Local 814, IBT

National Labor Relations Board - Board Decisions

Jan 9, 1974

208 N.L.R.B. 276 (N.L.R.B. 1974)

276 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Local 814, International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of Ameri-
ca (Molloy Brothers Moving and Storage , Inc.) and
Lloyd Townsend . Case 29-CC-344
January 9, 1974
DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS
FANNING AND PENELLO
On April 30, 1973, Administrative Law Judge
Sidney Sherman issued the attached Decision in this
proceeding. Thereafter, the Charging Party filed
exceptions and a supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision 'n light of the exceptions and brief
and has decided to affirm the rulings, findings, and
conclusions of the Administrative Law Judge and to
adopt his recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board adopts as its Order the recommend-
ed Order of the Administrative Law Judge and
hereby orders that '.he complaint be, and it hereby is,
dismissed in its entirety.
DECISION
SIDNEY SIIERMAN, Administrative Law Judge: The
insi int charge was served on Respondent on November 17,
1972,1 the complaint issued on December 8, and the case
was heard on January 10 and 11 and February 21 and 22,
1973. The only issue litigated was whether Respondent
violated Section 8(b)(4)(i) and (ii)(A) by coercing certain
individuals to become members of Respondent. Briefs
were filed by the General Counsel and Respondent.
Upon the entire record, 2 the following findings and
recommendations are made:
1. RESPONDENT
Local 814, International Brotherhood of Teamsters,
Chauffeurs , Warehousemen and Helpers of America,
herein called Respondent . is a labor organization under the
Act.
It. JURISDICTION
Molloy Brothers Moving and Storage, Inc., hereinafter
called Molloy, is a corporation under New York law, with
All dates herein are in 1972, unless otherwise indicated
2 For corrections of the transcript sec the order of April 18. 1973
a principal office at Rockville Center, New York. At that
location and others in the New York City area it is engaged
in the business of transporting household goods in
interstate commerce. Its annual gross revenues exceed
$500,000, of which more than $50,000 is derived from the
transportation of articles in interstate commerce. Molloy is
engaged in commerce within the meaning of Sections 2(6)
and 8(b)(4)(ii) of the Act.
Molloy has lease arrangements with certain "owner-
operators," pursuant to which they lease to Molloy tractors
owned by them and operate them in the transportation of
goods in interstate commerce. It is found that they are
persons engaged in commerce within the meaning of
Section 8(b)(4)(ii) of the Act. Whether they are employees
or independent contractors is a separate question, which
will be considered below.
III. THE MERITS
The pleadings raise the following issue : Whether
Respondent violated Section 8(b)(4)(i) and (ii)(A) by
various acts designed to coerce owner-operators of tractors
leased by them to Molloy to become members of
Respondent.
A. Sequence of Events
Molloy is engaged in the transportation of household
goods and other commodities throughout the United States
as an affiliate of Allied Van Lines, Inc., hereinafter called
Allied. Its hauling operations are conducted under an ICC
certificate issued to Allied. Generally speaking, for trips up
to 300 miles Molloy uses hourly paid employees who are
members of Respondent, and for longer trips it uses the
"owner-operators," hereinafter called "owners," who drive
their own tractors under a contractual arrangement with
Molloy and are paid a percentage of the revenue received
by it for their services. A few of them lease to the Company
a second tractor, which is operated by another driver.
For some years Molloy has had contracts with Respon-
dent but only for its hourly employees. In April 1971,
Molloy and Respondent executed a 3-year contract which
provided, inter a/ia, for the application to the owners of
certain provisions, including a union-security clause,
requiring them as a condition of employment to become
members of Respondent upon the expiration of the
statutory grace period. In June 1972, none of the owners
having as yet joined it, Respondent launched a campaign
to secure compliance with the foregoing membership
requirement by addressing to Molloy various appeals and
demands. When those proved unavailing Respondent, in
October, established a picket line at all Molloy locations,
which resulted in a stoppage of operations, until Molloy
turned over to Respondent signed applications for mem-
bership in Respondent from the bulk of its owners.
However, Molloy has not otherwise complied with the
provisions of the collective-bargaining contract applicable
to the owners.
208 NLRB No. 43
LOCAL 814, IBT 277
B. Discussion
Status of the Owner-Operators
The General Counsel contends that the owners are not
employees but sel:-employed individuals , and that, by
coercing them to join it, Respondent violated the prohib-
ition in Section 8(b)(4)(i ) and (ii)(A) of the Act against
engaging in the acts described therein with an object of
"forcing or requiring any employer or self-employed
person to join any labor . . . organization ... .
Respondent rejoins, inter alia, that the owners are not self-
employed but are employees of Molloy, and as such might
properly be required to join Respondent pursuant to the
union-security clause in the current collective contract.
As noted above, Molloy conducts its hauling operations
under the certificate of Allied and the record shows that
the owners receive from Molloy all long-haul shipments
originating in the New York City area . At their out-of-state
destination they received from Allied return loads . Howev-
er, the owners ' contract is only with Molloy . The contract
fixes the compensation of the owners for each shipment as
a percentage of the amount charged by Molloy to the
shipper . The contract imposes on each owner responsibility
for all expenses relating to the operation and maintenance
of his tractor and for the wages of his helpers and the
various payroll taxes , wage withholdings, and workmen's
compensation coverage applicable to them . The owner also
agrees to indemnify Molloy against any claims for cargo
damage pertaining to shipments handled by him, to buy
appropriate public liability insurance , to submit his trip
logs to Molloy or Allied, and to collect, and promptly
remit, all monies due Molloy on C.O.D. shipments. In
addition , the contract establishes a profit -sharing plan for
the owners , whereby they are credited by Respondent with
4 percent of their share of gross revenues attributable to
their services, provided that such revenues exceed $40,000
a year ; and under the contract Respondent assumes the
cost of health insurance coverage for the owners. The
record shows further that Molloy alone bears the risk of
any default by a customer in the payment of charges for
services rendered by an owner-operator, and that it
advances trip expenses to owners and has made loans to
them for other purposes in substantial amounts.
While granting to the owners the right to select their
routes of travel , rest stops and service stops, and the right
to hire , direct the work of, and fix the compensation of
their helpers, the contracts impose various restrictions on
their mode of operation . which will be discussed in detail
below.
As evidence of the owners' independent contractor
status, the General Counsel relies on the following:
(1) Their ownership of their tractors , which represent a
substantial capital investment.
(2) Their liability for the expense of operating and
maintaining their tractors.
(3) Their authority over their helpers.
(4) Their freedom to select their routes, rest stops, and
service stops.
(5) The fact that they are paid on a per -trip basis.
(6) The fact that Molloy does not withhold state or
Federal income taxes or social security taxes from their
earnings.
(7) The fact that , except for health insurance, they do not
receive any of the fringe benefits enjoyed by Molloy's
hourly paid employees.
In opposition to the foregoing , Respondent contends
that the following factors establish an employer-employee
relationship:
(1) The extensive control exercised by Molloy over their
mode of operation.
(2) The fact that they are all paid the same percentage of
the proceeds of a shipment, which percentage is predeter-
mined by Molloy.
(3) The fact that they are covered by a profit -sharing
plan established by Molloy and by a group health
insurance policy paid for by Molloy.
(4) The exclusivity of their services for Molloy.
(5) Molloy's assumption of the risk of loss due to
nonpayment by a shipper.
(6) The fact that Molloy makes advances to them for trip
expenses and for personal reasons.
The "Control" Issue
In determining whether owner-operators who, as here,
drive under lease arrangements with common carriers, are
employees or independent contractors , the Board has
uniformly held to be crucial the extent to which they are
subject to the control of the carrier , not only with respect
to the result to be achieved , but also with respect to the
means to be used in achieving that result .3 Accordingly,
consideration will first be given here to the degree of
control reserved or exercised by Molloy or by Allied
through Molloy over the operating methods of the owner-
operators.
With regard to this matter there was extensive evidence
in the record , consisting of contracts, and the practice of
the parties thereunder , regulations of the Department of
Transportation (hereinafter "DOT") instructions and
directives promulgated by Allied , and disciplinary action
taken against owners.
Analysis of the contracts, themselves , is complicated by
the fact that two somewhat different contract forms have
been used since 1968. These forms will be referred to
hereinafter as Form A and Form B. Form A (Resp. Exh.
28) is the earlier of the two and has ostensibly been
superseded by Form B (G. C. Exh. 2) at least since early in
1968.4 However , that Form A was still being used at least
as late as September 1971, is apparent from the fact that a
random examination of Molloy's records brought to light a
Form A contract signed in that month . The following
provisions are common to both forms:
1. That, while hauling for Allied , the owners ' vehicles
will meet the requirements and painting specifications of
Allied.
2. That they will at all times maintain their tractors in
a E.g, The Aetna Freight Lines, Incorporated, 194 NLRB 740
4 The only specimen of Form B in the record (Townsend's Contract) was
executed in May 1968
278 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the condition required by the safety rules of regulatory
bodies.
3. That, in performing their hauling and related
services, they will meet the standards established by
appropriate governmental authority.
4. That they will not, without the consent of the
shippers or consignees, disclose any information about a
shipment that will be prejudicial to their interests.
5. That they will prepare and submit all logs and daily
reports required by the ICC.
6. That they will make daily inspections of their
equipment with regard to specified items.
7. That, except for helpers, they will not carry any
passengers other than those authorized by Molloy and
Allied.
In addition, the following appears in Form A:
That, in pei forming his hauling and delivery services, the
owner will comply with "all of the By-Laws, Rules and
Regulations, Drivers' Manual and instructions" of Allied
and with "all the rules and regulations and instructions" of
Molloy.
It is apparent from the foregoing that under Form B, in
performing their services, the owners are required to
comply only with governmental regulations, whereas Form
A required that they comply also with regulations and
instructions issued by Allied and Molloy.
While the record shows that the governmental regula-
tions applicable to the owners, consisting of nearly 100
pages,5 strictly circumscribe nearly every phase of their
work, including maintenance of equipment, hours of
service, observance of safety standards, and the keeping of
detailed records, the General Counsel appears to contend
that such governmental controls are less significant than
would be the reservation by Molloy of the right to control
work of the owners by rules and directions originating with
it. In support of this contention the General Counsel cites
Fleet Transport Company, Inc., 196 NLRB 436, and Conley
Motor Express, Inc., 197 NLRB 624. Although a different
view seems to have been taken in The Aetna Freight Lines,
Incorporated, supra, and Deaton Truck Lines, 187 NLRB
780, it will be assumed for the purpose of this discussion
that no weight may be assigned to the authority of Molloy
(or Allied) to enforce compliance by the owners with
governmental requirements. With regard to other require-
ments, the record shows that, although Form B, as already
noted, has eliminated the obligation of owners to comply
with rules and instructions originating with Molloy and
Allied, in actual practice those carriers continue to
promulgate, and insist upon compliance by the owners
with, various directives, bulletins, and instructions, many
of which relate to matters beyond the ambit of governmen-
tal controls, and to discipline owners for noncompliance
therewith. Thus, it was conceded that the owners are still
required to attend training classes held by Allied, where
they use as a text a 102-page drivers manuals That manual
is a compilation of rules governing many phases of the
owners' operations which have no counterpart in DOT
5GCExh6
6 This requirement originates with Allied and Molloy secures compliance
therewith by its owners
7 Resp Exh 14 Note that in another bulletin Allied affirmed its policy
regulations. These include procedures For loading and
unloading freight, progress reports to be made during the
course of a trip, and relations with customers. With regard
to the last item, the manual contains such rules of personal
conduct as the following-
Never argue with shippers
Never smoke in residence or van
Do not ask shipper to bring food or drinks
Do not discuss length of time away from home or any
family problem.
The foregoing manual contains a list of infractions that
are subject to disciplinary action, including discharge. This
list includes the following matters which do not involve
violations of governmental regulations:
Preventable accidents
Failing to check out with the Allied dispatcher
Failure to report to the Allied agent at destination
Refusal to load
Misconduct
Dishonesty
As for the enforcement of the foregoing "extra-govern-
mental" requirements, the record shows that even after the
adoption of Form B owners have been threatened with,
and subjected to, disciplinary action by Molloy at the
instance of Allied for the following:
Failure to attend Allied's training classes
Improper handling of freight at the point of delivery
Involvement in a preventable accident
Failure to file a state use tax return
It is clear from the foregoing that, despite the absence
from Form B of any specific requirement that the owner
comply with rules other than those of regulatory agencies,
Allied and Molloy have promulgated to the owners
instructions and requirements that reach into areas not
covered by such rules, and have warned of, and imposed,
discipline for derelictions within those areas.
Moreover, even within the areas covered by regulatory
bodies, Allied has in many instances filled in matters of
detail. Thus, the DOT rule prohibiting any driver to
transport any person without authorization from the motor
carrier he is serving gives Allied and Molloy wide
discretion as to what persons, other than a helper, may
accompany a driver, and in the exercise of that discretion
Allied has announced a policy of permitting a driver's wife
to accompany him under certain circumstances.7
Another striking instance of this is an Allied bulletin
(Resp. Exh. 11) which, after enumerating 8 parts of his
vehicle which a driver is required by DOT rules to inspect
before beginning a trip, appends a list of 21 instructions
describing in minute detail how such inspection is to be
performed.
It is concluded that the operating procedures of the
owners are subject to a myriad of restrictions consisting of
of prohibiting the transportation of pets Resp Exh l3 This is another
instance of reaching into matters beyond the area of governmental
regulation , there being no like restriction in DOT rules
LOCAL 814, IBT
(a) governmental regulations , (b) interpretation and ampli-
fications of such regulations by Allied, and (c) require-
ments originating with Allied alone . It should be pointed
out, also, that, while Form B authorizes immediate
cancellation of ar . owner's contract for a material breach
thereof , it also provides for cancellation "at any time" by
either party upon giving specified , advance notice , without
any apparent limitation as to the reason therefore .8
In view of such apparently unlimited authority to
terminate on the part of Molloy, the owner is in no position
to resist any demand by it that he comply with its
requirements by relying on such a legalistic ground as the
absence of any basis therefore in DOT regulations.
Exclusivity of Services
Although stressing the importance of the "right to
control" test in the present context, the Board seems to
have given some consideration to the exclusive nature of
an owner-operator's services for a particular carrier. Here,
Form A was explicit in that regard, requiring that any
tractor furnished by an owner be devoted exclusively to the
service of Molloy and that the performance of hauling
services by the owner for anyone other than Molloy would
be ground for cancellation of the contract. Form B is
somewhat more roundabout. It provides that the owner
will furnish a tractor to Molloy "for its service from time to
time, and for the service of [Allied] at all necessary times as
made known" by Allied to Molloy; that, upon being
offered a shipment by Molloy or Allied, he furnish a
tractor and perform all necessary services; that, while he
may refuse a particular load offered by Molloy, he will
thereby lose his place in the rotation; that he will accept all
freight offered him by Allied, except that in case of an
unprofitable shipment or "unreasonable dispatch" Molloy
may attempt to arrange with Allied for a different
assignment ; and teat, if Molloy is not able to provide the
owner with work at a particular time, he may serve another
carver, but may not work for a competitor of Molloy or
Allied without their consent. Townsend, an owner, was
admittedly susperded for refusing a return load offered
him by Allied. It appears therefore that even under Form B
s Form I appears to have a smular blanket, cancellation provision. In
addition , that form specifies that sufficient cause for termination is afforded
by an c •vner's failure to comply fully with "the Driver 's Manual and
instructicns of Allied Van Lines, inc., in the operation of the tractor and the
performance of all scrvi-es covered in the agree.nent "
9 Florida Texas Freight. Inc., 197 NLRB 976: Aetna Freight Lines , supra,
Deacon, Inc., supra, PoTe Trucking, Inc., 198 NLRB No. 59
In view of the extensive participation by Allied in the direction of the
work of the owners, thm record warrants a finding that Allied and Molloy
are joint employers of the owners Whether their authonty over their helpers
requires a finding that the owners are supervisors is a matter which need not
279
the owners are precluded from performing services for
others at such times as Molloy and Allied have work for
them and that, when there is no such work available, they
are limited as to what other carriers they may work for.
Coverage of other Laws
The General Counsel contends that weight should be
given to the fact that the owners are not treated by Molloy
as employees for purposes of income tax withholding,
social security taxes, and State workmen's compensation
and unemployment compensation laws. This is consistent
with the various declarations in Form B that the owners
are independent contractors. However, neither such self-
serving declarations nor any legal conclusions reached by
Molloy as to the applicability to the owners of other
statutes are entitled to much weight in the present inquiry.
Even if, contrary to the fact, it were shown that such
conclusions are based on rulings by competent authority,
they would not be binding on the Board with respect to the
status of the owners under the instant Act.
To sum up, the record shows that Allied and Molloy
exercise pervasive control over the owners' mode of
operation, particularly their on-the-job training, their
procedures in loading and unloading cargo, their dealings
with customers, and maintenance of their equipment, and
that such control exceeds governmental requirements to a
significant degree . It is found, therefore, that the owners
are not independent contractors but employees under the
Act,9 and that Respondent did not violate Section
8(b)(4)(i) or (ii)(A) by such pressures as it may have exerted
to induce them to become members of Respondent. It will
accordingly be recommended that the complaint be
dismissed.
Upon the above findings of fact, conclusions of law, and
the entire record in the case, and pursuant to Section 10(c)
of the Act, there is issued the following:
RECOMMENDED ORDERio
The complaint herein is dismissed in its entirety.
here by resolved The only issues litigated were whether the owners were
employed, or self-employed , individuals within the meaning of Sec
8(b)(4)(i) and (ii)(A) and whether Respondent violated those subsections by
its efforts to secure their compliance with the contract 's union shop clause.
iO In the event no exceptions are filed as provided by Sec 102 46 of the
Rules and Regulations of the National Labor Relations Board , the findings,
conclusion, and recommended Order herein shall, as provided in Sec.
102.48 of the Rules and Regulations, be adopted by the Board and become
its findings , conclusions , and Order, and all objections thereto shall be
deemed waived for all purposes.