within the meaning of Sections 9(c) (1) and 2(6) and
(7) of the Act.
4. Teamsters' Steel Haulers Local Union No. 800,
a/w International Brotherhood of Teamsters, Chauf-
feurs, Warehousemen and Helpers of America
(hereinafter Local 800 or Petitioner), has petitioned
I Teamsters Local 249 was notified of the proceeding , but chose not to
attend and took no position in the above proceedings
2 Fraternal Association of Special Haulers , Local Union No 100,
intervened at the hearing on the basis of a showing of interest filed with the
Board.
3 The new lease was instituted by Hemmer several months after the
organizing campaign commenced The old lease differs in some particulars
221 NLRB No. 52
for a unit of all owner-operators employed by John
Hemmer Transfer, Inc., and operating out of its
Neville Island, Pennsylvania, terminal. Petitioner
and Fraternal Association of Special Haulers, Local
Union No. 100 (hereinafter Intervenor), contend that
all of the owner-operators are employees and are an
appropriate unit. The Employer contends that the
owner-operators are independent contractors, and
additionally contends that if the owner-operators are
found to be employees they should be included in the
already existing unit of company drivers represented
by General Teamsters, Chauffeurs and Helpers Local
249, a/w International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of America
(hereinafter Local 249).
John Himmer Transfer, Inc. (hereinafter Himmer
or Employer), is a Pennsylvania corporation engaged
in the hauling of steel and other commodities, with
its only terminal located at Neville Island, Pennsyl-
vania. It is licensed as a common motor carrier under
certificates from both the Pennsylvania Public Utility
Commission (PUC) and the Interstate Commerce
Commission (ICC). It is subject to regulations
promulgated by both of these agencies and to the
pertinent regulations of the Department of Transpor-
tation (DOT). Himmer employs nine drivers to
operate its own equipment; they are in a bargaining
unit represented by Teamsters Local 249. In addition
to these company drivers, the Employer began in
1973, as permitted by the Interstate Commerce Act,
to use owner-operators who lease their equipment to
the Employer. In the past year, Himmer has used as
many as 35 owner-operators and drivers of equip-
ment owned by multiple owner-drivers.
The governmental regulations require the exercise
of much control by the Employer over owner-
operators. It is required by law that control be
exercised over such things as safety of equipment and
drivers, physical health of drivers, identifying mark-
ers on vehicles, route determinations in certain
instances, and qualification of drivers.
The newly revised leases 3 covering the owner-
operators' equipment give Himmer the equipment for
"Himmer's exclusive possession, control, use and
responsibility," require the owner-operators to identi-
fy the equipment with Himmer's name, require
Himmer to provide cargo and public liability
insurance, are terminable on 30 days' notice by either
party, and prohibit assignment and subletting of the
equipment by the owner-operators.
from the new one, including a requirement that "before any person other
than a regular employee of the authorized carrier is assigned to drive the
equipment operated under this lease," Hemmer must assure that person's
qualifications The record does not clearly demonstrate that all of the
owner-operators executed new leases In addition, it appears that institution
of the new lease did not change the Employer's operations in any way
JOHN HIMMER TRANSFER, INC
Prior to Teamsters Local 800's seeking recognition,
Himmer used the same employment application form
for its owner-operators as it did for its company
drivers. Signing the application form obligated the
signer to agree to a 30-day probationary period,
during which time the employee may be discharged
without cause or recourse, and to an agreement that
any misrepresentation constituted grounds for imme-
diate dismissal. The application required extensive
personal information and required the owner-opera-
tors to give references of previous employers and
complete accident and motor vehicle violation
conviction histories. In addition, Himmer made an
independent investigation of the accident and motor
vehicle violation records of the applicant. The new
application requires substantially less information.
The Employer attempted to get all the owner-
operators to execute new applications. The record
reveals that many of them failed to do so.
It is uncontroverted that Himmer unilaterally sets
the percentage of its tariff that it pays its owner-
operators and does not consult with them in
determining what charges are going to be made to a
customer for a particular haul.
All owner-operators are required to display Him-
mer insignia on their trucks and Himmer has given
its regular owner-operators permanent decals. Him-
mer maintains liability and cargo insurance for all
owner-operators on a fleet basis and provides for
workmen's compensation insurance covering all
owner-operators.
Owner-operators must make themselves available
at all times to Himmer for dispatch. Himmer in turn
performs all dispatch services for the drivers. The
record reveals that it is important to Himmer's
business not to miss loads and, thus, Himmer insists
that all drivers call in immediately after completing a
load. In addition, employees are told to call in for
instructions should they have a breakdown. We are
persuaded on the record as a whole that owner-
operators are dispatched on an informal seniority
basis after all the company drivers are dispatched.
Although the testimony revealed that "some accom-
modation is allowed to those owner-operators who
do not wish to make certain trips to certain areas,"
and that owners are permitted by the Employer to
turn down overwidth or overweight loads, or loads
with which their particular truck might have difficul-
ty, we are persuaded that the general working
relationship includes an understanding that owner-
operators are not to refuse loads.
4 Deaton Truck Lines, Inc, 143 NLRB 1372 (1963), enfd 337 F 2d 697
(C A. 5, 1964)
5 We also note the testimony to the effect that the Employer has
disciplined owner-operators by refusing to dispatch them for a few days, or
by threatening to take such action
285
There is conflicting evidence as to whether or not
the Employer's regular owner-operators are permit-
ted to "trip lease" to other companies. It is clear that
under the terms of the lease Himmer has the right to
control trip leasing and has placed restrictions on it,
although after Local 800 sought recognition Himmer
told some owner-operators that they could trip lease
as long as work was slow at Himmer.
The owner-operators are responsible for mainte-
nance and repairs on their equipment. However,
Richard Himmer testified that he looks at the trucks,
although he is not capable of determining whether
they will pass governmental safety inspections and
requires the owner-operators to make whatever
repairs he deems necessary. Routing is left to the
driver except in the case of "permit" loads, but
Himmer gives the owner-operators instructions as to
the time for pickups and also as to the necessity for
any special equipment such as tarps or additional
chains. The record reveals that on occasion Hammer
has specifically told an owner-operator how to load.
In making our determination as to the status of
these owner-operators, we are guided by the common
lawright-of-control test; we must determine whether
the Employer exercises control over the means used
to achieve the ends desired or merely over the ends to
be achieved.4 We apply this test to all the relevant
evidence, and do not consider any one factor
determinative.
Although we are aware of various aspects which
indicate a degree of freedom exercised by the owner-
operators, we find that these factors are outweighed
by others which established extensive Employer
control over the owner-operators and dictate the
conclusion that they are employees of the Employer.
We rely particularly on the following facts: (1) either
party has the right to terminate the lease on 30 days'
notice; (2) payments made to the owner-operators
are unilaterally set by the Employer; (3) the trucks
must display the Employer's insignia; (4) the Em-
ployer sets schedules of pickups, dispatching proce-
dures, and procedures whereby drivers must remain
on call and cannot refuse loads; 5 (5) the Employer
pays workmen's compensation insurance for the
owner-operators; 6 (6) the Employer has the right to
restrict trip leasing under the lease provision giving it
"exclusive possession, control, use and responsibili-
ty" for the equipment; 7 (7) the overall effect of the
degree of control over equipment and personnel
required by state and Federal regulation of motor
carriers; (8) the extensive amount of information
6 In addition, it is undisputed that on one occasion the Employer
financed the sale of one of its trailers to an owner -operator.
7 See our dissenting opinion in Ace Doran Hauling & Rigging Co, 214
NLRB No 84 (1974)
286 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
required of the owner-operators in the hiring process,
as well as the investigation of the background of each
applicant, including reference to the applicant's
previous employers; (9) the right of the Employer to
discharge without cause or recourse an employee
during a 30-day probationary period and to dismiss
or discharge without recourse any employee at any
time if he or she has made any misrepresentations in
the employee's application; (10) the Employer
maintains liability and cargo insurance for all owner-
operators on a fleet basis, pays the Ohio Use tax,
pays for all interstate, overweight, overheight, and
overwidth permits, and provides West Virginia
permits; (11) the Employer looks at the trucks and
requires the owner-operators to make what repairs
the Employer deems necessary, even if those repairs
are not required by any governmental authority; and
(12) the Employer often gives instructions with
respect to loading and special equipment.8
We turn now to the question of whether the owner-
operators are properly an accretion to the existing
unit of company drivers. In our opinion, the owner-
operators are not an accretion to that unit. The
owner-operators have a sufficiently separate and
distinct community of interest as to warrant separate
representation primarily by virtue of the fact that
they own and lease their equipment. In addition, the
record reveals that they are dispatched for work only
after all the company equipment has been dispatched
and further that their compensation is a percentage
rate rather than a salary based on an hourly rate.
Furthermore, Local 249 has expressed no interest in
these employees.
In view of the foregoing, and on the basis of the
entire record, we find that the owner-operators are
employees of the Employer within the meaning of the
Act, and that the following employees constitute an
appropriate unit for collective bargaining within the
meaning of Section 9(b) of the Act: 9
All owner-operators employed by the Employer
at its Neville Island, Pennsylvania, address,
excluding all other employees.10
9 Our dissenting colleague states that many of the aspects of control
listed by the majority are attributable only to the "extensive governmental
regulation scheme under which common carriers operate " We believe,
nevertheless , that such factors are clearly pertinent to our consideration of
the control exercised by the Employer As the Board stated in Dixie
Transport Company, 218 NLRB No 187 (1975), in finding that the owner-
operators therein were employees , "While the Board has held that these
factors are not in themselves determinative of the drivers' status, they do
indicate a degree of actual control exercised by employers over how drivers
perform their work and as such , regardless of where the incentive for
exercising such control emanates , are relevant in our inquiry with respect to
application of the National Labor Relations Act "
9 In view of our finding that the owner -operators constitute a separate
[Direction of Election and Excelsior footnote
omitted from publication.]
MEMBER PENELLO, dissenting:
I disagree with my colleagues' conclusion that the
owner-operators involved herein are employees and
not independent contractors.
The entrepreneurial nature of the owner-operator's
position is reflected by the fact that he is an
individual with a substantial capital investment in
the equipment which he brings to Employer's service,
and which he purchases without any assistance from
the Employer and then utilizes to produce income for
himself. Himmer played no part in determining the
make, weight, style, or financing of the equipment.
The owner-drivers pay for their license fees, tires, gas
and oil, vehicle maintenance and repairs, and fire,
theft, collision, or other vehicle-related insurance.
Owner-operators choose the place for state inspec-
tion of their vehicles. They also park their vehicles
where they choose and select their own repair
stations, helpers, flagmen, and routes, except in the
case of overwidth loads where the routes are
prescribed in the load permit. The placarding on
owner-operators' trucks is different from that on the
Employer's trucks. Owner-operators do not wear any
special uniform, they do not participate in the
Employer's benefit program, and they do not receive
any vacation or holiday pay. In addition, they
receive no cash advances, and tax withholding, social
security, or other deductions are not made from the
owner-operators' payments. The Employer does not
give turkeys and liquor to the owner-operators, as it
does to the company drivers at Christmas time.
Moreover, the Employer exercises very little day-to-
day supervision and control over the owner-opera-
tors and has no work rules or written procedures on
speeds, safety, loading, delivery, or pickup.
Many of the aspects of control listed by the
majority do not stem from the existence of an
employer-employee relationship, but exist only be-
cause of and pursuant to the extensive governmental
regulation scheme under which common carriers
operate. For example, application forms, medical
examinations for drivers, driver tests, displaying of
the company insignia , safety inspections, and many
appropriate unit and should not be accreted to the existing unit of company
drivers, the petition in Case 6-UC-102 is hereby dismissed
10 Though much testimony was taken on the status of drivers operating
additional equipment owned by an owner -driver, the record is clear that, at
present, there are no persons in that category. There are, however, an
unspecified number of drivers operating equipment owned by James
Muter, who does not drive himself. Petitioner contends that the record
evidence is insufficient to make a determination as to the status of Miter's
employees and that they should be permitted to vote under challenge We
agree . In addition , the record raises a question as to the status of some
owner-operators who work for Himmer on a casual basis, at least one of
whom (Richard Eaches) has a full-time job with another company We shall
leave this question also to be resolved on challenge.
JOHN HIMMER TRANSFER, INC. 287
of the provisions of the lease, including the provision
for a 30-day term, are all required by the applicable
regulations.
The dispatching system is not on any formal
seniority basis, but is rather a loose rotation system
depending on who is available when there is a load.
It appears that an owner-operator can effectively
refuse a load by just not being available for
Himmer's phone call. Although owner-operators are
requested to call in and make themselves available
for another load, they seem to do so only if they so
choose. I am persuaded on the record as a whole that
owner-operators do refuse loads frequently. In
general , dispatching seems to work on the basis of
mutual accommodation, rather than under the iron
rule of Himmer.
In my opinion, the provisions in the lease giving
Himmer "exclusive possession and control" over the
leased equipment are of less significance than the
actual practice. Though there was much conflicting
testimony as to whether owner-operators could "trip
lease," it was at least established that in recent
months , due to a slackening of business, Himmer had
told several owner-operators that they could trip
lease . Furthermore, I am pursuaded, on the record as
a whole, that owner-operators have always exercised
considerable freedom in trip leasing.
The record does not establish that there is any
regular pattern of discipline that Himmer may
employ to insure compliance with its desired proce-
dures.
I do not regard as controlling the fact that the
percentage of the total revenue which is paid to
owner-operators is unilaterally set by the Employer.
It is commonly known that in certain business
relationships one party to the transaction may be in a
position essentially to fix unilaterally the terms on
which he will do business with another, but that fact
does not make the other his "employee." The fact
that the rate is unilaterally set in this case indicates
no more than that the economic power of Himmer
exceeds that of the lessors. Finally, I do not believe
that the 30-day termination provision in the lease is
inconsistent with an independent contractor relation-
ship. Many business relationships are severable on
very short notice, and many others at will.
For these reasons, I find that all owner-operators
leasing equipment to Himmer are small businessmen
who exercise independent judgment and make
independent determinations as to the work they
perform. Consequently, I conclude that the owner-
operators are independent contractors. Accordingly,
I would dismiss the RC petition and clarify the
existing unit in a manner consistent with my decision
herein.