Rediehs Interstate, Inc.

National Labor Relations Board - Board Decisions

Apr 20, 1980

255 N.L.R.B. 1073 (N.L.R.B. 1980)

REDIEHS INTERSTATE, INC. 1073
Rediehs Interstate, Inc. and Fraternal Association of
Special Haulers, Petitioner. Case 13-RC-14978
April 20, 1980
DECISION ON REVIEW AND
DIRECTION OF ELECTION
Upon a petition duly filed under Section 9(c) of
the National Labor Relations Act, as amended, a
hearing was held before Hearing Officer Edrward
D. Klaeren of the National Labor Relations Board.
On September 21, 1979, the Regional Director for
Region 13 issued a Decision and Direction of Elec-
tion, in which he found, inter alia, that the single
unit owner-operators and drivers of permanently
leased trucks who drive for the Employer are em-
ployees of the Employer within the meaning of the
Act. Thereafter, in accordance with Section 102.67
of the National Labor Relations Board Rules and
Regulations, Series 8, as amended, the Employer
filed a timely request for review of the Regional
Director's decision, contending, inter alia, that its
drivers are independent contractors or employees
of independent contractors. By telegraphic order
dated November 13, 1979, the National Labor Re-
lations Board granted the Employer's request for
review only with respect to the employee status of
owner-operators and drivers. Thereafter, the Em-
ployer and the Petitioner filed briefs on review.
The Board has considered the entire record with
regard to the issue under review, and makes the
following findings:
1. The Employer is engaged in commerce within
the meaning of the Act, and it will effectuate the
purposes of the Act to assert jurisdiction herein.
2. The Petitioner is a labor organization within
the meaning of the Act, and claims to represent
certain employees of the Employer.
3. A question affecting commerce exists concern-
ing the representation of the employees of the Em-
ployer within the meaning of Sections 9(c)(1) and
2(6) and (7) of the Act.
4. The Petitioner seeks a unit of owner-operators
and drivers of trucks permanently leased to the
Employer, contending that these individuals are
employees of the Employer within the meaning of
Section 2(3) of the Act. The Employer, on the
other hand, asserts that these individuals are inde-
pendent contractors or employees of independent
contractors and, therefore, not its employees.
The Employer, a motor carrier, is engaged pri-
marily in hauling steel between northern Indiana
and various midwestern, western, and southern
States. It contracts to haul goods under authority
I The Employer also filed a request for oral argument. We hereby
deny this request as the record, the request for review, and the briefs
adequately present the issues and contentions of the parties.
255 NLRB No. 127
granted by the Interstate Commerce Commission
(ICC) and the State of Indiana. As a motor carrier,
it is subject to regulations issued by the ICC, the
Federal Highway Administration of the U.S. De-
partment of Transportation (DOT), and the States
in which it operates.
The Employer owns no tractors or trailers. In
order to perform its contracts to ship goods, the
Employer leases approximately 120 tractor/trailer
units. Of these, about 60-75 percent are leased
from owner-operators, i.e., individuals who own a
single unit and also drive it for the Employer.
Nearly all of the remaining units are leased from
single unit owners who designate another person as
the driver.2 A few units are driven by owners of
multiple units.3
The relationship between the Employer and its
drivers is determined, to a large extent, by rules
promulgated by state and Federal agencies, which
the Employer is under a legal duty to enforce.4
Thus, in conformance with Federal regulations, the
Employer requires that its drivers successfully
complete a rigorous qualification process. It also
enforces detailed Federal regulations governing the
manner in which the drivers operate their trucks,
the condition of the vehicles, and the types of
equipment carried on them.
Each applicant for a driving position completes
an application form supplied by the Employer. The
applicant indicates his or her physical condition
and history, driving experience and training, and,
for the 3-year period preceding the application, his
or her addresses, employment history, and traffic
and accident record. The Employer independently
confirms the information provided. The applicant
must pass a physical examination and a road test,
and demonstrate, through a written exam, familiar-
ity with the DOT regulations. In addition, the Em-
ployer requires that drivers be at least 21 years old,
have a valid driver's license, be able to read and
speak English, know how to place and secure
cargo safely, and not be disqualified from driving a
commercial vehicle by reason of criminal miscon-
duct.5 Once hired, a driver's qualifications are re-
2 One driver testified he was hired directly by the Employer to drive a
leased unit for a short time. This appears from the record to have been an
isolated occurrence.
3 The Petitioner does not seek to represent those individuals who lease
multiple units to the Employer. In addition to driving for the Employer,
at least two of these multiple unit owners possess and utilize their own
ICC authority as motor carriers.
49 CFR Sec 391-Sec. 396.
' A driver is disqualified for criminal misconduct, pursuant to 49 CFR
Sec. 391.15 (c), if he or she is convicted of one of the following offenses
while driving a motor vehicle in furtherance of a commercial enterprise:
operating a vehicle while under the influence of alcohol, amphetamines,
or narcotics a crime involving transporting, possessing, or unlawfully
using amphetamines or narcotics; a felony involving the use of a motor
Continued
REDIEHS NTERSTATE, INC.
1074 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
viewed annually by the Employer based on a list of
motor vehicle violations submitted by the driver.
The Employer also requires each driver to obtain a
biennial physical examination.
With regard to the manner in which its drivers
perform their duties, the Employer enforces rules
prohibiting, inter alia, driving while ill, fatigued, or
under the influence of alcohol or dangerous drugs;
operating a truck within 4 hours of consuming al-
cohol; transporting unauthorized persons; allowing
more than one person in a sleeper berth or transfer-
ring to or from a sleeper berth and the cab while
the truck is in motion; using an open-flame heater
when the truck is in motion; disengaging the vehi-
cle's motive power except to change gears or to
stop; operating a vehicle when the presence of
carbon monoxide is known, suspected, or likely to
occur; and exceeding certain limits on driving time
and on-duty time per day and week. In addition,
the Employer requires its drivers to adhere to reg-
ulations establishing the following affirmative
duties. The drivers must insure that the cargo is
loaded safely and that the truck is operating prop-
erly, inspect the vehicle and load at regular inter-
vals, place red flags on "projecting" loads, wear
corrective lenses or a hearing aid if necessary, use
turn signals and lights correctly and at designated
times, and utilize seat belts if the truck has them.
The drivers also must approach railroad crossings
at a slow speed and follow detailed emergency pro-
cedures when required to stop and/or to leave the
vehicle along a road, or if involved in an accident.
These rules are enforced by the Employer pri-
marily through requirements that drivers submit
daily time logs provided by the Employer, and
report all accidents. 6 The Employer also gives a
copy of the regulations to each driver and periodi-
cally reminds them of the various rules in writing.
The Employer admitted that on occasion it had re-
fused to offer loads to drivers who were late in
turning in their logs. According to Renner, a
former secretary, the Employer has also refused to
issue settlement checks, i.e., checks issued each
week in payment for the driver's work, or assign
loads due to drivers' delays in filing logs or their
failure to obtain biennial physical examinations. In
addition, one driver indicated the Employer had
refused to allow him to drive during a period when
he was ill. Although the Employer presented testi-
mony that it did not enforce its rules by terminat-
ing leases or threatening to terminate leases, one
vehicle or leaving the scene of an accident which resulted in personal
injury or death.
6 The Employer's requirement that drivers report all accidents exceeds
the Federal regulations which dictate that only accidents which result in
death, serious bodily injury, or property damage in excess of $2,000 be
reported.
driver testified that he had been terminated because
he was late in submitting his logs. Further, the Em-
ployer has sent notices to its drivers threatening
termination of drivers who carried passengers in
their trucks or who did not present their trucks for
loading during a driver's strike in late 1978.
The Employer requires that the trucks it leases
conform to very detailed specifications with regard
to the following: lamps and reflectors, turn signals,
service, parking and emergency brakes, windows,
fuel systems, coupling devices, tires, sleeper berths,
heaters, wipers, defrosters, mirrors, horns, speed-
ometers, exhaust systems, floors, seat belts, rear end
protection, and emergecy equipment. In addition,
the Employer enforces maximum allowable noise
levels within the truck cabs. To assure compliance
with these rules, an agent of the Employer inspects
the drivers' trucks approximately once per month.
The Employer will refuse to load trucks which fail
to pass this inspection. Also, the drivers must com-
plete a daily vehicle condition statement which ap-
pears on their daily log form.
The relationship between the Employer and its
drivers is further defined by a "contractor's agree-
ment," which is drafted by the Employer to meet
certain requirements established by Federal regula-
tions, 7 and is not subject to negotiation by drivers
in the proposed unit. According to the agreement,
the "contractor," an owner of a tractor and/or
trailer unit, leases the equipment exclusively8 to the
Employer, and agrees either to drive the unit or to
provide a driver. Any driver so provided is consid-
ered under the agreement as the employee of the
contractor, and the contractor is responsible for
hiring, firing, directing, training, and paying the
driver. The contractor also sets wages, hours, and
working conditions, adjusts grievances, withholds
taxes and social security, and pays for unemploy-
ment and workers' compensation insurance premi-
ums. These drivers, however, like all drivers, must
complete the application process set forth above.
The Employer will reject any driver, provided by
a contractor, who does not complete the process.
The contractor also agrees, inter alia, to comply
with all laws and regulations regarding the qualifi-
cation of drivers, the driving of motor vehicles, the
condition of the truck, and the nature of the equip-
' 49 CFR Sec. 1057 requires that a motor carrier leasing equipment
execute a written lease which provides for exclusive possession, control,
and use of the equipment for a specified duration of at least 30 days. The
lease must also detail, inter alia, the amount of compensation and timing
of the payment, which party shall pay various expenses such as fuel,
taxes, licenses, and tolls, and the parties' respective responsibilities with
regard to providing insurance coverage.
I Although the Employer maintains that its contractors are not re-
quired to haul exclusively for it, the agreement expressly provides that
the contractor will not furnish the leased vehicle and equipment to any
other motor carrier or other person during the term of the agreement.
REDIEHS INTERSTATE. INC. 1075
ment on it;9 pay all fines, taxes, and costs of main-
tenance and operation of the vehicle; furnish all li-
censes and permits; assume liability for loss or
damage to the vehicle under most circumstances
and for cargo damage resulting from an accident or
the driver's negligence; arrange for liability insur-
ance for time periods when the equipment is not
operated for the Employer; timely submit all col-
lections, papers, logs, and other data; assume the
risk of death or injury to the contractor; and
inform the Employer of all accidents. The agree-
ment also calls for the contractor to make a cash
deposit with the Employer for each unit leased, al-
though it does not appear that this provision is en-
forced. The Employer agrees to provide public lia-
bility, property damage, and cargo insurance for
periods when the vehicle is being driven for the
Employer, and to pay the contractor 75 percent of
the gross transportation revenues each Friday for
the week's hauls.' °
The agreement allows a driver to trip lease' if
the Employer is unable to provide a back haul
(return load) for the driver, and if the load trip
leased has a destination within a 50-mile radius of
the driver's home terminal point. In addition, the
Employer receives 5 percent of the gross transpor-
tation revenues generated from the trip lease. Thus,
these trip leasing provisions give the Employer the
rights (I) to control the circumstances under which
the contractor may trip lease, and (2) to benefit fi-
nancially from the trip lease. These rights are not
required by Federal regulations.
The intent of the parties, as stated in the agree-
ment, is to create an independent contractor rela-
tionship between the contractor and the Employer,
rather than an employee-employer relationship.
The term of the agreement is essentially indefinite,
with the lease running until the end of the calendar
year in which it is signed, and then from year to
year so long as it is not terminated by one of the
parties. Either party may terminate the contract
upon 30 days' notice. The Employer estimated that
I The Employer asserts that it has no contractual right to reprimand
drivers for noncompliance with the DOT regulations. The agreement,
however, clearly gives the Employer the right to terminate the agree-
ment in the event of a breach, including a breach of the provision requir-
ing contractors to follow the regulations.
'O The Employer presented testimony that it frequently must negotiate
higher rates with the drivers to persuade them to accept partial loads or
loads destined for undesirable locations. Two of the drivers, however,
testified that they had been required to haul loads to undesirable areas
and that any higher rates paid to them on certain loads resulted from
their receiving 75 percent of a higher charge to the shipper rather than
an increase in the percentage of the gross revenue received by the driver.
An Employer witness also testified that the Employer consults with its
drivers during the process of setting its rates.
" Under 49 CFR Sec. 1057.22, an authorized carrier which owns or
permanently leases equipment may "trip lease," i.e., lease it for one trip
only, to another authorized carrier for transportation in the direction of a
point which the lessor is authorized to serve.
the average length of a contractual arrangement is
between 8 months and 1 year. It appears from the
record that some of the Employer's drivers have
driven for it for many years.
In practice, the relationship between the Em-
ployer and its contractors may differ from that set
forth in the contractor's agreement. For example,
the Employer obtains the various permits necessary
for operating in each State and provides a permit
book with its name printed on it. The Employer
presented testimony that all permit fees are paid by
the contractors. However, one driver testified that
he had never paid for his permits, and that when
the Employer tried to get him to begin such pay-
ments, he refused. In addition, Renner testified that
the Employer paid for all state permits except
those for Texas. Also, although the agreement pro-
vides that all fines resulting from the operation of
the vehicle are to be paid by the contractor, the
Employer pays traffic fines imposed due to its fail-
ure to obtain the proper permits.
The Employer's practice with respect to trip
leasing is not clearly established in the record. The
Employer asserts that, notwithstanding the provi-
sions of its contractor's agreement, it places no re-
strictions on its contractors' trip leasing. It esti-
mates that its drivers contract for 90 percent of
their own back hauls and that 50 percent of the
trip leases entered into by its contractors occur
without the Employer's permission, knowledge, or
receipt of the 5-percent share of the revenue. In
July 1978, however, the Employer sent a letter ad-
dressed to all its drivers indicating, inter alia, that
they were not to trip lease without permission from
one of its agents and that they could only trip lease
to a destination which would allow the Employer
to load the driver on the next run.' 2 Several driv-
ers testified that it was their understanding that
they needed the Employer's permission to trip
lease. One driver reported that he had been repri-
manded orally for trip leasing without the Employ-
er's permission. Renner also testified that she had
overheard an agent of the Employer inform a
driver that if Operations Manager Bryan knew the
driver had trip leased away from a Rediehs area,
the driver would be terminated.
i2 The Employer's operations manager, Bryan, admitted sending such
a letter detailing rules for drivers. He stated that the letter was sent only
to drivers associated with the Teamsters, in a move to counter demands
by those drivers. Bryan also asserted that soon after the letter was sent
the Employer's president, Rediehs, told Bryan that it was not the Em-
ployer's policy to have such rules and that the rules should not be en-
forced. As indicated above, however, the letter was addressed to all driv-
ers, and it appears from the record that it was not subsequently rescinded
in writing. Moreover, two drivers, both members of the Teamsters at the
time the letter was sent, testified that they received the rules letter, and,
as it had never been rescinded to their knowledge assumed it was the
Employer's policy
REDIEKS INTERSTATE. N.
1076 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The Employer has a fuel charge account at a
Lake Station truckstop which it allows its drivers
to use. It also provides cash advances to drivers
prior to long-haul trips. Both fuel charges and ad-
vances are deducted, without interest charges, from
the driver's settlement checks. The Employer car-
ries workers' compensation insurance for all its
drivers, and makes available a medical insurance
plan for them, for which it pays about 75 percent
of the cost. On occasion, the Employer has loaned
money to operators to help them pay for their
annual vehicle licenses.
The Employer assumes the risk of nonpayment
by the shipper. In fact, in most cases, the drivers
are paid for their hauls even before the shipper's
payments are due the Employer. If a load is stolen,
the Employer, not the driver, is liable to the ship-
per.
The Employer estimates that between 25-40 per-
cent of its loads are initially rejected, and asserts
that it does not penalize drivers who refuse loads.
The drivers, on the other hand, testified that if they
refused loads, they would be moved to the bottom
of the "board," which lists the drivers in the order
they have called in their availability for that day,
or that they subsequently would be offered less de-
sirable loads. The Employer also contends that it
has no rules requiring its drivers to call in or report
to its office every day. Its July 1978 letter to all
drivers, however, established such a rule, and two
of the drivers who testified reported receiving oral
reprimands for failure to call in regularly. Operat-
ing Manager Bryan testified that he will often try
to coordinate pickup times for the mutual conven-
ience of the driver and the shipper. The drivers,
however, indicated that the Employer simply di-
rected them to pick up a load at a particular time.
Although the Employer contends that it does not
require its drivers to make a certain number of
hauls per week, its July 1978 letter established a
rule requiring that the drivers haul at least one per
week. The Employer does not ordinarily specify
delivery times, but if a shipper wants a load deliv-
ered as soon as possible or at a particular time, the
Employer will charge a higher rate for this service
and the driver will receive 75 percent of the higher
rate. The Employer does not require that the driv-
ers drive a certain number of hours or miles per
day.
The Employer provides no bonuses, profit shar-
ing, pensions, unemployment compensation premi-
ums, vacation or holiday pay, nor does it pay for
meals or lodging. It does not withhold any taxes or
social security from the drivers' settlement
checks.' 3 The Employer holds no long-term legal
interest, beyond the leases, in the contractors'
trucks. 14 It does not provide repair or parking
facilities, safety awards, credit cards, uniforms,
tools, or training. 5
The contractors purchase their $60,000
tractor/trailer units with no assistance from the
Employer, and they may own their trucks as indi-
viduals, in partnerships, or as corporations. The
long-haul drivers may make up to 50 percent of
their income from their back hauls, which frequent-
ly are trip leased from other motor carriers. The
Employer may not sublease the equipment it leases
without the owner's permission. Some contractors
have painted the Employer's name on their trucks,
while others only use temporary paper signs. The
drivers select the particular highway routes they
use.' 6 Some drivers arrange for loads directly from
the Employer's shippers.
It is well established that the Board and the
courts should apply common law agency principles
in determining whether individuals are employees
or independent contractors under the National
Labor Relations Act. N.L.R.B. v. United Insurance
Company of America, 390 U.S. 254 (1968). Under
the common law right-to-control test, individuals
are deemed employees when the employer reserves
not only the right to control the ends to be
achieved, but also the means to be used in achiev-
ing those ends. However, where the right to con-
trol is merely limited to the result to be accom-
plished, an independent-contractor relationship
exists. In making this determination, we are mind-
ful that "there is no shorthand formula or magic
phrase that can be applied to find the answer, but
all of the incidents of the relationship must be as-
sessed and weighed with no one factor being deci-
sive." 17 The Restatement (Second) of Agency also
13 There is some evidence that the Employer will allow a garnishment
to be attached to a driver's settlement check.
14 The record contains references, however, to one incident where the
Employer held the title to a contractor's trailer as collateral for a short-
term loan.
'5 The Employer, in the past, has had a slightly different relationship
with a group of 9 to 10 drivers, represented by Teamsters Local 142,
who engaged in local or short hauls and usually did not trip lease. The
Employer paid these drivers separately for their wages and equipment
lease, and deducted taxes, union dues, and medical insurance premiums
from their wages. The most recent collective-bargaining agreement be-
tween Local 142 and the Employer expired March 31, 1979. and since
that date the Employer has treated all of its drivers in the same manner.
16 The only exception to this general practice is that the Employer
will sometimes direct that a load be driven over a particular route due to
an "interline" agreement, i.e.. a contract between another carrier and the
Employer which allows the Employer to utilize the other's authority on
a single-trip basis. Such agreements are used when the Employer's au-
thority is not sufficient to complete the haul.
7 N.L.R.B. v. United Insurance Company ofAmerica, supra at 258.
---- ___ __
REDIEHS INTERSTATE, INC. 1077
indicates a number of factors which should be con-
sidered. s8
After carefully reviewing the entire record, we
conclude that the owner-operators and drivers
sought by the Petitioner are employees of the Em-
ployer.'9 This conclusion is based on evidence of
the Employer's right to and its actual control of
the "manner and means" by which the drivers
transport goods for the Employer, as well as evi-
dence relating to the other indicia of employee or
independent-contractor status set forth in the Re-
statement.
Through its enforcement of regulations promul-
gated by Federal and state agencies, the Employer
controls many details of the drivers' conduct while
they are driving for the Employer. Thus, the Em-
ployer has a duty to control, inter alia, the level of
lawful driving, as measured by the number and
type of traffic citations, the driver's physical condi-
tion while driving, the number of persons carried
and their location in the vehicle, whether the
driver operates the vehicle in gear or not, the
maximum number of hours of work per day and
week, the timing and frequency of load and vehicle
inspections during the trip, the use of red flags, the
wearing of corrective lenses and/or hearing aids,
the speed at which rail crossings are approached,
the proper use of turn signals, seat belts, and lights
and specified procedures for emergencies and acci-
dents. In addition, the Employer regularly inspects
its drivers' trucks to assure itself that the vehicles
meet very detailed specifications.
In evaluating the extent of daily supervision, we
have considered the nature of the drivers' work.
's The Restatement (Second) of Agency, § 220 (2) (1958) sets forth the
following factors which, among others, are considered in determining
whether an individual is an employee or an independent contractor:
(a) the extent of control which, by the agreement the master may
exercise over the details of the work;
(b) whether or not the one employed is engaged in a distinct occu-
pation or business;
(c) the kind of occupation, with reference to whether, in the local-
ity, the work is usually done under the direction of the employer or
by a specialist without supervision;
(d) the skill required in the particular occupation;
(e) whether the employer or the [worker] supplies the instrumen-
talities, tools, and the place of work for the person doing the work;
(f) the length of time for which the person is employed;
(g) the method of payment, whether by the time or by the job;
(h) whether or not the work is part of the regular business of the
employer;
(i) whether or not the parties believe they are creating the relation
of master and servant; and
(j) whether the principal is or is not in business.
19 We recognize that there are some differences between the owner-
operators and the drivers of trucks permanently leased to the Employer
by single-unit lessors. For example, there are aspects of the relationship
between single-unit lessors and the drivers which indicate that these les-
sors may be dual employers of the drivers along with the Employer. The
nature of the Employer's control over the means and manner of the driv-
ers' work, however, is essentially the same as it is for owner-operators.
For this reason, we find that both groups of individuals are employees of
the Employer.
Obviously, the Employer cannot supervise the
drivers on the basis of personal observation because
the drivers are away from the Employer's premises
while they work. This freedom from daily observa-
tion, however, does not mean that the Employer
does not effectively supervise them through the
rules enforcement mechanisms noted above.
The fact that the Employer is required by Gov-
ernment regulations to control the means and
manner in which the drivers perform the Employ-
er's hauling does not diminish the validity of our
findings. The actual relationship between the Em-
ployer and its drivers, rather than the reasons for
the relationship, is the critical consideration. Mitch-
ell Bros. Truck Lines, 249 NLRB 476 (1980), and
Robbins Motor Transportation, Incorporated, 225
NLRB 761 (1975). We note that in certain earlier
decisions, the Board held that because Federal reg-
ulations are imposed on the parties by governmen-
tal fiat, they are insufficient by themselves to estab-
lish employee status. However, the Board, in
Mitchell Bros. Truck Lines, noted that these earlier
cases were implicitly overruled in Robbins Motor
Transportation, Inc.
Further, it is clear that the Employer either con-
trols or retains the right to control the drivers to
an extent beyond that required by the Federal reg-
ulations. Thus, the Employer insists that the drivers
report all accidents rather than only serious ones.
Also, although the Employer contends it does not
enforce its contractual trip leasing limitations, there
is no doubt that it retains for itself the right to con-
trol its drivers' trip leasing, and it is noteworthy
that the Federal regulations do not obligate the
Employer to place any restrictions on trip leasing
at all. We also rely, in finding the drivers to be em-
ployees, on the other less direct Restatement indi-
cia set forth above. We note in this regard that the
Employer's only business is the hauling of goods in
interstate commerce and the only work the drivers
perform for the Employer is to haul those goods.
Thus, the Employer and the drivers are engaged in
an identical, rather than a distinct, occupation,
which is the business of the Employer. The fact
that the drivers may have other employment or
that the drivers engage in a significant amount of
trip leasing on their back hauls does not affect our
decision here. A worker is not required to work
only at one place in order to be considered an em-
ployee under the Act. In addition, it is clear that
the drivers haul nearly all of their front hauls for
the Employer and obtain back hauls either from
the Employer or on a trip lease basis from various
other motor carriers. Thus, the drivers primarily
drive for the Employer. The Employer pays part
of the cost of the drivers' medical insurance premi-
REDIEHS INTERSTATE, INC.
1078 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ums. Finally, the term of employment is essentially
indefinite or "at will," lasting as long as both par-
ties agree to continue it.
There are some factors which arguably might
support a finding that the owner-operators are in-
dependent contractors. The owner-operators do
have a degree of entrepreneurial risk in and control
over their work. They purchase their trucks, pay
their operating expenses, and may decorate their
units as they wish. They decide when to haul and,
within the limits enforced by the Employer, how
many hours to drive. To some extent, at least, they
may refuse loads which they deem undesirable.
They are paid by the job, rather than by the hour,
have no taxes or social security deducted from
their checks, and receive few, if any, employee
benefits, except for medical insurance.20 Further,
they appear to have considerable actual freedom
under the Employer's current policy to trip lease
on their back hauls. Thus, they can affect their
profit or loss by varying the amount and timing of
their driving and by minimizing operating expenses,
repairs, and downtime through careful driving and
regular maintenance. In addition, the Employer,
through its agreement, has attempted to define its
drivers as independent contractors.
These factors, however, do not compel a finding
that the drivers are independent contractors. Al-
though the drivers buy and maintain their trucks,
they must do so according to the standards en-
forced by the Employer. While they are paid by
the job, the contractual rate paid is set unilaterally
by the Employer. In addition, the Employer as-
sumes the risk of nonpayment by customers and
carries liability and cargo insurance. The Employer
arranges for state and Federal permits and handles
the bookkeeping for all hauls without an overhead
charge to the drivers. The drivers are allowed to
charge fuel at the Lake Station truckstop and are
given cash advances prior to beginning a trip. Fi-
nally, their entrepreneurial discretion is limited
considerably by the rules enforced by the Employ-
er, and their risk is minimized by the Employer's
ultimate responsibility for the business and by the
services it provides the drivers.
For all of the above reasons, we conclude that
the owner-operators and drivers sought by the Pe-
titioner are employees of the Employer. In so con-
cluding, as we stated previously in Mitchell Bros.,
supra, we are mindful that some courts of appeals
have disagreed with our prior decisions finding
certain truck and cab drivers to be employees
20 Member Jenkins does not regard the factors mentioned in this sen-
tence as significant, since their presence or absence can be controlled at
the pleasure of the Employer.
within the meaning of the Act.21 This disagree-
ment generally has centered on the weight to be
given Federal regulations in determining an em-
ployer's right to control its drivers. 2 2 Most circuit
courts have affirmed our approach to the extent of
finding that the control mandated by such regula-
tions is a factor to be weighed. 2 3 In addition, in
several discussions the circuit courts have agreed
that the Federal regulations are an extremely im-
portant, if not determinative, factor in finding such
drivers to be employees. Thus, as the Fifth Circuit
noted in N.L.R.B. v. Deaton, Inc.:
The regulations . . . have the effect of requir-
ing the holder of a certificate of public con-
venience and necessity to possess and exercise
considerable control over all trucks operated
under the certificate, without regard to wheth-
er the holder owns the trucks. Control over
trucks involves control over drivers. [502 F.2d
at 1224-25.]
In Deaton, the court affirmed our finding of em-
ployee status based on Federal regulations and cer-
tain limited "additional controls" voluntarily re-
served by the employer. In finding the owner-oper-
ators and drivers to be employees, we point out
that we do so not only on the basis of the Federal
regulations, but also in light of the additional con-
trols retained by the Employer and the other fac-
tors noted in the Restatement.
Accordingly, we find that the following employ-
ees of the Employer constitute a unit appropriate
for the purposes of collective bargaining within the
meaning of Section 9(b) of the Act:
All single unit owner-operators and drivers of
permanently leased trucks employed by the
Employer; but excluding multiple unit owner-
21 See, e.g., N.L.R.B. v. A. Duie Pyle. Inc., 606 F.2d 379 (3d Cir. 1979);
Yellow Cab Company and Checker Cab Company v. N.L.R.B., 603 F.2d
862 (D.C. Cir. 1978); and Merchants Home Delivery Service, Inc. v.
N.L.R.B., 580 F.2d 966 (9th Cir. 1978). But cf. Aetna Freight Lines. Inc.
v. N.L.R.B., 520 F.2d 928 (6th Cir. 1975); N.L.R.B. v. Deaton. Inc., 502
F,2d 1221 (5th Cir. 1975); N.L.R.B. v. Pony Trucking, Inc., 486 F.2d 1039
(6th Cir. 1973), and Ace Doran Hauling d Rigging Company v. N.L.R.B.,
462 F.2d 190 (6th Cir. 1972).
22 Another area of disagreement relates to the relevance in these cases
of the Supreme Court's decision in United States v. Silk, 331 U.S. 704
(1947). Two circuits have held that Silk mandates a finding that truck-
drivers similar to those herein are independent contractors. See Merchants
Home Delivery Service. Inc. v. N.L.R.B., supra, and National Van Lines.
Inc. v. N.L.R.B., 273 F.2d 402 (7th Cir. 1960). Another has found it at
least supportive of such a conclusion. See N.L.R.B. v. A. Duie Pyle, Inc..
supra. In our view, Silk is inapplicable to the present case because it in-
terpreted the Social Security Act rather than the National Labor Rela-
tions Act, and because our decision herein is based on the Supreme
Court's more recent elucidation, in N.L.R.B. v. United Insurance Compa-
ny of America, supra, of the factors to be considered in determining
whether a person is an employee or an independent contractor within the
the meaning of the National Labor Relations Act.
23 The D.C. Circuit, in Yellow Cab Company, supra, took the position
that these regulations do not support a finding of control.
REDIEHS INTERSTATE, INC. 1079
operators, trip lease drivers, office employees,
professional employees, guards and supervisors
as defined in the Act.
[Direction of Election and Excelsior footnote
omitted from publication.]